$1,650,000 Bond 1997 Park Acres Apartments Project - Destroy 030138HOLMES & GALEYr LTD.
ONE FINANCIAL PLAZA, SUITE 1200, 120 SOUTH SIXTH STREET, MINNEAPOLIS, MINNESOTA 55402
TELEPHONE: (612) 288-9300 ♦ FACSIMILE: (612) 288-9408 • DIRECT DIAL (612) 305-4262
August 22, 1997
Daniel Donahue
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428-4898
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
Enclosed is your copy of the transcript for the above -referenced bond issue. Please acknowledge
receipt of your transcript by signing and returning the enclosed copy of this letter.
Sincerely,
Barbara Mellen
Legal Secretary
/bjm
Enclosures
RECEIPT
The undersigned acknowledges receipt of
the abov aptio transcript this �T
day of 11997.
By
DAN9W200001=RRII.TR ZMN.DOC
CLOSING MEMORANDUM
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
March 27, 1997
TERMS USED HEREIN:
Company: Reprise Associates Limited Partnership
Issuer: City of New Hope, Minnesota
Trustee: Norwest Bank Minnesota, National Association
Underwriter and
Remarketing Agent: Piper Jaffray Inc.
Investment Agreement
Provider: Bayerische Landesbank Girozentrale
Counsel to Company: Winthrop & Weinstine, P.A.
Counsel to Issuer: Steven A. Sondrall, Esq.
Counsel to Underwriter: Best & Flanagan, Professional Limited Liability Partnership
Counsel to Investment
Agreement Provider: Kutak Rock
Bond Counsel: Holmes & Galey, Ltd.
BASIC DOCUMENTS
Indenture of Trust between Issuer and Trustee
Exhibit A Notice of Mandatory Tender Date
2. Loan Agreement between Issuer and Company
Exhibit A Legal Description
Exhibit B Definitions
CLOSING WMORANDUM
3. Regulatory Agreement among Issuer, Trustee and Company
Exhibit A Legal Description
Exhibit B Certification of Tenant Eligibility
Exhibit C Certificate of Continuing Program Compliance
4. Bond Purchase Agreement among Issuer, Company and Underwriter
5. Remarketing Agreement among Remarketing Agent, Company and Trustee
6. Investment Agreement between Trustee, Company and Investment Agreement Provider
7. Limited Offering Memorandum
ISSUER DOCUMENTS AND AUTHORIZATIONS
8. Certificate of Issuer
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
9.
10.
11.
12.
Arbitrage Certificate
Order to Trustee
Preliminary Resolution
Certificate of Allocation
Program
Affidavit of Publication
Metropolitan Council Letter
Bond Resolution
Specimen Bond
Project Closing Information and Notice of Issue
Information Return, Form 8038
13. UCC -1 Financing Statement naming Issuer as Debtor and Trustee as Secured Party
COMPANY DOCUMENTS
14. General Certificate of the Company
Exhibit A Limited Partnership Agreement and Certificate of Limited
Partnership
Exhibit B Articles of Incorporation and Bylaws
Exhibit C Resolution of General Partner
15. Tax Certificate of Company
16. Exchange Agreement between BNR Partners ("Seller") and Company ('Buyer") dated as
of March 27, 1997
DANEW2001001\CC\CLOSEDOC CLOSRJG MEMORANDUM
INVESTMENT AGREEMENT PROVIDER DOCUMENTS
17. Certificate of Investment Agreement Provider
TRUSTEE DOCUMENTS
18. Certificate of Trustee
19. Trustee's Certificate of Receipt and Authentication
Exhibit A Authorized Signers
UNDERWRITING DOCUMENTS
20. Certificate of Underwriter
21. Certificate of Bidder for Investment Agreement
LEGAL OPINIONS AND RELATED MATTERS
22. Opinion of Counsel to Company
23. Opinion of Counsel to Investment Agreement Provider
24. Opinion of Counsel to Underwriter
25. Opinion of Bond Counsel
26. Supplemental Opinion of Bond Counsel
D:WEW200\001\CC\CLOSEDOC CLOSING MEMORANDUM
EXECUTION COPY
CITY OF NEW HOPE, MINNESOTA
Issuer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
INDENTURE OF TRUST
Dated as of March i, 1997
$1,650,000
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
This instrument was drafted by:
HOLMES & GALEV, LTD.
One Financial Plaza, Suite 1200
120 Sixth Street
Minneapolis, Minnesota 55402
D:\NEW2001,00I\DOCS\INDENTUR.DOC INDENTURE OF TRUST
TABLE OF CONTENTS
Page
PARTIES.........................................................................................................................................1
RECITALS.......................................................................................................................................1
ARTICLE 1
Definitions, Exhibits and General Provisions
Section1.01. Definitions............................................................................................................4
Section 1.02. Rules of Interpretation........................................................................................12
ARTICLE 2
The Bonds
Section 2.01.
Authorized Amount and Form of Bonds............................................................14
Section2.02.
Initial Issue..........................................................................................................23
Section 2.03.
Variable Rate......................................................................................................24
Section2.04.
Execution............................................................................................................24
Section 2.05.
Authentication.....................................................................................................25
Section 2.06.
Delivery of Initial Issue.......................................................................................25
Section 2.07.
Mutilated, Lost, Stolen, Destroyed or Untendered Bonds..................................26
Section 2.08.
Ownership of Bonds...........................................................................................26
Section 2.09.
Preparation of Definitive Bonds; Temporary Bonds..........................................26
Section 2.10.
Registration, Transfer and Exchange of Bonds..................................................27
Section 2.11.
Interest Rights Preserved....................................................................................28
Section 2.12.
Cancellation of Bonds.........................................................................................28
Section2.13.
Fixed Rate...........................................................................................................28
Section 2.14.
Book -Entry Provisions; Replacement Bonds......................................................31
ARTICLE 3
Redemption of Bonds Before Maturity
Section 3.01.
Redemption Provisions.......................................................................................34
Section 3.02.
Partial Redemption of Bonds..............................................................................35
Section 3.03.
Procedure for Redemption..................................................................................36
Section 3.04.
Payment of Bonds Upon Redemption.................................................................36
Section 3.05.
No Partial Redemption After Default.................................................................36
Section 3.06.
Cancellation........................................................................................................37
ARTICLE 4
Mandatory Tender and Remarketing of Bonds
Section 4.01. Mandatory Tender of Bonds ................
Section 4.02. Duties of Trustee ..................................
...........................................................3 8
...........................................................3 8
D."SNE W200\001\DOCS\INDENTUR.DOC i INDENTURE OF TRUST
Section 4.03. Remarketing of Bonds........................................................................................39
Section 4.04. Purchase of Tendered Bonds..............................................................................39
Section 4.05. Intentionally Omitted..........................................................................................39
Section 4.06. Purchase Not to Constitute a Redemption..........................................................39
Section4.07. Untendered Bonds...............................................................................................39
ARTICLE 5
General Covenants
Section 5.01.
Payment of Principal, Premium and Interest......................................................41
Section 5.02.
Performance of and Trustee for Covenants........................................................41
Project Fund........................................................................................................43
Section 5.03.
Instruments of Further Assurance.......................................................................41
Bond Fund...........................................................................................................44
Section 5.04.
Recording and Filing...........................................................................................41
Bond Purchase Fund.............................:............................................................45
Section 5.05.
Books and Records.............................................................................................42
Excess Investment Earnings Fund......................................................................46
Section 5.06.
Bondholders' Access to Bond Resister...............................................................42
Reserve Fund......................................................................................................46
Section 5.07.
Rights Under Loan Agreement...........................................................................42
Deposit of Funds with Paying Agent..................................................................46
ARTICLE 6
Funds and Accounts
Section 6.01.
"Trust Moneys" Defined.....................................................................................43
Section6.02.
Project Fund........................................................................................................43
Section6.03.
Bond Fund...........................................................................................................44
Section 6.04.
Bond Purchase Fund.............................:............................................................45
Section 6.05.
Excess Investment Earnings Fund......................................................................46
Section6.06.
Reserve Fund......................................................................................................46
Section 6.07.
Deposit of Funds with Paying Agent..................................................................46
ARTICLE 7
Intentionally Omitted.......................................................48
ARTICLE 8
Investments
Section 8.01.
Investments by Trustee.......................................................................................49
Section 8.02.
Return on Investments........................................................................................49
Section 8.03.
Computation of Balances in Fund......................................................................50
Section 8.04.
Rebate to United States.......................................................................................51
ARTICLE 9
Discharge of Lien
Section 9.01. Payment of Bonds; Satisfaction and Discharge of Bonds and
Obligation to Bondholders.............................................................................52
Section 9.02. Discharge of the Indenture..................................................................................53
D \NEW200MIDOCS4NDENTUR.DOC ii INDENTURE OF TRUST
Section9.03. Tax Call . ............................................................................................................. 53
Section 10.01.
Section 10.02.
Section 10.03.
Section 10.04.
Section 10.05.
Section 10.06.
Section 10.07.
Section 10.08.
Section 10.09.
Section 10.10.
Section 10.11.
Section 11.01.
Section 11.02.
Section 11.03.
Section 11.04.
Section 11.05.
Section 11.06.
Section 11.07.
Section 11.08.
Section 11.09.
Section 11.10.
Section 11.11.
Section 11.12.
Section 11.13.
Section 11.14.
Section 11.15.
Section 11.16.
Section 11.17.
Section 11.18.
ARTICLE 10
Default Provisions and Remedies
Eventsof Default.........................................................
Acceleration.................................................................
Remedies......................................................................
Direction of Proceedings By Bondholders ...................
Waiver of Stay or Extension Laws ..............................
Priority of Payment and Application of Moneys.........
Remedies Vested in Trustee......................................I..
Rights and Remedies of Holders .................................
Termination of Proceedings .........................................
Waiver of an Event of Default .....................................
Company as Agent of Issuer ........................................
ARTICLE 11
The Trustee
.......................................55
.......................................5 5
.......................................56
.......................................56
.......................................5 7
.......................................57
.......................................5 8
.......................................59
.......................................5 9
.......................................59
......................................60
Acceptance of the Trustee...................................................................................61
Trustee's Fees, Charges and Expenses................................................................63
Notice to Holders of Default...............................................................................64
Intervention by Trustee.......................................................................................64
SuccessorTrustee...............................................................................................64
Resignationby Trustee.......................................................................................64
Removalof Trustee.............................................................................................65
Appointment of Successor Trustee.....................................................................65
Acceptance by Successor Trustees.....................................................................65
Right of Trustee to Pay Taxes and Other Charges..............................................66
Trustee Protected in Relying Upon Resolutions.................................................66
Successor Trustee as Custodian of Bond Fund and Paying Agent .....................
66
Co-Trustee..........................................................................................................66
Obligation to Trustee as to Reporting.................................................................68
Successor Paying Agent......................................................................................68
Confirmation of the Trustee................................................................................68
RemarketingAgent.............................................................................................70
Qualifications of Remarketing Agent; Resignation; Removal ...........................70
ARTICLE 12
Supplemental Indentures
Section 12.01. Supplemental Indentures Not Requiring Consent of Bondholders .....................71
Section 12.02. Supplemental Indentures Requiring Consent of Holders....................................71
Section12.03. Rights of Trustee.................................................................................................72
D:\NEW200\001\DOCS\INDENTUR.DOC iii INDENTURE OF TRUST
ARTICLE 13
Amendments to Agreement and Related Documents
Section 13.01. Amendments Not Requiring Bondholder Consent.............................................74
Section 13.02. Amendments Requiring Bondholder Consent....................................................74
ARTICLE 14
Miscellaneous Provisions
Section14.01.
Consent...............................................................................................................76
Section 14.02.
Rights Under Indenture.......................................................................................76
Section 14.03.
Meetings of Bondholders....................................................................................76
Section14.04.
Severability .........................................................................................................79
Section14.05.
Notices................................................................................................................79
Section 14.06.
Required Approvals............................................................................................80
Section14.07.
Counterparts........................................................................................................80
Section 14.08.
Limitation of Issuer and its Officers, Employees and Agents .............................80
Section 14.09.
Amounts Remaining in Funds............................................................................81
TESTIMONIUM
SIGNATURES
EXHIBIT A Notice of Mandatory Tender Date
D:W E W2001001 \DOCSUNDENTURDOC iv INDENTURE OF TRUST
INDENTURE OF TRUST
THIS INDENTURE OF TRUST (the "Indenture") dated as of March 1, 1997, by and
between the City of New Hope, a Minnesota municipal corporation (the "Issuer"), and Norwest
Bank Minnesota, National Association, a national banking association, authorized to accept and
execute trusts of the character herein set out, with its principal office in Minneapolis, Minnesota
(the "Trustee"):
WITNESSETH:
WHEREAS:
1. The Issuer is authorized by Minnesota Statutes, Chapter 462C, as amended (the
"Act"), to issue rental housing revenue bonds to finance or refinance in whole or in part the cost
of a "Project" (as hereinafter defined) for the public purposes expressed in the Act; and
2. The Issuer has made the necessary arrangements with Reprise Associates Limited
Partnership, a Minnesota limited partnership (the "Company"), for the acquisition and
rehabilitation of an existing residential rental project (the "Project"), which will be of the
character and accomplish the purposes provided by the Act, and the Issuer has entered into a
revenue agreement with the Company (in the form of the Loan Agreement as hereinafter defined)
which specifies the terms and conditions of said acquisition and improvement and provides for
the Issuer to finance a portion of the costs of the Project by making a loan (the "Loan") to the
Company to be funded through the issuance of Multifamily Housing Revenue Bonds (Park Acres
Apartments Project) Series 1997, in the aggregate principal amount of $1,650,000 (the 'Bonds");
and
3. As security for the payment of the Bonds, the Issuer has agreed to assign and
pledge to the Trustee, among other things, all right, title and interest of the Issuer in and to the
Loan Agreement (except certain rights reserved to the Issuer under the terms of this Indenture),
including the Basic Payments (as hereinafter defined); and
4. In connection with the issuance of the Bonds, the company will enter into a
Regulatory Agreement dated as of March 1, 1997, with the Issuer and Trustee (the "Regulatory
Agreement") relating to compliance with certain federal, state and local requirements applicable
to the Project.
5. All things necessary to make the Bonds, when authenticated by the Trustee and
issued as in this Indenture provided, valid, binding and legal limited obligations of the Issuer
according to the import thereof, and to constitute this Indenture a valid contract for the security
of the Bonds, have been done and performed; and the creation, execution and delivery of this
Indenture, and the creation, execution and issuance of said Bonds, subject to the terms hereof,
have in all respects been duly authorized;
NOW THEREFORE, KNOW ALL PERSONS BY THESE PRESENTS, THIS
INDENTURE WITNESSETH:
D:\NEW200\00 I\ DOCSUNDENTUR.DOC I INDENTURE OF TRUST
The Issuer, in consideration of the premises and the acceptance by the Trustee of the
trusts hereby created and of the purchase and acceptance of the Bonds by the Holders (as herein
defined) thereof, in order to secure the payment of the principal of and interest and premium, if
any, on the Bonds according to their tenor and effect and the performance and observance by the
Issuer of all the covenants expressed or implied herein and in the Bonds, does hereby grant, grant
a security interest in, assign, transfer in trust, and pledge to the Trustee, and to its successors in
trust, and to them and their assigns forever, the following:
FIRST
All rights, title, interest and privileges of the Issuer in, to and under the Loan Agreement,
including, but not limited to, all sums which the Issuer is entitled to receive from the Company
pursuant to the Loan Agreement and in particular the Basic Payments (but excluding the rights of
the Issuer to indemnification and certain direct payments to be made to it pursuant to Sections
4.04, 7.04 and 9.05 of the Loan Agreement), and all other sums (including Bond proceeds) which
are required to be deposited in the trust accounts in accordance with Article VI hereof, except for
the Bond Purchase Fund and Excess Investment Earnings Fund which are not a part of the Trust
Estate; and the earnings derived from the investment of any of the foregoing sums as provided
herein; and
Any and all other property of every name and nature which may from time to time
hereafter by delivery or by writing of any kind be subjected to the lien hereof by the Issuer or by
anyone in its behalf or with its written consent, including, but not limited to, the interests of the
Issuer, if any, under the Collateral Documents, and the Trustee is hereby authorized to receive
any and all such property at any and all times and to hold and apply the same as additional
security hereunder subject to the terms hereof; and
TO HAVE AND TO HOLD all the same (herein called the "Trust Estate") with all
privileges and appurtenances hereby granted and assigned, or agreed or intended so to be, to the
Trustee and its successors in trust and to them and their assigns forever;
SUBJECT TO the rights of the Company under the Loan Agreement;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal
and proportionate benefit, security and protection of all Holders from time to time of the Bonds
issued under and secured by this Indenture, without privilege, priority or distinction as to lien or
otherwise of any of the Bonds over any of the others except as otherwise provided herein;
PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall well and truly
pay, or cause to be paid, or provide fully for payment as herein provided of the principal of the
Bonds and the interest due or to become due thereon (together with premium, if any), at the time
and in the manner set forth in the Bonds according to the true intent and meaning thereof, and
shall make the payments into the Bond Fund as required under Article VI or shall provide, as
permitted hereby, for the payment thereof by depositing with the Trustee sums sufficient for
payment of the entire amount due or to become due thereon as herein provided, and shall well
D: WEW200\001\DOCS\rNDENTUR.DOC 2 INDENTURE OF TRUST
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 this
Indenture and the rights hereby granted shall cease, terminate and be void except as otherwise
provided herein; otherwise, this Indenture shall be and remain in full force and effect.
UNDER THE PROVISIONS OF THE ACT the Bonds may not be payable from or be a
charge upon any funds of the Issuer other than the revenue pledged to the payment thereof nor
shall the Issuer be subject to any pecuniary liability thereon and no Holder or Holders of the
Bonds shall ever have the right to compel any exercise of the taxing power of the Issuer to pay
any Bonds or the interest and premium, if any, thereon, or to enforce payment thereof against any
property of the Issuer, except as above provided; the Bonds shall not constitute a charges, lien or
encumbrance, legal or equitable, upon any property of the Issuer, except as above provided; and
no Bond shall constitute a debt of the Issuer within the meaning of any constitutional or statutory
limitation, but nothing in the Act impairs the rights of Holders of Bonds issued under this
Indenture to enforce the covenants made for the security thereof as provided in this Indenture and
in the Act, and by authority of the Act the Issuer and the Trustee mutually covenant and agree, to
the extent specifically provided herein, for the equal and proportionate benefit of all Holders of
the Bonds, as follows:
D:\NEW200\00 I\DOCSVNDENTUR.DOC .$ INDENTURE OF TRUST
ARTICLE 1
Definitions, Exhibits and General Provisions
Section 1.01. Definitions.
In this Indenture the following terms have the following meanings unless the context
hereof clearly requires otherwise, and any other terms defined in the Loan Agreement shall have
the same meanings when used herein as assigned them in the Loan Agreement unless the context
or use thereof indicates another or different meaning or intent:
Act: Minnesota Statutes, Chapter 462C, as amended;
Act of Bankruptcy: any of the following events:
(a) If the Company shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee, liquidator or the like, or of all or a
substantial part of their property, (ii) commence a voluntary case under the Federal
Bankruptcy Code (as now or hereafter in effect), or (iii) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization, winding -up
or composition or adjustment of debts; or
(b) A proceeding or case shall be commenced, without the application or
consent of the Company, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, dissolution, winding�up, or the composition or adjustment of
its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of the
Company, or of all or any substantial part of its assets, or (iii) similar relief in respect of
the Company under any law relating to bankruptcy, insolvency, reorganization,
winding -up or composition or adjustment of debts;
Additional Charges: the payments required by Section 4.04 of the Loan Agreement;
Affiliated Party: as to a particular Person, any Person directly and, indirectly controlling
or controlled by or under direct or indirect common control with such specified Person.
"Control", when used with respect to a particular Person, means the possession, directly or
indirectly, of the power to direct management and policies of such Person whether through the
ownership of voting stock, by contract or otherwise, and the terms 'controlling" and "controlled"
have meanings correlative to the foregoing;
Authorized Denominations: $100,000 or any multiple of $5,000 in excess of $100,000;
Basic Payments or Loan Payments: the payments required by Section 4.02 and Section
4.03 of the Loan Agreement;
Beneficial Owner: the person for which a Depository Participant holds an interest in the
Bonds, as shown on the books and records of the Depository Participant;
D:\NEW200\001\DOCS\INDENTUR.DOC 4 INDENTURE OF TRUST
Bond Closing: the date on which there is delivery by the Issuer of, and payment for, the
Bonds;
Bond Counsel: any firm of nationally recognized bond counsel experienced in tax
exempt bond financing selected by the Trustee and acceptable to the Issuer, and the Company;
Bond Fund: the fund so designated in Section 6.03 from which the principal of and
interest on the Bonds are payable;
Bond Purchase Fund: the fund so designated in Section 6.04;
Bond Register: the register maintained by the Trustee pursuant to Section 2.10;
Bondholder or Holder: a Person in whose name a Bond is registered in the Bond
Register;
Bonds: the $1,650,000 Multifamily Housing Revenue Bonds (Park Acres Apartments
Project) Series 1997 to be issued pursuant hereto;
Bond Year: any twelve (12) month period ending on the anniversary of the Bond
Closing;
Business Day: any day on which the Trustee, the Investment Agreement Provider or the
Federal Reserve Bank of New York are not authorized by law to close;
Cede & Co.: Cede & Co. or Cede & Co.'s successor as nominee of DTC;
Code or Internal Revenue Code: the Internal Revenue Code of 1986, as amended, and all
applicable Treasury Regulations;
Collateral Documents: any written instrument other than the Loan Agreement and this
Indenture whereby any property or interest in property of any kind is granted, pledged, conveyed,
assigned, or transferred to the Issuer or Trustee, or both, as security for payment of the Bonds or
performance by the Company of its obligations under the Loan Agreement;
Comnanv: Reprise Associates Limited Partnership, a Minnesota limited partnership, its
successors and assigns or other Person which may assume its obligations under the Loan
Agreement;
Condemnation: the word "Condemnation" or phrase "eminent domain" as used herein
shall include the taking or requisition by governmental authority or by a Person, acting under
governmental authority and a conveyance made under threat of Condemnation, provided such
conveyance is made with the approval of the Trustee, which approval shall not be unreasonably
withheld, and "Condemnation award" shall mean payment for property condemned or conveyed
under threat of Condemnation;
Conversion Date: any Business Day, which day shall be no earlier than September 1,
1997 nor later than April 1, 1998, unless such date is extended in accordance with Section
D:\NE W200\001 \DOCSUNDENTURDOC 5 INDENTURE OF TRUST
2.13(a) hereof, as of which the interest rate on the Bonds converts from a Variable Rate to a
Fixed Rate as such date is established pursuant to Section 2.13 hereof,
Credit Facility: shall have the meaning assigned to such term in the Loan Agreement;
Date of Taxability: the date as of which the interest on the Bonds is deemed taxable
under a Determination of Taxability;
Defaulted Interest: shall have the meaning stated in Section 2.02 hereof;
Depository or DTC: a book -entry securities depository for the Bonds, initially Depository
Trust Company, New York, New York, a limited purpose trust company organized under the
laws of the State of New York, or any successor book -entry securities depository for the Bonds
appointed pursuant to Section 2.14;
Depository Bonds: Bonds in the form of one immobilized global certificate for each
maturity, registered in the Bond Register in the name of the Depository or its Nominee as
Bondowner and governed by Section 2.14 hereof,
Depository Participant: any broker-dealer, bank or other financial institution from time to
time for which the Depository holds Bonds or securities as depository;
Determination of Taxability: a determination that the interest income on any Bond is
includable in gross income for federal income tax purposes under Section 103 of the Code for
any reason, other than that the Holder is a Substantial• User of the Project or a Related Person
thereto, which determination shall be deemed to have been made upon the occurrence of the first
to occur of the following:
(a) the date on which the Company determines that the interest income on any
of the Bonds is includable in gross income for federal income tax purposes; or
(b) the date on which any change in law or regulation becomes effective or on
which the Internal Revenue Service has issued any private ruling, technical advice or any
other written communication to the effect that the interest income on any of the Bonds is
includable in gross income for federal income tax purposes; or
(c) the date on which the Company shall receive notice from the Trustee in
writing that the Trustee has been advised by any Holder that the Internal Revenue Service
has issued a thirty -day letter or other notice which asserts that the interest on such Bond is
includable in gross income for federal income tax purposes; provided that no
Determination of Taxability shall be deemed to have occurred as a result of a
determination by the Company pursuant to clause (a) above unless such determination is
supported by a written opinion of counsel satisfactory to the Trustee that the interest
income on the Bonds is includable in gross income for federal income tax purposes;
Discharge Date:
Article IX;
the date on which all Outstanding Bonds are discharged under
D \NE W200\00MOCS\INDENTUR.DOC 6 INDENTURE OF TRUST
Event of Default: any of the events set forth in Section 10.01 hereof.
Facili :the existing 41 -unit rental housing facility known as Park Acres Apartments, and
all related improvements and equipment, together with all additions to, replacements of and
substitutions for any of the foregoing;
Federal Bankruptcy Code: the United States Bankruptcy Reform Act of 1978, as
amended, or any similar or succeeding federal bankruptcy law;
Final Conversion Date: March 1, 2000;
Final Maturity Date: the Maturity Date, Discharge Date or Redemption Date on which all
outstanding Bonds either mature, are redeemed or discharged, whichever is earlier;
Fixed Rate: the interest rate established in accordance with Section 2.13 hereof;
Fixed Rate Period: the period from and including the Conversion Date to and including
the date next preceding the payment in full of the Bonds;
Fixed Rate Interest Payment Date: the first March 1 or September 1 next succeeding the
Conversion Date, and each March 1 and September 1 thereafter until payment in full of the
Bonds;
Government Obligations: shall mean direct general obligations of, or obligations the
prompt payment of the principal of and the interest on which are fully and unconditionally
guaranteed by, the United States of America;
Holder or Bondholder: the Person in whose name a Bond is registered in the Bond
Register;
Indenture: this Indenture of Trust by and between the Issuer and the Trustee, as the same
may from time to time be amended or supplemented as herein provided;
Independent Accountant: a certified public accountant or firm of certified public
accountants registered and qualified to practice as such under the laws of the State of Minnesota,
who does not have any direct financial interest in the Company, other than the payment to be
received under contract for services performed and who is not connected with the Company as an
officer, employee, underwriter, partner, affiliate, subsidiary, or person performing similar
functions and is not a trustee or director of the Company;
Independent Counsel: any attorney duly admitted to practice law before the highest court
of any state, who may be counsel to the Company or the Issuer but who may not be an officer or
a full time employee of the Company or the Issuer;
Interest Payment Date: each Fixed Rate Interest Payment Date, each Variable Rate
Interest Payment Date and the Conversion Date;
D:\NEW200'.00 ITOCS\INDENTUR.DOC 7 INDENTURE OF TRUST
Interest Period: the period from and including an Interest Payment Date to and including
the day next preceding the next Interest Payment Date, except that the first Interest Period shall
be the period from and including the date of the first authentication and delivery of the Bonds
hereunder to and including April 30, 1997;
Investment Aereement Provider: Bayerische Landesbank Girozentrale;
Investment Agreement: the Investment Agreement dated March 27, 1997 between the
Trustee and the Investment Agreement Provider;
Interest Payment Date: the Conversion Date and each Fixed Rate Interest Payment Date
and Variable Rate Interest Payment Date;
Internal Revenue Code or Code: the Internal Revenue Code of 1986, as amended, and all
applicable Treasury Regulations;
Issuer: the City of New Hope, Minnesota;
Letter of Representations: the Letter of Representations or other documentation required
by the Depository as a condition to its acting as book -entry depository for the Bonds, together
with any replacement thereof or amendment or supplement thereto (and including any standard
procedures or policies referenced therein or applicable thereto) respecting the procedures and
other matters relating to the Depository's role as book -entry depository for the Bonds;
Loan: the loan of Bond proceeds by the Issuer to the Company described in Section 4.01
of the Loan Agreement;
Loan Agreement: the Loan Agreement of even date herewith by and between the Issuer
and the Company, as the same may from time to time be amended or supplemented as provided
therein and in this Indenture;
Loan Payments or Basic Payments: the payments the Company is obligated to make
pursuant to Sections 4.02 and 4.03 of the Loan Agreement;
Mandatory Redem Pion Payments: the payments which are required to be made under
Section 3.01(a)(ii) or 3.01(a)(iii) to redeem the Bonds in accordance with the Mandatory
Redemption Schedule after appropriate credits, if any, have been made;
Mandatory Redemption Schedule: the mandatory redemption schedule for the Bonds set
forth in Section 3.01(a)(ii) or 3.01(a)(iii);
Mandatory Tender Date: the Conversion Date;
Mandatory Tender Notice: has the meaning assigned to it in Section 4.01(b);
Maturity Date or Maturi : any date on which principal of or interest or premium, if any,
on the Bonds is due, whether at maturity, on a scheduled interest payment date, or upon
redemption, defeasance, acceleration, or otherwise;
D:\NEW200\001\DOCS\INDENTUR.DOC 8 INDENTURE OF TRUST
Moody's: Moody's Investors Service, Inc., a corporation organized and existing under the
laws of the State of New York, its successors and assigns, and, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a municipal securities rating
agency, "Moody's" shall be deemed to refer to any other nationally recognized municipal
securities rating agency designated by the Issuer (other than Standard & Poor's Corporation);
Notice by Mail: notice of any action or condition by mail shall mean a written notice
meeting the requirements of this Indenture mailed by first-class mail, postage prepaid, to the
Holders of specified Bonds at the addresses shown in the Bond Register;
Original Purchaser: the first Person(s) who purchase the Bonds from the Issuer at Bond
Closing;
Outstanding Bonds: as of the date of determination, all Bonds theretofore issued and
delivered under this Indenture except:
(a) Bonds theretofore canceled by the Trustee or Paying Agent or delivered to
the Trustee or Paying Agent canceled or for cancellation;
(b) Bonds for which payment or redemption moneys or securities (as provided
in Article IX) shall have been theretofore deposited with the Trustee in trust for the
Holders of such Bonds; provided, however, that if such Bonds are to be redeemed, notice
of such redemption shall have been duly given pursuant to this Indenture or irrevocable
action shall have been taken to call such Bonds for redemption at a stated Redemption
Date; and
(c) Bonds in exchange for or in lieu of which other Bonds shall have been
issued and delivered pursuant to this Indenture, including Untendered Bonds; provided,
however, that in determining whether the Holders of the requisite principal amount of
Outstanding Bonds have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Bonds owned by the Company shall be disregarded and
deemed not to be Outstanding Bonds, except that in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization, direction,
notice, consent, or waiver, only Bonds which the Trustee knows to be owned by the
Company shall be disregarded;
Paying Agent: the Trustee or any other entity designated pursuant to this Indenture as the
agent of the Issuer and the Trustee to receive and disburse the principal of and premium, if any,
and interest on the Bonds;
Payment Date: any Interest Payment Date, any Stated Maturity, the Discharge Date, the
Mandatory Tender Date or any Redemption Date;
Permitted Investments:
(a) Government Obligations;
D:\NEW200\001\DOCS\INDENTUR.DOC 9 INDENTURE OF TRUST
(b) Shares of an investment company registered under the Federal Investment
Company Act of 1940, whose shares are registered under the Federal Securities Act of
1933, and whose only investments are obligations described in clause (a) above;
(c) Any general obligation of the State of Minnesota or any of its political
subdivisions, provided that securities described in clause (a) above have been irrevocably
deposited in escrow to effect discharge of the general obligations in the same manner and
subject to the same conditions required to effect discharge of the Bonds under Article LY;
(d) Certificates of deposit with fixed maturities, time deposits, repurchase
agreements or any other direct obligation with or of either the Trustee or any other
national or state bank or federally chartered savings and loan association whose senior
debt obligations are rated A or better by a Rating Agency or any other bank if the debt
obligations for which such bank's letters of credit are the primary basis are rated A or
better by a Rating Agency which initially rated the Bonds; and
(e) the Investment Agreement.
Person: any natural person, corporation, limited liability company, joint venture,
cooperative, partnership, trust or unincorporated organization, government or governmental body
or agency, political subdivision or other legal entity, as in the context may be appropriate;
Prime Rate: the rate of interest publicly announced by Morgan Guaranty Trust Co., in
New York, New York, or its successor as its "prime rate" or "reference rate," which rate shall
change when and as such prime rate changes;
Project: the Project Premises, the Facility and the Improvements, including all Project
Equipment, as they may at any time exist;
Project Equipment: any and all (i) fixtures or tangible personal property now or hereafter
attached or affixed to the Project Premises, (ii) other tangible personal property now or hereafter
located within or used in connection with the Project Premises or the Facility and (iii) any
additions to, replacements of and substitutions for any of the foregoing;
Project Premises: the real estate legally described in Exhibit A attached to the Loan
Agreement, together with all additions to, replacements of and substitutions for the foregoing;
Rating Agency: Standard & Poor's Ratings Group or Moody's;
Rating Category: one of the generic rating categories of a Rating Agency, without regard
to any refinement or gradation of such Rating Category by a numerical or other modifier;
Rebate Amounts: the amount determined pursuant to Section 7.07(14) of the Loan
Agreement to be rebated to the United States;
Record Date: the 15th day of the calendar month next preceding an Interest Payment
Date, whether or not such day is a Business Day;
DANEW200\00100CSUNDENTURDOC 10 INDENTURE OF TRUST
Redemption Date: when used with respect to any Bond to be redeemed shall mean the
date on which it is to be redeemed pursuant hereto;
Redemption Price: when used with respect to any Bond to be redeemed shall mean the
price at which it is to be redeemed pursuant hereto;
Regular Interest Payments: all interest payments on the Bonds, other than Special Interest
Payments;
Regulatory Agreement: the Regulatory Agreement dated as of March 1, 1997, by and
between the Trustee, the Issuer and the Company, as the same may be amended from time to
time;
Related Documents: the Loan Agreement and the Regulatory Agreement;
Related Person: with reference to any Substantial User, means a "related person" within
the meaning of Section 147(a)(2) of the Code;
Remarketing Agent: Piper Jaffray Inc. or any successor Remarketing Agent appointed
and serving in such capacity pursuant to this Indenture;
Remarketing Agreement: the Remarketing Agreement, dated as of March 1, 1997,
between the Company, the Remarketing Agent, and the Trustee, as the same may be amended
from time to time, and if a successor Remarketing Agent is appointed in accordance with the
Indenture, 'Remarketing Agreement" shall mean such other similar agreement between the
Company, the Trustee and such successor Remarketing Agent;
Replacement Bonds: Bonds which are not Depository Bonds and which are delivered to
replace Depository Bonds pursuant to Section 2.14 hereof;
Representative: the City Manager of the Issuer or a general partner of the Company, or
any other person at any time designated to act on behalf of the Issuer or the Company, as the case
may be, as evidenced by a written certificate furnished to the other party and the Trustee
containing the specimen signature of such person and signed for the Issuer by its City Manager or
for the Company by a general partner of the Company;
Resale Proceeds: all proceeds from the remarketing of the Bonds pursuant to Section
4.03 hereof;
Responsible Agent: any Person duly authorized and designated by the Trustee to act on
its behalf in carrying out the applicable duties and powers of the Trustee as set forth in this
Indenture (any action required by the Trustee under this Indenture may be taken by a Responsible
Agent);
Restricted Construction Funds: any Bond proceeds, including interest thereon, which are
required to be transferred on the Completion Date from the Project Fund to the Bond Fund and
which the Trustee is required under Section 6.O3(b) to apply towards the prepayment or pro rata
payment of Bonds;
DANEW200\00 I\DOCS\INDENTUR.DOC I I INDENTURE OF TRUST
Special Interest Payments: all payments of (or with respect to) interest on the Bonds
made upon the acceleration of the Bonds pursuant to Section 10.02;
Special Record Date: the date fixed by the Trustee pursuant to Section 2.02 hereof
relating to the payment of any Defaulted Interest;
Standard & Poor's Ratings Group: Standard & Poor's Ratings Group, a corporation
organized and existing under the laws of the State of New York, its successors and their assigns,
and if such corporation shall be dissolved or liquidated or shall no longer perform the functions
of a municipal securities rating agency "Standard & Poor's Ratings Group" shall be deemed to
refer to any other nationally recognized municipal securities rating agency designated by the
Issuer (other than Moody's);
Stated Maturity: when used with respect to any Bond or any installment of interest
thereon shall mean the date specified in such Bond as the fixed date on which principal of such
Bond or such installment of interest is due and payable;
Substantial User: a "Substantial User" within the meaning of Section 147(a)(1) of the
Code;
Tender Price: the principal and accrued interest due on the Bonds on any Mandatory
Tender Date;
Trust Estate: the Trust Estate as defined and set forth in the Granting Clauses hereof;
Trustee: Norwest Bank Minnesota, National Association in Minneapolis, Minnesota,
and any co -trustee or successor trustee appointed, qualified and then acting as such under the
provisions of this Indenture;
Underwriter: Piper Jaffray Inc.;
Unpaid Bonds: all Outstanding Bonds and any other Bonds which have neither matured
nor been redeemed or purchased and canceled under this Indenture;
Untendered Bond: shall have the meaning set forth in Section 4.07 hereof,
Variable Rate: the variable interest rate established in accordance with Section 2.03
hereof,
Variable Rate Interest Payment Date: shall mean the first Business Day of May, 1997,
and the first Business Day of each month thereafter through the Conversion Date;
Variable Rate Period: the period during which the Bonds bear interest at a Variable Rate;
Section 1.02. Rules of Internretation.
(a) This Indenture shall be interpreted in accordance with and governed by the laws of
the State of Minnesota.
D \NE W200\001\DOCS\INDENTUR.DOC 12 INDENTURE OF TRUST
(b) The words "herein" and "hereof' and "hereunder" and words of similar import,
without reference to any particular section or subdivision, refer to this Indenture as a whole rather
than to any particular section or subdivision of this Indenture.
(c) References in this Indenture to any particular article, section or subdivision hereof
are to the designated article, section or subdivision of this Indenture as originally executed.
(d) All accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles; and all computations provided
for herein shall be made in accordance with generally accepted accounting principles consistently
applied and applied on the same basis as in prior years.
(e) The Table of Contents and titles of articles and sections herein are for
convenience only and are not a part of this Indenture.
(f) Unless the context hereof clearly requires otherwise, the singular shall include the
plural and vice versa and the masculine shall include the feminine and vice versa.
(g) Articles, sections, subsections and clauses mentioned by number only are those so
numbered which are contained in this Indenture.
(h) For purposes of this Indenture and the Loan Agreement, an Act of Bankruptcy
shall be deemed no longer pending if either (a) the petition is dismissed by order of a court of
competent jurisdiction and no further appeal rights exist from such order or (b) the Company
notifies the Trustee that such a dismissal has occurred.
(i) Any opinion of counsel called for herein shall be a written opinion of such
counsel.
0) References to the Bonds as "tax-exempt" or to the "tax-exempt status of the
Bonds" are to the exclusion of interest from gross income pursuant to Section 103(a) of the Code,
irrespective of such forms of taxation as the alternative minimum tax or environmental tax or
branch profits tax on foreign corporations, as is consistent with the approach taken in Section
59(i) of the Code.
D:WEW200\001\DOCS\INDENTUR.DOC 13 INDENTURE OF TRUST
ARTICLE 2
The Bonds
Section 2.01. Authorized Amount and Form of Bonds.
Bonds secured by this Indenture shall be issued in fully registered form, without coupons,
in any Authorized Denominations, in substantially the form set forth herein with such appropriate
variations, omissions and insertions as are permitted or required by this Indenture, and in
accordance with the further provisions of this Article II. The total principal amount of the Bonds
that may be outstanding hereunder is expressly limited to $1,650,000, unless duplicate Bonds are
issued as provided in Section 2.09. Portions of the text of the Bonds may be printed on the back
of the Bonds to permit the printing of Bonds of a size which can be registered by machine. If a
portion of the text of the Bond is to be printed on the back of the Bond, the face of the Bond shall
contain a provision in substantially the following form:
"REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND WHICH ARE SET FORTH ON THE REVERSE HEREOF, AND SUCH PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE."
Additionally, at the request of the Trustee the following notation may appear at an
appropriate location on the Bonds to facilitate registration of the Bonds:
"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:
TEN COM - as tenants in common
TEN ENT - as tenants by entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common
UTMA - as custodian for under the
(cust) (minor)
Uniform Transfers to Minors Act.
(state)
Additional abbreviations may also be used though not in the above list."
The Bonds prior to the Conversion Date, together with the Trustee's Certificate of
Authentication, the form of Assignment and the registration information thereon, shall be in
substantially the following form:
THIS BOND IS REQUIRED TO BE TENDERED FOR PURCHASE ON A
MANDATORY TENDER DATE UPON TERMS AND CONDITIONS HEREIN DESCRIBED
AT A PRICE EQUAL TO 100% OF THE PRINCIPAL AMOUNT HEREOF PLUS ACCRUED
INTEREST HEREON. FROM AND AFTER A MANDATORY TENDER DATE INTEREST
SHALL CEASE TO ACCRUE ON THIS BOND, THIS BOND SHALL NO LONGER BE
DEEMED OUTSTANDING, AND THE HOLDER OF THIS BOND SHALL THEREAFTER
D:WEW200\001\DOCS\INDENTUR.DOC 14 INDENTURE OF TRUST
LOOK ONLY TO FUNDS HELD IN THE BOND PURCHASE FUND (WHICH IS NOT PART
OF THE TRUST ESTATE) FOR PAYMENT OF THE PURCHASE PRICE OF THIS BOND.
No. R -
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF NEW HOPE, MINNESOTA
MULTIFAMILY HOUSING REVENUE BONDS
(PARK ACRES APARTMENTS PROJECT)
SERIES 1997
Interest Maturity Date of CUSIP
Rate Date Original Issue
Variable March 1, 2032 March , 1997
REGISTERED HOLDER:
PRINCIPAL AMOUNT:
(1) KNOW ALL PERSONS BY THESE PRESENTS that the City of New Hope, in
the County of Hennepin and State of Minnesota (the "Issuer"), for value received, promises to
pay to the registered holder named above, or registered assigns, but only from the Bond Fund (as
defined in the Indenture described below), and upon presentation and surrender hereof at the
principal corporate trust office of the Trustee named below, the principal sum specified above, on
the maturity date specified above, or, if this Bond is prepayable as stated below, or a prior date on
which it shall have been duly called for redemption, and to pay interest on said principal sum to
the Record Date Holder hereof as defined below, solely from the Bond Fund, until the principal
sum is paid or discharged, at the rates and on the dates provided herein, on the basis of a
365/366 -day year and charged for the actual number of days elapsed.
This Bond shall bear interest from the date of original issue set forth above, or in the case
of transfer or exchange, from the most recent Interest Payment Date (hereinafter defined) to
which interest has been paid or provided for. The "Record Date Holder" is the person in whose
name this Bond is registered in the Bond Register maintained by the Trustee named below or its
successor in trust (the "Registered Holder" or "Holder" hereof) on the fifteenth day of the
calendar month next preceding an Interest Payment Date, whether or not such day is a Business
Day. Interest shall be payable by check or draft mailed to the Registered Holder at his or her
address as it appears on the Bond Register on the Record Date, except as otherwise provided in
the Indenture.
The principal of and interest and premium, if any, on this Bond are payable in lawful
money of the United States of America. Upon notice to the Trustee accompanied by proper wire
DANEW200\00I DOCS\INDENTUR.DOC 15 INDENTURE OF TRUST
instructions, any Holder of Bonds in an aggregate principal amount equal to or greater than
$1,000,000 may elect to be paid the interest on such Bonds payable on any Interest Payment Date
by Federal Reserve wire transfer in immediately available funds to any bank in the United States
specified by such Holder.
Interest not timely paid or duly provided for will be paid by check mailed to the person in
whose name this Bond is registered on the Bond Register at the close of business on a date (the
"Special Record Date") fixed by the Trustee, notice of which is to be mailed to all Bondholders.
(2) This Bond is one of an issue in the aggregate principal amount of $1,650,000 (the
'Bonds"), all of like nominal date of original issue and tenor, except as to number and amount,
issued in accordance with an Indenture of Trust, dated as of March 1, 1997 (the "Indenture"),
duly executed and delivered by the issuer to Norwest Bank Minnesota, National Association in
Minneapolis, Minnesota (the "Trustee"), setting forth the terms upon which the Bonds are issued.
The Bonds are equally and ratably secured and entitled to the protection of the Indenture. The
Bonds are issued for the purpose of financing a rental project within the meaning of Minnesota
Statutes, Chapter 462C (the "Project") owned by Reprise Associates Limited Partnership, a
Minnesota limited partnership (the "Company"). The Company has agreed under a Loan
Agreement dated as of March 1, 1997, between the Issuer and the Company (the "Loan
Agreement") to repay all amounts necessary to repay the Bonds, together with interest thereon, in
amounts and at times sufficient to pay the principal of, premium, if any, and interest on the
Bonds as the same shall become due and payable (the 'Basic Payments"). The Company, the
Issuer and the Trustee have entered into a Regulatory Agreement dated March 1, 1997 with
respect to each Project (collectively, the "Regulatory Agreement") requiring compliance with
certain requirements of federal and state law relating lo the construction and operation of the
Project as a residential rental housing project. Pursuant to the Indenture, the Issuer has assigned
and pledged to the Trustee, for the equal and ratable benefit of the Holders of the Bonds, the
Basic Payments due under the Loan Agreement.
(3) Reference is hereby made to the Loan Agreement, Regulatory Agreement, and
Indenture, including all indentures supplemental thereto, for a description of the property
encumbered and assigned, the provisions, among others, with respect to the nature and extent of
the security, the rights of the Issuer, and the rights, duties and obligations of the Company, the
Trustee and the Holders of the Bonds and the terms upon which the Bonds are issued and
secured.
(4) The term 'Business Day" shall mean any day on which the Trustee, the
Investment Agreement Provider or the Federal Reserve Bank of New York are not authorized by
law to close. If the date for making any payment or the last date for performance of any act or the
exercising of any right, as provided in this Bond, is not a Business Day, such payment may be
made or act performed or right exercised on the next succeeding Business Day.
(5) Prior to the Conversion Date, interest on the Bonds shall be payable on the first
Business Day of May 1997, and on the first Business Day of each month thereafter (each a
"Variable Rate Interest Payment Date"). Interest on the Bonds shall be payable on the
Conversion Date. After the Conversion Date, interest on the Bonds shall be payable on the first
day of each March and September following the Conversion Date, until payment in full of this
D:\NEW200\001\DOCSVNDENTUR.DOC 16 INDENTURE OF TRUST
Bond and on the date of payment in full of this Bond (each a "Fixed Rate Interest Payment
Date").
(6) Prior to the Conversion Date, this Bond shall bear interest at the Variable Rate as
defined in the Indenture (the "Variable Rate"). On and after the Conversion Date, this Bond shall
bear interest at the Fixed Rate, as defined in the Indenture. The interest rate on this Bond shall be
converted from the Variable Rate to the Fixed Rate, on a one-time basis at the option of the
Company upon the conditions set forth in the Indenture. In such case, the Fixed Rate shall be the
interest rate computed in accordance with the Indenture and announced by the Remarketing
Agent, effective on and after the Conversion Date.
(7) Subject to the provisions of (b) and (c) below, the Holder hereof shall be required
to tender this Bond to the Trustee on or before 12:00 noon, Minneapolis time on the Business
Day prior to the Mandatory Tender Date, for purchase on the Mandatory Tender Date at a
purchase price equal to the principal amount hereof plus accrued interest thereon, all as more
fully provided herein and in the Indenture.
(a) Notice of a Mandatory Tender Date (a "Mandatory Tender Notice") shall
be given by the Trustee, by certified mail, return receipt requested, to the Holder of this
Bond at its address appearing on the registration books for the Bonds maintained by the
Trustee, not less than thirty days prior to the Mandatory Tender Date. Such Mandatory
Tender Notice shall specify the Mandatory Tender Date and state (i) that all Bonds shall
be purchased on the Mandatory Tender Date at a purchase price equal to the principal
amount thereof plus accrued interest thereon, and (ii) that all Bonds must be tendered for
purchase at or before 12:00 noon, Minneapolis time on the Business Day prior to the
Mandatory Tender Date, together with an appropriate instrument of transfer executed in
blank and any such Bond which is not tendered but for which there has been irrevocably
deposited in the Bond Purchase Fund (as such term is defined in the Indenture) with the
Trustee an amount sufficient to pay the purchase price thereof (an "Untendered Bond")
shall not be entitled to receive interest on such Bond on and after the Mandatory Tender
Date.
(b) This Bond shall be tendered to the Trustee for purchase at or before 12:00
noon, Minneapolis time on the Business Day prior to the Mandatory Tender Date, by
delivering this Bond to the Trustee together with an appropriate instrument of transfer
duly executed in blank, and on the Mandatory Tender Date, the Trustee shall purchase
this Bond or cause this Bond to be purchased at a purchase price equal to the principal
amount hereof.
(c) If this Bond is not tendered on or before the Mandatory Tender Date, then
the Holder hereof shall not be entitled to receive interest on this Bond for any period
beginning on or after the Mandatory Tender Date, and upon surrender of this Bond to the
Trustee, the Holder of this Bond shall be paid only an amount equal to the purchase price
of this Bond due on the Mandatory Tender Date and interest through the Mandatory
Tender Date.
D: WEW 2001001 \DOCS\INDENTUR.DOC 17 INDENTURE OF TRUST
(8) The Bonds are subject to redemption prior to maturity as provided in the Indenture
as follows:
(a) Optional Redemption On or Prior to the Conversion Date. Prior to the
Conversion Date, the Bonds are subject to redemption in whole on any date on or after
September 1, 1997 at the option of the Company, at a redemption price equal to the
principal amount of the Bonds to be redeemed plus accrued interest thereon.
(b) Mandatory Sinking Fund Redemption Prior to Conversion Date. The
Bonds maturing on March 1, 2032 (the "Term Bonds") are subject to mandatory
redemption by lot in the principal increments of $5,000, at par and accrued interest
without premium, on March 1 of the years and in the principal amounts set forth below
(unless and to the extent a credit against any such amount is applied as provided in the
Indenture):
Year
Amount
Year
Amount
2002
$ 15,000
2018
$ 45,000
2003
15,000
2019
45,000
2004
15,000
2020
50,000
2005
15,000
2021
55,000
2006
20,000
2022
55,000
2007
20,000
2023
60,000
2008
20,000
2024
65,000
2009
20,000
'2025
70,000
2010
25,000
2026
75,000
2011
25,000
2027
85,000
2012
30,000
2028
90,000
2013
30,000
2029
95,000
2014
30,000
2030
100,000
2015
35,000
2031
110,000
2016
35,000
2032
260,000
2017
40,000
(c) Optional and Mandatory Redemption From and After Conversion Date.
From and after the Conversion Date, the Bonds shall be subject to optional and
mandatory sinking fund redemptions on the dates and at the prices determined by the
Remarketing Agent as provided in the Indenture.
(d) Calamity Redemption. After the Conversion Date, in the event of (i)
damage to or destruction of the Project or any part thereof or Condemnation of the Project
or any part thereof to the extent provided in Section 8.04 of the Agreement, or in the
event of any changes in the Constitution or laws of the United States of America or the
State of Minnesota as provided in Section 8.04 of the Loan Agreement and (ii)
termination of the Loan Agreement upon the occurrence of one of those events, all Bonds
shall be redeemed by the Issuer on the earliest date for which timely notice of call can be
D:\NEW200\001\DOCS\INDENTUR.DOC - 18 INDENTURE OF TRUST
given, at a redemption price equal to the principal amount to be redeemed, without any
premium, plus accrued interest to the redemption date.
(e) Tax Redemption. This Bond is subject to mandatory redemption in whole
on the first day of the first calendar month for which notice of redemption can properly be
given as provided herein upon the occurrence of a Determination of Taxability (as such
term is defined in the Indenture) at a redemption price equal to one hundred percent
(100%) of the principal amount of this Bond plus accrued interest thereon to the
redemption date.
(f) Special Mandatory Redemption for Failure to Convert to a Fixed Rate or
Upon Failure to Remarket.
(i) The Bonds shall be subject to special mandatory redemption on
March 1, 1998, if the Company has failed to deliver to the Trustee and
Remarketing Agent on or before February 8, 1998, either (A) a written request
that the interest rate on the Bonds be converted from the Variable Rate to the
Fixed Rate, accompanied by other items required by Section 2.13 of the Indenture,
or (B) an opinion of Bond Counsel to the effect that an extension of the
Conversion Date will not adversely affect the tax exempt status of the Bonds; and
the written consent of all Bondholders to the extension of the Conversion Date. In
the event the Conversion Date is extended, the Bonds shall be subject to special
mandatory redemption on the extended Conversion Date, which will be no later
than March 1, 2000, if the Company failg to deliver to the Trustee on or before 20
days prior to the extended Conversion Date the written request that the interest
rate on the Bonds be converted from the Variable Rate to the Fixed Rate
accompanied by the other items required by Section 2.13 of the Indenture. If the
Company fails to deliver a Credit Facility (as defined in the Loan Agreement) to
the Trustee on or prior to the Conversion Date, the Bonds shall be subject to
special mandatory redemption on the Conversion Date.
(ii) The Bonds shall be subject to mandatory redemption on the
Mandatory Tender Date if the Resale Proceeds and other funds provided by the
Company are insufficient to purchase any Bonds properly tendered on the
Mandatory Tender Date.
(9) In the case of any partial redemption of the Bonds of the same maturity, the
particular Bonds to be redeemed shall be selected by the Trustee in such manner as the Trustee
shall deem fair and equitable and the Bonds shall be redeemed in the principal amounts specified
in the Indenture. Any Bond which is to be redeemed only in part shall be surrendered to the
Trustee (i) for payment of the Redemption Price (including accrued interest thereon to the
Redemption Date) of the portion thereof called for redemption and (ii) for exchange for Bonds in
any authorized denomination or denominations in aggregate principal amount equal to the
unredeemed portion of such Bond.
(10) Notice of redemption shall be mailed at least fifteen (15) days but not more than
forty (40) days prior to the date fixed for redemption to each Registered Holder of a Bond to be
D:\NEW200\001\DOCS\rNDENTUR.DOC 19 INDENTURE OF TRUST
redeemed. All Bonds so called for redemption, provided funds for their redemption have been
duly deposited, will cease to bear interest on the specified redemption date and (except for the
purpose of payment) shall no longer be protected by the Indenture and shall not be deemed
Outstanding under the Indenture, and shall thereafter be payable solely from the funds provided
for payment.
(11) In addition to the foregoing, if under certain circumstances an Event of Default, as
defined in the Indenture, shall occur, the principal of all the Bonds and all interest accrued
thereon may, without prior notice to the Bondholders, be declared due and payable in the manner
and with the effect provided in the Loan Agreement and Indenture.
(12) This Bond and the series of which it forms a part are issued pursuant to and in full
compliance with the Constitution and laws of the State of Minnesota, particularly Minnesota
Statutes, Chapter 462C, and pursuant to a resolution adopted and approved by the Issuer, which
resolution authorized the financing of the Project and the execution and delivery of the Indenture,
and the issuance of the Bonds as special, limited obligations payable solely from revenues
derived from the Loan Agreement except that under certain circumstances the Bonds may be
payable from Bond proceeds. The loan repayments under the Loan Agreement are scheduled to
be sufficient to pay the principal of, premium, if any, and interest on the Bonds as the same
become due and payable and are to be paid to the Trustee for the account of the Issuer and
credited to the Bond Fund as a special trust fund account created by the Issuer and have been and
are hereby pledged for that purpose.
(13) The Bonds, including principal, premium and any other payments however
designated, and the interest due thereon do not and shall never constitute a general indebtedness
of the Issuer within the meaning of any state constitutional or statutory provision and do not and
shall not constitute or give rise to a pecuniary liability or moral obligation of the Issuer, the State
of Minnesota or any of its political subdivisions, or a charge against its general credit or taxing
powers, or to the extent permitted by law, any pecuniary liability of any officer, employee or
agent of the Issuer. The provisions of this paragraph are controlling notwithstanding anything
herein to the contrary.
(14) The Registered Holder of this Bond shall have no right to enforce the provisions
of the Indenture or to institute action to enforce the covenants therein, or to take any action with
respect to any Event of Default under the Indenture, or to institute, appear in or defend any suit or
other proceedings with respect thereto, except as provided in the Indenture. Modifications or
alterations of the Indenture, or of any indenture supplemental thereto, may be made only to the
extent and in the circumstances permitted by the Indenture.
(15) With the consent of the Issuer, the Company and the Trustee, as appropriate, and
to the extent permitted by and as provided in the Indenture, the terms and provisions of the
Indenture, the Loan Agreement and the Letter of Credit, or of any instrument supplemental
thereto, may be modified or altered by the consent of the Registered Holders of at least 51% in
aggregate principal amount of the Bonds then Outstanding thereunder.
(16) The Indenture also contains provisions permitting Holders of a majority in
aggregate principal amount of the Bonds at the time Outstanding, on behalf of all the Holders of
D:\KEW200\001\D0CS\INDENTUR.D0C 20 INDENTURE OF TRUST
all the Bonds, to waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such consent or waiver by
the Registered Holder of this Bond shall be conclusive and binding upon such Registered Holder
and on an future Registered Holders of this Bond and of any Bond issued in lieu hereof whether
or not notation of such consent or waiver is made upon this Bond.
(17) The Bonds are issued as fully registered Bonds without coupons in the Authorized
Denomination. The Bonds are interchangeable for one or more Bonds in Authorized
Denominations and of the same series, aggregate principal amount, interest rate and maturity
date, upon surrender thereof by the Holder at the principal office of the Trustee, in the manner
and subject to the limitations provided in the Indenture. The Issuer, the Trustee and any
additional paying agents may deem and treat the Registered Holder hereof as the absolute owner
hereof (whether or not this Bond shall be overdue) for the purpose of receiving payment of or on
account of principal hereof and interest (except as otherwise herein above provided with respect
to the Record Date) due hereon and for all other purposes, and the Issuer, the Trustee and any
additional paying agents shall not be affected by any notice to the contrary.
(18) Subject to the limitations provided in the Indenture, this Bond is only transferable
by the Registered Holder hereof upon surrender of this Bond for transfer at the principal
corporate trust office of the Trustee, duly endorsed or accompanied by a written instrument or
instruments of transfer in the form printed on this Bond or in another form satisfactory to the
Trustee and executed and with guaranty of signature by the Registered Holder hereof or his
attorney duly authorized in writing, containing written instructions as to the details of the transfer
of the Bond. Thereupon the Issuer shall execute (if necessary) and the Trustee shall authenticate
and deliver, in exchange for this Bond, one or more new" Bonds in the name of the transferee (but
not registered in blank or to "bearer" or a similar designation), of an authorized denomination, in
aggregate principal amount equal to the principal amount of this Bond, and the same maturity,
and bearing interest at the same rate.
(19) No service charge shall be made to the Registered Holder for any registration,
transfer or exchange hereinbefore referred to, but the Trustee may require payment of a sum
sufficient to cover any tax, fee or other governmental charge that may be imposed in connection
with any transfer or exchange of Bonds, other than exchanges expressly provided in the Indenture
to be made without charge to Bondholders.
(20) IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required to exist, to happen and to be performed precedent to and in the
execution and delivery of the Indenture and the issuance of this Bond to exist, have happened and
have been performed in due time, form and manner, as required by law, and that the issuance of
this Bond and the series of which it forms a part, together with all other obligations of the Issuer,
does not exceed or violate any constitutional or statutory limitation.
(21) This Bond shall not be valid or become obligatory for any purpose or be entitled
to any security or benefit under the Indenture unless the Certificate of Authentication hereon
shall have been executed by the Trustee.
D: WEW200\OOMOCSUNDENTUR.DOC 21 INDENTURE OF TRUST
(22) IN WITNESS WHEREOF, the City of New Hope, Minnesota, by its governing
body, has caused this Bond to be executed in its name by the facsimile signatures of its Mayor
and its City Manager and by the manual signature of a Responsible Agent of the Trustee acting as
authenticating agent.
CITY OF NEW HOPE, MINNESOTA
Mayor
City Manager
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture.
Date of Registration:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, Trustee
La
Responsible Agent
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and does hereby irrevocably
constitute and appoint attorney to transfer the Bond on the books kept for
the registration thereof, with Full power of substitution in the premises.
Dated:
Notice: The assignor's signature to this assignment must correspond with the name as it
appears upon the face of the within Bond in every particular, without alteration or
any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a member of a Medallion Signature Program.
The Trustee will not effect transfer of this Bond unless the information concerning the
transferee requested below is provided.
D:\NEW200\001\DOCSVNDENTUR.DOC 22 INDENTURE OF TRUST
Name and Address:
(Include information for all joint owners if the Bond
is held by joint account)
Insert social security or other identifying number of Transferee
After the Conversion Date, the form of the Bonds shall be modified so as to accurately reflect the
terms of the Bonds as they then exist.
shall:
Section 2.02. Initial Issue.
The bonds shall be initially issued in the aggregate principal amount of $1,650,000 and
(a) be dated as of their date of original issuance, or the date of their
registration as provided in Section 2.10;
(b) be issued and delivered to the Original Purchaser as fully registered bonds
without coupons in any authorized Denomination and be numbered R-1 upward;
(c) subject to the provisions of Section 2.05 hereof, mature on March 1, 2032,
and bear interest from Bond Closing, (i) until the Conversion Date, at the Variable Rate
provided in Section 2.03 computed on the basis of actual days elapsed in a 365/366 -day
year; (ii) from and after the Conversion Date until the Final Maturity Date, at the Fixed
Rate provided in Section 2.13 hereof computed on the basis of a 360 -day year composed
of twelve 30 -day months;
(d) prior to the Conversion Date, interest on the Bonds shall be payable on the
first Business Day of May, 1997, and on the first business Day of each month thereafter
(each a "Variable Rate Interest Payment Date"). Interest on the Bonds shall also be
payable on the Conversion Date. After the Conversion Date, interest on the Bonds shall
be payable on each March 1 and September 1 until payment in full of this Bond and on
the date of payment in full of this Bond (each a "Fixed Rate Interest Payment Date");
(e) subject to the provisions of Section 2.13 hereof, be subject to redemption
upon the terms and conditions and at the prices specified in Article III hereof;
(f) be payable in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts, at the
principal trust office of the Trustee acting as the paying Agent, or a duly appointed
successor Paying Agent, except that interest on the Bonds will be payable by check or
draft mailed by the Trustee to the Holders of such Bonds on the applicable Record Date
(the "Record Date Holders" as defined in the Bond) at the last addresses thereof as shown
D:\NEW200\001\DOCSUNDENTUR.DOC 23 INDENTURE OF TRUST
in the premium on any Bonds shall be payable at the principal office of the Trustee;
provided that any interest on any Bond which is payable but which is not punctually paid
or duly provided ("Defaulted Interest") shall be payable, on a date selected by the Trustee,
to the Person in whose name such Bond is registered in the Bond Register at the close of
business on a Special Record Date selected by the Trustee and which shall be at least ten
days but not more than 30 days before the date selected by the Trustee and which shall be
at least ten days but not more than 30 days before the date selected by the Trustee for
payment of such Defaulted Interest. The Trustee shall give Notice by Mail of the Special
Record Date and date for payment of Defaulted Interest at least ten days before the
Special Record Date; and
(g) be subject to Mandatory Tender as provided in Section 2.13 hereof, and be
subject to redemption upon the terms and conditions and at the prices specified in Article
III hereof.
Notwithstanding the foregoing, if the date for payment of the principal of, premium, if
any, or interest on any Bond shall be a day which is not a Business Day, then the date for such
payment shall be the next succeeding day which is a Business Day, and payment on such later
date shall have the same force and effect as if made on the nominal date of payment.
Notwithstanding the foregoing any Record Holder of at least $1,000,000 in principal
amount of the Outstanding Bonds may file with the Trustee an instrument satisfactory to the
Trustee requesting the interest payable by the Trustee to such Holder be paid by transferring by
wire transfer in immediately available funds, on the daX such payment is due, the amount to be
distributed to such Holder to a designated account maintained by such Holder at any bank in the
United States. The Trustee shall pay all amounts payable by the Trustee hereunder to such
Holder by transfer directly to said designated bank in accordance with the provisions of any such
instrument, provided that if such amount represents a payment of the principal of any Bond, such
Bond shall have been presented to the Trustee. All payments so made shall be valid and effectual
to satisfy and discharge the liability upon such Bonds.
Section 2.03. Variable Rate.
Prior to the Conversion Date, the Bonds shall bear interest at the Variable Rate, which
shall be a rate equal to fifty-nine percent (59%) of the Prime Rate. The interest rate on the Bonds
shall change effective as of the effective date of any change in the Prime Rate.
Section 2.04. Execution.
The Bonds shall be executed on behalf of the Issuer by the signature of its Mayor and
City Manager and be sealed with the seal of the Issuer; provided, however, that the seal of the
Issuer may be a printed facsimile or may be omitted; provided further that an of such signatures
may be printed or photocopied facsimiles, in which event the Bonds shall also be executed
manually by the Trustee as authenticating agent as provided in Section 2.05 and Minnesota
Statutes, Section 475.55. In the event of disability or resignation or other absence of either such
officer, the Bonds may be signed by the manual or facsimile signature behalf of such absent or
disabled officer. In case of that officer who may act in behalf of such absent or disabled officer.
D:\NEW200\00 I\DOCS\INDENTUR.DOC 24 INDENTURE OF TRUST
In case either such officer whose signature or facsimile of whose signature shall appear on the
Bonds shall cease to be such officer before the delivery of the Bonds, such signature or facsimile
shall nevertheless be valid and sufficient for all purposes, the same as if he had remained in
office until delivery. The Bonds may be issued and delivered as typewritten bonds or as printed
bonds, provided that if the typewritten bonds are delivered, the facsimile signatures of the Issuer
may be confirmed signatures.
Section 2.05. Authentication.
No Bond shall be valid or obligatory for any purpose or be entitled to any security or
benefit under this Indenture unless a Certificate of Authentication on such Bond, substantially in
the form hereinabove set forth, shall have been duly executed manually by a Responsible Agent.
Certificates of Authentication on different Bonds need not be signed by the same person. The
Trustee shall authenticate the signatures of officers of the Issuer on each Bond by execution of
the Certificate of Authentication on the Bond; and the executed Certificate of Authentication on
each Bond shall be conclusive evidence that it has been authenticated and delivered under this
Indenture.
Section 2.06. Delivery of Initial Issue.
Upon the execution and delivery of this Indenture the Issuer shall execute and deliver to
the Trustee, and the Trustee shall authenticate, the Bonds in the aggregate amount of $1,650,000
and the Trustee shall deliver the Bonds to the Original Purchaser as hereinafter provided after
filing with the Trustee the following:
(a) original executed counterparts of the Loan Agreement, Regulatory
Agreement, Remarketing Agreement, and this Indenture;
(b) a copy, duly certified by the Issuer's Secretary of the resolutions adopted
and approved by the governing body of the Issuer, authorizing the execution and delivery
of this Indenture and the Loan Agreement and the issuance of the Bonds;
(c) a request and authorization (which may be part of a certificate of the
Issuer) to the Trustee on behalf of the Issuer, signed by its Mayor and City Manager to
deliver the Bonds to the Original Purchaser therein identified upon payment to the
Trustee for the account of the Issuer of a specified sum plus accrued interest;
(d) the opinion of the Company's attorney in the form required by Bond
Counsel;
(e) the opinion of Bond Counsel approving the legality of the Bonds issued
pursuant to this Indenture;
(f) any other documents or opinions as Bond Counsel may require for
purposes of rendering its opinion required under subsection (e) of this section.
D:\NE W200\001\DOCSUNDENTUR.DOC 25 INDENTURE OF TRUST
Section 2.07. Mutilated, Lost, Stolen, Destroyed or Untendered Bonds.
(a) In case any Bond issued hereunder shall become mutilated or be destroyed or lost,
the Issuer shall, if not then prohibited by law, cause to be executed, and the Trustee shall
authenticate and deliver, a new Bond of like series, amount, maturity date and tenor in exchange
and substitution for and upon cancellation of any such mutilated Bond, or in lieu of and in
substitution for any such Bond destroyed or lost, upon the Holder's paying the reasonable
expenses and charges of the Trustee and Issuer and, in the case of a Bond destroyed or lost, the
filing with the Trustee evidence satisfactory to the Trustee that such Bond was destroyed or lost,
and of the ownership thereof, and furnishing the Issuer and the Trustee with indemnity
satisfactory to them. If the mutilated, destroyed or lost Bond has already matured or been called
for redemption in accordance with its terms, it shall not be necessary to issue a new Bond prior to
payment.
(b) In addition, the Issuer may execute and the Trustee may authenticate and deliver
Bonds of the same Stated Maturity, principal amount and tenor in lieu of and in substitution for
an Untendered Bond.
(c) In executing a new Bond and in furnishing the Trustee with the written
authorization to authenticate and deliver a new Bond as provided for in this Section, the Issuer
may rely conclusively on a representation of the Trustee that the Trustee is satisfied with the
adequacy of the evidence presented concerning the mutilation, loss, theft or destruction of any
Bond.
Section 2.08. Ownership of Bonds.
The Issuer, Trustee and Paying Agent may deem and treat the Holder of any Bond,
whether or not such Bond shall be overdue, as the absolute owner of such Bond for the purpose
of receiving payment thereof and for all other purposes whatsoever, and the Issuer (or any agent
thereof), Trustee and Paying Agent shall not be affected by any notice to the contrary.
Section 2.09. Preparation of Definitive Bonds: Temporary Bonds.
The definitive Bonds shall be lithographed or printed on steel engraved borders. Until the
definitive Bonds are prepared, the Issuer may execute, in the same manner as is provided in
Section 2.04 (except that manual signatures and a manual seal may be used), and deliver, in lieu
of definitive Bonds, but subject to the same provisions, limitations and conditions as the
definitive Bonds, except as to the denominations thereof, one or more temporary Bonds (which
shall be registered as to principal and interest), substantially of the tenor of the definitive bonds,
in any Authorized Denomination, and with such omissions, insertions and variations as may be
appropriate to temporary Bonds. The Issuer shall prepare and execute and, upon the surrender of
such temporary Bonds for exchange therefor, at the principal corporate trust office of the Trustee,
definitive Bonds of the same aggregate principal amount as the temporary Bonds surrendered.
Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and
security as definitive bonds issued pursuant to this Indenture. All temporary Bonds surrendered
in exchange for a definitive bond or Bonds shall be forthwith canceled by the Trustee.
D:WEW200\00I0OCS\INDENTUR.DOC 26 INDENTURE OF TRUST
Section 2.10. Registration. Transfer and Exchange of Bonds.
(a) The Issuer will cause to be kept at the principal corporate trust office of the
Trustee a Bond Register in which, subject to such reasonable regulations as the Trustee may
prescribe, the Issuer shall provide for the registration of Bonds and the registration of transfers of
Bonds; and the Trustee is hereby appointed "Bond Registrar" for the purpose of registering the
Bonds and transfers of the Bonds as herein provided. The Bond Register shall contain a record
of every Bond at any time authenticated hereunder, together with the name and address of the
Holder thereof, the date of authentication, the date of transfer or payment, and such other matters
as are appropriate for the Bond Register in the estimation of the Trustee.
(b) Upon surrender for transfer of any Bond at the principal corporate trust office of
the Trustee, the Issuer shall execute (if necessary), and the Trustee shall authenticate and deliver,
in the name of the designated transferee or transferees (but not registered in blank or to "bearer"
or a similar designation), one or more new Bonds of any Authorized Denomination, having the
same Stated Maturity and interest rate, as requested by the transferor; provided that until
termination of the book -entry only system pursuant to Section 2.14 hereof, the Bonds may only
be registered in the name of DTC or its nominee. The execution by the Issuer of any Bond of any
denomination shall constitute full and due authorization of such denomination and the Trustee
shall thereby be authorized to authenticate and deliver such Bond.
(c) At the option of the Holder, Bonds may be exchanged for other Bonds of the same
series of any Authorized Denomination of a like aggregate principal amount and Stated Maturity,
upon surrender of the Bonds to be exchanged at the principal corporate trust office of the Trustee,
and upon payment, if the Issuer shall so require, of the taxes, if any, hereinafter referred to.
Whenever any Bonds are so surrendered for exchange, the Issuer shall execute, and the Trustee
shall authenticate and deliver, the Bonds which the Holder making the exchange is entitled to
receive.
(d) All Bonds surrendered upon any exchange or transfer provided for in this
Indenture shall be promptly canceled by the Trustee and thereafter disposed of as directed by the
Issuer.
(e) All Bonds delivered in exchange for or upon transfer of Bonds shall be valid
special obligations of the Issuer evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Bonds surrendered for such exchange or transfer.
(f) Transfer of a Bond may be made on the Issuer's books by the registered owner in
person or by the registered owner's attorney duly authorized in writing. Every Bond presented or
surrendered for transfer or exchange shall (if so required by the Issuer or the Trustee) be duly
endorsed or be accompanied by a written instrument or instruments of transfer, in the form
printed on the Bond or in another form satisfactory to the Trustee, duly executed and with
guaranty of signature of the Holder thereof or his attorney duly authorized in writing and shall
include written instructions as to the details of the transfer of the Bond.
(g) No service charge shall be made to the Holder for any registration, transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any tax, fee or other
DANEW200\00100CS\MDENTURDOC 27 INDENTURE OF TRUST
governmental charge that may be imposed in connection with any transfer or exchange of Bonds,
other than exchanges expressly provided in this Indenture to be made without expense or without
charge to Bondholders.
(h) Subject to the provisions of subsection (i) below, the Trustee as Bond Registrar
shall endeavor to comply with rules applicable to transfer agents registered with the Securities
and Exchange Commission as to the 72 -hour "turnaround" standard established for the transfer of
registered corporate securities.
(i) The Trustee shall not be required (i) to transfer or exchange any Bond during a
period beginning at the opening of business 10 days before the day of the first publication or the
mailing (if there is no publication) of a notice of redemption of Bonds under this Indenture and
ending at the close of business on the day of such publication or mailing, or (ii) to transfer or
exchange any Bond so selected for redemption in whole or in part.
0) The Bond Registrar shall insert in each Bond the date of registration which, for
purposes of delivering the original Bonds to the original Purchaser, shall be the date of original
issue, and which for all other events shall be the last Interest Payment Date preceding the date of
authentication to which interest on the Bond has been paid or made available for payment, unless
the date of authentication is an interest payment date to which interest has been paid or made
available for payment, in which case the Bond shall be dated as of the date of authentication.
Each Bond shall be so dated that neither gain nor loss in interest shall result from any transfers,
exchange or substitution provided for herein.
Section 2.11. Interest Rights Preserved.
Each Bond delivered 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.
Section 2.12. Cancellation of Bonds.
Whenever any Outstanding Bond shall be delivered to Trustee for cancellation pursuant
to this Indenture, upon payment of the principal amount and interest represented thereby or for
replacement pursuant to Section 2.07 or transfer pursuant to Section 2.10, such Bond shall be
canceled and, subject to the Trustee's business practices, destroyed by Trustee and counterparts of
a certificate of destruction evidencing such destruction shall be furnished by the Trustee to the
Issuer.
Section 2.13. Fixed Rate.
(a) On and after the Conversion Date and until the Final Maturity Date, the Bonds
shall bear interest at the Fixed Rate. The Company shall have a one-time option to convert the
interest rate on the Bonds from the Variable Rate to the Fixed Rate pursuant to this Section upon
satisfaction of the following conditions: (i) delivery of written notice from the Company to the
Trustee and the Remarketing Agent stating (A) its election under this Section to convert the
interest rate on the bonds to the Fixed Rate, (B) the date on which such conversion shall occur
D: WEW200\00100CS\INDENTURDOC 28 INDENTURE OF TRUST
(the "Conversion Date"), which shall be any Business Day occurring on or after September 1,
1997 and no later than March 1, 1998, unless extended in accordance with provisions of
paragraph (i) below, and not less than 20 days from the date the Company gives such notice, (C)
the date on which the Fixed Rate shall be established, which shall be not less than 20 days prior
to the Conversion Date (the "Computation Date"), and (D) directing the Trustee to give notice of
the Conversion Date, as provided in paragraph (d) below; (ii) delivery to the Trustee and
Remarketing Agent not less than 20 days prior to the Conversion Date, of an opinion of Bond
Counsel, addressed to the Company, the Issuer, the Remarketing Agent and the Trustee, stating
that such conversion to the Fixed Rate is authorized and permitted by this Indenture and will not
impair the tax exempt status of the Bonds; (iii) delivery to the Trustee of a commitment to
provide a Credit Facility from a provider and upon terms acceptable to the Remarketing Agent;
(iv) delivery to the Trustee of an agreement of the Company undertaking to provide the annual
financial statements and material event notices as described in 17 CFR § 240.15c2 -12(b)(5) and
(v) delivery to the Trustee of evidence satisfactory to the Trustee, which may be determined in
reliance on an opinion of Bond Counsel, that a local unit of government or the Minnesota
Housing Finance Agency will participate in the financing of the acquisition and rehabilitation of
the Project (in addition to the issuance by the Issuer of the Bonds). The Company must deliver
the documents referred to above no later than February 8, 1998, unless the Conversion Date is
extended in accordance with the provisions of paragraph (i) hereof, in which event the
February 8, 1998 deadline for the notice shall be extended to a date 20 days prior to the extended
Conversion Date. The Fixed Rate shall be the interest rate or rates on the Bonds established by
the Remarketing Agent on the Computation Date in accordance with the provisions of paragraph
(e) hereof, to be effective on and after the Conversion Date.
(b) On the Computation Date, in accordance with the provisions of clauses (i) and (ii)
below, the Remarketing Agent shall establish the principal payment schedule and the optional
redemption schedule to become effective on the Conversion Date.
(i) The amount of principal due on March 1 of each year under the proposed
principal payment schedule (whether by serial maturity installments or sinking fund
installments or a combination thereof) will be such that scheduled annual debt service on
the Bonds will be approximately level. The Bonds shall be so dated that neither gain nor
loss in interest shall result from any transfers, exchange or substitution provided for
herein.
(ii) The optional redemption schedule shall be such that the Bonds
Outstanding after the Conversion Date will be subject to redemption on any Interest
Payment Date on or after the tenth year following the Conversion Date, in whole or in
part, at the redemption prices (expressed as percentages of the principal amounts) set
forth in the table below plus accrued interest to the Redemption Date:
D:\NEW 200\001\DOCS\INDENTUR.DOC 29 INDENTURE OF TRUST
Redemption Dates
Redemption Price
March 1 or September 1 of the tenth year following the 102%
Conversion Date
March 1 or September 1 of the eleventh year following the 101%
Conversion Date
March 1 or September 1 of the twelfth year following the 100%
Conversion Date and thereafter
provided that, the Remarketing Agent, with the consent of the Company, may establish any other
optional redemption provisions the Remarketing Agent deems desirable which will permit the
Bonds to be remarketed at par at the lowest possible interest rate, if an opinion of Bond Counsel
is delivered to the Trustee that the establishment of such optional redemption schedule will not
impair the tax exempt status of the Bonds.
The Remarketing Agent shall notify the Company and the Trustee, by telephone, which
notice shall be immediately confirmed in writing, of the principal payment schedule and optional
and mandatory redemption provisions.
(c) Upon receipt of notice of the principal payment schedule, the Trustee shall
determine the identifying numbers of the Bonds to mature at each maturity date by first selecting
by lot from among all Outstanding Bonds, in such manner as the Trustee may determine, such
Bonds as are sufficient to equal the aggregate principal amount of Bonds to mature on the last
maturity date, and then by selecting by lot from among all remaining Outstanding Bonds,
beginning with the earliest maturity date and ending with the second to last maturity date, such
Bonds as are sufficient to equal the aggregate principal amount of Bonds to mature on each such
maturity date.
(d) The Trustee shall give Notice by Mail of the Mandatory Tender Date (in
substantially the form attached to this Indenture as Exhibit A to all Bondholders not less than
thirty (30) days prior to the Conversion Date. Failure to give such notice shall not invalidate the
conversion to the Fixed Rate nor the effect thereof as provided herein.
(e) On the Computation Date the Remarketing Agent shall determine the Fixed Rate,
which shall be the annual interest rate or rates, which, in the determination of the Remarketing
Agent, would result as nearly as practicable in the market value of each maturity of the Bonds on
the Conversion Date, giving effect to the principal payment schedule, optional redemption and
any mandatory purchase provisions established pursuant to subparagraph (b), above, being 100%
of the principal amount thereof In determining the Fixed Rate pursuant to this Section, the
Remarketing Agent shall have due regard for general financial conditions and such other or
special conditions as in the judgment of the Remarketing Agent may have a bearing on the Fixed
Rate.
(f) If for any reason the position of Remarketing Agent is vacant or the Remarketing
Agent fails to act, the Fixed Rate shall be determined, on the Computation Date, by the Trustee,
D:\NE W200\0010OCS\INDENTURDOC 30 INDENTURE OF TRUST
and shall be equal to ninety-five percent (95%) of the average yield on the basis of a term
approximately equal to the earlier of the Final Maturity Date of the Bonds or the next succeeding
Mandatory Purchase Date, if any, of United States Treasury Bonds, as such yield is reported in
the Wall Street Journal. The optional and mandatory redemption provisions, the principal
repayment schedule, and all other terms of the Bonds shall be the same as those in effect
immediately prior to the Conversion Date.
(g) The determination of the Fixed Rate by the Remarketing Agent, or the Trustee, as
provided herein, shall be conclusive and binding upon the Issuer, the Company, the Trustee and
the Holders of the Bonds.
(h) The Company may, at any time prior to the Trustee giving notice of the
Conversion Date to the Bondholders, cancel the conversion to a Fixed Rate by giving written
notice of cancellation to the Trustee, the Issuer and the Remarketing Agent.
(i) The Conversion Date may be extended, at the option of the Company, if the
Company delivers to the Trustee and Remarketing Agent on or prior to March 11, 1998, an
opinion of Bond Counsel to the effect that extending the Conversion Date to a date certain will
not adversely affect the tax exempt status of the Bonds, and the written consent of all
Bondholders to the extension of the Conversion Date. In no event may the Conversion Date be a
date later than March 1, 2000.
0) On the Conversion Date, the Company shall deliver to the Trustee the documents
required by Section 3.05(2) of the Loan Agreement.
Section 2.14. Book -Entry Provisions; Replacement Bonds.
(a) Notwithstanding the other provisions of this Indenture regarding registration,
ownership, transfer, payment and exchange of the Bonds, unless the Issuer determines to permit
the exchange of Depository Bonds for Bonds in the Authorized Denominations, the Bonds shall
be issued as Depository Bonds in denominations of the entire principal amount of each maturity
of Bonds (or, if a portion of said principal amount is prepaid, said principal amount less the
prepaid amount); and such Bonds shall be registered in the name of the Depository or its
Nominee. With respect to Depository Bonds, neither the Issuer nor the Trustee shall have any
responsibility or obligation to any Depository Participant or to any Beneficial Owner. Without
limiting the immediately preceding sentence, neither the Issuer nor the Trustee shall have any
responsibility or obligation with respect to (i) the accuracy of the records of the Depository or its
Nominee or of any Depository Participant with respect to any ownership interest in the Bonds,
(ii) the delivery to any Depository Participant, any Beneficial Owner or any other person, other
than the Depository, of any notice with respect to the Bonds, (iii) the payment to any Depository
Participant, any Beneficial Owner or any other person, other than the Depository, of any amount
with respect to the principal of or premium, if any, or interest on the Bonds, or (iv) the failure of
the Depository to provide any information or notification on behalf of any Depository Participant
or Beneficial Owner.
The Issuer and the Trustee may treat the Depository as, and deem the Depository to be,
the absolute owner of each Bond for the purpose of payment of the principal of and premium (if
DANEW200\001 \DOCS\INDENTUR.DOC 31 INDENTURE OF TRUST
any) and interest on such Bond, for the purpose of all other matters with respect to such Bond, for
the purpose of registering transfers with respect to such Bonds, and for all other purposes
whatsoever (except for the giving of certain Bondowner consents, in accordance with the
practices and procedures of the Depository as may be applicable thereto). The Trustee shall pay
all principal of and premium, if any, and interest on the Bonds only to or upon the order of the
Bondowners as shown on the Bond Register, and all such payments shall be valid and effective
to fully satisfy and discharge the Issuer's obligations with respect to the principal of and
premium, if any, and interest on the Bonds to the extent so paid. Notwithstanding the provisions
of this Indenture to the contrary (including without limitation surrender of Bonds, registration
thereof, and authorized denominations), as long as the Bonds are Depository Bonds full effect
shall be given to the Letter of Representations and the procedures and practices of the Depository
thereunder, and the Trustee shall comply therewith.
(b) Upon (i) a determination by the Issuer based solely upon the instruction of the
Company that the Depository is no longer able to carry out its functions or is otherwise
determined unsatisfactory by the Issuer based solely upon the instruction of the Company, or (ii)
a determination by the Depository that the Bonds are no longer eligible for its depository services
or (iii) a determination by the Trustee that the Depository has resigned or discontinued its
services for the Bonds, the Issuer shall (A) designate a satisfactory substitute Depository in
accordance with Section 2.14(d) or, if a satisfactory substitute is not found, (B) provide for the
exchange of Depository Bonds for Replacement Bonds in Authorized Denominations.
(c) If the Issuer determines pursuant to Section 2.14(b) to provide for the exchange of
Depository Bonds for Bonds in Authorized Denominations, the Issuer shall so notify the Trustee
and shall provide the Trustee with a supply of executed unauthenticated Bonds to be so
exchanged. The Trustee shall thereupon notify the Holders of the Bonds and provide for such
exchange, and to the extent that the Beneficial Owners are designated as the transferee by the
Holders, in accordance with Section 2.10 the Bonds will be delivered in appropriate form,
content and authorized denominations to the Beneficial Owners, as their interests appear.
(d) Any substitute Depository shall be designated in writing by the Issuer to the
Trustee, and the Issuer shall also certify to the Trustee that the substitute qualifies as Depository
under this section. Any such substitute Depository shall be a "clearing corporation" as defined in
the Minnesota Uniform Commercial Code, Minnesota Statutes, Section 336.8-102, and shall be a
qualified and registered "clearing agency" as provided in Section 17A of the Securities Exchange
Act of 1934, as amended. The substitute Depository shall provide for (i) immobilization of the
Depository Bonds, (ii) registration and transfer of interests in the Depository Bonds by book
entries made on records of the Depository or its Nominee and (iii) payment of principal of,
premium, if any, and interest on the Bonds in accordance with and as such interests may appear
with respect to such book entries.
(e) So long as the Bonds are Depository Bonds, the following provisions shall apply,
notwithstanding anything to the contrary in this Indenture. The principal of the Bonds shall be
payable by the Trustee when due by wire transfer in same day funds. The transfers permitted
pursuant to Section 2.10 shall occur only with respect to Bonds of a minimum denomination of
the remaining principal amount of an entire maturity thereof so long as the Bonds are Depository
Bonds. Depository Bonds are not exchangeable for fully registered Bonds of smaller
D:\NE W200\001\DOCSUNDENTUR.DOC 32 INDENTURE OF TRUST
denominations. Upon a partial payment of a Bond which results in the stated amount thereof
being reduced, the Holder may in its discretion make notation on the register of partial payments
portion of the Bond of such payment, stating the amount so paid, but such notation, if made by
the Holder, shall be for reference only and may not be relied upon by any person as being in any
way determinative of the principal amount of the Bond Outstanding.
D9NE W 200W01 DOCSUNDENTURDOC 33 INDENTURE OF TRUST
ARTICLE 3
Redemption of Bonds Before Maturity
Section 3.01. Redemption Provisions.
(a) The Bonds are subject to redemption and prepayment as follows:
(i) Optional Redemption on or Prior to the Conversion Date. The Bonds are
subject to redemption in whole on any date on or after September 1, 1997, by the Issuer at
the direction of the Company at a Redemption Price equal to the principal amount of the
Bonds to be redeemed plus accrued interest thereon to the Redemption Date.
(ii) Initial Mandatory Redemption Schedule. Subject to the provisions of
Section 2.13, the Bonds are subject to Mandatory Sinking Fund redemption by lot on
March 1 of the years and in the principal amounts stated below at a Redemption Price
equal to their principal amount plus accrued interest to the Redemption Date, without any
premium:
Year
Amount
Year
Amount
2002
$ 15,000
2018
$ 45,000
2003
15,000
2019
45,000
2004
15,000
2020
50,000
2005
15,000
•2021
55,000
2006
20,000
2022
55,000
2007
20,000
2023
60,000
2008
20,000
2024
65,000
2009
20,000
2025
70,000
2010
25,000
2026
75,000
2011
25,000
2027
85,000
2012
30,000
2028
90,000
2013
30,000
2029
95,000
2014
30,000
2030
100,000
2015
35,000
2031
110,000
2016
35,000
2032
260,000
2017
40,000
or if less than such amount of Bonds is outstanding on any such Mandatory Sinking Fund
Payment Date, an amount equal to the aggregate principal amount of all Bonds then
Outstanding.
(iii) Optional and Mandatory Redemption From and After Mandatory Tender
Date. Effective as of the Mandatory Tender Date, the Bonds shall be subject to optional
and mandatory sinking fund redemption provisions or conversion to serial maturities, at
the times and prices established by the Remarketing Agent pursuant to Section 2.13.
D:WEW200\001\DOCSUNDENI'UR.DOC 34 INDENTURE OF TRUST
(iv) Tax Redemption. Following the occurrence of a Determination of
Taxability all of the Bonds shall be redeemed in whole on the first day of the first
calendar month for which notice of redemption can properly be given in accordance with
Section 3.03 at a redemption price equal to one hundred percent (100%) of the principal
amount of the Bonds to be redeemed plus accrued interest thereon to the Redemption
Date.
(v) Calamity Redemption. After the Conversion Date, in the event the
Company exercises its option to direct the redemption of all Outstanding Bonds upon the
occurrence of any of the events described in Section 8.04 of the Loan Agreement, all of
the Bonds shall be subject to redemption and shall be redeemed, in whole but not in part,
on the next succeeding Interest Payment Date for which .notice of redemption shall
properly be given, at their principal amount, plus accrued interest, without premium.
(vi) Special Mandatory Redemption Upon Failure to Convert to the Fixed Rate
or Upon Failure to Remarket.
(A) The Bonds shall be subject to special mandatory redemption on
March 1, 1998, if the Company has failed to deliver to the Trustee and
Remarketing Agent on or before February 8, 1998, either (1) a written request that
the interest rate on the Bonds be converted from the Variable Rate to the Fixed
Rate accompanied by the other items required by Section 2.13 hereof, or (2) (a) an
opinion of Bond Counsel to the effect that the extension of the Conversion Date to
a date certain will not adversely affect the tax exempt status of the Bonds, and (b)
the written consent of all Bondholders to the extension of the Conversion Date. In
the event the Conversion Date is extended, the Bonds shall be subject to special
mandatory redemption on the extended Conversion Date which shall be on a date
not later than March 1, 2000. If the Company fails to deliver to the Trustee on or
before 20 days prior to the extended Conversion Date the written request that the
interest rate on the Bonds be converted from the Variable Rate to the Fixed Rate
accompanied by the other items required by Section 2.13 hereof, the Bonds shall
be subject to mandatory redemption on such extended Conversion Date. If the
Company fails to deliver a Credit Facility to the Trustee on or prior to the
Conversion Date, the Bonds shall be subject to special mandatory redemption on
the Conversion Date.
(B) In addition, the Bonds shall be subject to mandatory redemption in
part on the Mandatory Tender Date if and to the extent Resale proceeds and other
funds provided by the Company are insufficient to purchase the Bonds properly
tendered (or deemed tendered) on the Mandatory Tender Date.
Section 3.02. Partial Redemption of Bonds.
In the case of any partial redemption of Bonds of the same maturity pursuant to any
provision of this Indenture, the particular Bonds or portions thereof to be redeemed shall be
selected by the Trustee in such manner as the Trustee shall deem fair and equitable; provided that
if at the time of selection of any Bonds for redemption any Bonds are Company Bonds, such
D:\NEW200\001\DOCSINDENTUR.DOC 35 INDENTURE OF TRUST
Company Bonds shall be selected for redemption prior to any other Bonds. In the case of any
partial redemption of a Bond in a denomination greater than $5,000 then for all purposes in
connection with such redemption, the first $5,000 of face value of such Bond shall be treated as
though it were a separate Bond in the denomination of $5,000 and each remaining $5,000 of face
value of such Bond shall be treated as though it were a separate Bond in the denomination of
$5,000, and such Bond shall be redeemed only in a principal amount sufficient to redeem one or
more of such separate Bonds in full. Any Bond which is to be redeemed only in part shall be
surrendered to the Trustee (i) for payment of the Redemption Price (including accrued interest
thereon to the Redemption Date) of the portion thereof called for redemption and (ii) for
exchange for Bonds in any Authorized Denomination in aggregate principal amount equal to the
unredeemed portion of such Bond without charge therefor. For all purposes of this Indenture,
unless the context otherwise requires, all provisions relating to the redemption of Bonds shall
relate, in the case of any Bond redeemed or to be redeemed only in part, to the portion of the
principal of such Bond which has been or is to be redeemed.
Section 3.03. Procedure for Redemption.
In the event the Company shall give notice to the Trustee of any redemption of the Bonds
under 3.01(i) and (v), the Trustee shall give notice, in the name of the Issuer, of the redemption
of such Bonds, which notice shall (1) specify the Bonds (or portions thereof) to be redeemed, the
Redemption Date, the redemption price and the place or places where or, if a partial redemption
the manner in which the amounts due upon such redemption will be payable and (2) state that on
the Redemption Date the Bonds (or portions thereof) to be redeemed shall cease to bear interest.
Such notice may set forth any additional information relating to such redemption. The Trustee
shall give such Notice By Mail at least fifteen (15) days nor more than forty (40) days prior to the
date fixed for redemption, to the Holders of the Bonds to be redeemed.
Any Bonds and portions of Bonds which have been duly selected for redemption and
which are deemed to be paid in accordance with Article Dt hereof shall cease to bear interest on
the specified Redemption Date.
Section 3.04. Payment of Bonds Upon Redemption.
The Redemption Price of Bonds or portions thereof called for redemption in accordance
with Section 3.03 shall be payable on the date of redemption upon presentation and surrender of
such Bonds at the place or places of payment. If, on the Redemption Date, sufficient moneys
shall have been deposited with the Trustee to effect such redemption in accordance with this
Indenture, then interest shall cease to accrue on all Bonds or portions thereof so called for
redemption.
Section 3.05. No Partial Redemntion After Default.
Anything in this Indenture to the contrary notwithstanding, if there shall have occurred
and be continuing an Event of Default, there shall be no redemption of less than all of the Bonds
at the time Outstanding.
D:\NE W200\001\DOCS\INDENTUR.DOC 36 INDENTURE OF TRUST
Section 3.06. Cancellation.
All Bonds which have been redeemed shall be canceled by the Trustee as provided in
Section 2.12 and shall not be reissued.
D: �NEW20MOOBDOCSUNDENTUR.DOC 37
INDENTURE OF TRUST
ARTICLE 4
Mandatory Tender and Remarketing of Bonds
Section 4.01. Mandatory Tender of Bonds.
(a) Subject to the provisions of subsection (c) below, the Holder of each Bond shall
tender such Bond to the Trustee for purchase on the Mandatory Tender Date, all as more fully
provided in this Section 4.01.
(b) Notice of a Mandatory Tender Date (a "Mandatory Tender Notice") shall be given
by the Trustee, by first-class mail, postage prepaid, to the Holders of all Bonds at their addresses
appearing on the Bond Register maintained by the Trustee not less than 15 days prior to the
Mandatory Tender Date. Such Notice shall specify the Mandatory Tender Date and state (i) that
all Bonds shall be purchased on the Mandatory Tender Date at a purchase price equal to the
principal amount thereof, and (ii) that all Bonds must be tendered for purchase at or before 12:00
noon, Minneapolis time, on the Business Day prior to the Mandatory Tender Date together with
an appropriate instrument of transfer executed in blank, and the Holder of any such Bond which
is not so tendered but for which there has been irrevocably deposited with the Trustee an amount
sufficient to pay the purchase price thereof (an "Untendered Bond") shall not be entitled to
receive interest on such Bond for any period beginning on or after the Mandatory Tender Date.
A copy of any Mandatory Tender Notice shall be delivered by the Trustee to the Remarketing
Agent and the Company.
(c) All Bonds shall be tendered to the Trustee for purchase at or before 12:00 noon
Minneapolis time on the Business Day prior to the Mandatory Tender Date, by delivering such
Bonds to the Trustee together with an appropriate instrument of transfer duly executed in blank.
On the Mandatory Tender Date the Trustee acting on behalf of the Company and for the benefit
of the Holders of the Bonds from time to time shall purchase or cause to be purchased all Bonds
at a purchase price equal to the principal amount thereof plus accrued interest thereon. Funds for
the payment of the purchase price of such Bonds shall be drawn by the Trustee from the Bond
Purchase Fund as provided in Section 6.04.
Section 4.02. Duties of Trustee.
The Trustee agrees, and will cause each of its agents to agree, that it will:
(a) hold all Bonds delivered to it pursuant to Section 4.01 hereunder in trust
solely for the benefit of the respective Bondholders which shall have so tendered such
Bonds for purchase until the payment of the purchase price with respect to such Bonds;
and
(b) hold all moneys delivered to it hereunder for the purchase of such Bonds
in trust solely for the benefit of the Holders which shall have so tendered such Bonds for
purchase until such moneys shall have been delivered to or for the account of such
Bondholders.
D:WEW200\001\D0CS\INDENTUR.DOC 38 INDENTURE OF TRUST
Section 4.03. Remarketine of Bonds.
(a) Pursuant to the terms of the Remarketing Agreement, the Remarketing Agent
shall offer for sale and use its best efforts to sell the Bonds on the Mandatory Tender Date at a
purchase price of par plus accrued interest.
(b) At or prior to 10:00 a.m., Minneapolis, Minnesota, time, on the third Business
Day prior to the Mandatory Tender Date, the Remarketing Agent shall give notice (the
"Remarketing Notice"), by telephone, telex or telecopier, promptly confirmed in writing, to the
Company and the Trustee specifying the total principal amount and denominations of the Bonds,
if any, sold for settlement on such Mandatory Tender Date and shall include in the Remarketing
Notice given to the Trustee the name, address and taxpayer identification number of the
purchaser. On or prior to 12:00 noon, Minneapolis, Minnesota, time on the Mandatory Tender
Date, the Remarketing Agent shall deliver to the principal office of the Trustee, in immediately
available funds, an amount equal to the purchase price of the total principal amount of Bonds so
specified in the Remarketing Notice, plus accrued interest, if any. If in the Remarketing Notice,
the Remarketing Agent shall have specified the name(s) in which each remarketed Bond is to be
registered together with the purchaser's address and taxpayer identification number of the
purchaser, and the denomination in which each remarketed Bond is to be issued, delivery of such
Bonds, properly executed on behalf of the Issuer and authenticated by the Trustee, registered in
the name(s) and issued in the denomination(s) so specified, shall be made to the Remarketing
Agent by 12:00 noon, Minneapolis time at its Minneapolis address on the Mandatory Tender
Date against payment by the Remarketing Agent as aforesaid.
Section 4.04. Purchase of Tendered Bonds.
On the Mandatory Tender Date, the Trustee shall pay, but only from funds in the Bond
Purchase Fund, the purchase price for all Bonds properly tendered, (or deemed tendered) for
purchase pursuant to Section 4.01 hereof, at a purchase price equal to 100% of the principal
amount thereof.
Section 4.05. Intentionally Omitted.
Section 4.06. Purchase Not to Constitute a Redemption.
The Issuer and the Trustee recognize and acknowledge that, in carrying out their
responsibilities under this Article IV, the Trustee and the Remarketing Agent shall be acting
solely for the benefit of the Holders from time to time of the Bonds and the Company. No
delivery of Bonds to the Trustee or purchase of Bonds under this Article shall constitute a
redemption of the Bonds or an extinguishment of the debt evidenced thereby.
Section 4.07. Untendered Bonds.
Any Bond which is not tendered on or prior to the Mandatory Tender Date with respect to
such Bond (an "Untendered Bond"), as to which there has been irrevocably deposited with the
Trustee an amount sufficient to pay the purchase price thereof shall be "deemed tendered" for
purposes of this Indenture and shall cease to accrue interest on such Mandatory Tender Date, as
D:WEW200\001\ DOCSVNDENTURDOC 39 INDENTURE OF TRUST
the case may be, and the Holder thereof shall not be entitled to any payment other than the
purchase price for such Untendered Bond, and shall no longer be entitled to the benefits of this
Indenture, except for payment of the purchase price therefor and interest thereon through the
Mandatory Tender Date from moneys held by the Trustee for such purpose upon presentment of
such Bond to the Trustee. In lieu of and in substitution for such Untendered bonds, Bonds shall
be issued in accordance with Section 2.07 hereof.
D:\NEW200\001\DOCSUNDENTUR.DOC 40 INDENTURE OF TRUST
ARTICLE 5
General Covenants
Section 5.01. Payment of Principal, Premium and Interest.
Solely from the moneys derived from the Loan Agreement (other than to the extent
payable from proceeds of the Bonds or temporary investments), the Issuer will duly and
punctually pay the principal of, premium, if any, and interest on the Bonds in accordance with the
terms of the Bonds and this Indenture. Moneys derived from the Loan Agreement include all
moneys derived from the Granting Clauses set forth herein, including, but not limited to, Basic
Payments under the Loan Agreement and trust funds deposited in the funds and accounts
established under Article VI herein to the extent and in the manner provided in said Article.
Nothing in the Bonds or in this Indenture shall be considered as assigning or pledging funds or
assets of the Issuer other than those covered by the Granting Clauses set forth herein.
Section 5.02. Performance of and Trustee for Covenants.
The Issuer covenants that it is duly authorized under the Act to issue the Bonds
authorized hereby, to execute this Indenture, to loan the Bond proceeds to the Company and to
assign and pledge the payments from the Loan Agreement in the manner and to the extent herein
set forth; that all action on its part for the issuance of the Bonds and the execution and delivery of
this Indenture has been duly and effectively taken.
Section 5.03. Instruments of Further Assurance:
The Issuer covenants that it has not made, done, executed or suffered, and will not make,
do, execute or suffer, any act or thing whereby its interest in the Loan Agreement or any part
thereof is now or at any time hereafter impaired, changed or encumbered in any manner
whatsoever, except as may be expressly permitted herein; and that it will do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and delivered, such
instruments supplemental hereto and such further acts, instruments and transfers as the Trustee
may reasonably require for the better assuring, transferring, pledging, assigning and confirming
unto the Trustee all and singular the sums assigned and pledged hereby to the payment of the
principal of and interest on the Bonds.
Section 5.04. Recording and Filing.
The Trustee covenants that solely from available Additional Charges it will require the
Company to cause this Indenture, all supplements thereto, to be kept, recorded and filed in such
manner and in such places as may be required by law in order to preserve and protect fully the
security of the Holders of the Bonds and the rights of the Trustee hereunder and under any other
instruments aforesaid.
D:NE W20010011DOCSUNDENTURDOC 41 INDENTURE OF TRUST
Section 5.05. Books and Records.
The Trustee covenants that so long as any Outstanding Bonds issued hereunder and
secured by this Indenture shall be unpaid, the Trustee will keep proper books or records and
accounts, in which full, true and correct entries will be made of all its financial dealings or
transactions in relation to the Project and the payments derived from the Loan Agreement and
this Indenture. At reasonable times and under reasonable regulations established by the Trustee,
such books shall be open to the inspection of Holders and such accountants or other agents as the
Trustee made from time to time designate.
Section 5.06. Bondholders' Access to Bond Resister.
Except as otherwise may be provided by law, the Bond Register shall not be deemed a
public record and shall not be made available for inspection by the public, unless and until notice
to the contrary is given to the Trustee by the Issuer.
Section 5.07. Rights Under Loan Agreement.
The Loan Agreement sets forth covenants and obligations of the Issuer and the Company,
and reference is hereby made to the same for a detailed statement of said covenants and
obligations. The Issuer agrees to cooperate in the enforcement of all covenants and obligations
of the Company under the Loan Agreement and agrees that the Trustee in its name or in the name
of the Issuer may enforce all rights of the Issuer and all obligations of the Company under and
pursuant to the Loan Agreement and on behalf of the Holders, whether or not the Issuer has
undertaken to enforce such rights and obligations.
D:\NEW200\001\DOCS\NDENTUR.DOC 42 INDENTURE OF TRUST
ARTICLE 6
Funds and Accounts
Section 6.01. "Trust Moneys" Defined.
All moneys received by the Trustee:
(a) as elsewhere herein provided to be held and applied under this Article VI,
or required to be paid to the Trustee and whose disposition is not elsewhere herein
otherwise specifically provided for, including, but not limited to the investment income of
all Trust Funds held by the Trustee under this Indenture (but excluding amounts on
deposit in the Excess Investment Earnings Fund); or
(b) as proceeds from the sale of the Bonds; or
(c) as Loan Payments, or as otherwise payable under the Agreement;
(all such moneys being herein sometimes called "Trust Moneys") shall be held by the Trustee as
a part of the Trust Estate, and, upon the exercise by the Trustee of any remedy specified in
Article X hereof, such Trust Moneys shall be applied in accordance with Section 10.06 hereof,
except to the extent that the Trustee is holding in trust moneys or Government Obligations, as the
case may be, for the payment of any specified Bonds which are no longer deemed to be
Outstanding under the provisions of Article IX hereof, which moneys or Government Obligations
shall be applied only as provided in said Article IX Prior to the exercise of any such remedy, all
or any part of the Trust Moneys shall be held, invested, withdrawn, paid or applied by the
Trustee, from time to time, as provided in this Article VI, in Article VII and Article VIII hereof.
Section 6.02. Project Fund.
(a) There is hereby created a Project Fund.
Until the Conversion Date, all proceeds of the Bonds shall be deposited in the Project
Fund held by the Trustee and invested in the Investment Agreement. Prior to the Conversion
Date, the Trustee shall transfer the interest earnings on Bond proceeds held in the Project Fund to
the Bond Fund on each Variable Rate Interest Payment Date and on the Conversion Date. Not
less than seven (7) days prior to the Conversion Date, the Trustee shall request a repayment of all
principal invested pursuant to the Investment Agreement in accordance with its terms.
(b) If (i) the Company has not delivered to the Trustee the written notice that it has
exercised its option to convert the interest on the Bonds from the Variable Rate to the Fixed Rate
at least 15 days prior to the Conversion Date, as it may be extended from time to time, or (ii) if
the Trustee has not received sufficient Resale Proceeds together with other funds from the
Company to effect purchase of all of the Bonds on the Mandatory Tender Date, which have been
properly tendered (or deemed tendered) as to a Mandatory Tender Date, the funds held under the
Investment Agreement shall be transferred to the Bond Fund and applied exclusively to redeem
the Bonds in accordance with Section 3.01 (vi) hereof.
DANEW200\00 I\DOCS\rNDENTUR.DOC 43 MDENTURE OF TRUST
(c) On the Conversion Date, amounts on deposit in the Project Fund in the amount of
$140,000 shall be transferred to the Reserve Fund. From and after the Conversion Date, or the
Discharge Date, the remaining proceeds of the Bonds shall be disbursed by the Trustee to or for
the account of the Company from the Project Fund in accordance with the applicable provisions
of Article III of the Loan Agreement.
(d) Any sums in the Project Fund in excess of any amount required to pay all Costs of
the Project shall be transferred to the Bond Fund at the time or times and in the manner provided
in Article III of the Loan Agreement.
(e) Any funds deposited in the Project Fund by the Company shall be disbursed
before any Bond proceeds, including any earnings thereon, shall be disbursed.
(f) Any interest earned on sums held in the Project Fund after the Conversion Date
but prior to the Completion Date shall remain a part of the Project Fund.
(g) In the event the Bonds are to be redeemed on the Conversion Date pursuant to
Section 3.01(vi) hereof, the Trustee shall apply the proceeds of the Investment Agreement to the
redemption of the Bonds.
Section 6.03. Bond Fund.
There is hereby created the Multifamily Housing Revenue Bonds (Park Acres Apartments
Project) Series 1997 Bond Fund, also referred to herein as the Bond Fund.
(a) There shall be credited to the Bond Fund, as and when received:
(i) each payment received by the Trustee under and pursuant to any of
the provisions of this Indenture or the Loan Agreement which is required to be
paid into the Bond Fund, or which is accompanied by directions that such
payment is to be credited to the Bond Fund;
(ii) all income derived from the investment of amounts described in
clause (i), as realized;
(iii) each Basic Payment made directly by the Company pursuant to
Section 4.02 or 4.03 of the Loan Agreement.
(b) The Trustee shall disburse, from time to time, sufficient moneys from the
Bond Fund as specified below to pay the principal of, premium if any, and the interest on,
the Bonds as the same become due and payable.
(c) If any Bond shall not be presented for payment at Maturity, provided
moneys sufficient to pay such Bond shall have been made available to the Trustee and are
held by the Trustee for the benefit of the Holder thereof, all liability of the Issuer to the
Holder thereof for the payment of such Bond shall forthwith cease, determine and be
completely discharged, and thereupon it shall be the duty of the Trustee to hold such
moneys, without liability for interest thereon, for the benefit of the Holder of such Bond,
D:WEW200\001\DOCSUNDENTURDOC 44 INDENTURE OF TRUST
who shall thereafter be restricted exclusively to such moneys for any claim of whatever
nature on his part hereunder or on, or with respect to, such Bond.
(d) Any moneys remaining in the Bond Fund after payment in full of all
Bonds, and payment of the fees, charges and expenses of the Trustee, the Paying Agent,
the Issuer and any Co -Paying Agent which have accrued and which will accrue and all
other items required to be paid hereunder, shall be paid to the Company.
(e) Moneys in the Bond Fund shall be invested as provided in Section 8.01
hereof.
Section 6.04. Bond Purchase Fund.
(a) There is hereby created a Bond Purchase Fund which shall be used to pay the
purchase price of Bonds to be purchased pursuant to Section 4.01.
(b) Payments Into the Bond Purchase Fund.
(i) There shall be paid into the Bond Purchase Fund, as and when received:
(A) the proceeds of the remarketing of Bonds by the Remarketing
Agent pursuant to Section 4.03 (which proceeds (together with any investments
thereof and the income therefrom and proceeds thereof) shall at all times be
traceable by the Trustee to their source and shall not be derived directly or
indirectly from the Company); and
(B) all other moneys received by the Trustee under and pursuant to any
of the provisions of this Indenture or the Loan Agreement or otherwise which are
required or accompanied by directions that such moneys are to be credited to the
Bond Purchase Fund.
(c) Use of Moneys in the Bond Purchase Fund.
(i) Except as provided in subsection (e) hereof and this subsection (c), money
in the Bond Purchase Fund shall be used solely for the payment of the purchase price of
Bonds to be purchased pursuant to Section 4.01.
(ii) On the Mandatory Tender Date, the Trustee shall disburse from the Bond
Purchase Fund sufficient moneys to pay the purchase price of all Bonds to be purchased
on such date pursuant to Section 4.01.
(d) Money to be Held in Trust. All moneys paid over to the Trustee for the account of
the Bond Purchase Fund under any provision hereof shall be held (subject to the provisions of
subsection (e)) in trust by the Trustee for the benefit of the Holders of the Bonds.
(e) No Payments to the Company from the Bond Purchase Fund. Any moneys held
by the Trustee in the Bond Purchase Fund shall be retained by the Trustee exclusively for the
benefit of Holders of Bonds not yet presented for payment of the purchase price thereof until paid
D:\NEW200\001\ DOCSUNDENTUR.DOC 45 INDENTURE OF TRUST
to such Holders; and such moneys shall not, under any circumstances or at any time whatsoever,
be paid to the Company or to any Person other than the Holders of Bonds entitled thereto, and
such Holders shall look only to such moneys for the payment of the purchase price of such
Bonds.
Section 6.05. Excess Investment Earnings Fund.
(a) There is hereby created an Excess Investment Earnings Fund. The Trustee shall
deposit in the Excess Investment Earnings Fund, upon receipt, all rebate amounts deposited with
the Trustee in accordance with Section 7.07(14) of the Loan Agreement; and for purposes of
making such deposits the Trustee shall, at the direction of the Company, transfer from the
appropriate Fund to the Excess Investment Earnings Fund a sum equal to any rebate amounts
attributable to sums held in the Bond Fund, the Project Fund and Reserve Fund.
(b) The Trustee shall cooperate with the Company in making the determinations for
each computation required pursuant to Section 7.07(14) of the Loan Agreement; and to that end,
the Trustee shall, within 30 days after the end of the fifth Bond Year, prepare and file with the
Company a report with respect to the Bond Fund, the Project Fund and Reserve Fund setting
forth the total amount invested during the preceding five Bond Years, the investments made with
the moneys in the Bond Fund, Project Fund and Reserve Fund and the investment earnings (and
losses) resulting from such investments, together with such additional information concerning the
Bond Fund and the investments therein as the Issuer or the Company shall reasonably request.
(c) Upon written direction of the Company, the Trustee shall remit sums in the
Excess Investment Earnings Fund to the United States as provided in Section 7.07(14) of the
Loan Agreement.
(d) Upon written direction of the Company, the Trustee shall remit to the Company,
or transfer to the Bond Fund, any surplus rebate sums held in the Excess Investment Earnings
Fund as provided in Section 7.07(14) of the Loan Agreement.
Section 6.06. Reserve Fund.
There is hereby created a Reserve Fund which shall be funded on the Conversion Date in
the amount of $140,000 transferred from the Project Fund. Amounts on deposit in the Reserve
Fund shall be transferred to the Bond Fund on any Interest Payment Date to the extent amounts
then on deposit in the Bond Fund are insufficient for the purpose of paying principal and interest
on the Bonds then due.
Section 6.07. Deposit of Funds with Paving Agent.
(a) The Trustee shall transfer and remit sums from the Bond Fund to the Paying
Agent in advance of each interest and principal due date and redemption date, from the balance
then on hand in the Bond Fund, sufficient to pay all principal, interest and redemption premiums
then due on Bonds. The Paying Agent shall hold in trust for the Holders of such Bonds all sums
so transferred to it until paid to such Holders or otherwise disposed of as herein provided.
D:WEW200\001\ DOCSUNDENTUR.DOC 46 INDENTURE OF TRUST
(b) Interest on each Bond including accrued interest to the date of deposit and
interest, to the extent permitted by law, on overdue installments of interest at the rate borne by
such Bond, (i) shall cease on its maturity date, or on any prior date on which it shall have been
duly called for redemption as herein provided, provided that funds sufficient for the payment
thereof with accrued interest and any redemption premium have been deposited with the Paying
Agent on or before the maturity date or redemption date, as the case may be, and in the case of
redemption, that the requirements of Article III have been complied with, or (ii) shall cease on
any date after maturity on which such deposit has been made, and the Holder shall have no
further rights with respect to the Bonds or under this Indenture except to receive the payment so
deposited.
(c) If any Bond is not presented for payment when due. and funds sufficient to pay
such Bond shall have been paid to the Trustee (or other Paying Agent, if any): (i) all liability of
the Issuer for payment of such Bond shall forthwith cease, (ii) such Bond shall forthwith cease to
be entitled to any lien, benefit or security under this Indenture, and the Holder of such Bond shall
forthwith have no rights in respect thereof except to receive payment thereof, and (iii) the Trustee
(or other Paying Agent, if any) shall hold such funds, without liability for interest thereon, for the
benefit of the Holder of such Bond. Any moneys still held by the Trustee (or other Paying Agent,
if any) after two years and eleven months from the date on which the Bond with respect to such
amount was paid to the Trustee (or other Paying Agent, if any), shall, if and to the extent
permitted by law, be paid by the Trustee (or other Paying Agent, if any) to the Company and shall
be discharged from the trust and all liability of the Paying Agent or the Trustee with respect to
such trust money shall cease; and the Bondholders shall thereafter be entitled to look only to the
Company for payment, and the Company shall not be liable for any interest thereon.
(d) If there is any Paying Agent who is not the Trustee, the Trustee will cause such
Paying Agent to execute and deliver to it an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section 6.07, that such Paying Agent will:
(i) hold all sums held by it for the payment of principal of (and premium, if
any) or interest on Bonds in trust for the benefit of the Holders of such Bonds until such
sums shall be paid to such Holders or otherwise disposed of as herein provided; and
(ii) at any time during the continuance of any default in the making of any
such payment of principal (and premium, if any) or interest, upon the written request of
the Trustee forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Trustee, acting as Paying Agent, shall also be bound by the terms of the foregoing
requirements.
D:\NEW200\001\DOCSUNDENTUR.DOC 47 INDENTURE OF TRUST
ARTICLE 7
Intentionally Omitted
D:\NE W200\001\DOCS\INDENTUR.DOC 48 INDENTURE OF TRUST
ARTICLE 8
Investments
Section 8.01. Investments by Trustee.
(a) Except during the continuance of an Event of Default, and subject to the
provisions of Section 8.02, moneys held for the credit of the Funds established by Article VI
shall be held by the Trustee as required by law and shall at the written request of the
Representative of the Company, to the extent practicable and permitted by the Act, and except as
provided below with respect to the moneys in the Bond Fund be invested as received and
reinvested by the Trustee in Permitted Investments (including investments in securities
authorized by Minnesota Statutes, Section 471.56, through a common trust fund or similar fund
maintained by a bank exclusively for the collective investment and reinvestment of moneys
contributed thereto by the bank in its capacity as trustee, certificates of deposit, and repurchase
agreements).
Subject to Minnesota Statutes, Sections 471.56 and 475.66, as to the investment of sums
(other than Bond proceeds) held in the Bond Fund, the type, amount and maturity of such
investments shall be as specified by the Representative of the Company; provided that sums in
the Bond Fund and may in any event only be invested in securities which mature or are subject to
redemption or repurchase at the option of the Trustee on or prior to the date or dates on which the
Trustee anticipates that cash funds will be required.
(b) The Trustee shall sell and reduce to cash'funds a sufficient portion of investments
under the provisions of this Section whenever the cash balance in the fund for which the
investment was made is insufficient for its current requirements. Securities so purchased as an
investment of money shall be held by the Trustee, shall be registered in the name of the Trustee if
registration is required, and shall be deemed at all times a part of the applicable Fund, and the
interest accruing thereon and any profit realized from such investments shall be credited to the
Fund from which the investment was made, subject to any transfer to another Fund as herein
provided. Any loss resulting from such investment shall be charged to the Fund from which the
investment was made.
(c) The Trustee may purchase from or sell to itself, or through any affiliated
company, as principal or agent, securities herein authorized so long as such purchase or sale is at
fair market value.
Section 8.02. Return on Investments.
(a) In directing investments pursuant to Section 8.03 of the Loan Agreement, the
Company will not instruct the Trustee to use the proceeds of the Bonds or other sums pledged to
the payment of the Bonds, directly or indirectly, to acquire any securities or obligations the
acquisition of which would cause any of the Bonds to be an "arbitrage bond" as defined in
Section 148 of the Code, and for this purpose the Trustee, in order to restrict yield on
investments, may invest in SLGS (and accordingly is hereby authorized to act as agent of the
Issuer for such Propose). The Trustee shall be fully protected in relying on an opinion of Bond
D:\NEW200\001\DOCS\MDENTUR.DOC 49 INDENTURE OF TRUST
Counsel with respect to whether the acquisition of any securities or obligations would have the
effect prohibited by this Section.
(b) The Bonds are subject to the limitation on investment in nonpurpose obligations
imposed by Section 148(d)(3) of the Code. At no time during any Bond year (as such term is
defined in the Treasury Regulations) may the amounts in the Bond Fund which are (i) not entitled
to a temporary period provided in 148(c) of the Code or the Treasury Regulations and (ii) in
excess of one hundred fifty percent (150%) of the debt service on the Bonds for any Bond Year
(which amount shall be promptly and appropriately reduced as the amount of outstanding
obligations of the Bonds is reduced) be invested in nonpurpose obligations with a yield higher
than the yield on the Bonds, and the Trustee may assume that investments directed by the
Company do not violate such requirements. In applying such requirement, however, no sale or
disposition will be required if it would result in a loss which exceeds the amount of the rebate
which would be paid to the United States (but for such sale or disposition) at the time of such
sale or disposition. The Trustee shall acquire nonpurpose investments at their fair market value,
provided that, in the case of any investment in United States Treasury obligations unless
otherwise directed by the Company, the Trustee shall purchase such obligations directly from the
United States Treasury, if such obligations are reasonably available to the Trustee for purchase,
or, if such obligations are not so available, the Trustee shall purchase such obligations for the
best price available in an arm's-length transaction, determined in accordance with the Trustee's
customary procedure.
(c) No moneys in any fund or account shall be invested in investments which cause
the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. If at
any time the moneys in all funds and accounts relating to the Bonds exceed, within the meaning
of Section 149(a) of the Code, (i) amounts invested for an initial temporary period until the
moneys are needed for the purpose for which the Bonds were issued, (ii) investments of a bona
fide debt service fund, and (iii) investments of a reserve which meet the requirement of Section
148(d) of the Code, then moneys in excess of such amounts shall be invested at the direction of
the Company pursuant to Section 8.03 of the Loan Agreement in (A) bonds issued by the United
States Treasury, (B) other investments permitted under regulations, or (C) obligations which are
(a) not issued by, or guaranteed by, or insured by, the United States or any agency or
instrumentality thereof or (b) not federally insured deposits or accounts, all within the meaning of
Section 149(b) of the Code. The Trustee shall not take any action or do anything the effect of
which shall be to cause the Bonds to be "federally guaranteed" within the meaning of Section
149(b) of the Code.
(d) The provisions of this Section 8.02 shall survive discharge and release of the
Indenture.
Section 8.03. Computation of Balances in Fund.
(a) In computing the assets of any Fund established hereunder, investments and
accrued but unpaid interest thereon shall be deemed a part thereof, and such investments shall be
valued at par value, or at the redemption price thereof, if then redeemable at the option of the
holder; provided that in any event for purposes of determining whether any balance in a Fund
may only be invested at a restricted yield to comply with Section 148 of the Code and the Federal
D:WEW200TOI DOMINDENTURDOC 50 INDENTURE OF TRUST
arbitrage regulations, any investments in the Fund shall be valued at their par value or the price
(less accrued interest) at which they were purchased, whichever is the greater.
Section 8.04. Rebate to United States.
The Bonds are subject to the rebate to the United States of earnings in excess of the yield
on the Bonds imposed by Section 148 of the Code and Section 1.148-0 through 1.148-11 of the
Treasury Regulations. The Trustee shall have no obligation to calculate the amount of, or make,
any required rebate as provided in Section 6.05. The Trustee shall cooperate with the Company
in determining the amount of any rebate.
D:\NE W200\00 I\DOCSUNDENTUR.DOC 51 INDENTURE OF TRUST
ARTICLE 9
Discharge of Lien
Section 9.01. Payment of Bonds: Satisfaction and Discharge of Bonds and Oblieation to
Bondholders.
Whenever the conditions specified in either clause (i) or clause (ii) of the following
subsection (a) and the conditions specified in the following subsections (b) and (c) to the extent
applicable, shall exist, namely:
(a) either:
(i) all Bonds have been canceled by the Trustee or delivered to the
Trustee for cancellation, excluding, however,
(A) Bonds for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Paying Agent or
Trustee and thereafter repaid to the Company or discharged from such
trust, and
(B) Bonds alleged to have been destroyed, lost or stolen which
have been replaced or paid as provided in Section 2.07 hereof, and (1)
which, prior to the satisfaction and discharge of this Indenture as
hereinafter provided, have not been presented to the Paying Agent or the
Trustee with a claim of ownership and enforceability by the Holder
thereof, or (2) whose enforceability by the Holder thereof has been
determined adversely to the Holder by a court of competent jurisdiction or
other competent tribunal; or
(ii) the Issuer or the Company has deposited or caused to be deposited
as trust funds:
(A) with the Paying Agent, cash which shall be sufficient, or
(B) with the Trustee, cash and/or Government Obligations,
which do not permit the redemption thereof at the option of the issuer
thereof, the principal of, premium, if any, and interest on which when due
(or upon the redemption thereof at the option of the holder), will, without
reinvestment, provide cash which together with the cash, if any, deposited
with the Trustee at the same time, shall be sufficient, to pay and discharge
the entire indebtedness on Bonds not theretofore canceled by the Trustee
or delivered to the Trustee for cancellation by the payment of interest on
and principal (and premium, if any) of the Bonds which have become due
and payable or which shall become due at their stated maturity or
redemption date, as the case may be, and which are to be discharged under
the provisions hereof, and has made arrangements satisfactory to the
D: WEW200WORDOCSUNDENTURDOC 52 INDENTURE OF TRUST
Trustee for the giving of notice of redemption, if any, by the Trustee in the
name, and at the expense, of the Company in the same manner as is
provided by Section 3.02 hereof; and
(b) the Issuer or the Company has paid, caused to be paid or made
arrangements satisfactory to the Trustee for the payment of all other sums payable
hereunder and under the Loan Agreement, and the Related Documents by the Trustee or
the Company until the Bonds are so paid; and
(c) the Company has delivered to the Trustee a report of an Independent
Accountant stating that the payments to be made on the security referred to in clause (ii)
of subsection (a) above will be sufficient to pay when due the principal of, premium, if
any, and interest on the Bonds to be defeased;
(d) if discharge is to be effected under clause (ii) of subsection (a), an opinion
of Bond Counsel is delivered to the Trustee stating in effect that such discharge will not
impair the tax exempt status of the Bonds; then, except as otherwise provided in Article
VII and Sections 8.02 and 9.03, the rights of the Bondholders shall be limited to the cash
or cash and securities deposited as provided in paragraph (a), clauses (i) or (ii) above, and
upon the Company's request the rights and interest hereby granted or granted by the Loan
Agreement and the any collateral security documents entered into in connection with the
Conversion Date to or for the benefit of the Trustee or Bondholders shall cease, terminate
and become null and void, and the Issuer and the Trustee shall, at the expense of the
Company, execute and deliver such instruments of satisfaction and transfer as may be
necessary, and forthwith the estate, right, title and interest of the Trustee in and to all of
the Project and in and to all rights under the Loan Agreement and this Indenture (except
the moneys or securities or both deposited as required above and except as may otherwise
be provided in Article VII and Sections 8.02 and 9.03 shall thereupon be discharge and
satisfied; except that in any event the obligations of the Company under Sections 7.04,
7.07, 7.08 and 10.10 of the Loan Agreement shall survive.
Section 9.02. Discharge of the Indenture.
Notwithstanding the fact that the lien of this Indenture upon the Trust Estate may have
been discharged and canceled in accordance with Section 9.01 hereof, this Indenture and the
rights granted and duties imposed hereby, to the extent not inconsistent with the fact that the lien
upon the Trust Estate may have been discharged and canceled, shall nevertheless continue and
subsist until the principal of and the interest on, all of the Bonds shall have actually been paid in
full and the Trustee shall have applied in accordance with Section 5.04 or 6.08 hereof, as
applicable, all funds theretofore held by the Trustee for payment of any Bonds not theretofore
presented for payment or purchase, as the case may be, which funds shall be held in trust solely
for the Holders of such Bonds pending their application in accordance herewith.
Section 9.03. Tax Call.
Notwithstanding any provisions herein to the contrary, if (1) the Bonds have been
discharged under Section 9.01 hereof, (2), any principal thereof has not become due and payable,
D:\NEW200\001\ DOCS\INDENTUR.DOC 53 MDENTURE OF TRUST
and (3) the Company is required to provide for the prepayment of the Bonds under Section 7.08
of the Loan Agreement if a Determination of Taxability should occur, the Trustee shall undertake
to prepay the Bonds due under Section 3.01(a(iv) hereof, and this obligation of the Trustee shall
survive release and discharge of this Indenture.
D:VJEW200 01\DOCSUNDENTUR.DOC 54 INDENTURE OF TRUST
ARTICLE 10
Default Provisions and Remedies
Section 10.01. Events of Default.
Each of the following events is hereby defined as, and declared to be and to constitute, an
"Event of Default" hereunder:
(a) default in the due and punctual payment of any interest on any Bond; or
(b) default in the due and punctual payment of the principal of any Bond at its
Maturity; or
(c) default in the due and punctual payment of the purchase price of Bonds
required to be purchased pursuant to Section 4.01 when payment of such amount has
become due and payable; or
(d) If default shall be made in the due and punctual payment of any other
moneys required to be paid to the Trustee under the provisions hereof and such default
shall have continued for a period of 30 days after written notice thereof, specifying such
default, shall have been given by the Trustee to the Issuer and the Company, or to the
Issuer, the Company and the Trustee by the Holders of not less than twenty-five percent
(25%) in aggregate principal amount of the then Outstanding Bonds; or
(e) If default shall be made in the performance or observance of any other of
the covenants, agreements or conditions on the part of the Issuer contained in this
Indenture or in the Bonds, and such default shall have continued for a period of 30 days
after written notice thereof given in the manner provided in clause (c) above; or
(f) the occurrence of an Act of Bankruptcy; or
(g) the occurrence of an "Event of Default" under the Loan Agreement.
Section 10.02. Acceleration.
(a) Upon the occurrence of an Event of Default referred to in Section 10.01 hereof,
the Trustee may, and at the written request of the Holders of not less than 25% in aggregate
principal amount of the Outstanding Bonds shall, by notice in writing delivered to the Issuer and
the Company declare the principal of all Bonds immediately due and payable, whereupon the
same shall become immediately due and payable any time herein or in the Bonds to the contrary
notwithstanding.
(b) Upon any declaration of acceleration, or occurrence resulting in acceleration under
this Section 10.02, the Trustee shall immediately declare the Basic Payments required to be made
by the Company under the Loan Agreement to be immediately due and payable in accordance
with Section 9.02 of the Loan Agreement.
D:WEW200\00I\DOCS\INDENTUR.DOC 55 INDENTURE OF TRUST
(c) Upon any acceleration required under this Section 10.02, interest shall cease to
accrue on the Bonds as of the date of declaration of such acceleration.
(d) Except as provided in this Section 10.02, under no other circumstances may the
Trustee accelerate the payment of the Bonds.
Section 10.03. Remedies.
(a) Subject to the provisions of Sections 10.02, upon the occurrence of an Event of
Default and acceleration of the Bonds, the Trustee may proceed to pursue any available remedy
by suit at law or in equity to enforce all rights of the Bondholders, including without limitation
the right to the payment of the principal or premium, if any, and interest on the then Outstanding
Bonds. Upon the occurrence of an Event of Default under the Loan Agreement, the Trustee may
also enforce any and all rights, if any, of the Issuer thereunder. The Issuer may also exercise any
of its rights as provided in Section 9.12 of the Loan Agreement.
(b) If any Event of Default shall have occurred, and if it shall have been requested to
do so by the Holders of seventy-five percent (75%) in aggregate principal amount of the then
Outstanding Bonds, and if it shall have received an indemnity bond as provided in Section 11.01
hereof, the Trustee shall be obliged to exercise such rights and powers conferred on the Trustee
by this Section and Section 10.02 as the Trustee (being advised by Independent Counsel), shall
deem most expedient in the interests of the Bondholders; provided, however, that the Trustee
shall have the right to decline to comply with any such request if the Trustee shall be advised by
Independent Counsel that the action so requested may not lawfully be taken or if the Trustee in
good faith shall determine that such action would be unjustly prejudicial to the Bondholders not
parties to such request.
(c) No remedy by the terms of this Indenture 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 (i) given to
the Trustee or to the Holders hereunder or (ii) now or hereafter existing at law or in equity or by
statute.
(d) 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.
(e) No waiver of any Event of Default hereunder, whether by the Trustee or by the
Holders, shall extend to or shall affect any subsequent Event of Default or impair any rights or
remedies consequent thereon.
Section 10.04. Direction of Proceedings By Bondholders.
The Holders of a majority in aggregate principal amount of the then Outstanding Bonds
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
D:\NEW200\001\DOCSUNDENTUR.DOC 56 INDENTURE OF TRUST
in connection with the enforcement of the terms and conditions of this Indenture, the Loan
Agreement or for the appointment of a receiver or any other proceedings hereunder; provided,
that such direction shall not be otherwise than in accordance with the provisions of law and of
this Indenture.
Section 10.05. Waiver of Stay or Extension Laws.
Upon the occurrence of an Event of Default, to the extent that such rights may then
lawfully be waived, neither the Issuer nor anyone claiming through it or under it shall or will set
up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption
laws now or hereafter in force, in order to prevent or hinder the enforcement of this Indenture,
but the Issuer, for itself and all who may claim through or under it,.hereby waives to the extent
that it lawfully may do so the benefit of all such laws and all right of appraisement and
redemption to which it may be entitled under the laws of the State of Minnesota.
Section 10.06. Priorityof Payment and Application of Moneys.
All moneys received by the Trustee pursuant to any right given or action taken under the
provisions of this Article shall, after payment of the costs and expenses of the proceedings
resulting in the collection of such other moneys and of the related expenses, liabilities and
advances incurred or made by the Issuer or the Trustee, be deposited in the Bond Fund. All
moneys in the Bond Fund shall be applied, subject to the provisions of Article VI, as follows:
(a) Unless the principal of all the Bonds shall have become or shall have been
declared due and payable, all such moneys shall be applied:
FIRST: To the payment to the Persons entitled thereto of all installments
of interest then due on the Bonds, in the order of the maturity of the installments
of such interest and, if the amount available shall not be sufficient to pay in full
any particular installment, then to the payment ratably, according to the amounts
due on such installment, to the Persons entitled thereto, without any
discrimination or privilege;
SECOND: To the payment to the Persons entitled thereto the unpaid
principal of any of the Bonds which shall have become due in the order of their
due dates with interest on such Bonds at the applicable rate and, if the amount
available shall not be sufficient to pay in full the unpaid principal on Bonds due
on any particular due date, then to the payment ratably, according to the amount of
principal and premium, if any, due on such date, to the Persons entitled thereto,
without any discrimination or privilege; and
(b) If the principal of all Bonds shall have become due or shall have been
declared due and payable, all such moneys shall be applied first to the payment of the
principal and interest then due and unpaid upon the Bonds, (other than Company Bonds)
without preference or priority of principal or any redemption premium over interest or of
interest over principal or any redemption premium, or of any installment of interest over
any other installment of interest, or of any Bond over any other Bond, ratably, according
D.NE W200\001\DOCSQNDENTUR.DOC 57 INDENTURE OF TRUST
to the amounts due respectively for principal and interest, to the Persons entitled thereto,
without any discrimination or privilege, and second, to the payment of the principal and
interest in the Company Bonds in the same manner.
(c) If the principal of all the Bonds shall have been declared due and payable,
and if such declaration shall thereafter have been rescinded and annulled under the
provisions of this Article, then, subject to the provisions of paragraph (b) of this Section
in the event that the principal of all the Bonds shall later become due or be declared due
and payable, the moneys shall be applied in accordance with the provisions of paragraph
(a) of this Section.
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 (i) 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 and (ii) on or before such date set aside the moneys necessary to effect such
application. The Trustee shall give to the Bondholders mailed notice of the deposit with it of any
such moneys and of the fixing of any such date. Neither the Trustee nor any Paying Agent shall
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 10.06, and all expenses and charges of the Trustee and the Issuer have been paid, any
balance remaining shall be paid to the person entitled to receive the same pursuant to Section
14.09.
Section 10.07. Remedies Vested in Trustee.
All rights of action (including the right to file proof of claims) under this Indenture or
under any of the Bonds may be enforced by the Trustee without the possession of any of the
Bonds or the production thereof in any trial or other proceedings 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, and any recovery or
judgment shall be for the equal benefit of the Holders of the Outstanding Bonds to the extent and
in the manner provided herein. The Issuer and the Trustee hereby agree, without in any way
limiting the effect and scope thereof, that the pledge and assignment hereunder to the Trustee of
all rights included within the Trust Estate shall constitute an agency appointment coupled with an
interest on the part of the Trustee which, for all purposes of this Indenture, shall be irrevocable
and shall survive and continue in full force and effect notwithstanding the bankruptcy or
insolvency of the Issuer or its default hereunder or on the Bonds.
DANEW200\00 I \DOCS\rNDENTUR. DOC 58 INDENTURE OF TRUST
Section 10.08. Rights and Remedies of Holders.
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, the Loan Agreement, or for the execution
of any trust hereof or any remedy hereunder or thereunder or for the appointment of a receiver,
unless: (i) a default thereunder shall have become an Event of Default and the Holders of
seventy-five percent (75%) in aggregate principal amount of the Bonds then Outstanding shall
have made written request to the Trustee and shall have offered it reasonable opportunity either
to proceed to exercise the powers hereunder granted or to institute such action, suit or proceeding
in its own name; (ii) such Holders shall have offered to indemnity the Trustee as provided in
Section 11.01; and (iii) the Trustee shall thereafter fail or refuse to exercise within a reasonable
period of time the remedies hereunder granted, or to institute such action, suit or proceeding in its
own name. 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 the enforcement of this Indenture,
the Loan Agreement, or for the appointment of a receiver 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 its, his or their
action or to enforce any right thereunder 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 then Outstanding; provided,
however, that nothing herein shall be construed to preclude any Bondholder from enforcing, or
impair the right of any Bondholder to enforce, the payment by the Trustee of principal of, and
interest and premium, if any, on any Bond of such Bondholder at or after its date of maturity, if
and to the extent that such payment is required to be made to such Bondholder by the Trustee
from available funds in accordance with the terms hereof.
Section 10.09. Termination of Proceedings.
In case the Trustee shall have proceeded to enforce any right under this Indenture or the
Loan Agreement by the appointment of a receiver, by entry and possession or otherwise, and
such proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, then and in every such case the Issuer and the Trustee shall
be restored to their former positions and rights hereunder with respect to the property herein
conveyed, and all rights, remedies and powers of the Trustee shall continue as if no such
proceedings had been taken.
Section 10.10. Waiver of an Event of Default.
The Trustee may waive any Event of Default and its consequences and shall do so upon
written request of the Holders of a majority in aggregate principal amount of all the Bonds then
Outstanding. No Event of Default giving rise to mandatory acceleration may be waived. No
such waiver or rescission shall extend to any subsequent or other Events of Default, or impair
any right consequent thereon.
DANEW200\001\ DOCSUNDENTUR.DOC 59 INDENTURE OF TRUST
Section 10. 11. Companygent of Issuer.
(a) No default under Section 10.01(g) of this Indenture shall constitute an Event of
Default until actual notice of such default by registered or certified mail shall be given by the
Trustee to the Issuer, the Company, and the Issuer and the Company shall have had the time
permitted by the applicable subsection after receipt of such notice to correct said default or cause
said default to be corrected and the Issuer or Company shall not have corrected said default or
caused said default to be corrected within said time.
(b) With regard to any alleged default concerning which notice is given to the
Company under the provisions of this Section 10. 11, the Issuer hereby names and appoints the
Company as its attorney-in-fact and agent with full authority to perform any covenant or
obligation of the Issuer alleged in said notice to constitute a default, in the name and stead of the
Issuer with full power to do any and all things and acts to the same extent that the Issuer could do
and perform any such things and acts and with power of substitution; provided that the Company
shall give the Issuer notice of its intention so to perform on behalf of the Issuer, and provided
further that the Issuer may at any time, by a writing addressed to the Company withdraw, limit or
modify the appointment hereby made.
D:\NEW200\001\DOCS\INDENTUR.DOC 60 INDENTURE OF TRUST
ARTICLE 11
The Trustee
Section 11.01. Acceptance of the Trustee.
The Trustee, prior to the occurrence of an Event of Default, undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture; and no implied
covenants or obligations should be read into this Indenture against the Trustee. In case an Event
of Default has occurred, the Trustee agrees to perform such trusts as an ordinarily prudent trustee
under a corporate indenture, but in any such event, only upon and subject to the following
express terns and conditions:
(a) 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, but shall be
answerable for the conduct of the same in accordance with the standard specified above,
and shall be entitled to advice of counsel concerning all matters of trusts hereof and
duties hereunder, and may in all cases pay such reasonable compensation to any attorney,
agent, receiver or employee retained or employed by it in connection herewith. The
Trustee may act upon the written opinion or written advice of any attorney, surveyor,
engineer or accountant selected by it in the exercise of reasonable care or, if selected or
retained by the Issuer, approved by the Trustee in the exercise of such care, provided that
the only legal advice or opinion that the Trustee may rely upon for purposes of securing
advice or an opinion relating to the tax exempt status of the Bonds is given by Bond
Counsel. The Trustee shall not be responsible for any loss or damage resulting from any
action or nonaction in good faith in reliance upon such opinion or advice.
(b) The Trustee shall not be responsible for any recital herein, or in the Bonds
(except with respect to the certificate of the Trustee endorsed on the Bonds) or for the
investment of moneys as herein provided, except as may be provided in Section 8.02, or
for the validity of the execution by the Issuer of this Indenture, or of any -supplemental
indentures or instruments of further assurance, or for the sufficiency of any security for
the Bonds issued hereunder or intended to be secured hereby, or for the value of title of
the property herein conveyed, if any, or otherwise as to the maintenance of the security
hereof, except as otherwise provided in Section 5.04 and except that in the event the
Trustee enters into possession of a part or all of the property conveyed pursuant to any
provisions of this Indenture, it shall use due diligence in preserving such property. The
Trustee may, but shall be under no duty to, require of the Company full information and
advice as to the performance of the covenants, conditions and agreements in the Loan
Agreement as to the condition of the Project and the performance of all other obligations
thereunder and shall use its best efforts, but without any obligation, to advise the Issuer
and the Company of any impending Event of Default known to the Trustee.
(c) The Trustee shall not be accountable for the use or application by the
Issuer or the Company of any of the Bonds or the proceeds thereof (except as herein
expressly provided) or for the use or application of any money paid over by the Trustee in
accordance with the provisions of this Indenture or for the use and application of money
D: WEW200\00100CS\MDENTUR.DOC 61 INDENTURE OF TRUST
received by any Paying Agent. The Trustee may become the owner of Bonds secured
hereby with the same rights it would have if not Trustee.
(d) The Trustee shall be protected in acting upon any written notice, order,
requisition, request, consent, certificate, opinion (including an opinion of Independent
Counsel or Bond Counsel), affidavit, letter, telegram or other paper or document
reasonably believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons. Any action taken by the Trustee pursuant to this Indenture
upon the request or authority or consent of any person who at the time of making such
request or giving such authority or consent is the Holder of any Bond, shall be conclusive
and binding upon all future Holders of the same Bond and upon Bonds issued in
exchange therefor, upon transfer thereof, or in place thereof .
(e) As to the existence or non-existence of any fact or as to the sufficiency or
authenticity of any instrument, paper or proceeding, the Trustee shall be entitled to rely
upon a certificate of the Issuer signed by its Deputy Clerk under the seal of the Issuer as
sufficient evidence of the facts stated therein as the same appear from the books and
records under the Deputy Clerk's custody or control or are otherwise known to him. The
Trustee may accept a certificate of the Deputy Clerk of the Issuer under the seal of the
Issuer to the effect that a motion, resolution or ordinance in the form therein set forth has
been adopted by the governing body of the Issuer as conclusive evidence that such
motion, resolution or ordinance has been duly adopted, and is in full force and effect, and
may accept such motion, resolution or ordinance as sufficient evidence of the facts stated
therein and the necessity or expediency of any .particular dealing, transaction or action
authorized or approved thereby, but may at its 'discretion, secure such further evidence
deemed necessary or advisable, but shall in no case be bound to secure the same.
(f) The Trustee shall not be answerable except for its own negligence or
willful default.
(g) The Trustee shall not be personally liable for any debts contracted or for
damages to persons or to personal property injured or damaged, or for salaries or
nonfulfillment of contracts during any period in which they may be in possession of or
managing the real and tangible personal property as in this Indenture provided.
(h) At any and all reasonable times, the Trustee, and its duly authorized
agents, attorneys, experts, engineers, accountants and representatives, shall have the right
fully to inspect any and all of the property comprising the Project, including all books,
papers and records of the Issuer pertaining to the Project and the Bonds, and to take such
memoranda from and with regard thereto as may be desired.
(i) The Trustee shall not be required to give any bond or surety with respect to
the execution of said trusts and powers or otherwise in respect to the premises.
0) Notwithstanding any thing elsewhere in this Indenture contained, the
Trustee shall have the right, but shall not be required, to demand, with respect to the
authentication of any Bonds, the withdrawal of any cash, the release of any property or
D:\NEW200\001\DOCS\INDENTUR.DOC 62 INDENTURE OF TRUST
any action whatsoever within the purview of this Indenture, any showings, certificates,
opinions (including opinions of Independent Counsel), appraisals or other information, or
corporate action or evidence thereof, in addition to that by the terms hereof required as a
condition of such action by the Trustee, deemed desirable for the purpose of establishing
the right of the Issuer to the authentication of any. Bonds, the withdrawal of any cash, the
release of any property, or the taking of any other action by the Trustee.
(k) Before taking any action under this Indenture, the Trustee may require that
they be furnished an indemnity bond satisfactory to them for the reimbursement of all
expenses to which they may be put and to protect them against all liability except liability
which is adjudicated to have resulted from the negligence or willful default of the
Trustee, by reason of any action so taken by the Trustee.
(1) All moneys received by the Trustee, the Paying Agent, any Co -Paying
Agent or the Remarketing Agent for the Bonds shall, until used or applied or invested as
herein provided, be held in trust for the purposes for which they were received but need
not be segregated from other funds except to the extent required herein or by law.
Neither the Trustee, the Paying Agent, any Co -Paying Agent nor the Remarketing Agent
shall be under any liability for interest on any moneys received hereunder except such as
may be agreed upon.
(m) No provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they shall have
reasonable grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to them.
(n) The Trustee shall make no representation as to the validity or adequacy of
this Indenture or the Bonds, it shall not be accountable for the Issuer's use of the proceeds
of the Bonds or any money paid to the Issuer or upon the Issuer's direction under any
provision hereof, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee and it shall not be responsible for
any statement or recital herein or any statement in the Bonds or any other document in
connection with the sale of the Bonds or pursuant to this Indenture other than its
certificate of authentication.
Section 11.02. Trustee's Fees. Charges and Expenses.
The Trustee and any Paying Agent shall be entitled to payment and/or reimbursement for
reasonable fees for services rendered hereunder and all advances, counsel fees and other
expenses reasonably and necessarily made or incurred by the Trustee in and about the execution
of the trusts created by this Indenture and in and about the exercise and performance of the
powers and duties of the Trustee hereunder and for the reasonable and necessary costs and
expenses incurred in defending 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). In this regard the Issuer has made provisions in Section 4.04 of the Loan Agreement
for the payment of said fees, advances, counsel fees, costs and expenses and reference is hereby
D:\NEW200\001\DOCS\WDENTUR.DOC 63 INDENTURE OF TRUST
made to the Loan Agreement for the provisions so made; and the Issuer shall not otherwise be
liable for the payment of such sums. Upon an Event of Default, but only upon an Event of
Default, the Trustee shall have a first lien with right of payment prior to payment on account of
interest on or principal or premium, if any, of any Bond and upon the money received by it
hereunder, for said fees, advances, counsel fees, costs and expenses incurred by it, except that the
Trustee shall have no right to apply funds on deposit in the Excess Investment Earnings Fund to
the payment of its fees, charges and expenses.
Section 11.03. Notice to Holders of Default.
The Trustee shall give to the Bondholders written notice of all Events of Default known
to the Trustee, within ninety (90) days after the occurrence of an Event of Default; provided that,
except in the case of an Event of Default in the payment of the principal of or interest on any of
the Bonds, the Trustee shall be protected in withholding such notice if and so long as the Board
of Directors, the executive committee or a trust committee of directors or chief executive officer
of the Trustee in good faith determine that the withholding of such notice is in the interest of the
Holders.
Section 11.04. Intervention by Trustee.
In any judicial proceeding to which the Issuer is a party and which in the opinion of the
Trustee and its counsel has a substantial bearing on the interests of Holders of Bonds, the Trustee
may intervene on behalf of Holders and shall do so if requested in writing by the Holders of at
least twenty-five percent (25%) of the aggregate principal amount of Outstanding Bonds. The
rights and obligations of the Trustee under this Section are subject to the approval of a court of
competent jurisdiction.
Section 11.05. Successor Trustee.
Any corporation, association or agency 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 and Paying Agent under this Indenture 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 11.06. Resignation by Trustee.
The Trustee and any successor trustee may at any time resign from the trusts hereby
created by giving thirty (30) days written notice to the Issuer and to the Company and by first
class mail to each Holder of Bonds as shown on the Bond Register, and such resignation shall
take effect upon the appointment of a successor trustee by the Holders or by the Issuer. Such
notice to the Issuer and the Company may be served personally or sent by registered mail.
D:W EW 200\001\DOCSUNDENTUR.DOC 64 INDENTURE OF TRUST
Section 11.07. Removal of Trustee.
The Trustee may be removed at any time by an instrument or concurrent instruments in
writing delivered to the Trustee, to the Company and to the Issuer, and signed by the Holders of a
majority in aggregate principal amount of then Outstanding Bonds. Such removal shall only take
effect upon the appointment of a successor trustee.
Section 11.08. Appointment of Successor Trustee.
In case the Trustee hereunder shall resign or be removed, or be dissolved or shall be in
course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in
case it shall be taken under the control of any public officer or officers, or of a receiver appointed
by a court, a successor may be appointed by the Holders of a majority in aggregate principal
amount of the then Outstanding Bonds, by an instrument or concurrent instruments in writing
signed by such Holders, or by their attomey-in-fact, duly authorized. Nevertheless, in case of
such vacancy the Issuer by resolution of its governing body may appoint a temporary trustee to
fill such vacancy until a successor trustee shall be appointed by the Holders in the manner above
provided; and any such temporary trustee so appointed by the Issuer shall immediately and
without farther act be superseded by the trustee so appointed by such Holders. Every such
Trustee appointed pursuant to the provisions of this Section 11.08 shall be a trust company or
bank having trust powers and having a reported capital and surplus not less than $25,000,000, if
there be such an institution willing, qualified and able to accept the trust upon reasonable or
customary terms.
Section 11.09. Acceptance by Successor Trustees.
Every successor Trustee appointed hereunder shall execute, acknowledge. and deliver to
its predecessor, to the Company and also to the Issuer, 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 predecessors as Trustee and Paying Agent; but such predecessor shall,
nevertheless, on the written request of the Issuer, or of its successor Trustee, execute and deliver
an instrument transferring to such successor Trustee all the estates, 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 instrument in writing
from the Issuer be required by any successor Trustee for more fully and certainly vesting in such
successor the estates, rights, powers and duties hereby vested or intended to be vested in the
predecessor trustee, any and all such instruments in writing shall, on request, be executed,
acknowledged and delivered by the Issuer. The resignation of any Trustee and the instrument or
instruments removing any Trustee and appointing a successor hereunder, together with all other
instruments provided for in this Article, shall be forthwith filed or recorded or both by the
successor Trustee in each recording office where the Indenture shall have been filed or recorded
or both.
D:WEW200\001\DOCS\INDENCUR.DOC 65 INDENTURE OF TRUST
Section 11.10. Richt of Trustee to Pay Taxes and Other Charges.
If any tax, assessment or governmental or other charge upon any part of the Trust Estate
is not paid as required herein, the Trustee may pay such tax, assessment or charge, without
prejudice, however, to any rights of the Trustee or the Bondholders hereunder arising in
consequence of such failure; and any amount at any time so paid under this Section, or under the
Loan Agreement, with interest thereon (to the extent permitted by law) from the date of such
payment until paid to the Trustee in full at a rate per annum equal to the Prime Rate, shall
become so much additional indebtedness secured hereby, and the same shall be given a
preference in payment over the principal of and the interest on, the Bonds and shall be paid out of
the revenues and receipts from the Trust Estate, if not otherwise caused to be paid; provided,
however, that payments of any such tax, assessment or charge shall not have any such preference
with respect to and shall not be paid from any proceeds from the Remarketing of the Bonds by
the Remarketing Agent pursuant to Section 4.04 hereof. The Trustee shall not be under an
obligation to make any such payment unless it shall have been requested to do so by the Holders
of at least 25% in principal amount of the Bonds then Outstanding and shall have been provided
with sufficient moneys for the purpose of making such payment.
Section 11.11. Trustee Protected in Relying Upon Resolutions.
The resolutions, orders, requisitions, 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 full warrant, protection and authority to the Trustee.
Section 11.12. Successor Trustee as Custodian of, Bond Fund and Paying Agent.
In event of a change in the office of Trustee the predecessor trustee which has resigned or
been removed shall cease to be custodian of the funds prescribed in Article V and shall cease to
act as the Paying Agent for principal and interest on the Bonds, and the successor trustee shall be
and become such custodian and Paying Agent.
Section 11.13. Co -Trustee.
At any time or times, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust Estate may at the time be located, the Issuer and the
Trustee shall have the power to appoint, and, upon the request of the Trustee or of the Holders of
at least fifty-one percent (51 %) in aggregate principal amount of the then Outstanding Bonds, the
Issuer shall for such purpose join with the Trustee in the execution, delivery and performance of
all instruments and agreements necessary or proper to appoint one or more persons approved by
the Trustee either to act as co -trustee or co -trustees, jointly with the Trustee, of all or any part of
the Trust Estate, or to act as separate trustee or separate trustees of all or any part of the Trust
Estate, and to vest in such person or persons, in such capacity, such right to the Trust Estate or
any part thereof, and such rights, powers, duties, trusts or obligations as the Issuer and the
Trustee may consider necessary or desirable subject to the remaining provisions of this Section
11.13.
66 INDENTURE OF TRUST
If the Issuer shall not have joined in such appointment within fifteen (15) days after the
receipt by it of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have power to make such appointment.
The Issuer shall execute, acknowledge and deliver all such instruments as may be
required by any such co -trustee or separate trustee for more fully confirming such title, rights,
powers, trusts, duties and obligations to such co -trustee or separate trustee.
Every co -trustee or separate trustee shall, to the extent permitted by law but to such extent
only, be appointed subject to the following terms, namely:
(a) The Bonds shall be authenticated and delivered, and all rights, powers,
trusts, duties and obligations by this Indenture conferred upon the Trustee in respect of
the custody, control or management of moneys, papers securities and other personal
property shall be exercised solely by the Trustee.
(b) All rights, powers, trusts, duties and obligations conferred or imposed
upon the trustees shall be conferred or imposed upon and exercised or performed by the
Trustee, or by the Trustee and such co -trustee or co -trustees or separate trustee or separate
trustees jointly, as shall be provided in the instrument appointing such co -trustee or
co -trustees or separate trustee or separate trustees, except to the extent that, under the law
of any jurisdiction in which any particular act or acts are to be performed, the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event such act or
acts shall be performed by such co -trustee or co -trustees or separate trustee or separate
trustees. .
(c) Any request in writing by the Trustee to any co -trustee or separate trustee
to take or to refrain from taking any action hereunder shall be sufficient warrant for the
taking, or the refraining from taking, of such action by such co -trustee or separate trustee.
(d) Any co -trustee or separate trustee may delegate to the Trustee the exercise
of any right, power, trust, duty or obligation, discretionary or otherwise.
(e) The Trustee at any time, by an instrument in writing, with the concurrence
of the Issuer, may accept the resignation of or remove any co -trustee or separate trustee
appointed under this Section 11.13, and, in case of a continuing Event of Default the
Trustee shall have power to accept the resignation of, or remove, any such co -trustee or
separate trustee without the concurrence of the Issuer. Upon the request of the Trustee,
the Issuer shall join with the Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such resignation or removal.
A successor to any co -trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section 11.13.
(f) No trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder.
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(g) Any demand, request, direction, appointment, removal, notice, consent,
waiver or other action in writing delivered to the Trustee shall be deemed to have been
delivered to each co -trustee or separate trustee.
(h) Any moneys, papers, securities or other items of personal property
received by any such co -trustee or separate trustee hereunder shall forthwith, so far as
may be permitted by law, be turned over to the Trustee.
Upon the acceptance in writing of such appointment by any such co -trustee or separate
trustee, it or he shall be vested with such interest in and to the Trust Estate or any part thereof,
and with such rights, powers, duties or obligations, as shall be specified in the instrument of
appointment jointly with the Trustee (except insofar as local law makes it necessary for any such
co -trustee or separate trustee to act alone) subject to all the terms of this Indenture. Every such
acceptance shall be filed with the Trustee. Any co -trustee or separate trustee may, at any time by
an instrument in writing, constitute the Trustee its or his attorney-in-fact and agent, with full
power and authority to do all acts and things and to exercise all discretion on its or his behalf and
in its or his name.
In case any co -trustee or separate trustee shall die, become incapable of acting, resign or
be removed, the title to the Trust Estate and all rights, powers, trusts, duties and obligations of
said co -trustee or separate trustee shall, so far as permitted by law, vest in and be exercised by the
Trustee unless and until a successor co -trustee or separate trustee shall be appointed in the
manner herein provided.
Section 11.14. Obligation to Trustee as to Reporting.
The Trustee shall, at the request of the Company, cause to be filed any reports lawfully
required by any public agency to be filed under any applicable security laws and any other reports
lawfully required by any public agency to be filed under the Act or any other applicable state law.
For this purpose the Trustee is entitled to require the Company to cause to be furnished to the
Trustee whatever information is necessary to comply with such reporting requirements at the
Company's sole expense.
Section 11.15. Successor Paves Agent.
The provisions of Sections 11.05 through 11.09 with respect to removal, resignation and
appointment of a successor trustee shall be equally applicable to resignation, removal and
appointment of a successor to the Paying Agent. The Trustee shall be eligible for appointment as
successor to the Paying Agent.
Section 11.16. Confirmation of the Trustee.
(a) At any time while Bonds remain Outstanding under this Indenture and in any of
the following circumstances, to the extent permitted by law, to -wit:
(i) The Trustee is in doubt as to whether or not the Indenture or any Related
Document or instrument requires Bondholders' consent or the consent of the Company,
any guarantor, or the Issuer in connection with any proposed action;
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(ii) The Trustee has substantial doubt as to whether its consent to a proposed
action, although authorized, should in the particular circumstances be given;
(iii) The Trustee's consent is sought or deemed necessary in connection with a
proposed action which is not specifically dealt with or contemplated by the Indenture or
any other Related Document, or it is unclear whether the Indenture or other Related
Document is intended to deal with the proposed action;
(iv) There is a disagreement between any of the parties to the Indenture or any
other Related Document as to whether a proposed action may be taken or is required to be
taken;
(v) There appears to be a conflict, ambiguity or inconsistency between or
among the provisions of the Indenture and any other Related Document other than as
provided for in Sections 12.01 and 13.01 hereof,
(vi) There is doubt as to whether or not a proposed action falls within one of
the provisions of Sections 12.01 and 13.01 hereof authorizing such action without
Bondholders' consent;
(vii) Bondholders' consent is required by this Indenture or Related Document
but consent cannot be obtained because:
(A) it is not possible to comply with requirements of this Indenture or
any other Related Document as to the Jaotice to be given to Bondholders with
respect to the proposed matter requiring consent; or
(B) if action is to be taken at a meeting of Bondholders, the requisite
number of Bondholders (the quorum) necessary to be present at a meeting in order
for a proposed action to be taken was not present at such meeting or any
adjourned meeting;
(viii) The Trustee wishes to depart from the procedures set forth in Section
14.03 for purposes of calling or conducting a meeting of the Bondholders, or in any other
eventuality in which it shall be necessary to determine a question arising under or to
construe this Indenture or any other Related Document;
the Trustee may, and upon request of the Issuer, the Company or the Holders of 25% or more in
principal amount of Outstanding Bonds shall, proceed in accordance with the provisions of
Minnesota Statutes, Section 501.33 through 501.38, as amended.
If Bondholder's consent cannot be obtained because of the circumstances
described in (a)(vii) above a court of competent jurisdiction may amend or supplement
the Loan Agreement or Indenture or any Related Document upon a proper showing of the
necessity therefor.
(b) In construing and interpreting the Indenture and any other Related Document, the
objective shall always be to ascertain and effectuate the intention of the parties. So far as
D: WEW2001001\DOCSUNDENTUR.DOC 69 INDENTURE OF TRUST
possible and appropriate, and to the extent that it does not conflict with the provisions of the
Indenture or the other Related Documents, the principles of statutory construction enunciated in
Sections 645.16, 645.17, 645.18, 645.19 and 645.20, Minnesota Statutes, as amended, shall be
applied in the interpretation and construction of the Indenture and other Related Documents.
(c) The Trustee or successor Trustee shall not be answerable for actions taken in
compliance with any final order of the court. The Trustee or successor Trustee shall not be
entitled to require an indemnity bond pursuant to Section 11.01(k), prior to taking any action
directed by final order of the court.
Section 11.17. Remarketing Agent.
The Issuer shall, at the direction of the Company, appoint any successor Remarketing
Agent for the Bonds, subject to the conditions set forth in Section 11.18 hereof. Any successor
Remarketing Agent shall designate to the Trustee its principal office for purposes hereof, which
shall be the office of such Remarketing Agent at which all notices and other communications in
connection herewith may be delivered to it, and signify its acceptance of the duties and
obligations imposed upon it hereunder by a written instrument of acceptance delivered to the
Issuer, the Company and the Trustee under which such Remarketing Agent will agree particularly
to use its best efforts to sell any Bond delivered to the Trustee for purchase pursuant to Article IV
or to assist the Company in selling such Bonds, and (ii) keep books and records with respect to
its activities hereunder available for inspection by the Issuer, and the Trustee and the Company at
all reasonable times.
The Issuer shall cooperate with the Trustee and the Company to cause the necessary
arrangements to be made and to be thereafter continued whereby funds from the sources
specified in Section 6.04 will be made available to pay the purchase price of Bonds presented at
the principal corporate trust office of the Trustee.
Section 11.18. Oualifications of Remarketing Agent, Resignation, Removal.
The Remarketing Agent shall be an institution capable of performing all the duties
imposed upon it by this Indenture. The Remarketing Agent may at any time resign and be
discharged of the duties and obligations created by this Indenture in accordance with the
provisions of the Remarketing Agreement. The Remarketing Agent may be removed at any time,
at the direction of the Company, in accordance with the provisions of the Remarketing
Agreement.
D: WEW2001001\DOCSUNDENTUR.DOC 70 INDENTURE OF TRUST
ARTICLE 12
Supplemental Indentures
Section 12.01. Supplemental Indentures Not Requiring Consent of Bondholders.
The Issuer and the Trustee may, from time to time and at any time, without the consent
of, or notice to, any of the Holders, and when so required by this Indenture shall, enter into an
indenture or indentures supplemental to this Indenture as shall not be inconsistent with the terms
and provisions hereof (which supplemental indenture or indentures shall thereafter form a part
hereof), so as to thereby (1) cure any ambiguity or formal defect or omission in this Indenture or
in any supplemental indenture, (2) grant to or confer upon the Trustee for the benefit of the
Holders any additional rights, remedies, powers, authority or security that may lawfully be
granted to or conferred upon the Holders or the Trustee, (3) more precisely identify the Trust
Estate, or any other property which may become a part of the Trust Estate, (4) subject to the lien
and pledge of this Indenture additional revenues, properties or collateral, (�) evidence the
appointment of a separate trustee or a co -trustee or the succession of a new Trustee and/or Paying
Agent hereunder, (6) modify, eliminate and/or add to the provisions of this Indenture to such
extent as shall be necessary to prevent any interest on the Bonds from becoming taxable under
the Federal income tax laws or 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, (7) make any other chane which is required by any provision of
this Indenture or which is deemed by the Trustee necessary to reconcile the Indenture with the
Related Documents or any amendments thereto, or (8) make any other change which in the
judgment of the Trustee is necessary or desirable and will not materially prejudice any
non -consenting Holder of a Bond.
Section 12.02. Supplemental Indentures Requiring Consent of Holders.
Exclusive of supplemental indentures covered by Section 12.01 hereof and subject to the
terms and provisions contained in this Section, and not otherwise, the Trustee, upon receipt of an
instrument evidencing the consent to the below -mentioned supplemental indenture by the
Holders of not less than fifty-one percent (51%) of the aggregate principal amount of the then
Outstanding Bonds, shall join with the Issuer in the execution of such other indenture or
indentures supplemental hereto as shall be deemed necessary and desirable 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
nothing herein contained shall permit or be construed as permitting (1) an extension of the
maturity of the principal or of the interest on any Bond issued hereunder, or (2) a reduction in the
principal amount of any Bond or the rate of interest thereon or any premium thereon, or (3) a
privilege or priority of any Bond or Bonds over any other Bond or Bonds except as may be
otherwise expressly provided herein, or (4) a reduction in the aggregate principal amount of the
Bonds required for consent to such supplemental indenture, or (5) modifying any of the
D:\NEW200\001\DOCS\INDENTUR.DOC 71 INDENTURE OF TRUST
provisions of this section without the consent of the Holders of one hundred percent (100%) of
the principal amount of all Bonds adversely affected thereby ("100% Bondholders' Consent").
If at any time the Issuer shall request the Trustee to enter into any such supplemental
indenture for any of the purposes of this Section which does not require 100% Bondholders'
Consent, the Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause
notice of the proposed execution of such supplemental indenture to be mailed by first class mail,
postage prepaid, to the Holders of the Bonds at the addresses shown on the Bond Register. Such
notice shall briefly set forth the nature of the proposed supplemental indenture and shall state that
copies thereof are on file at the principal office of the Trustee for inspection by all Bondholders.
The Trustee shall not, however, be subject to any liability to any Bondholder by reason of its
failure to mail such notice to any particular Bondholder if notice was generally mailed to
Bondholders, and any such failure shall not affect the validity of such supplemental indenture
when consented to and approved as provided in this Section. If the Holders of not less than
fifty-one percent (51%) in aggregate principal amount of the then Outstanding Bonds at the time
of the execution of any 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 any
of the terms and provisions contained herein 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 Issuer
from executing the same or from taking any action pursuant to the provisions thereof Upon the
execution of any such supplemental indenture as in this Section permitted and provided, this
Indenture shall be and is deemed to be modified and amended in accordance herewith.
Anything herein to the contrary notwithstanding, a supplemental indenture under this
Article XII which adversely affects the right of the Company under the Loan Agreement shall not
become effective unless and until the Company shall have consented (either in writing or by
inaction as provided below) to the execution and delivery of such supplemental indenture. In this
regard, the Trustee shall cause notice of the proposed execution and delivery of any such
supplemental indenture, together with a copy of the proposed supplemental indenture, to be
mailed by certified or registered mail to the Company at least fifteen (15) days prior to the
proposed date of execution and delivery of any such supplemental indenture. The Company shall
be deemed to have consented to the execution and delivery of any such supplemental indenture if
the Trustee does not receive a letter signed by a Representative of the Company of protest or
objection thereto on or before 4:30 p.m., Central Standard or Central Daylight Time, whichever
is then in effect, of the fifteenth day after the mailing of said notice and a copy of the proposed
supplemental indenture to the Company unless such fifteenth day falls on a Sunday or legal
holiday, in which event the letter of objection must be received on the next succeeding business
day.
Section 12.03. Rights of Trustee.
If, in the opinion of the Trustee, any supplemental indenture provided for in this Article
affects the rights, duties or immunities of the Trustee under this Indenture or otherwise, the
Trustee may, in its discretion, decline to execute such supplemental indenture, except to the
extent that this may be required in the case of a supplemental indenture entered into under
Section 12.01. The Trustee shall be entitled to receive, and shall be fully protected in relying
D:\NEW200\001\DOCSUNDENTUR.DOC 72 INDENTURE OF TRUST
upon, an opinion of Independent Counsel as conclusive evidence that any such supplemental
indenture conforms to the requirements of this Indenture.
D:W EW200\001\DOCSOMENTUR.DOC 73 INDENTURE OF TRUST
ARTICLE 13
Amendments to Agreement and Related Documents
Section 13.01. Amendments Not Requiring Bondholder Consent.
The Issuer and/or the Trustee may, without the consent of or notice to the Bondholders,
consent to any amendment, change or modification of the Related Documents:
(a) which may be required or permitted without Bondholder consent by the
provisions of the Related Documents or this Indenture;
(b) for the purpose of curing any ambiguity or formal defect or omission;
(c) to reconcile the Related Documents with any amendment or supplement to
the Indenture; or
(d) to effect any other change to the Related Documents which, in the
judgment of the Trustee, will not materially prejudice any non -consenting Holder of a
Bond.
Section 13.02. Amendments Requiring Bondholder Consent.
Except for amendments, changes or modifications described in Section 13.01 above,
neither the Issuer nor the Trustee shall consent to any other amendment, change or modification
of the Related Documents, without giving notice and the written approval or consent of the
Holders of not less then fifty-one percent (51 %) in aggregate principal amount of the Bonds then
Outstanding given and procured as provided in this Section; provided that in no event shall such
amendment, change or modification relieve the Company of the obligation under the Related
Documents to make when and as due any payments required for the payment of principal, interest
and any premium due or to become due on the Bonds unless the consent of the Holders of all
Bonds adversely affected thereby is first secured. If at any time the Issuer and the Company shall
request the consent of the Trustee to any such proposed amendment, change or modification any
Related Documents the Company shall request consent of the Trustee to any such proposed
amendment, change or modification, the Trustee shall, upon being satisfactorily indemnified with
respect to expenses, cause notice of such proposed amendment, change or modification to be
given in the same manner as provided in Section 12.02 hereof with respect to supplemental
indentures. Such notice shall briefly set forth the nature of such proposed amendment, change or
modification and shall state that copies of the instrument embodying the same are on file at the
principal office of the Trustee for inspection by all Holders. The Trustee shall not, however, be
subject to any liability to any Holder by reason of its failure to mail such notice to any particular
Bondholder if notice was generally mailed to Bondholders, and any such failure shall not affect
the validity of such amendment, change or modification when consented to and approved as
provided in this Section. If the Holders of not less than fifty-one percent (51%) in aggregate
principal amount of the Bonds then Outstanding at the time of the execution of any such
amendment shall consent to 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 the
D: WEW200\001\DOCS\INDENTURDOC 74 INDENTURE OF TRUST
operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin
or restrain the Trustee or the Issuer from executing the same or from taking any action pursuant
to the provisions thereof. Upon the execution of any such amendment, the affected Related
Document shall be deemed to be modified and amended in accordance therewith. Nothing in this
Section shall permit or be construed as permitting any reduction in the payments required to be
made (i) by Sections 4.02 or 4.03 of the Loan Agreement or (ii) permitting a reduction or change
in the Stated Maturities of the Bonds.
D:WEW200\00100CSUNDENTURDOC 75 UJDENTURE OF TRUST
ARTICLE 14
Miscellaneous Provisions
Section 14.01. Consent.
Any consent, request, direction, approval, objection or other instrument required by this
Indenture to be signed and executed by the Holders may be in any number of concurrent writings
of similar tenor and must be signed or executed by such Holders in person or by agent appointed
in writing. Proof of the execution of any such consent, request, direction, approval, objection or
other instrument or of the writing appointing any such agent and of the ownership of Bonds, if
made in the following manner, shall be sufficient for any of the purposes of this Indenture, and
shall be conclusive in favor of the Trustee with regard to any action taken by it under such
request or other instrument, namely:
(a) The fact and date of the execution by any Person of any such writing may
be proved by the certificate of any officer in any jurisdiction who by law has power to
take acknowledgments within such jurisdiction that the Person signing such writing
acknowledged before him the execution thereof, or by an affidavit of any witness to such
execution.
(b) The fact of the ownership by any Person of Bonds and the amounts and
numbers of such Bonds, and the date of the holding of the same, may be proved only by
reference to the Bond Register.
Section 14.02. Rights Under Indenture.
With the exception of rights herein expressly conferred, nothing expressed or mentioned
in or to be implied from this Indenture or the Bonds is intended or shall be construed to give any
person or company other than the parties hereto, and the Bondholders, any legal or equitable
right, remedy, or claim under or in respect to this Indenture or any covenants, conditions and
provisions herein contained; this Indenture and all of the covenants, conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and
the Holders of the Bonds hereby secured as herein provided.
Section 14.03. Meetings of Bondholders.
(a) A meeting of Bondholders may be called at any time and from time to time
pursuant to this Section to facilitate any of the following purposes:
(i) to give any notice to the Issuer, the Company or the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any default under this Indenture,
or to take any other action authorized to be taken by the Bondholders under this
Indenture;
(ii) to remove the Trustee or to appoint a successor trustee pursuant to
Sections 11.07 and 11.08 of this Indenture;
D: WEW200\001\DOMNDENTURDOC 76 INDENTURE OF TRUST
(iii) to consent to the execution of a supplemental indenture pursuant to
Section 12.02 hereof, or to consent to the execution of an amendment, change or
modification of any Related Document pursuant to Section 13.02 hereof; or
(iv) to take any other action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of the Bonds under any other
provision of this Indenture or under applicable law.
(b) Meetings of Bondholders may be held at such place or places as the Trustee or, in
case of its failure to act, the Bondholders calling the meeting, shall from time to time determine.
(c) The Trustee may at any time call a meeting of Bondholders to be held at such time
and at such place as the Trustee shall determine. Notice of every meeting of Bondholders setting
forth the time and the place of such meeting and in general terms the action proposed to be taken
at such meeting, shall be mailed by first class mail, postage prepaid, to the Holders of the Bonds
at the address shown on the Bond Register. Any failure of the Trustee to mail such notice to a
particular Bondholder, or any defect therein shall not, however, in any way impair or affect
the -validity of any such meeting if notice was generally mailed to Bondholders. In the event that
the Holders of at least 10% in aggregate principal amount of the Outstanding Bonds 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
accomplished the mailing of notice of such meeting within 20 days after receipt of such request,
then such Bondholders may determine the time and the place for such meeting and may call such
meeting to take any action authorized in paragraph (a) of this Section by giving notice of such
meeting in accordance with the provisions of this paragraph (c).
(d) To be entitled to vote at any meeting of Bondholders, a person shall be a Holder
of one or more Bonds Outstanding, or a person appointed by an instrument in writing as proxy
for a Bondholder by such Bondholder. The only persons who shall be entitled to be present or to
speak at any meeting of Bondholders shall be the persons entitled to vote at such meeting and
their counsel and any representatives of the Trustee, the Company and the Issuer and their
counsel.
(e) Notwithstanding any other provisions of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any meeting of Bondholders in regard
to proof of the ownership 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. Except as otherwise permitted or required by any
such regulations, the ownership of Bonds shall be proved in the manner specified in Section
14.01 of this Indenture and the appointment of any proxy shall be proved in the manner specified
in said section or by having the signature of the person executing the proxy witnessed or
guaranteed by any bank, banker or trust company authorized by said Section to certify to the
ownership of Bonds:
(i) The Trustee or, if the Bondholders have called the meeting, the
Bondholders shall, by an instrument in writing, appoint a temporary chairperson of the
D: WEW200\001\DOCS\NDENTUR.DOC 77 INDENTURE OF TRUST
meeting. A permanent chairperson and a permanent secretary of the meeting shall be
elected by vote of the Holders of a majority of the Bonds represented at the meeting and
entitled to vote.
(ii) At any meeting such Bondholder or proxy shall be entitled to one vote for
each $5,000 of principal amount of Outstanding Bonds owned or represented by him or
her; provided, however, that no vote shall be cast or counted at any meeting in respect of
any Bond challenged as not Outstanding and ruled by the chairperson of the meeting to be
not Outstanding. The chairperson of the meeting shall have no right to vote, except as a
Bondholder or proxy.
(iii) At any meeting of Bondholders, the presence of persons owning or
representing Bonds in an aggregate principal amount sufficient under the appropriate
provision of this Indenture to take action upon the business for the transaction of which
such meeting was called shall constitute a quorum. Any meeting of 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.
(f) 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 Bondholders or of their
proxies and the number or numbers of the Bonds Outstanding held or represented by them. The
permanent chairperson 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 triplicate of all votes cast at the meeting.
A record, at least in triplicate, of the proceedings of each meeting of Bondholders shall be
prepared by the secretary of the meeting. The original reports of the inspectors of votes on any
vote by ballot taken at such meeting, 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
published or mailed as provided in this Section shall be attached to such record. Each copy shall
be signed and verified by the affidavits of the permanent chairperson and secretary of the meeting
and one such copy shall be delivered to the Issuer, another to the Company and another to the
Trustee to be preserved by the Trustee which copy shall have attached thereto the ballots voted at
the meeting. Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
(g) At any time prior to the preparation of the record of the meeting in accordance
with the terms of this Section for delivery to the Trustee evidencing 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 the number of which is included
in the Bonds, the Holders of which have consented to such action, may, by filing written notice
with the Trustee at its Principal corporate trust office and upon proof of holding as provided in
Section 14.01 of this Indenture, revoke such consent so far as it concerns 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, upon transfer thereof, or in lieu thereof, irrespective of whether or not any
D:WEW2=00100MINDENTURDOC 78 INDENTURE OF TRUST
notation in regard thereto is made upon such Bond. Any action taken by the Holders of the
percentage in aggregate principal amount of the Bonds specified in this Indenture in connection
with such action shall be conclusively binding upon the Issuer, the Company, the Trustee and the
Holders of all the Bonds.
(h) Nothing in this Section 14.03 is intended to limit or prevent the Trustee from
taking any action permitted under Section 11.16 of this Indenture, including but not limited to the
Trustee's right to apply to a court of competent jurisdiction for confirmation of appointment, or
for instructions in accordance with the provisions of Minnesota Statutes, Sections 501.33 through
501.38, as amended.
Section 14.04. Severability.
If any provision of this Indenture shall be held or deemed to be or shall, in fact, be
inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions
or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or
statute or rule of public policy, or for any other reason, such circumstances shall not have the
effect of rendering the provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provisions herein contained invalid, inoperative or
unenforceable to any extent whatever.
The invalidity of any one or more phrases, sentences, clauses or paragraphs in this
Indenture contained shall not affect the remaining portions of this Indenture or any part thereof.
Section 14.05. Notices.
All notices, certificates or other communications hereunder shall be in writing (except as
otherwise expressly provided herein) and shall be sufficiently given and shall be deemed given
when mailed by first class mail, postage prepaid, with proper address as indicated below. The
Issuer, the Company, the Bondholders and the Trustee may, by written notice given by each to
the others, designate any address or addresses to which notices, certificates or other
communications to them shall be sent when required as contemplated by this Indenture. Until
otherwise provided by the respective parties, all notices, certificates and communications to each
of them shall be addressed as follows:
To the Issuer: City of New Hope, Minnesota
4401 Xylon Avenue North
New Hope, Minnesota 55428-4898
Attn: City Manager
To the Company: Reprise Associates Limited Partnership
Reprise, Inc.
3005 Ottawa Avenue
St. Louis Park, Minnesota 55416
Attn: President
D:WEW200\00RDOCSUNDENTURDOC 79 INDENTURE OF TRUST
To the Trustee: Norwest Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attn: Corporate Trust Department
To the Remarketing Agent: Piper Jaffray Inc.
222 South Ninth Street, 15th Floor
Minneapolis, Minnesota 55402
Attn: Head of Municipal Underwriting
Section 14.06. Required Approvals.
Consents and approvals required by this Indenture to be obtained from the Company, the
Remarketing Agent, the Issuer or the Trustee shall be in writing and shall not be unreasonably
withheld or delayed.
Section 14.07. Counterparts.
This Indenture 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 14.08. Limitation of Issuer and its Officers, Employees and Agents.
No covenant, provision or agreement of the Issuer herein or in the Bonds or in any other
document executed by the Issuer in connection with the;ssuance, sale and delivery of the Bonds,
or any obligation herein or therein imposed upon the Issuer or breach thereof, shall give rise to a
pecuniary liability of the Issuer or a charge against its general credit or taxing powers or shall
obligate the Issuer financially in any way except with respect to this Indenture and the application
of revenues therefrom and the proceeds of the Bonds. No failure of the Issuer to comply with
any term, condition, covenant or agreement therein shall subject the Issuer to liability for any
claim for damages, costs or other financial or pecuniary charges except to the extent that the
same can be paid or recovered from this Agreement or revenues therefrom or proceeds of the
Bonds. No execution on any claim, demand, cause of action or judgment shall be levied upon or
collected from the general credit, general funds or taxing powers of the Issuer. In making the
agreements, provisions and covenants set forth herein, the Issuer has not obligated itself except
with respect to this Agreement and the application of revenues hereunder as hereinabove
provided. The Bonds constitute special obligations of the Issuer, payable solely from the
revenues pledged to the payment thereof pursuant to this Indenture, and does not now and shall
never constitute an indebtedness or a loan of the credit of the Issuer, or the State of Minnesota or
any political subdivision thereof or a charge against general taxing powers within the meaning of
any constitutional or statutory provision whatsoever. It is further understood and agreed by the
Company in the Loan Agreement and by the Holders that the Issuer shall not incur pecuniary
liability hereunder nor shall it be liable for any expenses related hereto, all of which the Company
has agreed to pay. If, notwithstanding the provisions of this Section, the Issuer incurs any
expense, or suffers any losses, claims or damages or incurs any liabilities, the Company has
agreed in the Loan Agreement that it will indemnify and hold harmless the Issuer from the same
and to reimburse the Issuer for any legal or other expenses incurred by the Issuer in relation
80 INDENTURE OF TRUST
thereto, and such covenant to indemnify, hold harmless and reimburse the Issuer shall survive
delivery of and payment for the Bonds. The liability of the Issuer is further restricted as provided
in the Act.
Section 14.09. Amounts Remaining in Funds.
Upon expiration or sooner termination of the Loan Agreement as provided therein and
after adequate provision has been made to discharge the Bonds in accordance with Article IX and
make all other payments required hereunder and under the Loan Agreement, the Trustee
forthwith shall, pay all remaining amounts in the Funds established in Article VI hereof to the
Company.
DANEW2OO\001MOCSUNDENTUR.DOC 81 MDENTURE OF TRUST
l
IN WITNESS WHEREOF, the Issuer has caused this Indenture of Trust to be signed in
its name on its behalf by its Mayor and City Manager, and to evidence its acceptance of the trusts
hereby created the Trustee has caused these presents to be signed in its name and behalf by its
duly authorized officers, all as of the 1 st day of March, 1997.
D 1NE W 200\001 MOCSUNDENTUR. DOC
CITY OF NEW HOPE, MINNESOTA
By ;;�
Its Mayor
By
Its City Manager
INDENTURE OF TRUST
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By, =
Its Assistant Vice President
D:\NEW200\001\DOCS\INDENTUR.DOC 83 INDENTURE OF TRUST
EXHIBIT A
Notice of Mandatory Tender Date
To the Holders of: City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
NOTICE IS HEREBY GIVEN, pursuant to the provisions of the Indenture of Trust (the
"Indenture"), dated March 1, 1997, between the City of New Hope, Minnesota and Norwest Bank
Minnesota, National Association, as Trustee, that the above entitled Bonds will be purchased on
(the "Mandatory Tender Date"), at a price of 100% of the principal
amount (the 'Purchase Price").
You are hereby instructed to deliver to the Trustee on or before 12:00 noon, Minneapolis
time on the Business Day prior to the Mandatory Tender Date all of your Bonds for purchase
with form of assignment executed in blank. Payment of the Purchase Price and accrued interest
on each Bond shall be made only upon delivery of such Bond to the Trustee, together with proper
instruments of assignment of the Bond to the Remarketing Agent.
BONDS NOT TENDERED FOR PURCHASE ON THE MANDATORY TENDER
DATE SHALL NEVERTHELESS BE DEEMED TENDERED FOR PURCHASE. HOLDERS
OF BONDS REQUIRED TO BE SURRENDERED FOR PURCHASE ARE NOT ENTITLED
TO HOLD SUCH BONDS OR TO ANY ACCRUAL OF INTEREST THEREON ON OR
AFTER THE MANDATORY TENDER DATE.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
M
D1NEW200\00100CSUNDENTURDOC A -I INDENTURE OF TRUST
EXECUTION COPY
LOAN AGREEMENT
between
CITY OF NEW HOPE, MINNESOTA
and
REPRISE ASSOCIATES LIMITED PARTNERSHIP
relating to
$1,650,000
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
Dated as of March 1, 1997
With the exception of certain reserved rights, the interest of the City of New Hope, Minnesota, in
this Loan Agreement has been assigned to Norwest Bank Minnesota, National Association in
Minneapolis, Minnesota.
This instrument was drafted by:
HOLMES & GALEY, LTD.
One Financial Plaza, Suite 1200
120 South Sixth Street
Minneapolis, Minnesota 55402
D',NEW200\001\DOCS\LOAN.DOC LOAN AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is not a part of the Loan Agreement, but is included only
for convenience of reference.)
PAGE
PARTIES........................................................................................................................................ 1
ARTICLE 1
Definitions, Exhibits and Miscellaneous
Section1.01.
Definitions...............................................................
:........................................... 2
Section1.02.
Exhibits................................................................................................................
3
Section1.03.
Company's Acts...................................................................................................
3
Section 1.04.
Rules of Interpretation.........................................................................................
3
Section 2.01.
Section 2.02.
Section 3.01.
Section 3.02.
Section 3.03.
Section 3.04.
Section 3.05.
Section 3.06.
Section 3.07.
Section 3.08.
ARTICLE 2
Representations of Issuer and Company
Representations of the Issuer ...................
Representations of the Company .............
ARTICLE 3
Rehabilitation of Project
.................................. 5
.................................. 6
Acquisition and Rehabilitation of Project by Company ......................................
9
Payment of Costs by Company............................................................................
9
Authorization by Issuer......................................................................................
10
Issuance of Bonds..............................................................................................
11
Disbursements from Project Fund.....................................................................
11
Establishment of Completion Date....................................................................
12
IntentionallyOmitted.........................................................................................
12
Enforcement of Contract....................................................................................
12
ARTICLE 4
The Loan, Basic Payments, Additional Charges and Additional Financing
Section4.01.
The Loan ............................................................................................................
13
Section4.02.
Basic Payments..................................................................................................
13
Section 4.03.
Basic Payments on Account of the Purchase Price of Bonds ............................
14
Section 4.04.
Additional Charges............................................................................................
14
Section 4.05.
Company's Obligations Unconditional..............................................................
14
Section 4.06.
Assignment of Issuer's Rights............................................................................
15
Section 4.07.
Company's Remedies.........................................................................................
15
D:\NEW200\001\DOCS\LOAN.DOC i LOAN AGREEMENT
ARTICLE 5
Project Covenants
Section 5.01. Project Operation and Maintenance................................................................... 16
Section 5.02. Sale or Lease of Project..................................................................................... 16
Section 5.03. Intentionally Omitted......................................................................................... 16
Section5.04. Advances............................................................................................................ 16
Section 5.05. Alterations to the Project and Removal of Project Equipment .......................... 16
ARTICLE 6
Damage, Destruction and Condemnation
Section 6.01. Damage and Destruction.................................................................................... 18
Section6.02. Condemnation.................................................................................................... 18
ARTICLE 7
Company's Covenants
Section 7.01.
Covenant for the Benefit of the Trustee and Bondholders .................................
19
Section 7.02.
Inspection and Access........................................................................................
19
Section 7.03.
Annual Statement, Audit, Certificate of Compliance and Other Reports..........
19
Section 7.04.
Indemnity by Company......................................................................................
20
Section7.05.
Status of Company.............................................................................................
21
Section 7.06.
Filing of Financing Statements............:.............................................................
22
Section 7.07.
Assurance of Tax Exemption.............................................................................
22
Section 7.08.
Determination of Taxability...............................................................................
24
ARTICLE 8
Company's Options
Section 8.01. Assignment and Transfer................................................................................... 26
Section8.02. Prepayment........................................................................................................ 26
Section 8.03. Direction of Investments.................................................................................... 26
Section 8.04. Termination of Loan Agreement........................................................................ 26
ARTICLE 9
Events of Default and Remedies
Section9.01.
Events of Default...............................................................................................
29
Section9.02.
Remedies............................................................................................................
29
Section 9.03.
Disposition of Funds..........................................................................................
30
Section 9.04.
Nonexclusive Remedies.....................................................................................
30
Section 9.05.
Attorneys' Fees and Expenses............................................................................
30
Section9.06.
Effect of Waiver.................................................................................................
31
Section 9.07.
Waiver of Stay or Extension..............................................................................
31
Section 9.08.
Issuer May File Proofs of Claim........................................................................
31
D:\NEW200\001\DOCSLLOAN.DOC ii LOAN AGREEMENT
Section 9.09.
Restoration of Positions.....................................................................................
31
Section 9.10.
Suits to Protect the Project.................................................................................
31
Section 9.11.
Performance by Third Parties............................................................................
32
Section 9.12.
Exercise of the Issuer's Remedies by Trustee ....................................................
32
Section 9.13.
Non -Recourse Obligation..................................................................................
32
ARTICLE 10
General Provisions
Section 10.01.
Amounts Remaining in Funds...........................................................................
33
Section10.02.
Notices...............................................................................................................
33
Section 10.03.
Binding Effect....................................................................................................
34
Section 10.04.
Severability........................................................................................................
34
Section 10.05.
Amendments, Changes, and Modifications.......................................................
34
Section 10.06.
Execution Counterparts......................................................................................
34
Section 10.07.
Required Approvals...........................................................................................
34
Section 10.08.
Limitations on Issuer's Liability.........................................................................
34
Section 10.09.
Representations of Company.............................................................................
35
Section10.10.
Termination........................................................................................................
35
TESTIMONIUM
SIGNATURES
EXHIBIT A Legal Description
EXHIBIT B Definitions
D:\NEW200\00 I \DOCS\LOAN. DOC lil LOAN AGREEMENT
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of the 1 st day of March, 1997,
by and between the City of New Hope, a Minnesota municipal corporation (the "Issuer") and
Reprise Associates Limited Partnership, a Minnesota limited partnership (the "Company").
The Issuer and Company, each in consideration of the representations, covenants and
agreements of the other as set forth herein, mutually represent, covenant and agree as follows:
D:WEW200\001\DOCSU.OAN.DOC t LOAN AGREEMENT
ARTICLE 1
Definitions, Exhibits and Miscellaneous
Section 1.01. Definitions.
In this Agreement, the following terms have the following meanings, unless the context
clearly requires otherwise, and any other capitalized terms defined in Section 1.01 of the
Indenture (attached hereto as Exhibit B and incorporated herein by reference) shall have the same
meanings when used herein as assigned them in the Indenture unless the context or use thereof
indicates another or different meaning or intent:
Agreement: this Loan Agreement by and between the Issuer and Company, as the same
may from time to time be amended or supplemented as provided herein and in the Indenture;
Bondholder or Holder: the Person in whose name a Bond is registered in the Bond
Register;
Bond Purchase Agreement: the agreement dated March 1, 1997, by and among the
Issuer, the Company and the Underwriter pursuant to which the Underwriter agrees to purchase
the Bonds;
Completion Date: the date the Company certifies that the acquisition and rehabilitation
of the Facility have been completed;
Credit Facilitv: a letter of credit, promissory note, insurance policy, guaranty, mortgage
or other form of credit support acceptable to the Remarketing Agent;
Date of this Agreement: March 1, 1997;
Disbursing Agreement: an agreement to be entered into by the Company, the Trustee and
the provider of the Credit Facility specifying the conditions for the disbursement of Bond
proceeds to pay Project Costs;
Event of Default: any of the events set forth in Section 9.01 hereof;
Indenture: the Indenture of Trust by and between the Issuer and Trustee, of even date
herewith, as the same may from time to time be amended or supplemented as therein provided;
Improvements: the improvements constituting "rehabilitation expenditures" within the
meaning of Section 147(d)(3) of the Code to be made to the Facility;
Issuance Expenses: any and all costs and expenses relating to the issuance, sale and
delivery of the Bonds incurred or payable by the Company, including, but not limited to,
Underwriter's discount, remarketing fees and expenses, all fees and expenses of legal counsel, the
Trustee, financial consultants, feasibility consultants and accountants, any fee to be paid to the
Issuer, the cost of preparation and printing of this Loan Agreement, the Indenture, the Disbursing
Agreement, the Regulatory Agreement, any preliminary and final official statement or offering
D\NEW2001001\DOCS\LOAN.DOC 2 LOAN AGREEN ENT
memorandum, the Bonds and all other related closing documents, the costs of rating the Bonds,
and all other expenses relating to the issuance, sale and delivery of the Bonds and any other costs
which are treated as "issuance costs" within the meaning of Section 147(g) of the Code;
Issuer: City of New Hope, Minnesota, and any successor to its functions;
Loan: the loan of Bond proceeds by the Issuer to the Company pursuant to Section 4.01
hereof,
Net Bond Proceeds: proceeds of the Bonds, including interest earnings thereon, less such
proceeds of the Bonds, including interest earnings thereon, used to fund the Reserve Fund;
Proiect Costs: the cost items enumerated in Section 3.02 hereof;
Term of this Aareement: the period of time commencing on the Date of this Agreement
and terminating on the date set forth in Section 10.10 or such earlier date as provided by Sections
7.08 or 8.04, whichever date occurs sooner;
Working Capital Expense: any (a) Bond proceeds, including interest thereon, used to pay
interest accruing on the Bonds subsequent to the construction period, (b) Bond proceeds,
including interest thereon used to provide a credit against current payments of Basic Payments
and treated by the Internal Revenue Service as a working capital expense under Section 144(a) of
the Internal Revenue Code, and (c) Project Costs or other expenses which are paid or reimbursed
from Bond Proceeds, including interest thereon, and which the Internal Revenue Service treats as
a working capital expense or inventory under Section 144(a) of the Internal Revenue Code.
Section 1.02. Exhibits.
The following Exhibits are attached to and by reference made a part of this Agreement:
(1) Exhibit A: legal description of the Project Premises; and
(2) Exhibit B: definitions from the Indenture.
Section 1.03. Company.
Where the Company is permitted or required to do or accomplish any act or thing
hereunder, the Company may cause the same to be done or accomplished by a third parry selected
by the Company with the same force and effect as if done or accomplished by the Company.
Section 1.04. Rules of Interpretation.
(1) This Agreement shall be interpreted in accordance with and governed by the laws
of the State of Minnesota.
(2) The words "herein," "hereof' and "hereunder" and words of similar import,
without reference to any particular section or subdivision, refer to this Agreement as a whole
rather than to any particular section or subdivision of this Agreement.
D:\NEW200\OOPDOC&LOANDOC .i LOAN AGREEMENT
(3) References in this instrument to any particular article, section or subdivision
hereof are to the designated article, section or subdivision of this instrument as originally
executed.
(4) All accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles; and all computations provided
for herein shall be made in accordance with generally accepted accounting principles consistently
applied and applied on the same basis as in prior years.
(5) The Table of Contents and titles of articles and sections herein are for
convenience of reference only and are not a part of this Agreement, and shall not define or limit
the provisions hereof.
(6) Unless the context hereof clearly requires otherwise, the singular shall include the
plural and vice versa and the masculine shall include the feminine and vice versa.
(7) Articles, sections, subsections and clauses mentioned by number only are those so
numbered which are contained in this Agreement.
(8) For purposes of this Agreement and the Indenture, an Act of Bankruptcy shall be
deemed no longer in effect if either (a) the petition initiating the Act of Bankruptcy is dismissed
by order of a court of competent jurisdiction and no further appeal rights exist from such order or
(b) the Company notifies the Trustee that such a dismissal has occurred.
(9) Any opinion of counsel required hereunder shall be a written opinion of such
counsel.
(10) References to the Bonds as "tax exempt" or to the "tax exempt status of the
Bonds" are to the exclusion of interest on the Bonds from gross income pursuant to Section
1O3(a) of the Code, irrespective of such forms of taxation as the alternative minimum tax,
environmental tax or branch profits tax on foreign corporations.
D:WEW200\000DOCSU.OAN.DOC 4 LOAN AGREEMENT
ARTICLE 2
Representations of Issuer and Company
Section 2.01. Representations of the Issuer.
The Issuer makes the following representations and warranties as the basis for its
covenants herein:
(1) The Issuer is a municipal corporation organized and existing under the
laws of the State of Minnesota and is authorized to issue the Bonds to finance the Project
pursuant to the Act;
(2) In authorizing the Project, the Issuer's purpose is, and in its judgment the
effect thereof will be, to promote the public welfare by providing a multifamily rental
housing development within the meaning of the Act and assisting low and moderate
income persons within the Issuer to obtain decent, safe and sanitary housing at rentals
they can afford; and facilitating the development of rental housing opportunities for
residents of the Issuer;
(3) A public hearing on the proposal to finance the Project was called and held
on November 12, 1996, at which time all persons who appeared were given an
opportunity to express their views with respect to the proposal to undertake and finance
the Project; 7
(4) The Issuer's program for financing the Project was submitted to the
Metropolitan Council as required by the Act and was approved by its City Council on
November 12,1996;
(5) The issuance and sale of the Bonds, the execution and delivery of this
Agreement, the Indenture, the Regulatory Agreement, the Bond Purchase Agreement and
the performance of all covenants and agreements of the Issuer contained in this
Agreement, the Regulatory Agreement, the Bond Purchase Agreement and the Indenture
and of all other acts and things required under the Constitution and laws of the State to
make this Agreement, the Indenture and the Bonds valid and binding obligations of the
Issuer in accordance with their terms, are authorized by the Act and have been duly
authorized by resolutions of the governing body of the Issuer adopted at a meeting thereof
duly called and held on February 10, 1997, by the affirmative vote of not less than a
majority of its members;
(6) Under the provisions of the Indenture, the Issuer's interest in this
Agreement and certain payments due hereunder are pledged and assigned to the Trustee
as security for the payment of the principal and purchase price of, interest, and premium,
if any, on the Bonds; and
(7) No public official of the Issuer has either a direct or indirect financial
interest in this Agreement, nor will any public official either directly or indirectly benefit
D:\NEW2OO\001\DOCS\LOAN.DOC 5 LOAN AGREEN]ENT
financially from this Agreement within the meaning of Minnesota Statutes, Sections
412.311 and 471.87.
(8) The Issuer has authorized the Company, in accordance with the provisions
of the Act and subject to the terms and conditions set forth in Article 3 of this Agreement,
which terms and conditions the Issuer has deemed to be necessary and proper, to provide
for the acquisition and rehabilitation of the Project by such means as shall be available to
the Company and in the manner determined by the Company, and with or without
advertisement for bids as may be required for the acquisition and rehabilitation of
facilities by the Issuer; and has ratified, confirmed and approved all actions heretofore by
the Company consistent with and in anticipation of such authority;
(9) The Bonds are issued as "qualified residential rental bonds" within the
meaning of Section 142(a)(7) of the Code.
(10) The Issuer has received an allocation of tax exempt bonding authority for
the Bonds pursuant to Minnesota Statues, Chapter 474A.
Section 2.02. Representations of the Compan
The Company makes the following representation; and warranties as the basis for its
covenants herein:
(1) The Company is a limited partnership duly organized under the laws of the
State of Minnesota, is duly authorized to condupt its business in the State of Minnesota,
has power to enter into this Agreement, the Bond Purchase Agreement, the Remarketing
Agreement, and the Regulatory Agreement, and to use the Project for the purpose set
forth in this Agreement and by proper action has authorized the execution and delivery of
this Agreement, the Regulatory Agreement, the Remarketing Agreement, the Bond
Purchase Agreement, and has approved the Indenture;
(2) The execution and delivery of this Agreement, the Regulatory Agreement,
the Remarketing Agreement, the Bond Purchase Agreement, and the consummation of
the transactions contemplated thereby, and the fulfillment of the terms and conditions
thereof do not and will not conflict with or result in a breach of any of the terms or
conditions of the partnership agreement of the Company, any restriction or any agreement
or instrument to which the Company is now a party or by which it is bound or to which
any property of the Company is subject, and do not and will not constitute a default under
any of the foregoing, or cause the Company to be in violation of any order, decree,
statute, rule or regulation of any court or any state or federal regulatory body having
jurisdiction over the Company or its properties, including the Project, and do not and will
not result in the creation or imposition of any lien, charge or encumbrance of any nature
upon any of the property or assets of the Company contrary to the terms of any instrument
or agreement to which the Company is a party or by which it is bound;
(3) The Project will be operated as a multifamily rental housing development
as contemplated by the Act; and subject to the other provisions of this Agreement, it is
D:\NEW200\00I OOCS\LOAN.DOC 6 LOAN AGREEMENT
presently intended and reasonably expected that the Company will own and operate the
Project on the Project Premises throughout the Term of this Agreement in the normal
conduct of the Company's business;
(4) The Company has obtained or. will obtain prior to construction, all
necessary and material approvals of and licenses, permits, consents and franchises from
federal, state, county, municipal or other governmental authorities having jurisdiction
over the Project to acquire, rehabilitate and operate the Project and to enter into, execute
and perform its obligations under this Agreement, the Bond Purchase Agreement, the
Regulatory Agreement, and the Remarketing Agreement;
(5) The proceeds of the Bonds, together with any other funds to be contributed
to the Project by the Company or otherwise in accordance with this Agreement, will be
sufficient to pay the cost of acquiring and rehabilitating the Project in a manner suitable
for operation as a multifamily housing development as required in Article 3;
(6) The Bonds are issued within the exemption provided under Section 142(d)
of the Code with respect to residential rental property; and "substantially all" of the
proceeds of the Bonds will be used for expenditures chargeable to the capital account of
the Project;
(7) Any Project Costs heretofore incurred by the Company for which the
Company will seek reimbursement from the proceeds of the Bonds were incurred in
anticipation of reimbursement from the proceeds of the Bonds of the Issuer if such
proceeds should become available on terms acceptable to the Company; and the Company
investigated the possibility of such financing prior to incurring such Project Costs; and, in
any event, the Company will not seek reimbursement for any such costs incurred prior to
August 3, 1996, a date 60 days prior to the date on which the Issuer gave preliminary
approval of the Project and the financing thereof in whole or part through the Bonds;
(8) The Company is not in the trade or business of selling properties such as
the Project and the Company is acquiring the Project for investment purposes only or
otherwise for use by the Company in its trade or business, and therefore the Company has
no intention, now or in the foreseeable future to voluntarily sell, surrender or otherwise
transfer, in whole or part, its interest in the Project;
(9) There are no actions, suits, or proceedings pending or, to the knowledge of
the Company, threatened against the Company or any property of the Company in any
court or before any federal, state, municipal or other governmental agency, which, if
decided adversely to the Company, would have a material adverse effect upon the
Company or upon the business or properties of the Company or upon the validity or
enforceability of the instruments referred to in clause (1), or the ability of the Company to
perform its obligations thereunder; and the Company is not in default with respect to any
order of any court or governmental agency;
(10) The Company is not in default in the payment of the principal of or
interest on any indebtedness for borrowed money nor in default under any instrument or
D'.\NEW200\001\DOCS\LOAN.DOC 7 LOAN AGREEMENT
agreement under and subject to which any indebtedness for borrowed money has been
issued;
(11) The Company has filed all federal and state income tax returns which, to
the knowledge of the Company, are required to be filed and has paid all taxes shown on
said returns and all assessments and governmental charges received by it to the extent that
they have become due;
(12) The Company has reviewed and approved the provisions of the Indenture;
(13) To the best of the Company's knowledge, no public official of the Issuer
has either a direct or indirect financial interest in this Agreement nor will any public
official either directly or indirectly benefit financially from this Agreement within the
meaning of Minnesota Statutes, Section 471.87;
(14) No other obligations have been or will be issued under Section 103 of the
Code which are sold at substantially the same time as the Bonds, pursuant to the same
plan of financing, which are reasonably expected to be paid out of substantially the same
source of funds as the Bonds.
D:\NEW200\001\DOCS\LOAN.DOC 8 LOAN AGREEMENT
ARTICLE 3
Rehabilitation of Project
Section 3.01. Acquisition and Rehabilitation of Project by CoMpanv.
In connection with the acquisition and rehabilitation of the Project, the Company
represents and covenants that it will acquire the Project and will cause the Improvements to be
made to the Facility in an aggregate amount at each Facility not less than 15% of the acquisition
price of the building financed out of Bond proceeds and all such expenditures will be incurred
not later than the date which is two years after the Project is acquired by the Company.
Section 3.02. Payment of Costs by Company.
The Company agrees that it will provide any and all money required for the prompt and
full payment of all sums required to complete the Project, including all of the following items
which the Issuer agrees will be reimbursable from Bond proceeds from and to the extent and in
the manner provided in Sections 3.05 and 3.06 and subject to the provisions of the Act and the
Code:
(1) all expenses incurred and to be incurred in connection with the acquisition
and rehabilitation of the Project, including but not limited to cost of acquiring the Project,
the contract price of all labor, services, materials, supplies and equipment fin-nished under
any contract for rehabilitation of the Project or otherwise incurred in connection
therewith, including the cost of all rights-of-way for access and utility connections to and
from the Project, and all fees required for recording an financing statements and any title
documents relating to the Indenture, or Regulatory Agreement;
(2) the expense of preparation of the plans and specifications for the
Improvements, including utilities, and all other facilities necessary or desirable in
connection therewith, and all other architectural, engineering and supervisory services
incurred and to be incurred in the planning, construction and completion of the
Improvements;
(3) all legal (including Bond Counsel and counsel to the Issuer, Company,
Original Purchaser, and Trustee), abstractors', financial and accounting fees and expenses,
administrative and rating agency fees (if any), printing and engraving costs and other
expenses incurred and to be incurred on or before or in connection with the Completion
Date with respect to (i) the establishment of title to the Project Premises, (ii) the
authorization, sale and issuance of the Bonds, (iii) the preparation of this Agreement, the
Remarketing Agreement, the Indenture, the Regulatory Agreement, and all other
documents necessary to the Bond Closing or required by this Agreement or the Indenture,
or (iv) the establishment of the Completion Date, including compliance with any
governmental or administrative rules or regulations on or before such date; provided that
not more than $33,000 may be disbursed from Bond proceeds in payment or
reimbursement of any of the foregoing which constitute Issuance Expenses;
D: WEW200=11000SSLL.OAKDOC 9 LOAN AGREEMENT
(4) all expenses incurred in seeking to enforce any remedy against any
contractor, or any subcontractor or any supplier in respect of any default under any
contract with such Person;
(5) all deed taxes, mortgage registry, taxes, recording fees and other taxes,
charges and assessments and license and registration fees of every nature whatsoever
incurred and to be incurred in connection with acquisition or completion of the Project
including the financing thereof,
(6) the cost of all other labor, services, materials, supplies and equipment
necessary to complete the construction, acquisition and installation of the Improvements;
(7) without limitation by the foregoing, all other expenses which under
generally accepted accounting practice constitute necessary capital expenditures for the
completion of the Project or issuance of the Bonds, not including working capital or
expendable supplies (all of which are nevertheless to be supplied by the Company from
its own funds without reimbursement); provided that not more than $33,000 may be
disbursed from Bond proceeds in payment or reimbursement of any of the foregoing
which constitute Issuance Expenses; and
(8) all advances, payments and expenditures made or to be made by the Issuer,
the Trustee and any other person with respect to any of the foregoing expenses; provided
that not more than $33,000 may be disbursed from Bond proceeds in payment or
reimbursement of any of the foregoing which constitute Issuance Expenses;.
The Company shall be solely responsible for paying all such Project Costs until the
Conversion Date. Thereafter all Project Costs may be paid or reimbursed from available moneys
in the Project Fund to the extent and in the manner permitted in Sections 3.05 and 3.06. If,
however, such moneys are insufficient to pay in full Project Costs payable therefrom or are
otherwise unavailable to pay any Project Costs, the Company shall nevertheless promptly pay so
much of such Costs as may be in excess of such available moneys in the Project Fund or shall, at
the request of the Trustee, forthwith pay over to the Trustee such moneys as are necessary to pay
such Project Costs. The Company shall not by reason of the payment of such excess Project
Costs be entitled to any reimbursement from the Issuer in excess of any moneys available
therefor in the Project Fund or for any abatement or diminution of the Basic Payments or
Additional Charges.
Section 3.03. Authorization by Issuer.
In accordance with the Act, the Company is authorized by the Issuer, and the Company,
pursuant to such authorization, agrees:
(1) to acquire and rehabilitate the Project as provided in Section 3.01, upon
the Project Premises;
D:\NEW200\001\DOCS\LOAN.DOC 10 LOAN AGREEMENT
(2) to make, execute, acknowledge and deliver any contracts, orders, receipts,
writings and instructions, with any other Persons, and in general to do all things which
may be requisite or proper for acquiring, constructing and installing the Project;
(3) pursuant to the provisions of this Agreement, to pay any fees, costs and
expenses incurred in the acquisition, construction and installation of the Project from
funds made available therefor in accordance with this Agreement or otherwise subject to
the right to contest such fees, costs and expenses;
(4) so long as the Company is not in default under any of the provisions of this
Agreement to exercise all authority hereby conferred, which is granted and conferred
irrevocably to the Completion Date and thereafter until all activities in connection with
the acquisition and rehabilitation of the Project shall have been completed.
Neither the authorization granted in this Section nor any other provision of this
Agreement shall be construed as making the Company an agent or joint venturer with the Issuer.
Section 3.04. Issuance of Bonds.
The Issuer has contracted for the sale of the Bonds authorized by the Indenture, and the
Company has and does approve the terms of the Indenture. Forthwith upon execution of this
Agreement, the Bond Purchase Agreement, the Indenture, the Remarketing Agreement, the
Regulatory Agreement and all other documents required to be executed by the aforementioned
documents, or as soon thereafter as practicable, the Issuer will execute the Bonds and cause them
to be authenticated by the Trustee and delivered to the Underwriter upon payment pf the purchase
price and filing with the Trustee of the opinion of Bond Counsel as to the legality of the Bonds
and the furnishing of all other documents required by this Agreement, the Remarketing
Agreement, the Bond Purchase Agreement and the Indenture to be furnished before delivery.
The Issuer will then cause the proceeds of the Bonds to be transmitted to the Trustee, who is
required by the Indenture to deposit the same in the Project Fund.
If for any reason such documents are not furnished and the approving opinion of Bond
Counsel in customary form cannot be obtained, then this Agreement shall be terminated and be
void and of no effect and the Company shall be obligated to pay all costs and expenses
enumerated in Section 3.02 and incurred on or before the date of such termination.
Section 3.05. Disbursements from Project Fund.
(1) Prior to the Conversion Date and the delivery of the documents required by
paragraph (2) hereof, no moneys shall be disbursed from the Project Fund, except for interest
earnings on the Bond proceeds held therein which shall be transferred to the Bond Fund on or
prior to each Variable Rate Interest Payment Date and applied as a credit against Basic Payments.
(2) The Issuer has in the Indenture authorized and directed the Trustee to disburse
money from the Project Fund on and after the Conversion Date, subject to the Disbursing
Agreement, to or upon the order of the Company, in payment or reimbursement of all items of
Cost enumerated in Section 3.02 and certified, in writing by the Company Representative,
D W EW2001001\DOCSTOANDOC 11 LOAN AGREEN ENT
provided that in no event shall any Bond proceeds be disbursed until the Conversion Date and
until Company has delivered to the Trustee the Credit Facility and evidence satisfactory to the
Trustee that a local unit of government or the Minnesota Housing Finance Agency will
participate in the financing of the acquisition and rehabilitation of the Project (in addition to the
issuance by the Issuer of the Bonds).
Section 3.06. Establishment of Completion Date.
On the Completion Date any balance remaining in the Project Fund in excess of the
amount retained therein pursuant to the Disbursing Agreement shall be disbursed by the Trustee
to the Company or its order in such amount as may be necessary (and all thereof shall be
disbursed if necessary) to pay, or to reimburse to the Company for the payment of, any part of the
Project Costs which have not theretofore been paid by the Company or has not theretofore been
reimbursed to the Company, as the case may be, in accordance with the provisions of Section
3.05. Any balance remaining in the Project Fund in excess of any amount retained therein to
secure completion by any contractor shall be transferred by the Trustee to the Bond Fund.
Section 3.07. Intentionally Omitted.
Section 3.08. Enforcement of Contract.
Subject to the Disbursing Agreement, in the event of default of any contractor or
subcontractor under any construction contract or in the event of a breach of warranty with respect
to any materials, workmanship or performance, the Company will promptly proceed, either
separately or in conjunction with others, to exhaust its remedies against the contractor,
subcontractor or vendor in default and against any surety on a bond securing the performance of
such contract, provided, however, that the Company may on the advice of its counsel and with
the Trustee's consent refrain from exhausting such remedies if determined by the Company not to
be in its best interests and not necessary to complete the Project. The Company will promptly
advise the Trustee of the steps it intends to take in connection with any such default. Any
amounts recovered pursuant to any bond or by way of damages, refunds, adjustments or
otherwise in connection with the foregoing, after deduction of expenses incurred in such
recovery, other than any amounts resulting from the loss of income, shall be paid into the Project
Fund if received before the Completion Date, and otherwise shall be paid into the Bond Fund,
provided that the Company may obtain reimbursement for any payments made by the Company
in connection with such action as an item of Project Cost as provided in Section 3.05.
DANEW200\00 I\DOCS\LOAN. DOC 12 LOAN AGREEMENT
ARTICLE 4
The Loan, Basic Payments, Additional Charges and Additional Financing
Section 4.01. The Loan.
The Issuer agrees, upon the terns and conditions herein specified, to lend to the Company
the proceeds received by the Issuer from the sale of the Bonds, excluding any accrued interest, by
causing such proceeds to be deposited with the Trustee for disposition as provided herein and in
the Indenture. The amount of the Loan shall be deemed to include any "discount" or any other
amount by which the aggregate price at which the Issuer sells the Bonds to the Underwriter is
less than the aggregate principal amount of the Bonds, plus accrued interest; and the obligation of
the Issuer to make the Loan shall be deemed fully discharged upon so depositing the proceeds of
the Bonds with the Trustee.
Section 4.02. Basic Payments.
Subject to the Company's right of prepayment granted in Section 8.02, the Company
agrees to repay the Loan in installments of Basic Payments as follows:
(1) As and for repayment of the Loan the Company shall pay to the Trustee for
the account of the Issuer an amount equal to the aggregate principal amount of the Bonds
Outstanding and, as interest on its obligation to pay such amount, an amount equal to
interest on the Bonds, such amounts to be paid in installments on the dates, in the
amounts and in the manner provided in this Loan Agreement in order that the Issuer can
cause amounts to be deposited in the Bond Fund for the payment of the principal of,
premium, if any, and interest on the Bonds, whether at maturity, upon redemption or
otherwise as provided in the Indenture;
(2) In any event the sum of the Basic Payments payable under this Section
shall be sufficient to pay all principal, interest and premium, if any, on the Bonds as such
principal, interest and premiums become due, at maturity, upon redemption, acceleration
or otherwise.
(3) As provided in Internal Revenue Service Revenue Procedure 79-5,
Revenue Procedure 81-22 and 26 CFR 601.201 (and any subsequent amendments,
modifications or replacements thereof) Restricted Construction Funds in the Bond Fund
shall be used only to prepay Bonds which are subject to redemption at their earliest call
date without penalty or premium or to pay a pro rata portion of the principal of the Bonds
as provided in Section 6.03(b) of the Indenture.
(4) Except during the continuance of an Event of Default, all available
remaining sums on deposit in the Bond Fund not credited against currently payable
installments of Basic Payments or applied as provided in Sections 7.08, 8.02 or 8.04 shall
be credited against the last installments of Basic Payments.
D:WEW200\00PDOCSV..OAN.DOC 13 LOAN AGREEMENT
(5) In no event shall any purchase of any Bonds made by or on behalf of the
Company result in the discharge of either (i) the Bonds so purchased, (ii) the obligations
under this Section 4.02 to make Basic Payments relating to the Bonds so purchased, or
.(iii) the Loan made hereunder to the extent of the Bonds so purchased, unless to the
extent the Bonds so purchased are surrendered to the Trustee and canceled.
Section 4.03. Basic Payments on Account of the Purchase Price of Bonds.
The Company shall also pay to the Trustee amounts equal to the amounts to be paid by
the Trustee as the purchase price of Bonds pursuant to Section 4.01 of the Indenture, such
amounts to be paid by the Company to the Trustee one day prior to the dates such payments are
to be made pursuant to Section 4.01 of the Indenture.
Section 4.04. Additional Charges.
The Company agrees to pay, when due, each and all of the following:
(1) to or upon the order of the Trustee, when due, all reasonable fees of the
Trustee for services rendered under the Indenture and all reasonable fees and charges of
the Paying Agent, registrars, legal counsel, accountants, engineers, public agencies and
others incurred in the performance on request of the Trustee of services required under
the Indenture for which the Trustee and such other Persons are entitled to payment or
reimbursement; provided that the Company may, without creating a default hereunder,
contest in good faith the necessity or reasonableness of any such services, fees or
expenses;
(2) the reasonable fees and expenses of the Issuer, including the fees and
expenses of counsel for the Issuer in connection with the issuance of the Bonds and any
issue which refunds the Bonds; and
(3) to the Trustee, the amount of all advances made by the Trustee, with
interest thereon, as provided in Section 5.04.
Section 4.05. Company's Obligations Unconditional.
All Basic Payments and Additional Charges and all other payments required of the
Company hereunder shall be paid without notice or demand and without setoff, counterclaim, or
defense for any reason and without abatement or deduction or defense (except as provided in
Section 8.02). The Company will not suspend or discontinue any such payments, and will
perform and observe all of its other agreements in this Agreement, and, except as expressly
permitted in Sections 7.08 and 8.04, will not terminate this Agreement for any cause, including
but not limited to any acts or circumstances that may constitute failure of consideration,
destruction or damage to the Project or the Company's business, the taking of the Project or the
Company's business by Condemnation or otherwise, the lawful prohibition of the Company's use
of the Project or the Company's business, the interference with such use by any Person, the
invalidity or unenforceability or lack of due authorization or other infirmity of this Agreement,
the lack of right, power or authority of the Issuer to enter into this Agreement, eviction by
D:\NEW200\001\DOCS`.LOAN.DOC 14 LOAN AGREEMENT
paramount title, commercial frustration of purpose, bankruptcy or insolvency of the Issuer or
Trustee, change in the tax or other laws or administrative rulings or actions of the United States
of America or of the State or any political subdivision thereof, or failure of the Issuer to perform
and observe any agreement, whether express or implied, or any duty, liability or obligation
arising out of or connected with this Agreement, or for any other cause whether similar or
dissimilar to the foregoing, any present or future law to the contrary notwithstanding, it being the
intention of the parties hereto that the Basic Payments and other amounts payable by the
Company hereunder shall be paid in full when due without any delay or diminution whatever.
Section 4.06. Assi¢nment of Issuer's Rights.
As security for the payment of the Bonds, the Issuer will pledge the amounts payable
hereunder and assign, without recourse or liability, to the Trustee, the Issuer's rights under this
Agreement, including the right to receive payments hereunder (except the right to receive
payments, if any, under Section 4.04, 7.04 and 9.05 hereof) and hereby directs the Company to
make said payments directly to the Trustee. The Company herewith assents to such assignment
and will make payments under this Agreement directly to the Trustee without defense or setoff
by reason of any dispute between the Company and the Trustee.
Section 4.07. Company's Remedies.
Nothing contained in this Article shall be construed to release the Issuer from the
performance of any of its agreements herein, and if the Issuer should fail to perform any such
agreements, the Company may institute such action against the Issuer as the Company may deem
necessary to compel such performance so long as such action shall not violate the Company's
agreements in Section 4.04 or diminish or delay the amounts required to be paid by the Company
pursuant to Sections 4.02 and 4.03. The Company acknowledges, however, and agrees that any
pecuniary obligation of the Issuer created by or arising out of this Agreement except for any
pecuniary obligation caused by the Issuer's negligence shall be payable solely out of the proceeds
derived from this Agreement and the sale of the Bonds.
D:\NEW200\00I DOCSU.OAN.DOC 15 LOAN AGREEMENT
ARTICLE 5
Project Covenants
Section 5.01. Proiect Operation and Maintenance.
Upon acquisition of the Projects from proceeds of the Bonds, the Company shall pay all
expenses of the operation and maintenance of the Project including, but without limitation,
adequate insurance thereon and insurance against all liability for injury to Persons or property
arising from the operation thereof, and all taxes and special assessments levied upon or with
respect to the Project and payable during the Term of this Agreement, all in conformance with
and subject to any good faith contest provisions provided in any Credit Facility.
Section 5.02. Sale or Lease of Project.
So long as any Bonds are Outstanding, the Company will not lease the Project (except
residential leases in the normal course of business), in whole or in part, nor sell, mortgage or
otherwise encumber its interests in the Project, in whole or part, except as required in connection
with obtaining a Credit Facility and except as provided in Section 8.01; provided that in no event
shall such lease, assignment or sale be permitted if (a) the effect thereof would be to impair the
validity or the exclusion from gross income under Section 103 of the Code of the interest on the
Bonds, or (b) if any such transaction should release the Company of any of its obligations under
this Agreement (except as otherwise provided in Section 8.01). Before any such lease, sale or
assignment, the Company shall deliver to the Trustee an opinion of Bond Counsel, addressed to
the Trustee and in form and substance satisfactory to if, stating in effect that such lease, sale or
assignment will not impair the exclusion from gross income under Section 103 of the Code of
interest on the Bonds. The Company shall give at least 30 days notice to the Trustee and Issuer
of any such sale, assignment or lease, unless such 30 day notice is waived by the Trustee and the
Issuer.
Section 5.03. Intentionally Omitted.
Section 5.04. Advances.
The Company acknowledges and agrees that under the Indenture the Trustee may take
certain action and make certain advances relating to the Project or to certain other matters as
expressly provided therein, and the Company shall be obligated to repay all such advances on
demand, with interest from the date of each such advance, at the rate and under the conditions set
forth in the Indenture.
Section 5.05. Alterations to the Project and Removal of Project Equipment.
The Company shall, have the right from time to time at its cost and expense, to remodel
and make such additions, modifications, alterations, improvements and changes (collectively
referred to as "alterations") in or to the Project or to remove any equipment therefrom as the
Company, in its discretion, may deem to be desirable for its uses and purposes, provided such
alterations or removal do not impair the character of the Project as a "project" within the meaning
D:\NEW200\001\DOCS\LOAN.DOC 16 LOAN AGREEMENT
of the Act or otherwise impair the exclusion from gross income under Section 103 of the Code of
the interest on the Bonds.
D-\NEW200\001\DOCS\LOAN.DOC 17 LOAN AGREEMENT
ARTICLE 6
Damage, Destruction and Condemnation
Section 6.01. Damage and Destruction.
If there are any Outstanding Bonds when the Project is damaged or destroyed by fire or
other casualty, the Company shall either restore the Project to the extent permitted by the
Indenture or, if Section 8.04 of this Agreement is applicable, exercise its option to prepay the
Loan pursuant to said Section.
Section 6.02. Condemnation.
If there are any Outstanding Bonds when the Project or any part thereof is taken by
Condemnation, the Company shall either restore the Project to the extent permitted by the
Indenture or, if Section 8.04 of this Agreement is applicable, exercise its option to prepay the
Loan pursuant to said Section.
D:\NEW200\OO I\DOCSU.OAN.DOC 18 LOAN AGREEWNT
ARTICLE 7
Company's Covenants
Section 7.01. Covenant for the Benefit of the Trustee and Bondholders.
The Company recognizes the authority of the Issuer to assign its interest in and pledge
moneys receivable under this Agreement (other than certain payments required to be made to the
Issuer under Sections 4.04(2), 4.04(3), 4.04(5), 7.04 and 9.05) to the Trustee as security for the
payment of the principal and purchase price of and interest and redemption premiums, if any, on
the Bonds, and the payment of all fees and expenses of the Trustee; and hereby agrees to be
bound by, and joins with the Issuer in the grant of, a security interest to the Trustee in any right
and interest the Company may have in sums held in the Funds described in Article Six of the
Indenture, pursuant to the terms and conditions thereof, to secure payment of the Bonds. Each of
the terms and provisions of this Agreement is a covenant for the use and benefit of the Trustee
and Holders of the Bonds, so long as any thereof shall remain Outstanding; but upon payment in
full of the Bonds in accordance with Article Nine of the Indenture and of all fees and charges of
the Trustee and Paying Agent, all references in this Agreement to the Bonds, the Holders thereof
and the Trustee shall be ineffective, and neither the Trustee nor the Holders of any of the Bonds
shall thereafter have any rights hereunder, save and except those that shall have theretofore
vested or that arise from provisions hereunder which survive termination of this Agreement.
Section 7.02. Inspection and Access.
Upon acquisition of the Project from the proceeds of the Bonds, the Company agrees that
the Trustee and its duly authorized agents shall have the right at all reasonable times to examine
and inspect, and for that purpose to enter upon, the Project Premises, and shall also have such
right of access thereto as may be reasonably necessary to cause the Project to be properly
maintained in accordance with Article 5 in the event of failure by the Company to perform these
obligations.
Section 7.03. Annual Statement, Audit. Certificate of Compliance and Other Reports.
(1) The Company agrees that it will provide the Trustee and the Underwriter with any
financial statements provided to the issuer of a Credit Facility.
(2) At the time the Company causes to be furnished the annual financial statements,
the Company shall also furnish the Trustee a certificate executed by Company Representative,
declaring that during the same fiscal year covered by the statements and continuing to the date of
execution of the certificate, the Company has fully complied with the terms and conditions of
this Agreement.
(3) The Company will furnish the Issuer and the Trustee all reports required pursuant
to law and regulations of the Act.
(4) The Company will, and at the request of the Issuer, Trustee or Remarketing
Agent, at the Company's expense, furnish to the Trustee, Remarketing Agent, and Issuer at such
D:WEW200\001 00MLOANDOC 19 LOAN AGREEMENT
times and in such form as the Issuer, Trustee, Remarketing Agent, may reasonably require (i) a
copy of such other reports containing such information as is necessary to comply with any lawful
reporting or continuing registration requirements imposed by any agency of the State under the
Act, the Minnesota Blue Sky Laws or any other applicable state law as it now exists or may
hereafter be amended or by any agency of any other state in which the Bonds have been sold, or
(ii) such information as is necessary to comply with federal securities law.
Section 7.04. Indemnity by Company.
The Company will, to the fullest extent permitted by law, protect, indemnify and save the
Issuer, and Trustee and their officers, agents, and employees and any Person who controls the
Issuer or Trustee within the meaning of the Securities Act of 1933 (an "Indemnified Party"),
harmless from and against all liabilities, losses, damages, reasonable costs, and expenses
(including reasonable attorneys' fees and expenses of the Trustee and the Issuer), taxes, causes of
action, suits, claims, demands and judgments of any nature arising from:
(1) except for any gross negligence or willful misconduct of an Indemnified
Party, any injury to or death of any person or damage to property in or upon the Project or
growing out of or connected with the use, non-use, condition or occupancy of the Project
or any part thereof, including any and all acts or operations relating to the construction or
installation of property or improvements. The foregoing indemnification obligations shall
not be limited in any way by any limitation on the amount or type of damages,
compensation or benefits payable by or for the Company, customers, suppliers or
affiliated organizations under any Workers' Compensation Acts, Disability Benefit Acts
or other employee benefit acts;
(2) violation of any agreement, provision or condition of this Agreement,
except by the Indemnified Party, unless the Indemnified Party acts pursuant to direction
of the Company;
(3) violation by the Company of any contract, agreement or restriction, which
shall have existed at the commencement of the Term of this Agreement or shall have
been approved by the Company;
(4) violation, except by the Indemnified Parry, of any law, ordinance, court
order or regulation affecting the Project or a part thereof or the ownership, occupancy or
use thereof; and
(5) any statement or information relating to the expenditure of the proceeds of
the Bonds contained in the "Arbitrage Certificate" or similar document furnished by the
Company to the Issuer or Trustee which, at the time made, is misleading, untrue or
incorrect in any material respect.
Promptly after receipt by the Indemnified Party, as the case may be, of notice of the
commencement of any action with respect to which indemnity may be sought against the
Company under this Section, such person will notify the Company in writing of the
commencement thereof, and, subject to the provisions hereinafter stated, the Company shall
D:\NEW200\001\DOCS\LOAN.DOC 20 LOAN AGREEMENT
assume the defense of such action (including the employment of counsel, who shall be counsel
satisfactory to the Indemnified Party, and the payment of expenses). Insofar as such action shall
relate to any alleged liability with respect to which indemnity may be sought against the
Company, the Issuer, Trustee or any such other indemnified person shall have the right to employ
separate counsel in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall not be at the expense of the Company unless the employment of
such counsel has been specifically authorized by the Company. The Company shall not be liable
to indemnify any Indemnified Party for any settlement of any such action effected without its
consent.
The provisions of this Section 7.04 shall survive the payment and discharge of the Bonds.
Section 7.05. Status of Company.
Throughout the Term of this Agreement, the Company will maintain a limited partnership
organized under the laws of the State of Minnesota and will not wind up or otherwise dispose of
all or substantially all of its assets; provided that subject to the sale restrictions in section 5.02
and the assignment and transfer conditions in Section 8.01, the Company may, sell or otherwise
transfer to another Person all or substantially all of its assets in its entirety and thereafter wind up
if the transferee Person assumes all of the obligations of the Company under this Agreement and
the Regulatory Agreement by written instrument delivered to the Issuer and the Trustee. Every
such transferee shall be bound by all of the covenants and agreements of the Company herein
with respect to any further sale or transfer.
Upon any change in the identity of its generaN partner by way of substitution, sale or
otherwise of the Company, the Trustee shall be promptly informed and, if requested, each and
every general partner of the Company as newly constituted shall deliver to the Trustee for the
benefit of the Issuer and Bondholders an instrument in form satisfactory to the Trustee affirming
the joint and several liability of all then existing general partners for the obligations of the
Company hereunder for which the general partners remain liable.
The Issuer and Company agree that, upon any change in the status of the Company,
including a change in the identity of its general partner, so long as the requirements, restrictions
and conditions of Section 5.02, Section 8.01, and the Regulatory Agreement with respect to such
change have been satisfied as provided therein, the general partner involved shall be discharged
from liability hereunder. The Trustee by execution of the Indenture shall be deemed to have
agreed to execute such documents as may be necessary or desirable to indicate such discharge
upon receipt of evidence satisfactory to said parties that the requirements for this Section, Section
5.02, Section 8.01 and the Regulatory Agreement have been satisfied, and provided that no Event
of Default under this Agreement shall have happened and be continuing on the date of the
discharge.
The Company shall not effect such transfer or change if the result thereof would be to
violate any sale restrictions set forth in Section 5.02 of this Agreement, or to subject the interest
payable on the Bonds (in the hands of any Person who is not a "substantial user" of the Project or
a "related person") to federal income taxes under Section 103 of the Code.
D:WEW200\001\DOCS\LOAN.DOC 21 LOAN AGREEMENT
Section 7.06. Filing of Financing Statements.
The Company agrees that it will, at its sole expense, file or cause to be filed any financing
statements and continuation statements required or requested by the Trustee to perfect the
security interest in this Agreement and the payments to be made hereunder granted to the Trustee
under the Indenture.
Section 7.07. Assurance of Tax Exemption.
In order to assure that the interest on the Bonds shall at all times be excluded from gross
income for the purposes of federal income taxation, the Company represents and covenants with
the Issuer, Trustee and all Holders of the Bonds as follows:
(1) the Company will fulfill all continuing conditions specified in section 142
of the Code and Regulation 1.103-8(b) promulgated thereunder, to qualify the Bonds as
residential rental property bonds thereunder; and the Company shall fulfill its obligations
under the Regulatory Agreement;
(2) the Company will not use (or permit to be used) the Project or use or
invest (or permit to be used or invested) the proceeds of the Bonds or any other sums
treated as "bond proceeds" under Section 148 of the Code and applicable federal income
tax regulations, including "investment proceeds," "invested sinking funds" and
"replacement proceeds," in such a manner as to cause the Bonds to be classified
"arbitrage bonds" under Section 148 of the Code or "federally guaranteed obligations"
under Section 149(b) of the Code;
(3) at least 95% of Net Bond Proceeds will be used to finance costs properly
chargeable to the capital account of a qualified residential rental project within the
meaning of Section 142(d) and fimctionally related and subordinate property thereto;
(4) the Company will incur "rehabilitation expenditures" (as defined in
Section 147(d)(3) of the Code) with respect to each Facility in an amount equal to at least
15% of the acquisition cost of the Facility within the later of 2 years from (i) the date the
Facility was acquired, or (ii) the date the Bonds were issued;
(5) the Company has not permitted and will not permit any obligation or
obligations other than the Bonds to be issued within the meaning of Section 103(b) of the
Code so as to cause such obligations to become part of the same "issue of obligations" as
the Bonds so as to impair the tax exempt status of the Bonds;
(6) no portion of the proceeds of the Bonds are to be used to provide any
airplanes, skybox, or other private luxury box, health club facility, facility primarily used
for gambling or liquor store;
(7) no portion of the proceeds of the Bonds will be used to acquire (a)
property to be leased to the government of the United States of America or to any
department, agency or instrumentality of the government of the United States of America,
(b) any property not part of the residential rental housing portion of the Project, or (c) any
D NEW200\001\DOCS\LOAN.DGC 22 LOAN AGREEIENT
private or commercial golf course, country club, massage parlor, tennis club, skating
facility (including roller skating, skateboard and ice-skating), racquet sports facility
(including any handball or racquetball court), hot tub facility, suntan facility or racetrack;
(8) no portion of the proceeds of the Bonds (including investment earnings
thereon) shall be used (directly or indirectly) for the acquisition of land (or an interest
therein) to be used for farming purposes, and less than twenty-five percent (25%) of the
Bond proceeds (including investment earnings thereon) shall be used (directly or
indirectly) for the acquisition of land to be used for purposes other than farming purposes;
(9) the Company understands that the Code imposes a penalty for failure to
file with the Secretary of the Treasury an annual certification of compliance with low
income occupancy requirements, and if the requirements for a "qualified residential rental
project" are not met, does not allow deduction for interest paid on the Bonds which
accrues during the period beginning on the first day of the taxable year in which the
Project ceases to meet such requirements and ending on the date the Project again meets
such requirements;
(10) the average maturity of the Bonds does not and will not exceed 120% of
the average reasonably expected economic life of the Project within the meaning of
Section 147(b) and 1313(a) of the Code;
(11) the Company shall provide the Issuer at Bond Closing with all information
required to satisfy the informational requirements set forth in Section 149(e) of the Code
including the information necessary to complete SIRS Form 8038;
(12) no moneys in the Bond Fund, Project Fund or any other fund held or
created under the Indenture shall be invested in investments which cause the Bonds to be
federally guaranteed within the meaning of Section 149(b) of the Code. If at any time the
moneys in such Funds exceed, within the meaning of Section 149(b), (i) amounts
invested for an initial temporary period until the moneys are needed for the purpose for
which the Bonds were issued, (ii) investments of a bona fide debt service fund, and (iii)
investments of a reserve which meet the requirement of Section 148 (c) and (d) of the
Code, such excess moneys shall be invested in only those Permitted Investments or
Government Obligations, as otherwise appropriate, which are (A) obligations issued by
the United States Treasury, (B) other investments permitted under regulations, or (C)
obligations which are (a) not issued by, or guaranteed by, or insured by, the United States
or any agency or instrumentality thereof or (b) not federally insured deposits or accounts,
and within the meaning of Section 149(b)(3)(B) of the Code;
(13) at no time during any Bond Year shall the amount invested in taxable
nonpurpose investments with a yield higher than the Bond yield exceed 150% of the debt
service on the Bonds for the Bond Year, all within the meaning of Section 148(d)(3) of
the Code; provided, however, that the Company may take advantage of exemptions to
such requirement provided for the investment of sums for temporary periods;
D: WEW2W001\DOCS\LOAN.DOC 23 LOAN AGREEMENT
(14) the Company on behalf of the Issuer shall pay to the United States, as a
rebate, an amount equal to the sum of (i) the excess of (I) the aggregate amount earned on
all nonpurpose investments (other than investments attributable to an excess described in
this clause), over (II) the amount which would have been earned if all nonpurpose
investments were invested at a rate equal to the yield on the Bonds, plus (ii) any income
attributable to the excess described in clause (i), at the times and in the amounts required
by Section 148(f) of the Code, all within the meaning of Section 148(f) of the Code. The
Company and the Trustee shall maintain records of the interest rate borne by the Bonds
and the investments of the Project Fund and Bond Fund (and any other fund created under
the Indenture) and earnings thereon in adequate detail to enable the Company to calculate
the amount of any rebate required to be made to the United States at times and in
installments which satisfy Section 148(f) of the Code and the Regulations, at least once
every five (5) years and within sixty (60) days after the day on which the last of the Bonds
is redeemed. Calculations of the amount to be rebated shall be made at least once every
five years (or at such other times as may be required by Section 148(f) of the Code and
the Treasury Regulations applicable thereto) and the Trustee shall be furnished with such
calculations within sixty (60) days of the time they are made. If the Trustee is not
furnished with such calculations) the Trustee may undertake to have such calculations
made at the expense of the Company. Such calculations shall be retained until six (6)
years after the retirement of the last Bond. The rebate shall be calculated as provided in
Section 148(f) of the Code and Sections 1.148-0 through 1.148-11 of the Treasury
Regulations, including taking into account the gain or loss on the disposition of
nonpurpose investments but not gross earnings of up to $100,000 on the portion, if any,
of the Bond Fund constituting a bona fide debt service fund. The Company shall acquire,
and shall cause the Trustee to acquire all nonpurpose investments at their fair market
value in arm's length transactions;
(15) the Company will not permit more than two percent of the proceeds of the
Bonds to be expended (or to be used to reimburse any person for an expenditure) to pay
Issuance Expenses as provided by Section 147(g) of the Code;
(16) neither the Company nor any "related person" thereto will enter into any
arrangement, formal or informal, for the Company or such "related person" to purchase
the Bonds; and
(17) the Company will not otherwise use Bond proceeds, including expenses,
earnings thereon, or take, or permit or cause to be taken, any action that would adversely
affect the exclusion from gross income of the interest on the Bonds, nor otherwise omit to
take or cause to be taken any action necessary to maintain such exclusion from gross
income; and, if it should take or permit, or omit to take or cause to be taken, as
appropriate, any such action, the Company shall take all lawful actions necessary to
rescind or correct such actions or omissions promptly upon having knowledge thereof.
Section 7.08. Determination of Taxabili
(1) Promptly after the occurrence of a Determination of Taxability, the Company
shall give written notice to the Issuer and Trustee of the Determination of Taxability and the
D:WEW200\0010OC&LOAN.DOC 24 LOAN AGREEMENT
Company shall provide to the Trustee in immediately available funds, an amount which when
added to the amounts on deposit in the Funds, will equal the principal amount of all the Unpaid
Bonds plus accrued interest thereon to the Redemption Date, and the Bonds shall be redeemed
pursuant to Article Three of the Indenture.
(2) Upon a Determination of Taxability the Company shall also pay to the Trustee an
amount equal to the Paying Agent's, Trustee's fees, accrued and to accrue until final payment and
redemption of the Bonds, and all other advances, fees, costs and expenses reasonably incurred by
the Trustee, the Issuer and the Paying Agent, including Bond Counsel and legal fees.
(3) If this Agreement has not been terminated under Section 8.04 prior to the
Redemption Date for the Bonds, this Agreement shall be terminated on said Redemption Date
and the closing for the termination of this Agreement shall be completed otherwise as provided
for termination of this Agreement upon exercise of the Company's options under Section 8.04.
(4) Neither the Company nor any Holder shall be required to contest or appeal any
notice of deficiency, ruling, decision or legislative enactment which may give rise to a
Determination of Taxability; and the expenses of any such contest or appeal shall be paid by the
party initiating the contest or appeal.
DANEW200\00 I OOCS\LOAN. DOC 25 LOAN AGREEMENT
ARTICLE 8
Company's Options
Section 8.01. Assignment and Transfer.
The Company may assign its rights and obligations under this Agreement as an incident
thereto, transfer its interest in the Project without prior consent of the Issuer or the Trustee, but
subject to the provisions of Sections 5.02 and 7.05 hereof.
Section 8.02. Prepayment.
(1) The Company shall have the option to direct the Trustee to call for redemption
and prepayment of the Outstanding Bonds in whole or after the Conversion Date, in part as
provided in Section 3.01(a)(i), 3.01(a)(iii) or 3.01(a)(v) of the Indenture. The Bonds to be
redeemed shall be redeemed at a price equal to their principal amount plus accrued interest set
forth in Section 3.01 of the Indenture. In the event the Bonds are called for redemption in whole
or in part, the Company shall make a Basic Payment as provided in Section 4.02 hereof on such
Redemption Date.
(2) If, after the Company exercises its option to redeem all Bonds, no Bonds remain
Outstanding, the Indenture is discharged, and the Company has satisfied all of its obligations
hereunder, the Trustee and the Issuer shall execute and deliver to the Company such release and
other instruments as the Company reasonably determines are necessary to terminate this
Agreement. All further obligations of the Company hereunder, except as set forth in Section
10. 10, shall thereupon terminate.
Section 8.03. Direction of Investments.
Except during the continuance of an Event of Default, the Company shall have the right
during the Term of this Agreement to direct the Trustee to invest or reinvest all money held for
the credit of Funds established by Article Five of the Indenture in such securities as are
authorized by law for such funds, subject, however, to the further conditions of Article Seven of
the Indenture and Section 7.07 hereof.
Section 8.04. Termination of Loan Agreement.
Except during the continuance of an Event of Default, after the Conversion Date, the
Company shall, have the option of terminating this Agreement subject to the following
conditions:
(1) such option may be exercised only if one of the following events shall
have occurred:
(A) if the Project shall have been damaged or destroyed to such extent
that in the reasonable judgment of the Company (i) the Project cannot reasonably
be restored within six (6) months to substantially its condition immediately
preceding such damage or destruction, or (ii) the Project cannot reasonably be
D:WEW200WO I00MLOAN.DOC 26 LOAN AGREEMENT
used to carry on the normal operations of the Company for six (6) months, or (iii)
the reasonably estimated cost of restoration of the Project exceeds twenty percent
(20%) of the original face amount of the Bonds and is also reasonably estimated
to exceed the proceeds of property insurance payable therefor plus any deductible
amount for which the Company is self-insured, provided that such estimates shall
be approved by the Trustee; or
(B) if by reason of Condemnation, title shall have been taken to all or
substantially all of the Project or the Project Premises, or so much thereof that, in
the reasonable judgment of the Company, (i) the Company will be prevented from
carrying on its normal operations for six (6) months, or (ii) the reasonably
estimated cost of restoration of the Project exceeds twenty percent (20%) of the
original face amount of the Bonds and is also reasonably estimated to exceed the
proceeds of the Condemnation award, provided that such estimates shall be
approved by the Trustee; or
(C) if as a result of any changes in the Constitution of the State of
Minnesota or the Constitution of the United States of America, or of any
legislative or administrative action, whether state or federal, or of any final decree,
judgment or order of any court or administrative body, whether state or federal,
entered after the contest thereof by the Company in good faith, the agreements
contained in this Agreement shall have become impossible of performance in
accordance with the intent and purposes of the parties as expressed herein, or
unreasonable burdens or excessive liabilities shall have been imposed upon the
Company, including, but not limited to, the imposition of new state or local ad
valorem, property, income or other taxes not imposed on the date of this
Agreement, other than ad valorem taxes upon privately owned property and for
the same general purpose as the Project and special assessments levied in amounts
proportionate to and not exceeding the benefits of future public improvements to
the land included in the Project;
(2) in any of the events stated in subsection (1), clauses (A) through (C)
above, if the Company determines to exercise its option to terminate this Agreement it
must give written notice to the Issuer and Trustee of its decision to exercise its option
within one hundred twenty (120) days after such event;
(3) the Company shall give written notice to the Issuer and Trustee of its
intention to exercise the option, stating therein a termination date not less than forty-five
(45) nor more than ninety (90) days after the date the notice is mailed, but in no event
prior to the date on which all Outstanding Bonds shall be deemed discharged under
Article Nine of the Indenture; and the Company shall make arrangements satisfactory to
the Trustee for the giving of any notice required for redemption of all of the Outstanding
Bonds on the date on which the Bonds are to be redeemed;
(4) the Company shall make a Basic Payment as provided in Section 4.02
hereof on the Redemption Date;
27 LOAN AGREEMENT
(5) the Company shall pay to the Trustee at least 5 days prior to the Discharge
Date, an amount equal to the Trustee's and Paying Agent's fees and expenses under the
Indenture, accrued and to accrue until final payment and redemption of the Bonds and all
other advances, fees, costs and expenses reasonably incurred and to be incurred on or
before the termination date by the Trustee and Paying Agent under the Indenture and by
the Issuer under this Agreement;
(6) on the termination date, a closing shall be held at the principal office of the
Trustee, or any other office mutually agreed upon. At the closing the Issuer and Trustee
shall, upon acknowledgment of receipt of the sum set forth in subsection (4) above,
execute and deliver to the Company such release and other instruments as the Company
reasonably determines are necessary to terminate this Agreement. All further obligations
of the Company hereunder, except under Sections 7.04, 7.07 and 7.08 and 10.10 shall
thereupon terminate; provided, however, that the Company shall also remain obligated to
pay or reimburse the Issuer and Trustee for the payment of all other fees, costs and
expenses unaccounted for in the sum paid in accordance with subsection (4) above and
reasonably incurred before or subsequent to such closing in connection with the Bonds.
D:\NEW200\00MOCS\LOAN.DOC 28 LOAN AGREEMENT
ARTICLE 9
Events of Default and Remedies
Section 9.01. Events of Default.
Any one or more of the following events is an Event of Default under this Agreement,
and the term "Event of Default," wherever used herein, means any one of the following events,
whatever the reason for such default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body:
(1) if the Company shall fail to pay any Basic Payments due under this
Agreement and such failure shall continue for ten (10) days;
(2) if the Company shall fail to pay any Additional Charges on or before the
date that the payment is due, and shall continue to be in arrears for thirty (30) days after
mailing of a notice to it by the Issuer or the Trustee that said Additional Charges have not
been received on the due date;
(3) if the Company shall fail to observe and perform or shall breach any other
covenant, condition or agreement on its part under this Agreement for a period of sixty
(60) days after mailing of a notice to it by the Issuer or the Trustee, stating that it is a
"Notice of Default" hereunder and specifying such default or breach and requesting that it
be remedied;
(4) if the Company shall be dissolved or liquidated (other than when a new
entity assumes the obligations of the Company under the conditions permitting such
action contained in Section 7.05);
(5) if any representation or warranty made by the Company herein, or by a
general partner or Representative of the Company in any document or certificate
furnished the Trustee or the Issuer or the Underwriter in connection herewith or therewith
or pursuant hereto or thereto, shall prove at any time to be, in any material respect,
incorrect or misleading as of the date made; or
(6) if an event of default occurs and is continuing under the Indenture or any
Related Document.
Section 9.02. Remedies.
(1) Whenever any Event of Default shall have happened and be subsisting the Trustee
may, by written notice to the Company, declare all the Basic Payments payable for the remainder
of the Term of this Agreement (an amount equal to that necessary to pay in full all outstanding
Bonds and the interest thereon assuming acceleration of the Bonds under the Indenture and to pay
all other indebtedness thereunder) to be immediately due and payable whereupon the same shall
D:\NEW200\001\DOCS\LOAN.DOC 29 LOAN AGREEMENT
become immediately due and payable by the Company. The provisions of this Section 9.02 do
not limit the application of Section 9.01.
(2) Upon the occurrence of an Event of Default, the Trustee may also take whatever
action at law or in equity may appear necessary or appropriate to collect all sums then due and
thereafter to become due, or to enforce performance and observance of any obligation,
agreement, covenant, representation or warranty of the Company, under this Agreement, or any
related instrument; or to otherwise compensate the Issuer, Trustee or Bondholders for any
damages on account of such Event of Default.
(3) The Issuer (without the prior written consent of the Trustee if the Trustee is not
enforcing the Issuer's right in a manner to protect the Issuer or is .otherwise taking action that
brings adverse consequences to the Issuer) may take whatever action at law or in equity may
appear necessary or appropriate to enforce its rights of indemnification under Section 7.04 and to
collect all sums then due and thereafter to become due to the Issuer under Sections 4.04, 7.04,
9.05 and 10.08 of this Agreement. Notwithstanding the foregoing, the Issuer is not precluded
from exercising any of its rights reserved to it as set forth in this Section, even if the Trustee is
exercising the rights of the Issuer hereunder.
Section 9.03. Disposition of Funds.
Any amounts collected pursuant to action taken under Section 9.02 (other than sums
collected for the Issuer on account of its rights to indemnification and certain direct payments to
be made to the Issuer under Sections 4.03, 7.04, and 9.05 which sums shall be paid directly to the
Issuer) shall be applied in accordance with the provisions of the Indenture.
Section 9.04. Nonexclusive Remedies.
No remedy herein conferred upon or reserved to the Issuer or Trustee is intended to be
exclusive of any other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this Agreement 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 thereof, but any such right and power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle the Issuer (or Trustee) to
exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice,
other than such notice as may be herein expressly required or as may be required by law.
Section 9.05. Attorneys' Fees and Expenses.
If an Event of Default shall exist under this Agreement and the Issuer or Trustee should
employ attorneys or incur other expenses for the collection of any amounts due hereunder, or for
the enforcement of performance of any obligation or agreement on the part of the Company, the
Company will upon demand pay to the Issuer or Trustee the reasonable fees of such attorneys and
such other expenses so incurred.
D:\NEW200\00I DOCSWANDOC 30 LOAN AGREEMENT
Section 9.06. Effect of Waiver.
In the event any agreement contained in this Agreement should be breached by either
parry and thereafter waived by the other parry, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other breach hereunder.
Section 9.07. Waiver of Stay or Extension.
The Company covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any appraisement, valuation, stay, or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants in, or the performance of, this Agreement; and
the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Issuer or Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 9.08. Issuer May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the
Company or the property of the Company, the Trustee or the Issuer with the prior consent of the
Trustee, shall be entitled and empowered, by intervention in such proceeding or otherwise:
(1) to file and prove a claim and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Issuer and Trustee (for
themselves and on behalf of Bondholders) (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Issuer and Trustee, their
agents and counsel) allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or deliverable
on any such claims, and to distribute the same.
Section 9.09. Restoration of Positions.
If the Issuer or Trustee have instituted any proceeding to enforce any right or remedy
under this Agreement, and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Issuer or Trustee, then and in every such case the
Company, Trustee and Issuer shall, subject to any determination in the proceeding, be restored to
the positions they held prior to commencement of such proceedings, and thereafter all rights and
remedies of the Issuer shall continue as though no such proceeding had been instituted.
Section 9.10. Suits to Protect the Project.
If the Company shall fail to do so after thirty (30) days prior written notice from the
Issuer or Trustee, the Issuer shall have power to institute and to maintain such proceedings as it
may deem expedient to prevent any impairment of the Project or any portion thereof, by any acts
which may be unlawful or in violation of this Agreement, and such suits and proceedings as the
D:\NEW200\001\DOCS\LOAN.DOC 31 LOAN AGREEMENT
Issuer may deem expedient to protect its interests in the Project or any portion thereof, including
power to institute and maintain proceedings to restrain the enforcement of or compliance with
any governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if
the enforcement of, or compliance with, such enactment, rule or order would impair or adversely
affect the Project or be prejudicial to the interests of the Bondholders.
Section 9.11. Performance by Third Parties.
The Trustee or the Issuer may permit third parties to perform any and all acts or take such
action as may be necessary for and on behalf of the Company to cure any Event of Default
hereunder. The acceptance by Issuer or the Trustee of any such performance by third parties
shall not in any way diminish or absolve the Company of primary liability hereunder.
Section 9.12. Exercise of the Issuer's Remedies by Trustee.
Whenever any Event of Default shall have happened and be subsisting the Trustee may,
but except as otherwise provided in the Indenture shall not be obliged to, exercise any or all of
the rights of the Issuer under this Article 9, without notice to the Issuer.
Section 9.13. Non -Recourse Obligation.
It is recognized that the Loan is a non-recourse obligation of the Company, that as a result
thereof this Agreement is not intended to create any personal liability for the "debt" herein
created on account of the issuance of the Bonds and the obligation of the Company to make
Basic Payments hereunder and that accordingly the remedies available to the Issuer and the
Trustee upon an Event of Default insofar as they related to the payment of any Basic Payments
are limited to the rights and remedies against such security to secure the repayment of the Loan
as is given the Issuer or the Trustee under the Related Documents, provided that nothing herein
shall be deemed to relieve the Company from personal liability for the performance of any
obligation of the Company hereunder other than the obligation to make Basic Payments and
discharge the Loan.
D:\NEW200\001\DOCS\LOAN.DOC 32 LOAN AGREEMENT
ARTICLE 10
General Provisions
Section 10.01. Amounts Remaining in Funds.
Except during the continuance of an Event of Default any amounts remaining in the
Funds created under Article Five of the Indenture upon expiration or earlier termination of this
Agreement, as provided herein, and after adequate provision has been made for payment in full
of the Bonds, in accordance with Article Nine of the Indenture, any Additional Charges payable
to the Trustee and Issuer, including Paying Agent's fees and expenses, and all other amounts
required to be paid under this Agreement, the Indenture, shall, forthwith be paid to the Company.
Section 10.02. Notices.
All notices, certificates or other communications hereunder shall be in writing (except as
otherwise expressly provided herein) and shall be sufficiently given and shall be deemed given
when mailed by first class mail, postage prepaid, with proper address as indicated below. The
Issuer, the Company, the Remarketing Agent, and Trustee may, by written notice given by each
of them to the others, designate any address or addresses to which notices, certificates or other
communications to them shall be sent when required as contemplated by this Agreement. Until
otherwise provided by the respective parties, all notices, certificates and communications to each
of them shall be addressed as follows:
To the Issuer: City of New Hope Minnesota
4401 Xylon Avenue North
New Hope, Minnesota 55428-4898
Attn: City Manager
To the Company: Reprise Associates Limited Partnership
Reprise, Inc.
3005 Ottawa Avenue
St. Louis Park, Minnesota 55416
Attn: President
To the Trustee: Norwest Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust Department
To the Remarketing Agent: Piper Jaffray Inc.
222 South Ninth Street, 15th Floor
Minneapolis, Minnesota 55402
Attn: Head of Municipal Underwriting
D:WEW200\0010OCSLOANDOC 33 LOAN AGREEMENT
Section 10.03. Binding Effect.
This Agreement shall inure to the benefit of and shall be binding upon the Issuer and
Company and their respective successors and assigns.
Section 10.04. Severability.
In the event any provisions of this Agreement 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 10.05. Amendments. Changes, and Modifications.
Except as otherwise provided in this Agreement or in the Indenture, subsequent to the
issuance of the Bonds and before the lien of the Indenture is satisfied and discharged in
accordance with its terms, this Agreement may not be effectively amended, changed, modified,
altered or terminated without the written consent of the Trustee.
Section 10.06. Execution Counterparts.
This Agreement 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 10.07. Required Approvals.
Consents and approvals required by this Agreement to be obtained from the Company,
the Issuer or the Trustee shall be in writing and shall not be unreasonably withheld or delayed.
Section 10.08. Limitations on Issuer's Liability.
No agreements or provisions contained in this Agreement nor any agreement, covenant or
undertaking by the Issuer contained in any document executed by the Issuer in connection with
the Project shall give rise to any pecuniary liability of the Issuer or a charge against its general
credit or taxing powers, or shall obligate the Issuer financially in any way except with respect to
the Project and the application of revenues therefrom and the proceeds of the Bonds. No failure
of the Issuer to comply with any term, condition, covenant or agreement herein shall subject the
Issuer to liability for any claim for damages, costs or other financial or pecuniary charge except
to the extent that the same can be paid or recovered from the Project or revenues therefrom or
from proceeds of the Bonds; and no execution of any claim, demand, cause of action or judgment
shall be levied upon or collected from the general credit, general funds or taxing powers of the
Issuer. Nothing herein shall preclude a proper party in interest from seeking and obtaining
specific performance against the Issuer for any failure to comply with any term, condition,
covenant or agreement herein; provided, that no costs, expenses or other monetary relief shall be
recoverable from the Issuer except as may be payable from the Project or its revenues.
D:\NEW200\001\DOCS\LOAN.DOC 34 LOAN AGREEN ENT
Section 10.09. Representations of Company.
All representations made in this Agreement by the Company are based on the Company's
independent investigation of the facts and law, and accordingly no such representations are made
in reliance upon any representations made or legal advice given by the Issuer, its Bond Counsel,
or any of its agents, officers or employees.
Section 10.10. Termination.
At any time when no Bonds remain Outstanding and arrangements satisfactory to the
Issuer and Trustee have been made for the discharge of all liabilities under this Agreement, this
Agreement shall terminate. All obligations of the Company under Sections 7.04, 7.07 and 7.08
shall survive termination of this Agreement.
D:\NEW200\001\DOCS\LOAN.DOC 35 LOAN AGREEMENT
-, IN WITNESS WHEREOF, the Issuer and the Company have caused this Loan
Agreement to be executed by their duly authorized officers.
CITY OF NEW HOPE, MINNESOTA
6&�W
Its Mayor
i /
Its City Manager
D:\NEW200\001\DOCS\LOAN.DOC LOAN AGREEN ENT
REPRISE ASSOCIATES LIMITED
PARTNERSHIP
By Reprise, Inc.
Its General Partner
By :;
is P're si e
D:WEW200\001\DOCSUAAN.DOC 37 LOAN AGRFEMENT
EXHIBIT A
Legal Description
(The following Parcel is identified as Brooklyn Park Elderly, and
is located at 74th and Zane Avenue North, Hennepin County,
Brooklyn Park, Minnesota, and is legally described as follows:
PARCEL A
Starting at a point 333 feet East of the NW corner of the South 626.6 feet
of the SE 1/4 of 1114 1/4 of Section 28, Township 119, Range 21; thence pro-
ceeding East 200 feet along said I16rth line of the South 686.6 feet of the
SE 1/4 of UW 1/4 of Section 28, Township 119, Range 21; thence proceeding
South along a line parallel with the West line of SE 1/4 of NW 1/4 of Section_
Township 119, Range 21 a distance of 64.75 feet; thence proceeding East a -
distance of 100 feet along a line parallel to the South line of SE 1/4
f T4rr
NW 1/4 of Section 28, Township 119, Range 21; thence proceeding North parallel
to the West line of SE 1/4 of NW 1/4 of Section 28, Township 119, Range 21 to
its intersection with the South line of Twin Brook Center; also being the
South line of 74th Ave. No. as dedicated in said plat of Twin Brook Center;
thence proceeding West along said South line of Twin Brook Center to its
intersection with a line extending North parallel with the West line of SE 1/y
of NW 1/4 of Section 28, Township' -119, Range.71 'thence South along said inter
setting line to point of beginning.
PARCEL A-1
Starting at a point 333 feet East of the NW corner of the South 686.6 feet o
the SE 1/4 of the NW 1/4 of Section 28, Township 119, Range 21; thence pro-
ceeding East 200 feet along said North line of the South 686.6 feet of the
SE 1/4 of the NW 1/4 of Section 28, Township 119, Range 21; thence proceeding
South along�a line parallel with the West line of the SE -1/4 of the NW 1/4 of
Section 28, Township 119, Range 21, a distance of 64.75 feet; thence'proceedi
East a distance of 100 feet along a -line parallel to the South line of the
SE 1/4 of the* NW 1/4 of Section 28, Township 119, Range 21 't6 point of -
beginning. Thence proceeding North parallel to the West line of the SE 1/4 of
the NW 1/4 of Section 28,' Township 119, Range 21 to its intersection with the
South line of Twin Brook Center, also being the South line of 74th Ave. No. as
dedicated in said plat of Twin Brook Center; thence proceeding East along said
South line of Twin Brook Center, a distance of 49 feet; thence South a distana
of 269:64 feet parallel with said blest line of the SE 1/4of the NW 1/4; then
West parallel to the South line thereof to pbeginning.
A-1
i*v:ut1r8tl
Definitions
Act: Minnesota Statutes, Chapter 462C, as amended;
Act of Bankruotcv: any of the following events:
(a) If the Company shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee, liquidator or the like, or of all or a
substantial part of their property, (ii) commence a voluntary case under the Federal
Bankruptcy Code (as now or hereafter in effect), or (iii) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization, winding -up
or composition or adjustment of debts; or
(b) A proceeding or case shall be commenced, without the application or
consent of the Company, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, dissolution, winding -up, or the composition or adjustment of
its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of the
Company, or of all or any substantial part of its assets, or (iii) similar relief in respect of
the Company under any law relating to bankruptcy, insolvency, reorganization,
winding -up or composition or adjustment of debts;
Additional Charges: the payments required by Section 4.04 of the Loan Agreement;
Affiliated Party: as to a particular Person, any Person directly and, indirectly controlling
or controlled by or under direct or indirect common control with such specified Person.
"Control", when used with respect to a particular Person, means the possession, directly or
indirectly, of the power to direct management and policies of such Person whether through the
ownership of voting stock, by contract or otherwise, and the terms "controlling" and "controlled"
have meanings correlative to the foregoing;
Authorized Denominations: $100,000 or any multiple of $5,000 in excess of $100,000;
Basic Payments or Loan Payments: the payments required by Section 4.02 and Section
4.03 of the Loan Agreement;
Beneficial Owner: the person for which a Depository Participant holds an interest in the
Bonds, as shown on the books and records of the Depository Participant;
Bond Closing: the date on which there is delivery by the Issuer of, and payment for, the
Bonds;
Bond Counsel: any firm of nationally recognized bond counsel experienced in tax
exempt bond financing selected by the Trustee and acceptable to the Issuer, and the Company;
Bond Fund: the fund so designated in Section 6.03 from which the principal of and
interest on the Bonds are payable;
D:\NEW200\00RDOCS4LOAN DOC B -I LOAN AGREEMENT
Bond Purchase Fund: the fund so designated in Section 6.04;
Bond Reg ster: the register maintained by the Trustee pursuant to Section 2.10;
Bondholder or Holder: a Person in whose name a Bond is registered in the Bond
Register;
Bonds: the $1,650,000 Multifamily Housing Revenue Bonds (Park Acres Apartments
Project) Series 1997 to be issued pursuant to the Indenture;
Bond Year: any twelve (12) month period ending on the anniversary of the Bond
Closing;
Business Dav: any day on which the Trustee, the Investment Agreement Provider or the
Federal Reserve Bank of New York are not authorized by law to close;
Cede & Co.: Cede & Co. or Cede & Co.'s successor as nominee of DTC;
Code or Internal Revenue Code: the Internal Revenue Code of 1986, as amended, and all
applicable Treasury Regulations;
Collateral Documents: any written instrument other than the Loan Agreement and the
Indenture whereby any property or interest in property of any kind is granted, pledged, conveyed,
assigned, or transferred to the Issuer or Trustee, or both, as security for payment of the Bonds or
performance by the Company of its obligations under the Loan Agreement;
Company: Reprise Associates Limited Partnership, a Minnesota limited partnership, its
successors and assigns or other Person which may assume its obligations under the Loan
Agreement;
Condemnation: the word "Condemnation" or phrase "eminent domain" as used herein
shall include the taking or requisition by governmental authority or by a Person, acting under
governmental authority and a conveyance made under threat of Condemnation, provided such
conveyance is made with the approval of the Trustee, which approval shall not be unreasonably
withheld, and "Condemnation award" shall mean payment for property condemned or conveyed
under threat of Condemnation;
Conversion Date: any Business Day, which day shall be no earlier than September 1,
1997 nor later than April 1, 1998, unless such date is extended in accordance with Section
2.13(a) hereof, as of which the interest rate on the Bonds converts from a Variable Rate to a
Fixed Rate as such date is established pursuant to Section 2.13 hereof;
Credit Facility: shall have the meaning assigned to such term in the Loan Agreement;
Date of Taxability: the date as of which the interest on the Bonds is deemed taxable
under a Determination of Taxability;
Defaulted Interest: shall have the meaning stated in Section 2.02 hereof-,
D WEW200W01\DOCS\LOAN.DOC B-2 LOAN AGREEMENT
Depository or DTC: a book -entry securities depository for the Bonds, initially Depository
Trust Company, New York, New York, a limited purpose trust company organized under the
laws of the State of New York, or any successor book -entry securities depository for the Bonds
appointed pursuant to Section 2.14;
Depository Bonds: Bonds in the form of one immobilized global certificate for each
maturity, registered in the Bond Register in the name of the Depository or its Nominee as
Bondowner and governed by Section 2.14 hereof,
Depository Participant: any broker-dealer, bank or other financial institution from time to
time for which the Depository holds Bonds or securities as depository;
Determination of Taxability: a determination that the interest income on any Bond is
includable in gross income for federal income tax purposes under Section 103 of the Code for
any reason, other than that the Holder is a Substantial User of the Project or a Related Person
thereto, which determination shall be deemed to have been made upon the occurrence of the first
to occur of the following:
(a) the date on which the Company determines that the interest income on any
of the Bonds is includable in gross income for federal income tax purposes; or
(b) the date on which any change in law or regulation becomes effective or on
which the Internal Revenue Service has issued any private ruling, technical advice or any
other written communication to the effect that the interest income on any of the Bonds is
includable in gross income for federal income tax purposes; or
(c) the date on which the Company shall receive notice from the Trustee in
writing that the Trustee has been advised by any Holder that the Internal Revenue Service
has issued a thirty -day letter or other notice which asserts that the interest on such Bond is
includable in gross income for federal income tax purposes; provided that no
Determination of Taxability shall be deemed to have occurred as a result of a
determination by the Company pursuant to clause (a) above unless such determination is
supported by a written opinion of counsel satisfactory to the Trustee that the interest
income on the Bonds is includable in gross income for federal income tax purposes;
Discharge Date: the date on which all Outstanding Bonds are discharged under
Article IX;
Event of Default: any of the events set forth in Section 10.01 hereof.
Facili :the existing 41 -unit rental housing facility known as Park Acres Apartments, and
all related improvements and equipment, together with all additions to, replacements of and
substitutions for any of the foregoing;
Federal Bankruptcy Code: the United States Bankruptcy Reform Act of 1978, as
amended, or any similar or succeeding federal bankruptcy law;
Final Conversion Date: March 1, 2000;
D:WEW200\001\D0MLOANDOC B-3 LOAN AGREEMENT
Final Maturity Date: the Maturity Date, Discharge Date or Redemption Date on which all
outstanding Bonds either mature, are redeemed or discharged, whichever is earlier;
Fixed Rate: the interest rate established in accordance with Section 2.13 hereof,
Fixed Rate Period: the period from and including the Conversion Date to and including
the date next preceding the payment in full of the Bonds;
_Fixed Rate Interest Payment Date: the first March 1 or September 1 next succeeding the
Conversion Date, and each March 1 and September 1 thereafter until payment in full of the
Bonds;
Government Obligations: shall mean direct general obligations of, or obligations the
prompt payment of the principal of and the interest on which are fully and unconditionally
guaranteed by, the United States of America;
Holder or Bondholder: the Person in whose name a Bond is registered in the Bond
Register;
Indenture: the Indenture of Trust by and between the Issuer and the Trustee, as the same
may from time to time be amended or supplemented as herein provided;
Independent Accountant: a certified public accountant or firm of certified public
accountants registered and qualified to practice as such under the laws of the State of Minnesota,
who does not have any direct financial interest in the,_ Company, other than the payment to be
received under contract for services performed and who is not connected with the Company as an
officer, employee, underwriter, partner, affiliate, subsidiary, or person performing similar
functions and is not a trustee or director of the Company;
Independent Counsel: any attorney duly admitted to practice law before the highest court
of any state, who may be counsel to the Company or the Issuer but who may not be an officer or
a full time employee of the Company or the Issuer;
Interest Payment Date: each Fixed Rate Interest Payment Date, each Variable Rate
Interest Payment Date and the Conversion Date;
Interest Period: the period from and including an Interest Payment Date to and including
the day next preceding the next Interest Payment Date, except that the first Interest Period shall
be the period from and including the date of the first authentication and delivery of the Bonds
hereunder to and including April 30, 1997;
Investment Agreement Provider: Bayerische Landesbank Girozentrale;
Investment Agreement: the Investment Agreement dated March 27, 1997 between the
Trustee and the Investment Agreement Provider;
Interest Payment Date: the Conversion Date and each Fixed Rate Interest Payment Date
and Variable Rate Interest Payment Date;
D:WEW200\0010OCS\LOAN.DOC B-4 LOAN AGREEMENT
Internal Revenue Code or Code: the Internal Revenue Code of 1986, as amended, and all
applicable Treasury Regulations;
Issuer: the City of New Hope, Minnesota;
Letter of Representations: the Letter of Representations or other documentation required
by the Depository as a condition to its acting as book -entry depository for the Bonds, together
with any replacement thereof or amendment or supplement thereto (and including any standard
procedures or policies referenced therein or applicable thereto) respecting the procedures and
other matters relating to the Depository's role as book -entry depository for the Bonds;
Loan: the loan of Bond proceeds by the Issuer to the Company described in Section 4.01
of the Loan Agreement;
Loan Agreement: the Loan Agreement of even date herewith by and between the Issuer
and the Company, as the same may from time to time be amended or supplemented as provided
therein and in the Indenture;
Loan Payments or Basic Payments: the payments the Company is obligated to make
pursuant to Sections 4.02 and 4.03 of the Loan Agreement;
Mandatory Redemption Payments: the payments which are required to be made under
Section 3.01(a)(ii) or 3.01(a)(iii) to redeem the Bonds in accordance with the Mandatory
Redemption Schedule after appropriate credits, if any, have been made;
Mandatory Redemption Schedule: the mandatory redemption schedule for the Bonds set
forth in Section 3.01(a)(ii) or 3.01(a)(iii);
Mandatory Tender Date: the Conversion Date;
Mandatory Tender Notice: has the meaning assigned to it in Section 4.01(b);
Maturity Date or Maturi : any date on which principal of or interest or premium, if any,
on the Bonds is due, whether at maturity, on a scheduled interest payment date, or upon
redemption, defeasance, acceleration, or otherwise;
Moody's: Moody's Investors Service, Inc., a corporation organized and existing under the
laws of the State of New York, its successors and assigns, and, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a municipal securities rating
agency, "Moody's" shall be deemed to refer to any other nationally recognized municipal
securities rating agency designated by the Issuer (other than Standard & Poor's Corporation);
Notice by Mail: notice of any action or condition by mail shall mean a written notice
meeting the requirements of the Indenture mailed by first-class mail, postage prepaid, to the
Holders of specified Bonds at the addresses shown in the Bond Register;
Orieinal Purchaser: the first Person(s) who purchase the Bonds from the Issuer at Bond
Closing;
D:\NEW200\00I DOCS\LOAN.DOC B -S LOAN AGREEMENT
Outstanding Bonds: as of the date of determination, all Bonds theretofore issued and
delivered under the Indenture except:
(a) Bonds theretofore canceled by the Trustee or Paying Agent or delivered to
the Trustee or Paying Agent canceled or for cancellation;
(b) Bonds for which payment or redemption moneys or securities (as provided
in Article IX) shall have been theretofore deposited with the Trustee in trust for the
Holders of such Bonds; provided, however, that if such Bonds are to be redeemed, notice
of such redemption shall have been duly given pursuant to the Indenture or irrevocable
action shall have been taken to call such Bonds for redemption at a stated Redemption
Date; and
(c) Bonds in exchange for or in lieu of which other Bonds shall have been
issued and delivered pursuant to the Indenture, including Untendered Bonds; provided,
however, that in determining whether the Holders of the requisite principal amount of
Outstanding Bonds have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Bonds owned by the Company shall be disregarded and
deemed not to be Outstanding Bonds, except that in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization, direction,
notice, consent, or waiver, only Bonds which the Trustee knows to be owned by the
Company shall be disregarded;
Paving Agent: the Trustee or any other entity designated pursuant to the Indenture as the
agent of the Issuer and the Trustee to receive and disburse the principal of and premium, if any,
and interest on the Bonds;
Payment Date: any Interest Payment Date, any Stated Maturity, the Discharge Date, the
Mandatory Tender Date or any Redemption Date;
Permitted Investments:
(a) Government Obligations;
(b) Shares of an investment company registered under the Federal Investment
Company Act of 1940, whose shares are registered under the Federal Securities Act of
1933, and whose only investments are obligations described in clause (a) above;
(c) Any general obligation of the State of Minnesota or any of its political
subdivisions, provided that securities described in clause (a) above have been irrevocably
deposited in escrow to effect discharge of the general obligations in the same manner and
subject to the same conditions required to effect discharge of the Bonds under Article IX;
(d) Certificates of deposit with fixed maturities, time deposits, repurchase
agreements or any other direct obligation with or of either the Trustee or any other
national or state bank or federally chartered savings and loan association whose senior
debt obligations are rated A or better by a Rating Agency or any other bank if the debt
D:\NEW200\001\DOCS\LOAN.DOC B-6 LOAN AGREEMENT
obligations for which such bank's letters of credit are the primary basis are rated A or
better by a Rating Agency which initially rated the Bonds; and
(e) the Investment Agreement.
Person: any natural person, corporation, limited liability company, joint venture,
cooperative, partnership, trust or unincorporated organization, government or governmental body
or agency, political subdivision or other legal entity, as in the context may be appropriate;
Prime Rate: the rate of interest publicly announced by Morgan Guaranty Trust Co., in
New York, New York, or its successor as its "prime rate" or "reference rate," which rate shall
change when and as such prime rate changes;
Project: the Project Premises, the Facility and the Improvements, including all Project
Equipment, as they may at any time exist;
Project Equipment: any and all (i) fixtures or tangible personal property now or hereafter
attached or affixed to the Project Premises, (ii) other tangible personal property now or hereafter
located within or used in connection with the Project Premises or the Facility and (iii) any
additions to, replacements of and substitutions for any of the foregoing;
Proiect Premises: the real estate legally described in Exhibit A attached to the Loan
Agreement, together with all additions to, replacements of and substitutions for the foregoing;
Rating Agency: Standard & Poor's Ratings Group or Moody's;
Rating Category: one of the generic rating categories of a Rating Agency, without regard
to any refinement or gradation of such Rating Category by a numerical or other modifier;
Rebate Amounts: the amount determined pursuant to Section 7.07(14) of the Loan
Agreement to be rebated to the United States;
Record Date: the 15th day of the calendar month next preceding an Interest Payment
Date, whether or not such day is a Business Day;
Redemption Date: when used with respect to any Bond to be redeemed shall mean the
date on which it is to be redeemed pursuant to the Indenture;
Redemption Price: when used with respect to any Bond to be redeemed shall mean the
price at which it is to be redeemed pursuant to the Indenture;
Regular Interest Payments: all interest payments on the Bonds, other than Special Interest
Payments;
Regulatory greement: the Regulatory Agreement dated as of March 1, 1997, by and
between the Trustee, the Issuer and the Company, as the same may be amended from time to
time;
D: WE W200 00T1DOCSU.OAN.DOC B-7 LOAN AGREEMENT
Related Documents: the Loan Agreement and the Regulatory Agreement;
Related Person: with reference to any Substantial User, means a "related person" within
the meaning of Section 147(a)(2) of the Code;
Remarketing Agent: Piper Jaffray Inc. or any successor Remarketing Agent appointed
and serving in such capacity pursuant to the Indenture;
Remarketing Agreement: the Remarketing Agreement, dated as of March 1, 1997,
between the Company, the Remarketing Agent, and the Trustee, as the same may be amended
from time to time, and if a successor Remarketing Agent is appointed in accordance with the
Indenture, "Remarketing Agreement" shall mean such other similar agreement between the
Company, the Trustee and such successor Remarketing Agent;
Replacement Bonds: Bonds which are not Depository Bonds and which are delivered to
replace Depository Bonds pursuant to Section 2.14 hereof,
Representative: the City Manager of the Issuer or a general partner of the Company, or
any other person at any time designated to act on behalf of the Issuer or the Company, as the case
may be, as evidenced by a written certificate furnished to the other parry and the Trustee
containing the specimen signature of such person and signed for the Issuer by its City Manager or
for the Company by a general partner of the Company;
Resale Proceeds: all proceeds from the remarketing of the Bonds pursuant to Section
4.03 hereof,
Responsible Agent: any Person duly authorized and designated by the Trustee to act on
its behalf in carrying out the applicable duties and powers of the Trustee as set forth in the
Indenture (any action required by the Trustee under the Indenture may be taken by a Responsible
Agent);
Restricted Construction Funds: any Bond proceeds, including interest thereon, which are
required to be transferred on the Completion Date from the Project Fund to the Bond Fund and
which the Trustee is required under Section 6.03(b) to apply towards the prepayment or pro rata
payment of Bonds;
Special Interest Payments: all payments of (or with respect to) interest on the Bonds
made upon the acceleration of the Bonds pursuant to Section 10.02;
Special Record Date: the date fixed by the Trustee pursuant to Section 2.02 hereof
relating to the payment of any Defaulted Interest;
Standard & Poor's Ratings Group: Standard & Poor's Ratings Group, a corporation
organized and existing under the laws of the State of New York, its successors and their assigns,
and if such corporation shall be dissolved or liquidated or shall no longer perform the functions
of a municipal securities rating agency "Standard & Poor's Ratings Group" shall be deemed to
refer to any other nationally recognized municipal securities rating agency designated by the
Issuer (other than Moody's);
DANEW200\001\DOCS\LOAN.DOC B -s LOAN AGREEMENT
Stated Maturity: when used with respect to any Bond or any installment of interest
thereon shall mean the date specified in such Bond as the fixed date on which principal of such
Bond or such installment of interest is due and payable;
Substantial User: a "Substantial User" within the meaning of Section 147(a)(1) of the
Code;
Tender Price: the principal and accrued interest due on the Bonds on any Mandatory
Tender Date;
Trust Estate: the Trust Estate as defined and set forth in the Granting Clauses hereof,
Trustee: Norwest Bank Minnesota, National Association in Minneapolis, Minnesota,
and any co -trustee or successor trustee appointed, qualified and then acting as such under the
provisions of the Indenture;
Underwriter: Piper Jaffray Inc.;
Unpaid Bonds: all Outstanding Bonds and any other Bonds which have neither matured
nor been redeemed or purchased and canceled under the Indenture;
Untendered Bond: shall have the meaning set forth in Section 4.07 hereof;
Variable Rate: the variable interest rate established in accordance with Section 2.03
hereof;
Variable Rate Interest Payment Date: shall mean the first Business Day of May, 1997,
and the first Business Day of each month thereafter through the Conversion Date;
Variable Rate Period: the period during which the Bonds bear interest at a Variable Rate.
WNEW200= I \DOCS\LOAN. DOC B-9 LOAN AGREEMENT
EXECUTION COPY
REGULATORY AGREEMENT
among
CITY OF NEW HOPE, MINNESOTA
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
and
REPRISE ASSOCIATES LIMITED PARTNERSHIP
(PARK ACRES APARTMENTS PROJECT)
Dated as of March 1, 1997
This instrument drafted by:
HOLMES & GALEY, LTD.
One Financial Plaza, Suite 1200
120 South Sixth Street
Minneapolis, MN 55402
D:WEW200WIMOCS\REGULATO.DOC REGULATORY AGREEMENT
TABLE OF CONTENTS
1A
PARTIES........................................................................................................................................
1
RECITALS......................................................................................................................................
1
1. Term of Restrictions...........................................................................................................
2
2. Project Restrictions.............................................................................................................
2
3. Occupancy Restrictions.......................................................................................................
4
4. Rental Restrictions..............................................................................................................
7
5. Transfer Restrictions...........................................................................................................
7
6. Enforcement........................................................................................................................8
7. Indemnification...................................................................................................................
9
8. Agent of the Issuer..............................................................................................................
9
9. Interpretation.......................................................................................................................
9
10. Amendment.........................................................................................................................9
11. Severability.........................................................................................................................9
12. Notices................................................................................................................................9
13. Governing Law..................................................................................................................
10
14. Attorneys' Fees..................................................................................................................
10
15. Agreement Binding...........................................................................................................
10
TESTIMONIUM
SIGNATURES
EXHIBIT A Legal Description
EXHIBIT B Certification of Tenant Eligibility
EXHIBIT C Certificate of Continuing Program Compliance
D:\NEW200\001'DOCS\REGULATO.DOC i REGULATORY AGREEN ENT
REGULATORY AGREEMENT
THIS REGULATORY AGREEMENT dated as of March 1, 1997, by and among Reprise
Associates Limited Partnership, a Minnesota limited partnership, and its successors and assigns
(jointly and severally hereinafter called the "Company"), Norwest Bank Minnesota, National
Association, a national banking association (the "Trustee") and the City of New Hope, a
municipal corporation of the State of Minnesota, organized and existing pursuant to the
Constitution and laws of the State of Minnesota (the "Issuer"),
WITNESSETH:
WHEREAS, the Company proposes to acquire and rehabilitate a 41 -unit multifamily
rental housing development located within the jurisdiction of the Issuer on the site described in
Exhibit A attached hereto (the "Project"); and
WHEREAS, the acquisition and rehabilitation of the Project will be financed from
proceeds of the sale of Issuer's Multifamily Housing Revenue Bonds (Park Acres Apartments
Project), Series 1997 (the "Bonds") to be issued pursuant to an Indenture of Trust, dated as of
March 1, 1997 between the Issuer and the Trustee (the "Indenture"); and
WHEREAS, the proceeds of the Bonds will be loaned to the Company (the "Loan")
pursuant to a Loan Agreement, dated as of March 1, 1997 between the Issuer and the Company;
and
WHEREAS, interest on the Bonds paid to the registered owners of the Bonds is exempt
from federal income tax if the Project continuously complies with Sections 142(d) and 147(d) or
any successor provisions of the Internal Revenue Code of 1986, as amended and Treasury
Regulations applicable thereto (collectively, the "Code"); and
WHEREAS, compliance by the Project with Minnesota Statutes, Chapter 462C (the
"Act") and with Sections 142(d) and 147(d) or any successor provisions of the Code is in large
part within the control of the Company; and
WHEREAS, the Issuer is unwilling to provide Bond proceeds to finance the Project
unless the Company shall, by entering into this Regulatory Agreement (this "Agreement"),
consent to be regulated by the Issuer to assure compliance with the Act and to preserve the
tax-exempt status of the Bonds under Sections 142(d) and 147(d) or any successor provision of
the Code;
NOW, THEREFORE, in consideration of the mutual premises and covenants hereinafter
set forth, and of other valuable consideration, the Company, the Issuer and the Trustee agree as
follows:
D:\NEW200\00 RDOCS REG I REGULATORY AGREEMENT
1. Term of Restrictions.
(a) Occupancy Restrictions: The term of the Occupancy Restrictions set forth in
Section 4 of this Agreement shall commence on the first day following the acquisition of the
Project from the proceeds of the Bonds and shall end on the latest of the following: (i) the date
which is 15 years after the later of the date of issuance of the Bonds or the date on which at least
50% of the units in the Project are first occupied; or (ii) the first day on which none of the Bonds
are outstanding; or (iii) the termination date of any Housing Assistance Payments Contract
relating to the Project under Section 8 of the United States Housing Act of 1937, including the
initial term and any renewal thereof.
(b) Rental Restrictions: The term of the Rental Restrictions set forth in Section 4 of
this Agreement will remain in effect during the longer of (i) the period during which any of the
Bonds remain outstanding; or (ii) the term of the Occupancy Restrictions set forth in paragraph
(a) of this Section 1.
(c) Termination of Restrictions: Notwithstanding the provisions of (a) and (b) of this
Section 1, this Agreement and all other restrictions hereunder shall terminate upon any
foreclosure or transfer of title to the Project by deed in lieu of foreclosure; in addition, this
Agreement and the restrictions hereunder shall also cease to apply in the event of an involuntary
noncompliance caused by unforeseen events such as fire, seizure, requisition, a change in federal
law or an action of a federal agency after the date of issue of the Bonds which prevents the Issuer
from enforcing the requirements of this Agreement or condemnation or similar event, provided in
all such cases that (i) the Bonds are retired at the first available call date; or (ii) any insurance
proceeds or condemnation award or other amounts received as a result of such loss or destruction
are used to provide a project which meets the requirements of Section 142(d) or any successor
provision of the Code and Treasury Regulations Section 1.103-8(b), as amended, or any
successor law or regulation in which case this Agreement shall be automatically reinstated.
However, the foregoing provisions of this paragraph shall cease to apply in the event of
foreclosure, transfer of title by deed in lieu of foreclosure or similar event if, at any time
subsequent to such event and during the period set forth in paragraph (a) of this Section 1, the
obligor on the purpose investment (as defined in Section 1.148-1(b) of the Treasury Regulations)
or a related person (as defined in Section 147(a)(2) obtains an ownership interest in the Project
for federal tax purposes.
(d) Termination of Agreement: This Agreement shall terminate upon the earlier of (i)
termination of the Occupancy Restrictions and the Rental Restrictions as provided in paragraphs
(a) and (b) of this Section 1, or (ii) a termination pursuant to the provisions of paragraph (c) of
this Section 1.
2. Project Restrictions.
(a) The Company represents, warrants and covenants that in order to meet the
requirements of Section 142(d) of the Code and Minnesota Statutes, Section 462C.05:
D. NEW200WIOOCSIREGULATO.DOC 2 REGULATORY AGREEMENT
W The Project will be maintained for the purpose of providing multifamily
residential rental property and will constitute multifamily residential rental property, as
such phrase is used in Section 142(a)(7) of the Code.
(ii) The Project consists of a building or structure or several proximate
buildings or structures which are located on a single tract of land or contiguous tracts of
land which may include facilities functionally related and subordinate thereto.
(iii) In the event a unit within a building or structure is occupied by the
Company, the building or structure must include no fewer than four units not occupied by
the Company.
(iv) All of the units in the Project will contain complete living, sleeping,
eating, cooking, and sanitation facilities for a single person or a family.
(v) None of the units in the Project will at any time be utilized on a transient
basis, or used as a hotel, motel, dormitory, fraternity house, sorority house, rooming
house, hospital, sanitarium or rest home.
(vi) Other than units for a resident manager or maintenance personnel or units
for individuals or families of low or moderate income as provided for in Section 4(a)
hereof, all of the units in the Project will be leased, rented, or available for lease or rental
on a continuous basis to members of the general public (and may be restricted to elderly
persons and families).
(vii) The Company shall not restrict Qualifying Tenants (as hereinafter defined)
from the enjoyment of unrestricted access to all common facilities and common areas of
the Project, except as reasonably necessary to protect and preserve the health and safety
of tenants.
(viii) The Company shall not discriminate on the basis of race, creed, color, sex,
or national origin in the lease, use or occupancy of the Projector in connection with the
employment or application for employment of persons for the operation and management
of the Project.
(ix) None of the proceeds of the Bonds will be used to finance commercial
property.
(x) All tenant lists, applications, and waiting lists relating to the Project shall
at all times be kept separate and identifiable from any other business of the Company
which is unrelated to the Project, and shall be maintained in the State in a reasonable
condition for proper audit and subject to examination during business hours by
representatives of the Issuer, the Trustee or the Bondholders.
(xi) All leases of units to Qualifying Tenants shall contain clauses, among
others, wherein each individual lessee:
D:\NEW2W001`DOCS\REGULATO.DOC 3 REGULATORY AGREEMENT
(1) Certifies the accuracy of the statements made in its application and
Certification of Tenant Eligibility; and
(2) Agrees that the family income, family composition and other
eligibility requirements at the time the lease is executed shall be deemed
substantial and material obligations of the lessee's tenancy; that the lessee will
comply promptly with all requests for income, family composition and other
information relevant to determining low or moderate income status from the
Company, the Issuer or the Trustee (as hereinafter defined), and that the lessee's
failure or refusal to comply with a request for information with respect thereto
shall be deemed a violation of a substantial obligation of the lessee's tenancy.
(xii) If the Project includes a rental or management office, such office shall be
used exclusively for the rental or management of the Project.
(b) The Company further represents, warrants and covenants that, in accordance with
the requirements of Minnesota Statutes, Section 474A.O47:
(i) The rehabilitation with respect to the Project will meet the minimum
rehabilitation expenditures in Section 42(e)(2) of the Internal Revenue Code;
(ii) The Project involves participation by the Issuer in the financing of the
acquisition of the Project; and
(iii) The Project will be occupied by individuals or families whose incomes at
the time of their initial residency in the Project meet the requirements of Section 42(g) of
the Internal Revenue Code.
(c) The Company further represents, warrants and covenants that, in order to comply
with the requirements of Section 147(d) of the Code and applicable regulations:
(i) Within 2 years following the date of acquisition of the Project, the
Company shall cause to be made rehabilitation expenditures with respect to the building
which comprises the Project, in an amount equal to or exceeding 15 percent of the portion
of the cost of acquiring such building financed with proceeds of the Bonds. For this
purpose, "rehabilitation expenditures" shall have the meaning given in Section 147(d)(3)
of the Code.
3. Occupancy Restrictions.
(a) The Company represents, warrants and covenants that in order to meet the
requirements of Section 142(d) of the Code and Minnesota Statutes, Section 462C.O5:
(i) At least forty percent (40%) of the units in the Project shall be occupied
(or treated as occupied as provided herein) or held vacant and available for occupancy by
Qualifying Tenants and such units will be of comparable quality and will be a range of
sizes and number of bedrooms comparable to those units which are available to other
tenants. Qualifying Tenants shall mean those persons and families who shall be
DANEW200WOI\DOCS`REG ULATODOC 4 REGULATORY AGREEN ENT
determined from time to time by the Company to be eligible as "individuals whose
income is sixty percent (60%) or less of area median gross income" within the meaning of
Section 142(d)(2)(B) of the Code in a manner consistent with the method of
determination of lower income families that is, as of the date of issuance of the Bonds, in
effect under the Section 8 Program (or if such program has been terminated as of the date
of issuance of the Bonds, under such program as in effect immediately prior to such
termination). Occupants of a unit are considered individuals or families of "low or
moderate income" only if their combined adjusted income does not exceed sixty percent
(60%) of the median gross income for the area with adjustments for smaller and larger
families as set forth in Exhibit B hereto. For purposes of this definition, the occupants of
a residential unit shall not be deemed to be Qualifying Tenants if all the occupants of
such residential unit at any time are "students," as defined in Section 151(c)(4) of the
Code, no one of whom is entitled to file a joint return under Section 6013 of the Code.
The determination of whether an individual or family is of low or moderate income shall
be made at the time the tenancy commences and on an ongoing basis thereafter,
determined at least annually. Any unit occupied by an individual or family who is a
Qualifying Tenant at the commencement of occupancy shall not continue to be treated as
if occupied by a Qualifying Tenant during their tenancy in such unit if such individual or
family subsequently ceases to be of low or moderate income unless such individual's or
family's income does not exceed 140% of the maximum income qualifying as low or
moderate income for a family of its size. In the event that a unit does cease to be treated
as occupied by a Qualifying Tenant for such reason, and thereupon less than 40% of the
completed units in the Project would not be occupied by, or held vacant and available for
occupancy by, Qualifying Tenants, the next vacant unit of comparable or smaller size not
previously occupied by a Qualifying Tenant must be rented to a Qualifying Tenant or held
vacant and available for occupancy by a Qualifying Tenant. Any completed unit vacated
by a Qualifying Tenant which results in the Project not being in compliance with the
provisions of this Section must be rented (on other than a temporary basis) to a
Qualifying Tenant before any other units in the Project are rented to tenants who are not
Qualifying Tenants until the Project is again in compliance.
(ii) As a condition to initial and continuing occupancy, each person who is
intended to be a Qualifying Tenant shall be required annually to sign and deliver to
Company a Certification of Tenant Eligibility substantially in the form attached as
Exhibit B hereto, or in such other form as may be approved by Bond Counsel (the
"Eligibility Certification"), in which the prospective Qualifying Tenant certifies as to
qualifying as low or moderate income. In addition, such person shall be required to
provide whatever other information, documents or certifications are deemed necessary by
the Issuer to substantiate the Eligibility Certification, on an ongoing annual basis, and to
verify that such tenant continues to be a Qualifying Tenant within the meaning of Section
3(a) hereof.
(iii) The form of lease to be utilized by the Company in renting any units in the
Project to any person who is intended to be a Qualifying Tenant shall provide for
termination of the lease and consent by such person to immediate eviction for failure to
D\NEW200\00VDOCSaEGULATO.DOC 5 REGULATORY AGREEMENT
qualify as a Qualifying Tenant as a result of any material misrepresentation made by such
person with respect to the Eligibility Certification.
(iv) Eligibility Certifications will be maintained on file by the Company with
respect to each Qualifying Tenant who resides in a Project unit or resided therein during
the immediately preceding calendar year, and the Company will, within thirty (30) days of
the end of each calendar year, file a copy of a certificate of the Company summarizing the
information set forth in such Eligibility Certifications with the Issuer and the Trustee.
(v) On or before the first day of each January, April, July, and October, the
Company will submit to the Issuer and the Trustee a certificate, substantially in the form
of Exhibit C hereto, executed by the Company stating the percentage of units of the
Project which were occupied by Qualifying Tenants at all times during the preceding
three months and identifying Qualifying Tenants who commenced or terminated
occupancy of the Project during such three months.
(vi) The Company covenants and agrees that during the term of this
Agreement, it will prepare and submit to the Issuer and the Trustee within thirty (30) days
after each anniversary of the date the Project first becomes available for occupancy, a
report certified to be accurate by the Company (a) identifying the tenancies and the dates
of occupancy (or vacancy) for all dwelling units in the Project including the percentage of
the dwelling units of the Project which were occupied by Qualified Tenants (or held
vacant and available for occupancy by Qualified Tenants) at all times during the year
preceding the date of such certificate (b) desC.ribing all transfers or other changes in
ownership of the Project or any interest therein and (c) stating, that to the best knowledge
of the person executing such certificate after due inquiry, all units were rented or
available for rental on a continuous basis during such year to members of the general
public and that the Company was not otherwise in default under this Agreement during
such year.
(vii) On the first (1st) day of the month which is twelve (12) months after the
Occupancy Restrictions commence, as determined by Section 2(a) hereof, and each
anniversary thereof, the Company shall certify to the United States Treasury Department
that the Project and the tenants thereof comply with the restrictions set forth in Sections 2
and 3(a) hereof.
(viii) In order to assure compliance with this Section 3, the Company shall
advise the Issuer and the Trustee in writing of the first day on which (i) the initial
residential unit or units in the Project are first occupied, (ii) ten percent (10%) of the
residential units in the Project are first occupied and (iii) fifty percent (50%) of the
residential units in the Project are first occupied.
(ix) The Company will immediately notify the Issuer and the Trustee at any
time the dwelling units in the Project are not occupied or available for occupancy as
provided above.
D:WEW200\00 I\DOCS\REGULATO.DOC 6 REGULATORY AGREENWNT
(x) The Company will obtain and maintain on file with respect to each
Qualifying Tenant residing in the Project, evidence reasonably satisfactory to the Issuer
and the Trustee as to such Qualifying Tenant's income for the taxable year immediately
preceding such Qualifying Tenant's initial occupancy in the Project, which may include
OMB Form No. 2502-0204, "Certification and Re -Certification of Tenant Eligibility."
(b) The Company further represents, warrants and covenants that in order to meet the
requirements of Minnesota Statutes, Section 474A.047, for the period commencing on the date of
issuance of the Bonds and ending 15 years later, the Project will be occupied by individuals or
families whose incomes at the time of their initial residency in the Project meet the requirements
of Section 42(g) of the Code. The Company agrees to certify on or before each March 1 during
such period, commencing March 1, 1998, to the Issuer that the occupancy requirements set forth
in this clause have been met for the preceding year. Upon request of the Issuer, the Company
agrees to provide individual certifications with respect to the tenants in the Project.
The Issuer shall monitor compliance with the requirements of this provision and, in
addition to any other remedies provided in this Agreement, if the Project is found by the Issuer to
be out of compliance with the foregoing requirements, the Company shall pay a penalty to the
Issuer equal to one-half of one percent of the total amount of the Bonds if the Issuer issues an
order of noncompliance. For each additional year a project is out of compliance, the annual
penalty must be increased as provided in Minnesota Statutes, Section 474A.047, Subd. 3. The
imposition of such penalty shall be subject to the receipt by the Issuer of an opinion of Bond
Counsel selected by the Issuer to the effect that the imposition of such penalty shall not adversely
affect the tax-exempt status of interest on the Bonds.
4. Rental Restrictions.
(a) The Company represents, covenants and warrants that once available for
occupancy each unit in the Project will be rented or available for rental to members of the general
public on a continuous basis until the termination of such requirements, as provided in Section 1
(c) hereof.
(b) The rental restrictions imposed by this Section and the occupancy restrictions of
Section 3 (a) (i) hereof may be enforced by the Issuer by an action for specific performance.
5. Transfer Restrictions.
The Company covenants and agrees that the Company will cause or require as a condition
precedent to any conveyance, transfer, assignment or any other disposition of the Project prior to
the termination of the Rental Restrictions and Occupancy Restrictions provided herein (the
"Transfer") that the transferee of the Project pursuant to the Transfer assume in writing, in a form
acceptable to the Issuer all duties and obligations of the Company under this Agreement,
including this Section 5, in the event of a subsequent Transfer by the transferee prior to
expiration of the Rental Restrictions and Occupancy Restrictions provided herein (the
"Assumption Agreement"). The Company shall deliver the Assumption Agreement to the Issuer
prior to the Transfer.
D:\NEW2001001\DOCS\REGULATO.DOC 7 REGULATORY AGREEMENT
6. Enforcement.
(a) The Company shall permit any duly authorized representative of the Issuer or the
Trustee to inspect any books and records of the Company regarding the Project and with respect
to the incomes of Qualifying Tenants which pertain to, compliance with the provisions of this
Agreement, the Act and Section 142(d) or any successor provision of the Code.
(b) The Company shall submit any information, documents or certificates requested
by the Issuer or the Trustee which either of them deem reasonably necessary to substantiate the
Company's continuing compliance with the provisions of this Agreement, the Act and Section
142(d) or any successor provision of the Code.
(c) The Issuer, the Trustee and the Company each covenant that it will not knowingly
take or permit any action (other than an action required by any documents executed in connection
with the Loan) that would adversely affect the exemption from federal income taxation of interest
on the Bonds. Moreover, each covenants to take any lawful action (including amendment of this
Agreement as may be necessary, in the opinion of Bond Counsel) to comply fully with all
applicable rules, rulings, policies, procedures, regulations or other official statements
promulgated or proposed by the Department of the Treasury or the Internal Revenue Service
from time to time pertaining to obligations the interest on which is tax-exempt under Section
142(d) or any successor provision of the Code and affecting the Project.
(d) The Company covenants and agrees to give written notice to the Issuer of any
violation of the Company's obligations hereunder within five (5) days after first discovering any
such violation, and the Issuer covenants and agrees to inform the Company by written notice of
any violation of the Company's obligations hereunder within five (5) days after first discovering
such violation and to provide the Company a period of time in which to correct such violation. If
any such violation is not corrected to the satisfaction of the Issuer and the Trustee within the
period of time specified which shall be at least thirty (30) days after the date any notice to the
Company is mailed, or within such further time as the Issuer and the Trustee determine is
necessary to correct the violation without loss of tax exemption of interest on the Bonds, but not
to exceed any limitations set by applicable regulations, without further notice the Issuer or the
Trustee shall declare a default under this Agreement effective on the date of such declaration of
default, and upon such default the Company hereby agrees to pay the Issuer any rents or other
amounts received by the Company for any units in the Project which were in violation of this
Agreement during the period such violation continued, and the Issuer shall apply to any court,
state or federal, for specific performance of this Agreement or an injunction against any violation
of this Agreement, or any other remedies at law or in equity or any such other actions as shall be
necessary or desirable so as to correct non-compliance with this Agreement.
(e) The Company, the Trustee and the Issuer each acknowledge that the primary
purpose for requiring compliance by the Company with the restrictions provided in this
Agreement is to comply with the Act and to preserve the federal income tax exemption of
interest on the Bonds to the Bondholders, and that the Holder of the Bonds, who are declared to
be third party beneficiaries of the Agreement, shall be entitled, for any breach of the provisions
hereof, to all remedies both at law and in equity in the event of any default hereunder.
D.\NEW 200\00 I\DOCSIREGULATO.DOC 8 REGULATORY AGREEMENT
7. Indemnification.
The Company hereby indemnifies, and agrees to defend and hold harmless, the Issuer
from and against all liabilities, losses, damages, costs, expenses (including attorneys' fees and
expenses), causes of action, suits, allegations, claims, demands and judgments of any nature
arising from the consequences of a legal or administrative proceeding or action brought against
them, or any of them, on account of any failure by the Company to comply with the terms of this
Regulatory Agreement, or on account of any representation or warranty of the Company
contained herein being untrue.
8. Agent of the Issuer.
The Issuer shall have the right to appoint an agent to cavy out any of its duties and
obligations hereunder, and shall inform the Company of any such agency appointment by written
notice. The Issuer hereby appoints the Trustee as its agent for such purpose, and this shall
constitute written notice to the Company of such appointment.
9. Interpretation.
Any terms not defined in this Agreement shall have the same meaning as terms defined in
the Indenture or in the Act or in Section 142(d) of the Code and Treasury Regulations applicable
thereto.
10. Amendment.
It is agreed that the parties hereto shall promptly amend this Agreement (in a form
suitable for recording) (a) to the extent and when necessary or advisable, in the opinion of
nationally recognized Bond Counsel acceptable to the Issuer, to preserve the exemption of
interest on the Bonds from federal income taxation and (b) to the extent requested by either party
if, in the opinion of nationally recognized Bond Counsel acceptable to the Issuer, such
amendment will not adversely affect the federal tax exemption of interest on the Bonds; provided
that no such amendments shall be permitted or required hereunder if there is pending before
Congress, or either house of Congress, legislation which if enacted would be applicable to the
Bonds and could affect the tax-exempt status of interest on the Bonds, unless such amendment
would not adversely affect the tax exempt status of interest on the Bonds if such legislation were
to become law.
11. Severabilitv.
The invalidity of any clause, part or provision of this Agreement shall not affect the
validity of the remaining portions thereof.
12. Notices.
All notice to be given pursuant to this Agreement shall be in writing and shall be deemed
given when mailed by certified or registered mail, return receipt requested, to the parties hereto at
the addresses set forth below, or to such other place as a party may from time to time designate in
writing. A duplicate copy of each notice, certificate or other communication given hereunder by
D:\NEW200\00I\DOCS',REGULATO.DOC 9 REGULATORY AGREEMENT
the Issuer or the Company shall also be given to the Trustee at the address set forth below. The
Issuer, the Company and the Trustee may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other communications shall be
sent. The initial addresses for notices and other communications are as follows:
To the Issuer: City of New Hope, Minnesota
4401 Xylon Avenue North
New Hope, Minnesota 55428-4898
Attention: City Manager
To the Company: Reprise Associates Limited Partnership
Reprise, Inc.
3005 Ottawa Avenue
St. Louis Park, Minnesota 55416
Attention: President
To the Trustee: Norwest Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust Department
To the Remarketing Agent: Piper Jaffray, Inc.
222 South Ninth Street, 15th Floor
Minneapolis, MN -55402
Attention: Head of Municipal Underwriting
13. Governing Law.
This Agreement shall be governed by the laws of the State of Minnesota and, where
applicable, the laws of the United States of America.
14. Attorneys' Fees.
In case any action at law or in equity, including an action for declaratory relief, is brought
against the Company to enforce the provisions of this Agreement, the Company agrees to pay
reasonable attorneys' fees and other reasonable expenses incurred by the Issuer in connection
with such action.
15. Agreement Bindine.
This Agreement and the covenants contained herein shall run with the Premises and shall
bind the Company (including each general, special or limited partner of the Company, each of
whom the Company hereby represents to have authorized the Company to be bound by this
Agreement, and, to the extent controlled by the Company or any of the foregoing, each person
who is "related" to any of the foregoing within the meaning of Section 147(a) of the Code), its
heirs, legal representatives, executors, administrators, successors in office or interest, and
assigns, and all subsequent owners of the Project or any interest therein, and the benefits shall
D1NEW200\001\D0CS\REGULAT0.D0C 10 REGULATORY AGREENTNT
inure to the Issuer and its successors and assigns for the term of this Agreement as provided in
Section 1(d).
D \NEW200',0011DOCSU2EGULATO.DOC 11 REGULATORY AGREEMENT
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their
respective duly authorized representatives, as of the day and year first written above.
CITY OF NEW HOPE, MINNESOTA
By
Its Mayor
yx LIts City Manager
-��
STATE OF MINNESOTA )
)SS.
COUNTY OF HENNEPIN 1
9n this /'day of i 2 t e year 1997, before me personally appeared
G(l/r/l and AJ/Jie 011e , personally known to me (or
provided on the basis of satisfactory evidence) to be the persons who executed this instrument as
Mayor and City Manager, respectively, of the City of New Hope, Minnesota on behalf of the
Issuer.
Given under my hand and official seal this � day of �`�� L� 1997.
Notary Public
a s
STEVEN A. SONDRALL
NOTARY PUBLIC -MINNESOTA
HENNEPIN COUNTY
My Commission Expires Jan. 31, 2000
r p
D:\NEW200\001\DOCS\REGULATODOC REGULATORY AGREEMENT
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By �zj�� 2��
Its Assistant Vice resident
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
On this day of March, 1997, before me personally appeared Steven Gubrud, to me
known to be the person who executed this instrument as Assistant Vice President of Norwest
Bank Minnesota, National Association, . a national banking association, on behalf of said
association. (�
Notary Public
D: \NEW 200\001 \DOCS\REGULATO. DOC
13
THERESA L. BERG
NOTARY PUBLIO--I+IINNESOTA
•` MY COMMISSION EXPIRES b312000
REGULATORY AGREENIENT
ri
REPRISE ASSOCIATES LIMITED
PARTNERSHIP
By Reprise, Inc.
Its General Partner
Wy 0/ z
Its
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
On this day of March, 1997, before me personally appeared Robert J. Boisclair, to
me known to be the person who executed this instrument as President of Reprise, Inc., the
General Partner of Reprise Associates Limited Partnership, a Minnesota limited partnership, on
behalf of the limited partnership.
D:\NEW200\00MOCS\REGULATO.DOC
14
Notary Public
XLTHERESA L. ®ERG
NOTARY PUBUC-MINNESOTA
COMMISSION EXPIRES 131.2000
REGULATORY AGREEMENT
EXHIBIT A
Legal Description
(The following Parcel is identified as New Hope
and is located at Wisconsin Avenue and Bass Lake
County, New Hope, Minnesota, and is legally
follows):
Family Housing,
Road, Hennepin
described as
PARCEL C
Par 1: That part of the South 292.5 feet of the West 1/2 of the Northeast
Quarter of the Southeast Quarter lyino,East of the West 210 feet
thereof, Section 6, Township 118, Range 21, West of the Fifth Prin-
cipal Meridian. '
Subject to the rights of the public over the West 30 feet of the
above land as shown in deeds Docurtsnt Nos. 455014, 455015, 455016 and
455013 as modified by the order of Court Document No. 1034962.
Subject to minerals and mineral rights reserved by the State of Minne-
sota as to above land except that part of the North 37.5 feet lying
East of the West .210 -feet thereof. Also
par 2: . All that part of the following described property:
That part of the East 1/2 of the Northeast Quarter of the Southeast
Quarter of Section 6, Township 118, Range 21, west of the Fifth Prin-
cipal Meridian, described as follows, to -wit: Commencing at the Soutl-
vest corner of the East 1/2 of the Northeast Quarter of the Southeast
Quarter of said Section 6; thence North along the west line thereof a
,distance of 475 feet, more or less, -to the Southerly -line of public
highway; thence Southeasterly along Southerly line of said highway a
distance of 406 feet; thence South a distance of 247.6 feet more
-or *less, to a point on the South line. of the East 1/2 of the North-
east Quarter of the Southeast Quarter of said Section 6, 341 feet Eas T
from point of beginning, thence West 341 feet to beginning, which lies
Westerly and' Northwesterly of the following described line. begirt r5
at a point on the youth line of the East 1/2 of the Northeast Qu
of the Southeast Quarter of'said Section 6 distant 30 feet east of the
Southwest corner thereof; thence North parallel with the west line of
the East 1/2 of the Nortlieast Quarter.of the Southeast Quarter of said
Section 6 a distance of 379.91 feet; thence deflecting Northeasterly
33 degrees 04 minutes (measured from North to East) to the Southerly
line of said public highway and there terminating.
A-1
EXHIBIT B
Certification of Tenant Eligibility
D:WEW200\00hDOCS\REGULATO.DOC B-1 REGULATORY AGREEMENT
CC L v It'
Owner's Certification of
U.S. Departmem of Housing
3 DM a inure
MwM IMo
IAn P,* rtT
and Urban Development
Compliance with HUD's Tenant
Office of Housing
Eligibility and Rent Procedures
Federal Housing Commisioner
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EXHIBIT C
Certificate of
Continuing Program Compliance
Date: 19_
The following information with respect to the Project located at ,
New Hope, Minnesota (the 'Project'), is being provided by Reprise Associates Limited
Partnership (the "Company") to the City of New Hope, Minnesota (the "Issuer"), pursuant to that
certain Regulatory Agreement dated as of March 1, 1997 (the 'Regulatory Agreement") with
respect to the Project:
(A) The total number of residential units which are available for occupancy is
204. The total number of such units occupied is
(B) The following residential units (identified by unit number) have been
designated for occupancy by "Qualified Tenants," as such term is defined in the
Regulatory Agreement (for a total of 1:
(C) The following residential units which are included in (B) above, have been
re -designated as units for Qualified Tenants since 19_, the date on
which the last "Certificate of Continuing Program Compliance" was filed with the Issuer
by the Company:
Unit Previous Designation Replacing
Number of Unit (if any) Unit Number
(D) The following residential units are considered to be occupied by Qualified
Tenants based on the information set forth below:
D',NE W200400I MOCSULEGULATO.DOC C-1 REGULATORY AGREEMENT
(E) The Company has obtained a "Certificate of Tenant Eligibility," in the form
provided as Exhibit "B" to the Regulatory Agreement,, from each Tenant named in (D) above,
and each such Certificate is being maintained by the Company in its records with respect to the
Project. Attached hereto is the most recent "Certificate of Tenant Eligibility" for each Tenant
named in (D) above who signed such a Certificate since , 19_, the date on
which the last "Certificate of Continuing Program Compliance" was filed with the the
by the
Company.
(F) In renting the residential units in the Project, the Company has not given
preference to any particular group or class of persons (except for persons who qualify as
Qualified Tenants); and none of the units listed in (D) above have been rented for occupancy
entirely by students, no one of which is entitled to file a joint return for federal income tax
purposes. All of the residential units in the Project have been rented pursuant to a written lease,
and the term of each lease is at least months.
(G) The information provided in this "Certificate of Continuing Program Compliance"
is accurate and complete, and no matters have come to the attention of the Company which
would indicate that any of the information provided herein, or in any "Certificate of Tenant
Eligibility" obtained from the Tenants named herein, is inaccurate or incomplete in any respect.
D:WEW200'M I\DOCSU2EGULATO.DOC C-2 REGULATORY AGREEMENT
Unit Number
Name of
Tenant
Number of
Persons Residing
in the Unit
Total Adjusted
Gross Income
Date of Initial
Occupancy
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(E) The Company has obtained a "Certificate of Tenant Eligibility," in the form
provided as Exhibit "B" to the Regulatory Agreement,, from each Tenant named in (D) above,
and each such Certificate is being maintained by the Company in its records with respect to the
Project. Attached hereto is the most recent "Certificate of Tenant Eligibility" for each Tenant
named in (D) above who signed such a Certificate since , 19_, the date on
which the last "Certificate of Continuing Program Compliance" was filed with the the
by the
Company.
(F) In renting the residential units in the Project, the Company has not given
preference to any particular group or class of persons (except for persons who qualify as
Qualified Tenants); and none of the units listed in (D) above have been rented for occupancy
entirely by students, no one of which is entitled to file a joint return for federal income tax
purposes. All of the residential units in the Project have been rented pursuant to a written lease,
and the term of each lease is at least months.
(G) The information provided in this "Certificate of Continuing Program Compliance"
is accurate and complete, and no matters have come to the attention of the Company which
would indicate that any of the information provided herein, or in any "Certificate of Tenant
Eligibility" obtained from the Tenants named herein, is inaccurate or incomplete in any respect.
D:WEW200'M I\DOCSU2EGULATO.DOC C-2 REGULATORY AGREEMENT
IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of the
Company, on '19—.
REPRISE ASSOCIATES LIMITED
PARTNERSHIP
By Reprise, Inc.
Its General Partner
U-2
Its President
D:\NEW200\001\DOCSREGULATODOC C-3 REGULATORY AGREEMENT
BOND PURCHASE AGREEMENT
March 20, 1997
Reprise Associates Limited Partnership
c/o Reprise, Inc.
3005 Ottawa Avenue
St. Louis Park, Minnesota 55416-2296
City of New Hope
4401 Xylon Avenue North
New Hope, Minnesota 55428
Re: $1,650,000 City of New Hope, Minnesota, Multifamily Housing Revenue
Bonds (Park Acres Apartments Project) Series 1997
Ladies and Gentlemen:
The undersigned, Piper Jaffray Inc. (the "Underwriter") hereby offers to purchase,
upon the terms and conditions hereinafter specified, Multifamily Housing Revenue
Bonds (Park Acres Apartments Project) Series 1997 in the aggregate principal amount of
$1,650,000 (the "Bonds") issued by the City of New -Hope, Minnesota (the "Issuer"). The
Bonds are described in the Limited Offering Memorandum dated March 20, 1997,
including, without limitation, the Exhibits and any supplements or amendments thereto
(together, the "Limited Offering Memorandum"). If and when accepted by you, this
document shall constitute our Bond Purchase Agreement (the 'Bond Purchase
Agreement").
Section 1. Back rg ound. The Bonds will be issued by the Issuer pursuant to a
resolution adopted by the City Council of the Issuer on February 10, 1997 (the
"Resolution") and an Indenture of Trust dated as of March 1, 1997 (the "Indenture"),
between the Issuer and Norwest Bank Minnesota, National Association, as trustee (the
"Trustee"). The proceeds of the Bonds will be loaned to Reprise Associates Limited
Partnership (the 'Borrower") pursuant to a Loan Agreement dated as of March 1, 1997
(the "Loan Agreement") between the Issuer and the Borrower for the purpose of
providing funds to the Borrower to acquire and rehabilitate a multifamily rental housing
project located in the City of New Hope, Minnesota (the "Project").
Prior to the Conversion Date (as defined in the Indenture) the Bonds will be
secured by and payable from amounts derived from an Investment Agreement, dated as
of Bond Closing (as defined in Section 9 hereof), (the "Investment Agreement") between
the Trustee and Bayerische Landesbank Girozentrale (the "Investment Agreement
Provider"). After the Conversion Date the Bonds will be secured in accordance with the
provisions of the Indenture.
The Bonds are subject to mandatory and optional redemption prior to maturity,
and bear interest at such rate or rates, as described in the Limited Offering
Memorandum and as provided in the Bonds and in the Indenture.
It is understood and agreed that the Bonds and the interest thereon are special
limited obligations of the Issuer payable solely from revenues provided by the Borrower
and amounts held in various funds and accounts as provided in the Indenture and shall
never constitute a general indebtedness of the Issuer within the meaning of any state
constitutional or statutory provision and do not give rise to a general or moral obligation
of the Issuer, the State of Minnesota (the "State"), or any of its political subdivisions, and
do not constitute a charge against the Issuer's general credit or taxing powers.
All capitalized terms used and not defined herein shall have the meanings
assigned in the Indenture.
Section 2. Supplement or Amendment to Limited Offering Memorandum. If,
between the date of this Bond Purchase Agreement and the date which is ninety (90)
days following Bond Closing, any event shall occur which, with the passage of time or
otherwise, would cause the Limited Offering Memorandum to contain any untrue
statement of a material fact or to omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading, the Borrower shall promptly notify the Issuer and the Underwriter and if, in
the reasonable opinion of the Underwriter, such event requires the preparation and
distribution of a supplement or amendment to the Limited Offering Memorandum, the
Borrower and the Issuer will supplement or amend the Limited Offering Memorandum
in a form and in a manner approved by the Underwriter. If the Limited Offering
Memorandum is so supplemented or amended prior to Bond Closing, such approval by
the Underwriter of a supplement or amendment to the Limited Offering Memorandum
shall not preclude the Underwriter from thereafter terminating this Bond Purchase
Agreement, and if the Limited Offering Memorandum is so amended or supplemented
subsequent to the date hereof and prior to the Bond Closing, the Underwriter may
terminate this Bond Purchase Agreement by notification to the Borrower and the Issuer
at any time prior to the Bond Closing if, in the reasonable judgment of the Underwriter,
such amendment or supplement has or will have a material adverse effect on the
marketability of the Bonds.
IPA
Section 3. Representations and Warranties of Issuer
The Issuer makes the following representations:
(a) The Issuer is a municipal corporation duly organized and validly
existing under the laws of the State.
(b) The Issuer has, and as of Bond Closing will have, all necessary
power and authority to (i) execute and deliver this Bond Purchase Agreement, the
Loan Agreement and the Indenture, (ii) authorize the distribution of the Limited
Offering Memorandum, (iii) issue the Bonds in the manner contemplated by the
Resolution and the Indenture, and (iv) otherwise consummate all of the actions
contemplated by the Resolution, this Bond Purchase Agreement, the Loan
Agreement, the Limited Offering Memorandum, the Regulatory Agreement and
the Indenture. This Bond Purchase Agreement, the Loan Agreement, the
Regulatory Agreement and the Indenture are referred to hereinafter, collectively,
as the "Issuer Documents."
(c) At the time of its adoption, the Issuer had all necessary power and
authority to adopt the Resolution.
(d) The Issuer duly adopted the Resolution at a meeting duly called and
held in accordance with applicable law, with a quorum present and the requisite
number of City Council members voting thereon, and since that time the
Resolution has not been rescinded, amende&or modified.
(e) By official action of the Issuer prior to or concurrently with the
acceptance hereof, the Issuer has duly authorized the (i) execution and delivery of
the Issuer Documents, (ii) distribution of the Limited Offering Memorandum and
(iii) consummation of all of the transactions contemplated hereby and by the
Issuer Documents and the Resolution.
(f) The adoption of the Resolution and the execution and delivery by
the Issuer of the Issuer Documents and the consummation by the Issuer of the
transactions contemplated hereby and thereby are not prohibited by, do not
violate any provision of, and will not result in the breach of or default under any
contract, indenture, agreement or commitment to which the Issuer is a party or by
which it is bound.
(g) The information contained in the Limited Offering Memorandum
under the caption "THE ISSUER" is true and correct. The Issuer has not
otherwise participated in the preparation of the Limited Offering Memorandum
and assumes no responsibility therefor nor makes any representation with respect
thereto.
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(h) There is no action, suit, proceeding or investigation, at law or in
equity, before or by any court, public board or body pending, or to the best
knowledge of the Issuer, threatened against or affecting the Issuer or the Bonds
wherein an unfavorable decision, ruling or finding would adversely affect the
Issuer's participation in transactions contemplated by the Resolution or the Issuer
Documents.
(i) The Issuer has not been notified of any listing or proposed listing by
the Internal Revenue Service to the effect that the Issuer is an issuer whose
arbitrage certifications may not be relied upon.
(j) Except as otherwise stated therein, any certificate signed by any
official of the Issuer and furnished to the Underwriter in connection with the
delivery of the Bonds shall be deemed to be a representation and warranty by the
Issuer to the Underwriter as to the statements made therein.
(k) To the best knowledge of the Issuer, no member of the governing
body or other officer or employee of the Issuer is directly or indirectly interested
in the transactions contemplated herein or any contract, agreement or job hereby
contemplated to be entered into or undertaken in connection with the Project.
Section 4. Representations and Warranties of the Borrower.
The Borrower makes the following representations:
(a) The Borrower is a limited partnership duly organized and validly
existing under the laws of the State. The general partner of the Borrower is
Reprise, Inc., a Minnesota corporation (the "General Partner").
(b) The Borrower has, and as of Bond Closing will have, all necessary
power and authority to execute and deliver this Bond Purchase Agreement, the
Loan Agreement, the Regulatory Agreement and the Remarketing Agreement,
and to consummate all of the actions contemplated by the foregoing documents,
the Resolution, and the Limited Offering Memorandum. This Bond Purchase
Agreement, the Loan Agreement, the Regulatory Agreement and the
Remarketing Agreement are hereinafter collectively referred to as the 'Bond
Documents."
(c) The Borrower has duly authorized the (i) execution and delivery of
the Bond Documents and (ii) consummation of all of the transactions
contemplated by the Limited Offering Memorandum and the Bond Documents.
(d) All actions taken by the Borrower to approve the Bond Documents
and to authorize their execution and delivery and participation by such person or
Is
persons in the transactions contemplated thereby were taken in accordance with
the organizational documents of the Borrower, and in accordance with applicable
law, and none of such actions have been subsequently modified, amended or
rescinded.
(e) To the best knowledge of the Borrower, all consents, approvals,
orders or authorizations of any governmental authority, board, agency or
commission having jurisdiction which are required for the execution and delivery
by the Borrower of the Bond Documents, or the consummation by such person of
the actions contemplated hereby and thereby (excluding approvals, if any, required
by state or federal securities laws), have been obtained or will be obtained prior
to Bond Closing.
(f) The Bond Documents, when executed and delivered by the other
parties thereto, will constitute legal, valid and binding obligations of the Borrower
enforceable in accordance with their respective terms (except as the enforceability
thereof may be limited by bankruptcy, insolvency or other laws affecting creditors'
rights and by the exercise of judicial discretion in the application of equitable
remedies).
(g) The execution and delivery by the Borrower of the Bond
Documents, and the consummation by the Borrower of the transactions
contemplated thereby are not prohibited by, do not violate in any material
respects any provision of, and will not result in the breach of or default (other
than a breach or default that would not have an adverse material effect on the
operations or condition, financial or otherwise, of the Borrower) under (A) the
organizational documents of the Borrower, (B) any law, rule, regulation,
judgment, decree, order or other requirement, applicable to the Borrower, or (C)
any contract, indenture, agreement or commitment to which the Borrower is a
party or by which it is bound.
(h) The information contained in the Limited Offering Memorandum,
as of the date thereof and hereof, does not and will not contain any untrue
statement of a material fact or omit to state a material fact that is necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading; provided, that the Borrower makes no representation
as to the information contained in the Limited Offering Memorandum under the
captions "THE ISSUER," "TAX MATTERS," "THE INVESTMENT
AGREEMENT AND INVESTMENT AGREEMENT PROVIDER," or
"UNDERWRITING."
(i) There is no action, suit, proceeding or investigation, at law or in
equity, before or by any court, public board or body, which has been served upon
the Borrower, or, to the best knowledge of the Borrower threatened against or
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affecting the Borrower in which the validity or enforceability of the Bond
Documents or Bonds is questioned or wherein an unfavorable decision, ruling or
finding would materially and adversely affect the transactions contemplated by the
Bond Documents or Bonds, or the Limited Offering Memorandum.
(j) Any certificate signed on behalf of the Borrower and furnished to
the Underwriter in connection with the transactions contemplated by the Bonds,
the Bond Documents and the Limited Offering Memorandum shall be deemed to
be a representation and warranty by the Borrower to the Underwriter as to the
statements made therein.
Section 5. Representations and Warranties of the Underwriter.
The Underwriter represents:
(a) The Underwriter has, and as of Bond Closing will have, all necessary
power and authority to execute and deliver this Bond Purchase Agreement and to
consummate all of the actions of the Underwriter contemplated hereby.
(b) In connection with its offering and sale of the Bonds, the
Underwriter shall make no material representation or warranty contrary to the
material contained in the Limited Offering Memorandum.
(c) The Underwriter is a registered broker-dealer qualified under
federal and state securities laws to offer and sell the Bonds in those jurisdictions
where the Bonds will be offered or sold.
(d) With respect to the information in the Limited Offering
Memorandum under the caption "UNDERWRITING," such information does not
contain any untrue statement of a material fact or omit to state a material fact
that is necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading.
Section 6. Covenants and Indemnification.
6.1. The Issuer and the Borrower, as applicable, hereby make the following
covenants with the Underwriter:
(a) The Issuer and Borrower will not supplement or amend the Limited
Offering Memorandum or cause the Limited Offering Memorandum to be
supplemented or amended without the prior written consent of the Underwriter.
(b) From and after Bond Closing, the Issuer and the Borrower shall not
amend, modify, terminate or rescind, and will not agree to any amendment,
modification, termination, or rescission of, the Resolution or the Bond Documents
except as permitted by the terms thereof.
(c) The Issuer will cause the Bonds to be delivered to the address and
at the time specified by the Underwriter in conjunction with the Bond Closing.
6.2. The Issuer and the Borrower, as applicable hereby make the following
covenants with each other and with the Underwriter:
(a) The Borrower will promptly advise the Underwriter of any material
matter arising or discovered after the date of this Bond Purchase Agreement and
prior to the Bond Closing that if existing or known at the date hereof would
render any of the representations or warranties set forth herein to be untrue or
misleading or might materially and adversely affect the correctness or
completeness of any statement of a material fact contained in the Limited
Offering Memorandum.
(b) If as the result of any matters described in paragraph (a) of this
Section 6.2 it becomes necessary, in the opinion of counsel to the Underwriter, to
amend or supplement the Limited Offering Memorandum to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading, the Borrower will, at the sole expense of the Borrower, upon notice
thereof by such counsel, promptly prepare and furnish, or cause to be prepared
and furnished, to the Underwriter a reasonable number of copies of an
amendment of, or a supplement to, the Limiied Offering Memorandum (in form
and substance satisfactory to counsel to the Underwriter) so that, as amended or
supplemented, it will not contain any untrue statement of a material fact or omit
to state a material fact that is necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
(c) Prior to Bond Closing, the Borrower will obtain all governmental
consents, approvals, orders or authorizations (other than state and federal
securities law clearances, if any) of any governmental authority or agency that
would constitute a condition precedent to the performance by it of its obligations
under the Resolution, the Bond Documents or the Bonds.
(d) Neither the Issuer nor the Borrower will voluntarily undertake any
course of action inconsistent with the satisfaction of the requirements applicable
to them as set forth in the Resolution or the Bond Documents.
(e) The Issuer and the Borrower will cooperate with the Underwriter in
the qualification of the Bonds for offering and sale and the determination of their
eligibility for investment under the laws of such jurisdictions as the Underwriter
-7-
might designate, except that the Issuer shall not be required to consent to any
service of process in any jurisdiction other than the State.
(f) The Borrower will not, except as required by law, take or omit to
take any action which, under existing law, adversely affects the exclusion of
interest on the Bonds from gross income for purposes of federal income taxation
or the exclusion, to the same extent, of interest on the Bonds from net taxable
income for purposes of Minnesota income taxation.
6.3. Indemnification.
The Borrower agrees to indemnify and hold harmless the Underwriter, its officers,
directors, shareholders, agents and employees, and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act, the Trustee, its officers,
directors, shareholders, agents and employees, and each person, if any, who controls the
Trustee within the meaning of Section 15 of the 1933 Act, and the Issuer, and each of
the Issuer's council members, officers, agents and employees (collectively, the
"Indemnified Persons") to the full extent permitted by law from and against any and all
losses, claims, damages or liabilities asserted against any Indemnified Person insofar as
such losses, claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Limited
Offering Memorandum, or the omission or alleged omission to state therein a material
fact necessary to me the statements therein, in light of the circumstances under which
they were made, not misleading, except that the indemnification given in this paragraph
to the Underwriter shall not apply to the information contained in the Limited Offering
Memorandum under the captions "THE ISSUER," "TAX MATTERS," "THE
INVESTMENT AGREEMENT AND INVESTMENT AGREEMENT PROVIDER,"
and "UNDERWRITING."
The Underwriter agrees to indemnify and hold harmless the Borrower, the
Trustee, the Issuer, and each of the Issuer's council members, officers, agents or
employees (also, the "Indemnified Persons") to the same extent as the foregoing
indemnity from the Borrower to the Underwriter, the Trustee and the Issuer but only
with respect to (i) the information contained in the Limited Offering Memorandum
under the caption "UNDERWRITING," (ii) statements or omissions, if any, made in the
Limited Offering Memorandum, or in any application, in reliance upon, and in
conformity with, written information furnished by the Underwriter and concerning the
Underwriter expressly for use in such Limited Offering Memorandum, or in any of said
applications, and (iii) violation of the representations contained in Section 5 hereof.
In case any action shall be brought against any Indemnified Person in respect to
which indemnity may be sought against the Borrower or the Underwriter (each such
party as the context requires, hereafter, the "Indemnifying Party"), such Indemnified
Person shall promptly notify the Indemnifying Party in writing and the Indemnifying
In
Party shall assume the defense thereto, including the employment of counsel reasonably
satisfactory to such Indemnified Person and the payment of all expenses in connection
with such defense. Any Indemnified Person shall have the right to employ separate
counsel in any such action and to participate in the defense thereto. The fees and
expenses of such separate counsel shall be at the expense of such Indemnified Person,
unless (i) the employment of such counsel has been specifically authorized in writing by
the Indemnifying Party or (ii) the named parties to any such action (including any
impleaded parties) include both such Indemnified Person and the Indemnifying Party
and such Indemnified Person shall have been advised by such counsel that a conflict of
interest between the Indemnifying Party and such Indemnified Person may arise and for
this reason it is not desirable for the same counsel to represent both the Indemnifying
Party and the Indemnified Person. In the case of such a conflict of interest, the
Indemnifying Party shall not have the right to assume the defense of such action on
behalf of such Indemnified Person and the Indemnified Person shall have the right to
select separate counsel to assume such legal defense and to otherwise participate in the
defense of such action on behalf of the Indemnified Person. In connection with any one
such action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, the
Indemnifying Party shall not be liable for the fees and expenses of more than one
separate firm of attorneys for all such Indemnified Persons, which firm shall be
designated in writing by the Indemnified Persons. The Indemnifying Party shall not be
liable for any settlement of any such action effected without its or their written consent.
If such action is settled with the written consent of the Indemnifying Party, or if there be
a final judgment, after the exhaustion of all claims, for the plaintiff in any such action,
with or without the consent of the Indemnifying Party, the Indemnifying Party agrees to
indemnify and hold harmless any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. This indemnity includes
reimbursement for expenses reasonably incurred by the Indemnified Person in
investigating the claim and in defending it if the Indemnifying Party declines to assume
the defense. The Indemnifying Party under this Section 6.3 shall not be required to
indemnify any Indemnified Person for the negligent, wrongful and willful or intentional
acts or omissions of such Indemnified Person. The indemnity agreement of the
Borrower and the Underwriter contained in this paragraph 6.3 shall survive the payment
for and delivery of the Bonds.
In order to provide for just and equitable contribution in circumstances in which
the indemnity agreement provided for in the preceding part of this Section 6.3 is for any
reason held to be unavailable to the Underwriter, the Borrower, the Trustee or the
Issuer, then the Borrower shall contribute to the damages paid by the Underwriter, the
Trustee or the Issuer, and the Underwriter shall contribute to the damages paid by the
Borrower, the Trustee or the Issuer, in such proportions that the Underwriter is
responsible for that portion represented by the percentage that the underwriting fee set
forth herein bears to the aggregate face amount of the Bonds and the Borrower is
responsible for the balance; provided, however, that (i) in no case shall the Underwriter
M
be responsible for any amount in excess of the underwriting fee applicable to the Bonds
purchased by it pursuant to this Bond Purchase Agreement, and (ii) no person guilty of
fraudulent misrepresentation of a material fact or falling to state a material fact shall be
entitled to contribution as to any liability arising from such fraudulent misrepresentation
or omission, from any person who was not guilty of such fraudulent misrepresentation or
omission. In determining the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by each party from the
offering of the Bonds (taking into account the portion of the proceeds of the offering
realized by each), the parties' relative knowledge and access to information concerning
the matter with respect to which the claim was asserted the opportunity to correct and
prevent any statement or omission, and any other equitable consideration appropriate in
the circumstances. The Borrower and the Underwriter agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per capita
allocation. The Underwriter or person controlling such Underwriter shall not be
obligated to make contribution hereunder which in the aggregate exceeds the total public
offering price of the Bonds purchased by the Underwriter under this Bond Purchase
Agreement, plus accrued interest, less the aggregate amount of any damages which the
Underwriter and its controlling persons have otherwise been required to pay in respect
of the same or any substantially similar claim. For purposes of this Section, each person,
if any, who controls the Underwriter within the meaning of the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, shall have the same
rights to contribution as the Underwriter or the Borrower, respectively.
Section 7. Conditions of Closing.
7.1. The obligations of the Underwriter to consummate at Bond Closing the
transactions contemplated hereby are subject to receipt by the Underwriter of the items
described in Section 7.2 hereof and to the satisfaction, unless waived in writing by the
Underwriter, of the following conditions:
(a) There shall be no material misstatement or omission in the
representations and warranties made by Borrower or the Issuer in this Bond
Purchase Agreement, which representations and warranties will be deemed to
have been made again at and as of the time of the Bond Closing and will then be
true in all material respects.
(b) The Borrower will have performed and complied with all
agreements and conditions required or contemplated by this Bond Purchase
Agreement to be performed or complied with by the Borrower at or prior to the
Bond Closing.
(c) The Resolution shall have been duly adopted and the Bond
Documents shall each have been executed and delivered by each of the parties
thereto, shall be in full force and effect on and as of Bond Closing and shall not
10-
have been amended, modified, terminated, rescinded or supplemented prior to
Bond Closing except as may have been agreed to in writing by the Underwriter,
and the Issuer, the Borrower shall not then be in default in their observance or
performance of any agreement, obligation, representation or covenant under any
such documents.
7.2. In addition to the conditions set forth in Section 7.1, the obligations of the
Underwriter to consummate at Bond Closing the transactions contemplated hereby are
subject to receipt by the Underwriter of the following items:
(a) An approving opinion of Holmes & Galey, Ltd., Bond Counsel, in
the form acceptable to the Underwriter, dated as of Bond Closing, and a
supplemental opinion of such Bond Counsel, dated as of Bond Closing and
addressed to the Underwriter, in the form acceptable to the Underwriter; and a
separate reliance letter addressed to the Trustee and the Borrower authorizing the
Trustee and the Borrower to rely on such opinions to the same extent as if they
were addressees thereof.
(b) An opinion of Counsel to the Investment Agreement Provider,
satisfactory in form and substance to the Underwriter, dated as of Bond Closing
and addressed to the Underwriter, Borrower, the Issuer, and Bond Counsel.
(c) The opinion of Winthrop & Weinstine, P.A., counsel to the
Borrower, satisfactory in form and substance to the Underwriter, dated as of Bond
Closing and addressed to the Underwriter, the Issuer, and Bond Counsel, in the
form satisfactory to Bond Counsel and the Underwriter.
(d) Certificates, each dated as of Bond Closing, of the Issuer, signed by
the Mayor and City Clerk, and of the Borrower, signed by the authorized
officer(s) of the Borrower each to the effect that (i) the representations and
warranties made by or on behalf of the Issuer or the Borrower, as the case may
be, in this Bond Purchase Agreement, which representations and warranties will
be deemed to have been made again at and as of the time of Bond Closing, are
true and correct in all material respects; and (ii) the Issuer or the Borrower, as
the case may be, has performed and complied with all agreements and conditions
required or contemplated by this Bond Purchase Agreement to be performed or
complied with by it at or prior to the Bond Closing.
(e) Certificates, dated as of Bond Closing, signed by the Mayor and City
Manager on behalf of the Issuer, and the authorized officer of the Borrower,
sufficient in form and substance to show to the satisfaction of Bond Counsel and
the Underwriter that the Bonds will not be arbitrage bonds under Section 148 of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder,
which certificates shall state (i) the reasonable expectations of the Issuer and
11-
Borrower as of such date regarding the amount and use of proceeds (as
"proceeds" is defined in said section of the Code and the regulations thereunder)
of the Bonds, and the facts and the estimates on which such expectations are
based, and (ii) that, to the best of the knowledge and belief of the persons
executing such certificates, the expectations reflected therein are reasonable;
provided that the Issuer may rely solely on representations of the Borrower in
making its representations.
(f) The Trustee shall have acknowledged receipt of the proceeds of the
Bonds and the Investment Agreement (which shall be in form and substance
acceptable to the Underwriter), and shall have remitted proceeds of the Bonds as
directed by the Issuer.
(g) A properly completed and executed IRS Form 8038 as to the Bonds,
together with evidence of the filing thereof with the Internal Revenue Service.
(h) A certified copy of the Resolution, and executed originals of the
Bond Documents.
(i) The items (to the extent not otherwise required hereby) required by
Section 2.06 of the Indenture.
0) Such additional legal opinions, certificates and other documents as
the Underwriter, its Counsel or Bond Counsel reasonably may deem necessary to
evidence the truth and accuracy as of the Bond Closing of the representations and
warranties herein contained and of the Limited Offering Memorandum, and to
evidence compliance by the Issuer and the Borrower with this Bond Purchase
Agreement and all applicable legal requirements and to evidence the due
performance and satisfaction by the Borrower or the Issuer at or prior to such
time of all agreements then to be performed and all conditions then to be
satisfied by the Borrower or the Issuer.
7.3. If any of the conditions set forth in Section 7.1 or 7.2 have not been met as
of Bond Closing, the Underwriter may, at its sole option, terminate this Bond Purchase
Agreement or proceed to Bond Closing upon waiving any rights under this Bond
Purchase Agreement with respect to any such condition. If this Bond Purchase
Agreement is terminated pursuant to this Section, no party will have any rights or
obligations to the other, except as provided in Section 6.3 and Section 8 regarding the
payment of costs and expenses related to the execution and performance of this Bond
Purchase Agreement.
Section 8. Costs and Fees. The Underwriter and the Borrower agree that the
Bonds are being structured as an interim cash -backed transaction, and that the entire
underwriting fee of the Underwriter in connection with the initial purchase of the Bonds
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hereunder shall be equal to and shall be deemed paid from the $4,125 payment made by
the Borrower to the Underwriter pursuant hereto.
At the Bond Closing the Borrower shall pay or provide for the payment of all
costs and expenses relating to the execution and delivery of this Bond Purchase
Agreement and to the delivery of the Bonds to the Underwriter, including but not
limited to the fees and expenses of Bond Counsel, Underwriter's and Trustee's Counsel,
administrative fees of the Issuer, any fees and expenses for rating the Bonds, state
securities registration or exemption fees and expenses, and all printing and reproduction
costs related to the Bonds and any other expenses payable by the Borrower hereunder.
These fees and charges apply to the initial purchase of the Bonds only. Amounts
payable in connection with the remarketing of the Bonds will be as set forth in the
Remarketing Agreement and any amounts payable in connection with a refunding of the
Bonds will be as set forth in a separate bond purchase agreement for such refunding
bonds.
Section 9. Purchase. Sale and Delivery of the Bonds. On the basis of the
representations and warranties and subject to the terms and conditions set forth herein,
the Underwriter agrees to purchase and the Issuer agrees to sell and deliver the Bonds at
a price of 100% of the principal amount thereof plus accrued interest from the date
thereof to Bond Closing. Payment for the Bonds shall be made by wire transfer in
immediately available funds to the order of the Issuer at the Trustee, at or before 11:00
a.m., Eastern time on March 27, 1997 (the "Bond Closing"), or at such other place and at
such other time or date as may be agreed upon by the Issuer, the Borrower, the Bank
and the Underwriter, against delivery of the Bonds to the Underwriter.
Section 10. Representations and Agreements to Survive Sale and Payment.
Except as the context otherwise requires, all representations, warranties and agreements
contained in this Bond Purchase Agreement shall be deemed to be representations,
warranties and agreements of the parties hereto as of Bond Closing, notwithstanding the
nondelivery for any reason of any certificate or document required to be delivered
hereunder; and such representations, warranties and agreements of the parties, including
the indemnity and contribution provisions contained in Section 6.3 hereof and payment
of any fees and expenses due under Section 8 hereof, shall remain operative and in full
force and effect regardless of any investigation made by the Underwriter or by any
Indemnified Person, and shall survive the sale of and any Payment for the Bonds.
Section 11. Termination of this Bond Purchase Agreement. Subject to Section 10
hereof, this Bond Purchase Agreement may be terminated at any time prior to Bond
Closing by the Underwriter if, in the reasonable judgment of the Underwriter, the
market price of the Bonds would be materially adversely affected or it is impractical to
offer the Bonds for sale or to enforce contracts made by the Underwriter for the resale
of the Bonds agreed to be purchased hereunder by reason of. (a) pending or threatened
litigation, legal action or other governmental or municipal proceeding or legislation
-13-
before either the House of Representatives or the United States Senate (or a committee
thereof) which, if adversely determined or passed into law, as the case may be, would
adversely affect the exclusion from gross income of interest on the Bonds for federal
income tax purposes, (b) any action having been taken by the President of the United
States, the Treasury Department of the United States or the Internal Revenue Service of
the United States, or any decision having been rendered by the United States Tax Court
or any Court established under Article III of the United States Constitution, having the
effect of imposing, directly or indirectly, federal income taxation upon interest received
on obligations of the general character of the Bonds other than as provided by law on
the date hereof, (c) trading in securities on the New York Stock Exchange or the
American Stock Exchange having been suspended or limited or minimum prices having
been established on either such exchange, (d) a banking moratorium having been
declared by either federal or applicable state authorities, (e) an outbreak of major
hostilities or other national or international calamity having occurred or, (f) any action
having been taken by any government in respect of its legislative or monetary affairs
which, in the opinion of the Underwriter, has a material adverse effect on the United
States' securities markets or the market for the Bonds. If this Bond Purchase Agreement
is terminated for any reason whatsoever other than due to breach by the Underwriter,
the Borrower shall be liable for all out of pocket costs and expenses set forth in
Section 8 hereof other than the Underwriting Fee.
Section 12. Bond Offering by Underwriter. The Underwriter proposes to offer
the Bonds for institutional sale and may sell to selected dealers and special purchasers.
Concessions from the offering price may be allowed to selected dealers and special
purchasers.
Section 13. Notices. All notices provided for in this Bond Purchase Agreement
shall be made in writing either (a) by actual delivery of the notice into the hands of the
party or parties entitled thereto, or (b) by the mailing of the notice in the United States
mail to the address as stated below (or at such other address as may have been
designated by written notice), of the party entitled thereto, by certified or registered
mail, return receipt requested. The notice shall be deemed to be received (a) in case of
actual delivery on the date of its actual receipt by the party entitled thereto, and (b) in
case of mailing on the date of deposit in the United States mail, postage prepaid.
All communications hereunder, except as herein otherwise specifically provided,
shall be in writing and mailed or delivered:
If to the Underwriter: Piper Jaffray Inc.
Piper Jaffray Tower - 15th Floor
222 South 9th Street
Minneapolis, Minnesota 55402
Attention: Public Finance Department
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If to the Issuer: City of New Hope, Minnesota
4401 Xylon Avenue North
New Hope, Minnesota 55428
If to the Borrower: Reprise Associates Limited Partnership
c/o Reprise, Inc.
3005 Ottawa Avenue
St. Louis Park, Minnesota 55416-2296
A copy of items sent
to the Borrower to: Todd Urness, Esq.
Winthrop & Weinstine, P.A.
3000 Dain Bosworth Plaza
60 South Sixth Street
Minneapolis, Minnesota 55402
Section 14. Construction. This Bond Purchase Agreement shall be governed by,
subject to and construed in accordance with the laws of the State of Minnesota.
Section 15. Severability. If any portion of this Bond Purchase Agreement shall
be held invalid or inoperative, then, so far as is reasonable and possible (a) the
remainder of this Bond Purchase Agreement shall be considered valid and operative, and
(b) effect shall be given to the intent manifested by the portion held invalid or
inoperative.
Section 16. Multiple Counterparts. This Bond Purchase Agreement may be
executed in a number of identical counterparts, each of which shall be deemed to be an
original, but all of which constitute, collectively, one and the same agreement; but in
making proof of this Bond Purchase Agreement, it shall not be necessary to produce or
account for more than one such counterpart.
Section 17. Modification of Bond Purchase Amendment. This Bond Purchase
Agreement may not be modified or amended except by written agreement executed by
all of the parties hereto.
Section 18. Number or Gender of Words. Whenever the context so requires, the
masculine shall include the feminine and neuter, and the singular shall include the plural,
and conversely, the plural shall include the singular.
Section 19. Other Instruments. The parties hereto covenant and agree that they
will execute such other and further instruments and documents as are or may become
necessary or convenient to effectuate and carry out this Bond Purchase Agreement.
-15-
Section 20. Captions. The captions used in this Bond Purchase Agreement are
for convenience only and shall not be construed in interpreting this Bond Purchase
Agreement.
Section 21. Parties. This Bond Purchase Agreement shall be binding upon and
inure to the benefit of the parties hereto, and their respective successors, legal
representatives, heirs and assigns. Nothing in this Bond Purchase Agreement, expressed
or implied, is intended to confer on any person other than the parties to this Bond
Purchase Agreement or their permitted successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Bond Purchase Agreement.
Section 22. Time. Time shall be of the essence of this Bond Purchase
Agreement.
Section 23. Entire Agreement. This Bond Purchase Agreement contains the
entire understanding among the patties and supersedes any prior understandings or
written or oral agreements between them respecting the subject matter hereof.
If the foregoing correctly sets forth the understanding among the Underwriter, the
Issuer and the Borrower, then the Issuer and the Borrower should so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a binding
agreement among such parties and the Underwriter.
67900
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PIPFA TeIMP evTNT(-
IM
k
Accepted as of the date first above written:
CITY OF NEW HOPE, MINNESOTA
By: �'y ' �I�
Its: Mayor
By:
Its City Manager
REPRISE ASSOCIATES LIMITED
PARTNERSHIP
By Reprise, Inc.
Its General Partner
By: 46 z
Ks Preside
REMARKETING AGREEMENT
This Remarketing Agreement (this "Agreement" or this 'Remarketing
Agreement"), dated as of March 1, 1997, is between PIPER JAFFRAY, INC. (the
'Remarketing Agent'), REPRISE ASSOCIATES LIMITED PARTNERSHIP, a
Minnesota limited partnership (the "Company"), and NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee under the Indenture, as hereinafter defined
(the "Trustee"). Any capitalized terms used herein and not otherwise defined herein
have the meaning given such terms in the Indenture.
RECITALS:
A. The City of New Hope, Minnesota (the "City") has authorized the issuance,
sale and delivery of its Multifamily Housing Revenue Bonds (Park Acres Apartments
Project) Series 1997 in the aggregate principal amount of $1,650,000 (the 'Bonds")
pursuant to an Indenture of Trust, dated as of March 1, 1997 (the "Indenture"), between
the City and the Trustee.
Capitalized terms not otherwise defined herein shall have the meanings set forth
in the Indenture.
B. The Bonds will bear interest until the Conversion Date at a Variable Rate
equal to 59% of the prime rate publicly announced from time to time by Morgan
Guaranty and Trust Company. .
C. The Indenture provides, among other things, that, on a Mandatory Tender
Date, each Bond shall be required to be tendered to the Trustee for purchase.
D. Prior to the Conversion Date (as defined in the Indenture) the Bonds will
be secured by and payable from amounts derived from an Investment Agreement, dated
March 27, 1997 (the "Investment Agreement') between the Trustee and Bayerische
Landesbank Girozentrale. After the Conversion Date, the Bonds will be secured by a
Credit Facility (as defined in the Indenture) provided by the Company to the Trustee to
secure the Bonds in accordance with the provisions of the Indenture.
E. The Purchase Price of any tendered Bonds will be paid by the Trustee on
the Conversion Date, from the proceeds of the Bonds which have been remarketed and
the sales price therefor is available to pay such Purchase Price.
F. The Indenture provides for the appointment of an agent to arrange for the
remarketing of Bonds tendered or deemed tendered for purchase pursuant to the
Indenture. The Remarketing Agent is willing to accept such appointment upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
contained herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. The Bonds: Definitions. The Bonds will be issued pursuant to and upon
the terms and conditions specified in the Indenture.
2. Appointment of Remarketing Agent. The Company hereby appoints Piper
Jaffray, Inc., as the Remarketing Agent, and Piper Jaffray, Inc. hereby accepts the
appointment subject to the terms and conditions contained in this Agreement. It is
understood that all acts of the Remarketing Agent pursuant to this Agreement shall be
performed by the Remarketing Agent as agent for the Company, except that any
determination of interest rates to be borne by the Bonds shall be made by the
Remarketing Agent as agent for the Trustee.
3. Obligations To Remarket Bonds. (a) During the Remarketing Period
(hereinafter defined), so long as no Event of Default has occurred and is continuing, the
Remarketing Agent shall, on the Mandatory Tender Date, pursuant to Article 4 of the
Indenture, offer for sale and use its best efforts to remarket to one or more "accredited
investors", as defined by Rule 501(a) under the Securities Act of 1933, as amended, or
investors who otherwise have such knowledge and experience in financial and business
matters that they are capable of evaluating the merits and risks of an investment in the
Bonds, who agree to purchase the Bonds for investment purposes and without a view to
reselling or distributing the Bonds.
The price of each Bond which the Remarketing Agent is required by this
Section 3(a) to offer for sale and to use its best efforts to remarket shall be the principal
amount of such Bond plus accrued interest thereon to the Mandatory Tender Date. The
Remarketing Agent shall cause the proceeds of sale of Bonds sold by the Remarketing
Agent to be delivered to the Trustee not later than 12:00 noon, Minneapolis time, on the
Mandatory Tender Date in accordance with Section 4.03(2) of the Indenture.
(b) In accordance with Section 4.03 of the Indenture, at or prior to 10:00 a.m.,
Minneapolis time, on the third Business Day immediately preceding each Mandatory
Tender Date, the Remarketing Agent shall give notice by telephone, telecopy, or telex,
promptly confirmed in writing to the Trustee specifying the names, addresses and
taxpayer identification numbers of purchasers of and the principal amount and
denominations of such Bonds, if any, remarketed by it pursuant to Section 3(a) hereof.
(c) The Remarketing Agent shall have no obligation to purchase any tendered
Bonds for its own account.
(d) As used in this Agreement, the term 'Remarketing Period" means the
period beginning on the date of initial delivery of the Bonds under the Indenture (the
"Closing Date") and continuing through and including the earliest of (i) the date as of
which there are no Bonds Outstanding, (ii) the appointment of a receiver, liquidator,
conservator or similar official for the Company, or (iii) the occurrence of an Event of
Default described in Section 10.01 of the Indenture.
-2-
4. Fees and Expenses. Prior to the date of this Agreement, the Remarketing
Agent and the Company entered into an Investment Banking and Allocation Deposit
Agreement, dated as of December 27, 1996 (the "Investment Banking Agreement"). The
Investment Banking Agreement provided in the first paragraph of Section E,
Compensation for Investment Banking Services, for the fees payable to the Remarketing
Agent as follows. If the remarketing of the Bonds is structured as a variable rate (lower
floater) FNMA -insured transaction, the Company shall pay a remarketing fee to the
Remarketing Agent equal to 1.25% of the par amount of the FNMA -insured variable
rate Bonds remarketed and 5.0% of the par amount of the subordinate series of Bonds
remarketed, and if the remarketing of the Bonds is structured as an unrated transaction,
the Remarketing Agent's fee will be 1.75% of the par amount of the Bonds remarketed
for a limited public offering and 2.50% of the par amount of the Bonds remarketed for a
full public offering. For any other structure for the remarketing of the Bonds, the
Company hereby agrees to pay to the Remarketing Agent a remarketing fee to be
negotiated between the Company and the Remarketing Agent not less than 35 days prior
to the Conversion Date. Such fee shall be payable on the Conversion Date. The
Company shall have no obligation to pay the Remarketing Agent a fee if the
Remarketing Agent withdraws from or is unable to perform its duties under this
Agreement, if there is no Conversion Date or Optional Redemption under the Indenture
or if the Company does not receive the proceeds of the Bonds or any other tax exempt
Bonds in a refunding transaction. The foregoing fees do not include the Remarketing
Agent's expenses, which the Company is obligated to pay pursuant to Section F of the
Investment Banking Agreement and Section 2 hereof.
5. Resignation. (a) Except as otherwise provided in Section 5(b) hereof,
the Remarketing Agent may at any time resign and be discharged of the duties and
obligations created by this Agreement by giving at least 30 days' written notice to the
Company and the Trustee; provided, however, that such resignation will not be effective
prior to the effective date of the appointment and acceptance of a successor
Remarketing Agent. In the event that the Remarketing Agent shall resign or be
removed, or be dissolved, or if the property or affairs of the Remarketing Agent shall be
taken under the control of any state or federal court or administrative body because of
bankruptcy or insolvency, or for any other reason, the Company, shall appoint a
successor Remarketing Agent meeting the requirements set forth in the Indenture. Any
successor Remarketing Agent shall be an institution authorized by law to perform all of
the duties imposed upon it under the Indenture and this Agreement. If a successor
Remarketing Agent shall be appointed pursuant to this Section, all references herein to
the "Remarketing Agent" shall thereafter refer to such successor Remarketing Agent.
(b) A resignation fee of $33,000 shall be paid by the Company to the
Remarketing Agent and the Remarketing Agent may resign and be discharged of the
duties and obligations created by this Agreement following the giving of 30 days' written
notice to the Trustee and the Company that the Company has failed to reach agreement
on a remarketing fee required to be negotiated and paid pursuant to Section 4 of this
Agreement. The ability of the Remarketing Agent to resign as provided in this Section
5(b) shall constitute a remedy for the failure to negotiate a remarketing fee due under
Section 4 of this Agreement but shall not preclude the exercise of any other remedy or
-3-
remedies which may otherwise be available to the Remarketing Agent at law, in equity
or pursuant to this Agreement, including, but not limited to, the right to petition a court
of competent jurisdiction for the appointment of a successor Remarketing Agent. Any
resignation pursuant to this Section 5(b) shall be effective following the giving of such
30 -day notice regardless of whether a successor Remarketing Agent has been appointed
in accordance with the provisions of the Indenture and this Agreement.
6. Responsibilities of the Remarketine Aeent. (a) The duties of the
Remarketing Agent shall be solely as provided in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Remarketing
Agent. The Remarketing Agent may consult with counsel of its choice, including counsel
who are employees of the Remarketing Agent, and shall not be liable for any action
taken in good faith in reliance upon advice of such counsel. Except as otherwise
provided herein, the Remarketing Agent may act or refrain from acting in good faith
reliance upon any resolution or other document transmitted to it on behalf of the
Trustee or the Company.
(b) The Remarketing Agent's obligation to use its best efforts to remarket
Bonds pursuant to Section 3(a) hereof shall not include an obligation to solicit purchases
from investors other than institutional investors that customarily purchase tax-exempt
securities in large denominations.
(c) The Remarketing Agent hereby agrees:
(i) to hold all money delivered to it hereunder for the purchase of Bonds
in trust for the benefit of the person which shall have delivered such money until
such money is transferred to the Tender Agent, and not to commingle such
money with its general funds;
(ii) to keep such books and records as shall be consistent with prudent
industry practice and make such books and records available for inspection by the
City, the Trustee and the Company at all reasonable times;
(iii) in the event of the resignation of removal of the Remarketing Agent,
to pay over, assign and deliver to the successor Remarketing Agent any money
and Bonds held by it; and
(iv) not to knowingly offer for sale or sell Bonds to the City, the Company
or any Affiliate (as defined in the Indenture) of the City or the Company.
(d) The Remarketing Agent shall not be liable for any action taken or omitted
to be taken pursuant to this Agreement except for its own gross negligence or willful
misconduct.
7. Preparation of Disclosure Documents; Registration of Bonds; Restriction
on Amendments. (a) The Company shall, at the Company's expense, use its best efforts
to supply the Remarketing Agent with such information as the Remarketing Agent may
El
reasonably request for use in connection with any remarketing of the Bonds pursuant to
this Agreement. If during the term of this Agreement any event known to the Company
shall occur which might cause any limited offering memorandum or other disclosure
document used by the Remarketing Agent in connection with the offer for sale and
remarketing of Bonds to contain any untrue or misleading statement of a material fact,
or omit to state any fact required to be stated therein in order to make the statements
made in such limited offering memorandum or disclosure document, in light of the
circumstances under which they were made, not misleading, then and in every such case
the Company shall promptly notify the Remarketing Agent as to the occurrence of such
event. If, in the opinion of the Remarketing Agent, such event requires the preparation
and publication of a supplement or amendment to such private placement memorandum
or disclosure documents, the Company shall supplement or amend such limited offering
memorandum or disclosure document in a form and manner acceptable to the
Remarketing Agent.
If so requested by the Remarketing Agent in connection with any remarketing of
the Bonds, the Company shall cause to be prepared and made available to the
Remarketing Agent (in such quantities as the Remarketing Agent may reasonably
request) in writing and in a form acceptable to the Remarketing Agent, information
concerning such matters (including, without limitation, the Bonds, the Company, the
Indenture, the security for the Bonds, any rating assigned to the Bonds and the
exemption from federal income taxes of interest on the Bonds and any information
required in order to comply with the applicable provisions of Rule 15c2-12 of the
Securities and Exchange Commission, as if such Rule were applicable) in such detail as
the Remarketing Agent may reasonably request.
Notwithstanding any other provision of this Agreement, the obligation of the
Remarketing Agent to offer for sale and use its best efforts to remarket any Bond
pursuant to this Agreement shall be expressly conditioned upon the receipt by the
Remarketing Agent, prior to the commencement of any such remarketing, of an offering
circular or other disclosure documents, satisfactory in form and content to the
Remarketing Agent and its counsel, for use in connection with such remarketing.
(b) The Trustee and the Company will, at the Company's expense, take all
steps reasonably requested by the Remarketing Agent which the Remarketing Agent or
its counsel may consider necessary or desirable to enable the Remarketing Agent to
establish a "due diligence" defense to any action commenced against the Remarketing
Agent in respect of any information in any disclosure document relating to the Bonds.
(c) The Company and the Trustee each hereby agree that they will not amend
the Indenture without the prior written consent of the Remarketing Agent, if and to the
extent that any such amendment would affect, directly or indirectly, the rights and
obligations of the Remarketing Agent under this Agreement.
8. Remarketing of the Bonds on Mandatory Tender Date. Upon the
Mandatory Tender Date, the Remarketing Agent agrees to offer for sale and use its best
efforts to remarket Bonds described in a notice from the Trustee to the Remarketing
-5-
Agent which are tendered pursuant to the Indenture, at a price at least equal to the
principal amount thereof subject to the following conditions:
(a) compensation satisfactory to the Remarketing Agent shall be paid to the
Remarketing Agent pursuant to this Agreement and other terms and conditions shall
have been agreed upon by the Company and the Remarketing Agent;
(b) the Remarketing Agent shall have received an Opinion of Bond Counsel to
the effect that the remarketing of the Bonds will not adversely affect the exclusion of
interest on the Bonds from gross income for federal or state income tax purposes;
(c) no event described in clause (ii) or (iii) of the definition of Remarketing
Period has occurred;
(d) the Remarketing Agent shall have received, in a timely manner to permit
the Remarketing Agent to comply with Rule 15c2-12 of the Securities and Exchange
Commission (as if such Rule were applicable), a limited offering memorandum, or other
appropriate disclosure document satisfactory in form and substance to the Remarketing
Agent, to be used in connection with its efforts to remarket the Bonds; and
(e) the Remarketing Agent shall have received such additional documents,
certificates and legal opinions as it may reasonably request.
In connection with any such remarketing of Bonds by the Remarketing Agent, the
Company hereby agrees to provide the Remarketing Agent with such information,
opinions of counsel, accountants, letters, certificates and other documents and assistance
as may be reasonably requested by the Remarketing Agent and its counsel. All
reasonable expenses related to the foregoing shall be paid by the Company.
9. Indemnification. (a) The Company agrees to indemnify and hold the City
and the Remarketing Agent harmless from any liability, loss, damages, reasonable costs
and expenses of any nature (including interest and reasonable counsel fees) arising out of
or in connection with the performance by the City or the Remarketing Agent of their
obligations under this Agreement, or those of their employees or agents arising from the
performance of such obligations, under this Agreement, except for claims arising from
gross negligence, willful misconduct or breach of the Remarketing Agreement by the
Remarketing Agent, its employees and agents. This indemnity includes any action taken
or omitted within the scope of this Agreement or any such action taken or omitted upon
telephonic, telegraphic or written instructions received or reasonably believed to have
been received by the City or the Remarketing Agent from the Trustee, the Tender Agent
or the Company and, with respect to the Remarketing Agent, from the City.
(b) To the fullest extent permitted by applicable law, the Company shall also
indemnify and hold harmless the City, the Trustee, the Remarketing Agent and each
member, officer, director, official and employee of the City, the Trustee, and the
Remarketing Agent, and each Person, if any, who controls the City or the Remarketing
Agent within the meaning of Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Securities Exchange Act of 1934, as amended collectively, the
"Indemnified Parties"), against (i) any and all losses, claims, damages, expenses, actions
or liabilities, joint or several, to which any of the Indemnified Parties may become
subject under any statute or regulation or at common law or otherwise and, except as
hereinafter provided, will reimburse the Indemnified Parties for any legal or other
expense reasonably incurred by them or any of them in connection with investigating or
defending any such losses, claims, damages, expenses or actions, whether or not resulting
in any liability, insofar as such losses, claims, damages, expenses, actions or liabilities
arise out of or are based upon any untrue statement or alleged untrue statement or
misleading statement or alleged misleading statement of a material fact relating to the
Company or the Project contained in any limited offering memorandum, offering circular
or other document (collectively, the "Disclosure Documents") prepared or approved by
or on behalf of the Company and used by the Remarketing Agent in connection with any
remarketing of the Bonds (including any disclosure materials or offering circular
furnished to the Remarketing Agent), or arise out of or are based upon the omission or
alleged omission from the Disclosure Documents of any material fact relating to the
Company or the Project necessary to be stated therein in order to make the statements
made therein, in light of the circumstances under which they were made, not misleading,
except to the extent that such losses, claims, damages, expenses, actions or liabilities are
caused by an untrue statement or alleged untrue statement in, or omission or alleged
omission from, information furnished in writing by or on behalf of the City or the
Remarketing Agent expressly for use therein; and (ii) if, after the Closing Date, the
Company takes any action or consents to the taking of any action, including, but not
limited to, consent to amendments or supplements to any of the documents related to
the financing transaction or to the Bonds without first obtaining the consent of the
Remarketing Agent, against any and all losses, claims, damages, expenses, actions or
liabilities, joint or several, to which the Indemnified Parties or any of them may become
subject under the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust
Indenture Act of 1939, the rules or regulations under said acts, or any amendment to any
of said acts, to the extent that such losses, claims, damages, expenses, actions or liabilities
arise out of or are based upon the failure to register the Bonds under the Securities Act
of 1933 or to qualify the Indenture under the Trust Indenture Act of 1939.
Promptly after receipt by an Indemnified Party of notice of the commencement of
any action in respect of which indemnification may be sought against the Company under
paragraph (a) of this Section 9 hereof, such Indemnified Party shall promptly notify the
Company in writing; but the omission to so notify the Company will not relieve the
Company from any liability which it may be under to any Indemnified Party otherwise
than under paragraph (a) of this Section 9 nor affect any rights it may have otherwise
than under this Section 9 to participate in and/or assume the defense of any action
brought against any Indemnified Party. In case such action is brought against any
Indemnified Party, and it notifies the Company of the commencement thereof, the
Company shall be entitled to participate in, and, to the extent that it so chooses, to
assume the defense thereof (including the employment of counsel reasonably satisfactory
to the Indemnified Party), and the Company shall assume the payment of all fees and
expenses relating to such defense and shall have the right to negotiate and consent to the
settlement thereof. Any one or more of the Indemnified Parties shall have the right to
-7-
employ separate counsel in any such action and to participate in the defense thereof, but
after notice from the Company to such Indemnified Party of its election to assume the
defense thereof, the fees and expenses of such separate counsel shall be at the expense
of such Indemnified Party unless the employment of such counsel has been specifically
authorized in writing by the Company. The Company shall not be liable for any
settlement of any such action effected without its consent, but if settled with the consent
of the Company, or if there be a final judgment for the plaintiff in any such actions to
which the Company has received notice in writing as hereinabove required, the Company
agrees to indemnify and hold harmless the Indemnified Party from and against any loss
or liability by reason of such settlement or judgment.
(c) The indemnity provided by this Section 9 shall be in addition to any other
liability that the Company may otherwise have hereunder, at common law or otherwise,
and is provided solely for the benefit of each of the Indemnified Parties and their
respective successors, assigns and legal representatives, and no other person shall acquire
or have any right under or by virtue of such provisions of this Agreement.
(d) In order to provide for just and equitable contribution in circumstances in
which the indemnity provided for in paragraph (a) of this Section 9 is for any reason
held to be unavailable from the Company with respect to matters covered by such
paragraph (a), the Company, on the one hand, and the Remarketing Agent, on the other
hand, with respect to such matter, shall contribute to the aggregate losses, damages,
expenses, liabilities or claims to which the Company, on the one hand, and the
Remarketing Agent, on the other hand, may be subject proportionately so that the
Remarketing Agent is responsible for that portion represented by the percentage that the
underwriting discount or placement fee, if any, payable to the Remarketing Agent
hereunder with respect to the distribution in question, bears to the aggregate offering
price, with the Company responsible for the balance. The contribution provided for in
this paragraph shall also extend, without limitation, to any and all expenses whatsoever
reasonably incurred in connection with investigating, preparing for or defending against,
or providing evidence, producing documents or taking any other reasonable action in
respect of, any such loss, damage, expense, liability or claim (or action in respect
thereof), whether or not resulting in any liability, and shall include any loss to the extent
of the aggregate amount paid in settlement of any litigation, commenced or threatened,
or of any claim whatsoever as set forth herein if such settlement is effected with the
written consent of the Company. For purposes of this paragraph (d), each officer,
director, employee, agent or attorney of the Remarketing Agent or the Company and
each Person, if any, who controls the Remarketing Agent or the Company within the
meaning of Section 15 of the Securities Act of 1933 or Section 20 of the Securities
Exchange Act of 1934, or any amendment of said acts, shall, under the same
circumstances, have the same rights to contribution as does the Remarketing Agent or
the Company hereunder within a reasonable time after a party entitled to contribution
under this paragraph (d) shall have been served with the summons or other first legal
process or shall have received written notice of the threat of a claim in respect of which
contribution may be sought hereunder, such Person shall, if a claim for contribution is to
be made against the Company under this paragraph (d), notify the Company in writing
of the commencement thereof; but the omission to so notify the Company shall not
N
relieve the Company from any liability that it may have other than pursuant to this
paragraph (d); provided, however, that any notice given by the Remarketing Agent for
purposes of, and as provided in, paragraph (b) of this Section 9 shall constitute notice for
purposes of this paragraph (d).
(e) The Company agrees to reimburse any Indemnified Parry for any expenses
(including reasonable fees and expenses of counsel) incurred as a result of producing
documents, presenting testimony or evidence, or preparing to present testimony or
evidence (based upon time expended by an Indemnified Party at its then current time
charges), in connection with any court or administrative proceeding (including any
investigation which may be preliminary thereto) arising out of or relating to any public
distribution of the Bonds.
(f) The obligations set forth in this Section 9 shall be in addition to any other
liability that the Company may otherwise have hereunder, at common law or otherwise,
and is provided solely for the benefit of each of the Indemnified Parties.
10. Dealing in Bonds. The Remarketing Agent, in its individual capacity, may
in good faith, but is not obligated to, buy, sell, own, hold and deal in any of the Bonds,
and may join in any action which the Company may be entitled to take with like effect as
if were not Remarketing Agent. The Remarketing Agent, in its individual capacity,
either as principal or agent, may also engage in or be interested in any financial or other
transaction with the City and may act as depository, trustee or agent for any committee
or body of holders of Bonds secured by the Indenture or other obligations of the City as
freely as if it were not Remarketing Agent. The Remarketing Agent shall have the right
to tender Bonds for purchase pursuant to the provisions of the Indenture and shall have
all other rights of a Bondholder at any time that it is the Owner of any Bonds.
11. Representations. Each of the parties hereto represents and warrants to the
others that this Agreement has been duly authorized, executed and delivered by such
party and (assuming due authorization, execution and delivery by other parties hereto)
constitutes a legal, valid and binding obligation of such party. The Remarketing Agent
hereby further represents and warrants that it is authorized by law to perform all the
duties imposed upon it by the Indenture and this Agreement. The Principal Office of
the Remarketing Agent for purposes of the Indenture is as set forth in Section 12
hereof.
12. Notices. Any notice required or permitted to be given under this
Agreement may be given in person or by mail, telegraph, telecopier, or telex and shall be
deemed received, if mailed, when deposited in the United States mail, postage prepaid,
or, if by the telegraph or telex, when delivered to the appropriate office for transmission,
charges prepaid, in each case addressed to the City, the Trustee, the Company or to the
Remarketing Agent at its Principal Office set forth below:
W2
If to the Company:
A copy of items sent to the
Company to:
If to the City:
Reprise Associates Limited Partnership
c/o Reprise, Inc.
3005 Ottawa Avenue
St. Louis Park, Minnesota 55416
Attn: President
Winthrop & Weinstine, P.A.
3000 Dain Bosworth Plaza
60 South Sixth Street
Minneapolis, Minnesota 55402
Attn: Todd Urness, Esq.
City of New Hope, Minnesota
4401 Xylon Ave., North
New Hope, Minnesota 55428
Attn: City Manager
If to the Trustee: Norwest Bank Minnesota, National Association
6th Street and Marquette Avenue
Minneapolis, Minnesota 55479-0069
Attn: Corporate Trust Operations
If to the Remarketing Agent:
Piper Jaffray, Inc.
222 South Ninth Street
Minneapolis, Minnesota 55402
Attn: Public Finance Department
Each party hereto may change the address for service of notice upon it by a
notice in writing to the other parties hereto.
The Remarketing Agent may rely upon, and is hereby authorized to honor, any
telephonic request or directions which the Remarketing Agent believes, in its reasonable
judgment, to emanate from an authorized representative of the City, the Company or the
Trustee, acting pursuant hereto, regardless of the source of such request or direction.
Any telephonic request or direction to the Remarketing Agent shall promptly be
confirmed in writing; provided, however, that failure to receive any such written
confirmation shall not affect the authority of the Remarketing Agent to rely and act
upon such request or direction.
13. Miscellaneous. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
(b) This Agreement may be amended only by a written agreement signed by
the Company, the Trustee and the Remarketing Agent.
-10-
(c) This Agreement may be executed in any number of counterparts, each of
which, when so executed and delivered, shall constitute an original, but such counterparts
together shall constitute but one and the same Agreement.
(d) Any obligations of the City hereunder shall be limited obligations of the
City, payable solely from Bond proceeds and amounts derived by the City from the Loan.
(e) The covenants, representations and agreements contained herein are and
shall be for the sole and exclusive benefit of the parties hereto and their successors and
assigns.
jbl\remarketing\67724.agr
-11-
IN WITNESS WHEREOF, the parties have executed this Remarketing
Agreement as of the day and year first written above.
PIPER JAFFRAY, INC.
By:
Its:
Signature Page of the Remarketing Agreement, dated as of March 1, 1997, among Piper
Jaffray, Inc., Norwest Bank Minnesota, N.A. and Reprise Associates Limited Partnership.
jbl\remarketing\67724.AGR
REPRISE ASSOCIATES LIMITED
(� PARTNERSHIP
By: Reprise, Inc., its General Partner
Signature Page of the Remarketing Agreement, dated as of March 1, 1997, among Piper
Jaffray, Inc., Norwest Bank Minnesota, N.A. and Reprise Associates Limited Partnership.
jb1\remarketing\67724.AGR
NORWEST BANK MINNESOTA, N.A., as
Trustee
lt�By:Al"A/
Its: Assistant Vice President
Signature Page of the Remarketing Agreement, dated as of March 1, 1997, among Piper
Jaffray, Inc., Norwest Bank Minnesota, N.A. and Reprise Associates Limited Partnership.
jblVemarkedng\67724.AGR
Bayerische LandesbankI North American Region
New York Branch
THIS INVESTMENT AGREEMENT (the "Agreement") dated as of March 27,1997
is entered into by and between BAYERISCHE LANDESBANK GIROZEN Ta ALE (the
"Depository% acting through its New York Branch, and NORWEST BANK MIIVNFSOTA,
NATIONAL ASSOCIATION, as trustee (the 'Trustee°), under that Indenture of Trust dated
as of March 1, 1997 (the "Indenture") between the City of New Hope, Minnesota (the
"Issuer") and the Trustee providing for the issuance of $1,650,000 principal amount of the
Issuer's Multifamily Housing Revenue Bonds (Park Acres Apartments Project) Series 1997
(the "Bonds").
WITNESSETH:
WHEREAS, the Indenture establishes various trust funds and accounts for the receipt
and disbursement of moneys, all as more fully set forth in the Indenture;
WHEREAS, the Issuer has loaned the proceeds from the sale of the Bonds to Reprise
Associates Limited Partnership (the "Borrower") pursuant to that Loan Agreement dated
March 1, 1997 between the Issuer and the Borrower;
WHEREAS, pursuant to the Indenture, the Borrower has directed the Trustee to invest
certain moneys received by the Trustee under the Indenture with the Depository pursuant to
the terms and provisions of this Agreement; and
WHEREAS, the Depository is willing, on the terms and conditions set forth in this
Agreement, to accept the deposit of the moneys held or credited by the Trustee in the fund
(the 'Fund") identified in Exhibit A to this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
herein set forth, the Depository and the Trustee hereby agree as follows:
SECTION I. DEPOSIT OF FUNDS
1.1. Delivery of Funds. On March 27, 1997, the Trustee shall deliver $1,650,000
(the "Invested Moneys") by wire transfer in immediately available funds to the Depository 58o Lemglon Avenue
pursuant to the Depository's wire transfer instructions set forth in Exhibit A and the New York, N.Y. 10022, USA
Depository shall accept the Invested Moneys from the Trustee. Phe"a'
212-3109800
1.2. interest. Interest shall accrue on the daily outstanding balance of the Invested Teles:
TRT 177130 oaytand ryk
Moneys in the Fund at the rate set forth in Exhibit A (the 'Rate of Earnings') on the basis
Fax:
set forth in Exhibit A therefor. All interest earned (the "Earnings") shall be payable byWire 212.3109841 (GENERAL)
transfer of immediately available funds to the Trustee in arrears on each Interest Payment 212-3109888 (CORP. FIN)
Date, as defined in Exhibit A. The Trustee shall provide or cause to be provided written 212-310-9970 (MEASURY)
notice to the Depository on or before the date of any change in the Prime Rate (as defined in awl":
Exhibit A); provided, however, notwithstanding the Trustee's failure to give such notice, the BYLAUS33
awe:
SAYERNBANK NEWYORK
Head Olnee:
Bnenner Sim" 20
04R =&Wil"w Ho".MNIBLMII • 3M 80333 Munchen
GermM
Phone: 49-69-2171-01
Rate of Earnings hereunder shall change with each change in the Prime Rate on the date the Prime Rate
changes. Such notice shall include the new Prime Rate and the date such change shall be effective. If
any Interest Payment Date is not a Business Day, payment will be made on the first Business Day
thereafter. A "Business Day" shall mean any day other than a Saturday, Sunday or other day on which
commercial banks are required or authorized to be closed in New York, New York or Minneapolis,
Minnesota.
1.3. Withdrawal. On each of the withdrawal dates set forth in Exhibit A (each a "Withdrawal
Date" and, collectively, the "Withdrawal Dates") with respect to the Fund, the Depository shall pay to
the Trustee such amounts as may be requested by the Trustee. Withdrawals may be made only for the
purposes specified in the Indenture. Withdrawals may not be made hereunder for reinvestment purposes.
If any Withdrawal Date is not a Business Day, payment will be made on the first Business Day thereafter.
1.4. Early Withdrawal. Notwithstanding anything in this Agreement to the contrary, in no
event may withdrawals be made on any day other than a Withdrawal Date as set forth on Exhibit A hereto
unless: (a) the Depository shall have received at least seven () days' prior written notice of the intended
withdrawal and the Trustee shall have paid to the Depository, if applicable, such charges for the
Depository's breakage costs as described in Section 6 hereof ('Break Costs") in respect of such
withdrawal; or (b) in the event the Depository shall not have received at least seven O days' prior
written notice of the intended withdrawal, the Trustee shall have paid to the Depository the higher of
(i) the Depository's Break Costs in respect of such withdrawal or (ii) an early withdrawal penalty equal
to seven ('n days' simple interest on amounts so withdrawn.
I.S. Form of Withdrawal. All amounts paid to the Trustee hereunder shall be remitted by wire
transfer of immediately available funds pursuant to the wire transfer instructions of the Trustee shown
in Exhibit A or at such other instructions as shall have been specified by the Trustee by no less than
seven O days' prior written notice to the Depository.
SECTION 2. TEltll4INATION
This Agreement shall terminate upon the earlier to occur of: (a) the Termination Date set forth
in Exhibit A hereto with respect thereto or (b) upon withdrawal of all Invested Moneys and accrued and
unpaid Earnings on deposit in the Fund (such earlier date, the "Maturity Date"). At such time, all
amounts not previously withdrawn from the Fund by the Trustee, together with all accrued and unpaid
Earnings, shall be paid to the Trustee in immediately available funds.
SECTION 3. DEFAULT
3.1. Events of Default. The following events are defaults under this Agreement (each a
"Default"):
(a) A failure by the Depository to make any payment of principal or interest when
due pursuant to the provisions of this Agreement which continues for one (1) Business Day
following receipt by the Depository of written notice thereof from the Trustee.
(b) If the Depository commences a case in bankruptcy relating to it, is adjudicated
an insolvent or bankrupt, petitions or applies for the appointment of any receiver or trustee for
itself or any substantial part of its property; or initiates any proceeding relating to it under any
reorganization, arrangement, or dissolution under applicable bankruptcy laws; or if any such
04MM6.7M Hop XN/BLBJ61/-397
proceeding is initiated against it and if the Depository indicates in any manner its consent thereto
or if such proceeding is not dismissed within ninety (90) days.
(c) A failure by the Depository to perform any of its obligations under this
Agreement (other than those described in Section 3.1(a) hereof) which continues for ten (10)
Business Days or more after written notice thereof is given by the Trustee to the Depository.
3.2. nights and Obligations of Parties Upon Default.
(a) Upon the occurrence of a Default under Section 3.1(a) or Section 3.1(b) of this
Agreement, the Trustee, upon providing the Depository with seven (7) days' prior written notice,
may withdraw all Invested Moneys and Earnings from the Depository and shall not deliver any
additional funds to the Depository pursuant to this Agreement. Upon the occurrence of a Default
under Section 3.1(c) of this Agreement or at any time thereafter as such Default remains uncured,
the Trustee may cause to be delivered to the Depository a notice setting forth the existence of a
Default in accordance with Section 3. l(c) above (the "Notice of Default"). If such Default under
Section 3.1(c) is not cured prior to the close of business of the tenth Business Day following
delivery of the Notice of Default, the Trustee shall have the right, in addition to any other rights
and remedies, to withdraw all Invested Moneys and Earnings from the Depository.
(b) If the Trustee elects to withdraw Invested Moneys and Earnings pursuant to the
preceding paragraph, and is able to reinvest such funds (and any additional funds which would
have been delivered to the Depository pursuant to this Agreement) with another entity pursuant
to an agreement, the terms and conditions of which are substantially identical to this Agreement
and the substitution of which does not adversely affect the investment rating of the Bonds, the
Trustee shall terminate this Agreement by delivery of notice of such termination to the
Depository. If the Trustee is not able to reinvest the withdrawn Invested Moneys and Earnings
in such a manner, the Trustee shall invest said funds (and any additional funds which would have
been delivered to the Depository pursuant to this Agreement) upon the best terms and conditions
which it may obtain through the exercise of reasonable efforts, in which case the Depository shall
pay to the Trustee on each Interest Payment Date and each date on which Invested Moneys would
have been withdrawn hereunder the difference between (i) the amounts which would have been
payable hereunder with respect to all such funds on such Interest Payment Date or Withdrawal
Date had such funds been left on deposit through the date of termination set forth in Section 2
hereof and (ii) the amounts actually realized by the Trustee through each such date of calculation.
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1. The Trustee represents and warrants to the Depository that: (a) this Agreement constitutes
a valid and binding obligation of the Trustee; (b) to the best of its knowledge, the execution, delivery and
performance of this Agreement by the Trustee does not and will not result in a breach or violation of or
cause a default under any provision of any law, regulation, order, license, decree, judgment, indenture,
contract or agreement binding upon the Trustee or its assets; (c) all moneys that the Trustee invests with
the Depository pursuant to this Agreement shall be derived from funds and accounts established pursuant
to the Indenture; and (d) the Trustee is authorized by the Indenture to make all investments on the terms
hereunder.
4.2. The Depository represents and warrants to the Trustee that (a) this Agreement constitutes
a valid and binding obligation of the Depository, and (b) to the best of its knowledge, the execution,
06MM.21N. He MNBLEJ611 -7/97
delivery and performance of this Agreement by the Depository does not and will not result in a breach
or violation of or cause a default under any provision of any law, regulation, order, license, decree,
judgment, indenture, contract or agreement binding upon the Depository or its assets.
SECTION 5. ROLE OF THE DEPOSITORY
It is expressly understood and agreed that in performing its obligations neither the Depository nor
any of its directors, officers, employees or agents is acting as a fiduciary or agent of the Trustee, the
Issuer, the Borrower or any other party, and neither the Depository nor any of its directors, officers,
employees or agents shall be liable or responsible for: (a) the payment of any amounts owing on or with
respect to the Bonds; (b) the use or application by the Trustee of any moneys payable to the Trustee
hereunder; (c) any acts or omissions of the Trustee under or with respect to the Bonds or the Indenture;
(d) the validity or enforceability of the Bonds or the Indenture; or (e) the Trustee's performance of its
obligations under this Agreement, the Indenture, the Bonds or any other agreement or instrument relating
to the Bonds or their issuance (collectively, the "Bond Documents"). Without limiting the foregoing,
regardless of whether the Depository has reviewed the Indenture or is generally familiar with the terms
of indentures of a similar type, the Depository shall have no duty to comply with the terms of the
Indenture or to ascertain whether the Trustee is in compliance therewith. The Trustee recognizes that
the Depository may have other business relationships with the Issuer, the Borrower and with other entities
or persons party to any of the Bond Documents. The Trustee shall maintain complete and accurate
records identifying the principal amount of Invested Moneys and Earnings thereon.
SECTION 6. RFMeMURSEMEN'T
If at any time during the term of this Agreement the Trustee shall make withdrawals (other than
those permitted under Section 1.2, Section 1.3, Section 3.2 or Section 7.11) which cause the Depository
to break its deposit(s) or other funding arrangements with other institutions, and provided that the early
withdrawal penalty specified in Section 1.4(b)(ii) is not applicable, the Trustee shall promptly reimburse
the Depository in an amount equal to the penalties, losses, costs, expenses, damages and other charges
as are incurred by the Depository as a result of such breaking by the Depository of its deposit(s) or other
funding arrangements. A certificate as to the amount of such penalties, losses, costs, expenses, damages
or other charges submitted by the Depository to the Trustee shall be conclusive absent manifest error as
to the amount thereof.
SECTION 7. MISCELLANEOUS
7.1. Information Regarding the Depository. The Trustee and the Borrower hereby agree that
they will not, nor will they permit any other person to, include in any offering circular, information
memorandum or other description of the Bonds any information relating to the Depository without the
Depository's prior written consent. The Depository hereby consents to the inclusion of its name as
provider of this Agreement in the Limited Offering Memorandum dated March 20, 1997 relating to the
Bonds.
7.2. Reserved.
7.3. No Waiver. No failure or delay on the part of the Depository or the Trustee in exercising
any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right or remedy preclude any other right or remedy. The rights and remedies of the
Depository or the Trustee hereunder are cumulative and are not exclusive of any rights or remedies
01//I"1 VNe Nape, /R BP611 .3M
provided by law or equity or in any other contract between the Trustee and the Depository. None of the
terms or provisions of this Agreement may be waived, modified or amended, except in writing duly
signed by the Depository and the Trustee.
7.4. Notices. Any notices or other communications to be given under this Agreement shall be
given by either party at the address as set forth in Exhibit A in writing by personal service, or by
registered or certified mail, postage prepaid, by facsimile transmission, wire, mailgram or telegram, or
by courier service or messenger. Notice shall be deemed given only upon actual receipt thereof by the
party to which it is directed. A party may change the address to which notices are to be sent at any time
by delivery of proper notice of such change to the other party pursuant hereto.
7.5. Survival. All warranties and representations made by the Trustee or the Depository in this
Agreement or in any of the instruments or documents delivered pursuant to this Agreement regardless
of any investigation made shall be considered to have been relied upon by the other party hereto and shall
survive the delivery of any instruments or documents.
7.6. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors, assigns and beneficiaries. Notwithstanding the
foregoing, this Agreement, and the obligations arising out of this Agreement or any part hereof, shall not
be sold, pledged, assigned or otherwise transferred by the Depository or the Trustee without the prior
written consent of the other party hereto and any such attempted sale, pledge, assignment or transfer shall
be void ab initio; provided, however, that any successor to the Trustee as trustee under the Indenture
shall be considered a successor in interest to the Trustee with respect to this Agreement without the
necessity of obtaining the prior written consent of the Depository.
7.7. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CHOICE OF LAW RULES.
7.8. No FDIC Insurance. The deposit made pursuant to this Agreement is not insured by
the Federal Deposit Insurance Corporation.
7.9. Counterparts. This Agreement may be executed in several counterparts and, as so
executed shall constitute one agreement binding upon all of the parties hereto.
7.10. Contractual Relationship with Trustee. The deposit(s) made pursuant to this Agreement
with the Depository are made by Norwest Bank Minnesota, National Association solely in its capacity
as trustee under the Indenture, and the parties hereto recognize that this Agreement is a contractual
arrangement entered into between the Depository and the Trustee, solely in its capacity as trustee under
the Indenture, and the Depository shall have no obligation to holders of the Bonds or to any person other
than the Trustee with respect to the deposit(s) made hereunder.
7.11. Downgrade.
(a) If the rating assigned to the Depository's senior unsecured long-term debt
obligations falls below "Aa3" by Moody's Investors Service or "AA-" by Standard do Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc., during the term of this
Agreement, the Depository shall, within ten (10) Business Days after the Depository's receipt of
a written request from the Trustee, enter into a repurchase agreement, or such other agreement
04M206.2/N- Hup XWBLMII - 3/97
as is mutually acceptable to the Depository and the Trustee, with the Trustee upon the same terms
and conditions (with appropriate changes in terminology) as are set forth in Exhibit A hereto,
pursuant to which the Depository shall sell and deliver to and agree to repurchase from the
Trustee U.S. government obligations of the type set forth in Exhibit B hereto (the 'Securities'),
having a market value equal to not less than the applicable percentage amount set forth on
Exhibit B hereto (the 'Required Percentage') of the then outstanding Invested Moneys and
accrued but unpaid Earnings (the 'Agreement Balance'). Upon each repurchase of Securities by
the Depository, the Trustee shall deliver to the Depository such portion of the Securities (the
'Excess Securities') as is necessary such that the ratio of (i) the market value of Securities
remaining in the possession of the Trustee after delivery of the Excess Securities to the
Depository to (ii) the outstanding Agreement Balance shall equal the Required Percentage. The
value of the Securities shall be marked to market weekly by the collateral custodian, with a cure
period of two (2) Business Days and one (1) Business Day for delivery of additional Securities
or redelivery of Excess Securities, respectively.
(b) If the Depository does not enter into the repurchase agreement as provided in
Subsection (a) of this Section 7. 11, the Trustee shall thereafter have the right, but not the
obligation, to terminate this Agreement by providing the Depository with seven (7) days' prior
written notice, in which case on the withdrawal date specified in such notice the Depository shall
pay to the Trustee all amounts in the Fund in accordance with the provisions of Section 2 hereof.
7.12. Certain Prohibited Actions. The Borrower shall not sell to any third party an instrument
granting to the holder thereof any rights relating to the exercise of any call or redemption feature of the
Bonds.
7.13. Notice to Depository of Refunding. The Borrower or the Trustee shall immediately
notify the Depository in writing as soon as any action is taken to effect a partial or complete refunding
of the Bonds.
7.14. Consent to Jurisdiction and Venue, Etc. The Trustee and the Depository irrevocably
(a) agree that any suit, action or other legal proceeding arising out of or relating to this Agreement may
be brought in a court of record in the State of New York or in the Courts of the United States of America
located in such state, (b) consent to the jurisdiction of each such court in any such suit, action or
Proceeding and (c) waive any objection which it may have to the laying of venue of any such suit, action
or proceeding in any of such courts and any claim that any such suit, action or proceeding has been
brought in an inconvenient forum. The Trustee and the Depository also irrevocably consent to the service
of any and all process in any such action or proceeding by mailing of copies of such process to the
Trustee or the Depository, as applicable, at its respective address provided in Exhibit A attached hereto.
The Trustee and the Depository agree that a final judgment in any such suit, action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. All mailings under this Section 7.14 shall be by certified mail, return receipt requested.
7.15. Monthly Reports. The Depository shall provide monthly reports to the Trustee, by the
fifteenth day of each month, setting forth, as of the end of the preceding month, the amount of Invested
Moneys held hereunder and the accrued but unpaid Earnings thereon.
ounaxvn.. x.r..MWKZAu .3W 6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
and delivered as of the date and year first written above.
BAYERISCHE LANDESBANK
GIROZENTRALE
syj� e�
Bert von Stuelpnagel \
Executive Vice President
and Manager
By
Ronald IJertolini
First Vice President
and Treasury Manager
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
Name
Title
The undersigned consents to the execution and delivery of this Agreement and agrees to the
provisions of Sections 1.3, 7.1, 7.12 and 7.13 hereof -
REPRISE ASSOCIATES LIMITED PARTNERSHIP
By Reprise, Inc., as General Partner
0
W71316.'JN. Ha .MN/BLU611 - 3197 7
Name
Title
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
and delivered as of the date and year first written above.
BAYERISCHE LANDESBANK
GIROZENTRALE
LM
Bert von Stuelpnagel
Executive Vice President
and Manager
Ronald Bertolini
First Vice President
and Treasury Manager
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By
Name S-f� vrr --
Title
The undersigned consents to the execution and delivery of this Agreement and agrees to the
provisions of Sections 1.3, 7.1, 7.12 and 7.13 hereof:
REPRISE ASSOCIATES LIMITED PARTNERSHIP
By Reprise, Inc., as General Partner
"7=6.1JNe Hape,MN/ LZftll -7197 7
1:8►__:1I IV- v .
The Depository: Bayerische Landesbank Girozentrale
New York Branch
560 Lexington Avenue
New York, NY 10022
Attention: Ms. Elizabeth Roman
Telephone No.: (212) 310-9891
Telecopy No.: (212) 310-9870
Wire Instructions: Account: The Chase Manhattan Bank
ABA #: 021 -OW -021
Account #: 544-7-07960
Account: Bayerische Landesbank GZ, New York Branch
Ref.: City of New Hope, Minnesota, Series 1997
CUSIP No.: 645464 EN4
The Trustee: Norwest Bank Minnesota,
National Association
Sixth Street and Marquette Avenue
Minneapolis, MN 55479
Attention: Mr. Tim Matyi
Telephone No.: (612) 667-3252
Telecopy No.: (612) 667-9825
Wire Instructions: Norwest Bank Minnesota, National Association
ABA #: 091-000-019
Credit Clearing Account #: 6355 010 133
Attention: Ms. Lisa Ifonlaja
Re: City of New Hope/Park Acres Apartments
The Borrower: Reprise Associates Limited Partnership
Reprise, Inc.
3005 Ottawa Avenue
St. Louis Park, MN 55416
Attention: Mr. Robert Boisclair
Telephone No.: (612) 922-3881
Telecopy No.: (612) 922-3071
The Interest
Payment Dates: The first Business Day of each month, commencing May, 1997.
Interest Rate
Calculation Basis: A year of 365 or 366 days, as applicable, and the actual number of days
elapsed.
00M206.21Ne Ho,..MNMLBA11 -3M
Fund: Project Fund
Initial Principal
Amount: $1,650,000
Rate of Earnings: 61% of the Prime Rate. "Prime Rate" means the rate of interest publicly
announced by Morgan Guaranty Trust Co., in New York, New York, or
its successor as its "prime rate" or "reference rate," which rate shall
change when and as such prime rate changes.
Withdrawal Dates: On any Business Day on or after September 1, 1997 upon receipt by the
Depository of at least seven (7) days' prior written notice from the
Trustee, which notice shall specify the purpose, amount and date of such
withdrawal.
Termination Date: March 1, 1998
W71W6.2JN- H.",MNlBI.Mil -3191 A_Z
f�►H:71CF::;YI B:
Securities
Required Percentage
1. Direct obligations of the United States of
America (including obligations issued or held in
book -entry form on the books of the Department
of the Treasury) or obligations the principal of
and interest on which are unconditionally
guaranteed by the United States of America. 103%
2. Obligations, debentures, notes or other evidences
of indebtedness issued by the following federal
agencies:
Government National Mortgage Association
(unconditionally guaranteed by the United States)
(GNMA) 103%
Federal Home Loan Mortgage Corporation
(rated "AAA" by S&P and "Aaa" by Moody's)
(FHLMC) 103%
Federal National Mortgage Association (rated
"AAA" by S&P and "Aaa" by Moody's)
(FNMA) 103%
3. Cash 100%
01n1E16.1/N. Ha .MNIBIJWII .3197
CERTIFICATE REGARDING INVESTMENT OF
FUNDS AND ACCOUNTS
IN INVESTMENT AGREEMENTS
Norwest Bank Minnesota, N.A.
Corporate Trust Department
Sixth & Marquette
Minneapolis. MN 55479-0069
CITY OF NEW HOPE, MN
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project, Series 1997)
The undersigned Authorized Officer, acting pursuant to the Indenture of Trust dated March 1, 1997,
between The City of New Hope, MN and Norwest Bank Minnesota, N.A. (the "Trustee"), has reviewed
the following referenced investment agreement and hereby certifies, acknowledges, and agrees to the form,
terms and conditions thereof and directs the Trustee per the Indenture, to enter into such agreement.
PROJECT FUND (Bayerische Landesbank, Interest rate of 61% of Morgan Guaranty Prime)
Dated this 27th day of March , 1997.
Reprise Associates Limited Partnership
Reprise, Inc.
By:
Its: GL:
NEW ISSUE NOT RATED
In the opinion of Holmes & Galey, Ltd., Minneapolis, Minnesota, Bond Counsel,
according to existing Minnesota and federal laws, regulations, rulings and judicial decisions,
as of their date of issuance, unless the Holder is a "substantial user" of the Project or a
"related person" to a "substantial user," and except as described under the heading "TAX
MATTERS" herein, the Bonds bear interest which is not includable in gross income for
purposes of federal income taxation and is not includable, to the same extent, in gross
income or taxable net income of individuals, estates or trusts for Minnesota income tax
purposes, but is subject to the Minnesota franchise tax imposed on corporations and financial
institutions. Interest on the Bonds is subject to the federal alternative minimum tax
applicable to individuals and corporations and the Minnesota alternative minimum tax
applicable to individuals, estates and trusts. No opinion will be expressed by Bond Counsel
with respect to the tax exempt status of interest on the Bonds from and after the Conversion
Date. See "TAX MATTERS" herein.
$1.650,000
CITY OF NEW HOPE, MINNESOTA
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
Interest Rate: 59% of Morgan Guaranty Trust Company's "prime rate"
Dated: Date of Issue
Due: March 1, 2032
The bonds offered herebv (the 'Bonds") are not general obligations of the City of
New Hope, Minnesota (the "Issuer") and are not payable from any of the Issuer's eeneral
funds, revenues, or other assets. The Bonds and the interest thereon will be pavable
solely from and will be secured by the revenues or other receipts, funds, or moneys of
the Issuer pledged therefor or otherwise available to the Trustee for the payment
thereof, including those derived under a Loan Agreement between the Issuer and
Reprise Associates Limited Partnership. a Minnesota limited partnership (the
"Companv'), dated as of March 1. 199" ( the "Loan Agreement"). The Bonds do not
constitute a pledge of the full faith and credit of the Issuer and do not constitute an
indebtedness. liability or obligation of the Issuer. the State of Minnesota, or anv other
political subdivision thereof. Certain capitalized terms used below, but not required by
proper grammar to be capitalized, are defined in the text hereof or in the documents
attached hereto as Exhibits A, B and C. This cover page is for quick reference purposes
only and is not a summary of the information contained herein. Investors are urged to
read this Limited Offering Memorandum in its entirety.
The Bonds are being issued pursuant to an Indenture of Trust, dated as of
March 1, 1997 (the "Indenture"), between the Issuer and Norwest Bank Minnesota,
National Association, a national banking association, as trustee (the "Trustee"). Pursuant
to the Loan Agreement, proceeds of the Bonds will be loaned to the Company, which,
together with Company funds, will be used to acquire a 41 -unit multifamily rental
housing project, known as Park Acres Apartments located in New Hope, Minnesota (the
"Project"), pay certain expenses of rehabilitation of the Project, fund a debt service
reserve fund and pay costs of issuance. See "ESTIMATED SOURCES AND USES OF
FUNDS."
Until the hereinafter mentioned Conversion Date, the principal of, premium, if
any, and purchase price and interest on the Bonds are secured by, and payable solely
from, bond proceeds and amounts realized as investment earnings pursuant to an
Investment Agreement between the Trustee and the Investment Agreement Provider
named herein.
The Conversion Date will occur on any Business Day on or after September 1,
1997, selected by the Company, and before March 1, 1998; provided that the Conversion
Date may be extended to any Business Day on or prior to March 1, 2000 upon
compliance with the terms of the Indenture, including the approval of 100% of the
Bondholders. The Conversion Date will be the first Business Day for which the
Company has given not less than twenty (20) days' written notice to the Trustee and
Piper Jaffray Inc., as remarketing agent ('Remarketing Agent") requesting that the rate
of interest on the Bonds be adjusted to the Fixed Rate (as defined in the Indenture). If
the Company does not give notice of conversion on or prior to February 8. 1998 (or if a
request for extension shall not have occurred by such date) all Bonds shall be redeemed
on March 1, 1998 at a redemption price equal to the par amount thereof, plus accrued
interest to the redemption date. If the Conversion Date shall be extended in accordance
with the Indenture, all Bonds shall be subject to redemption on such extended date if the
Company shall fail to deliver a notice of conversion 20 days prior to such extended date.
In any event, the Conversion Date must occur on or prior to March 1, 21000. Until the
Conversion Date, the Bonds shall bear interest at the Variable Rate, which shall be a
rate equal to fifty-nine percent (59%) of Morgan Guaranty Trust Company's "prime
rate," as such prime rate may change from time to time (the "Variable Rate"). From and
after the Conversion Date the Bonds will bear interest at a rate determined pursuant to
the provisions of the Indenture.
On the Conversion Date, all Bonds are subject to mandatory purchase at par, plus
accrued interest to such date (the "Purchase Price") and all Bond owners must tender
their Bonds to the Remarketing Agent for purchase on or before such date. Payment of
the Purchase Price on the Conversion Date will be made solely from the successful
remarketing of the Bonds or other refinancing arranged by the Company. If all Bonds
are not remarketed or funds for such purchase are not otherwise provided on the
Conversion Date, all Bonds will be redeemed on such date. See "THE BONDS --
Mandatory Tender of Bonds on the Conversion Date."
Except as otherwise provided herein, this Limited Offering Memorandum
provides information relative to the Bonds and their security only until the Conversion
Date.
f The Bonds will initially be issued as one fully registered typewritten Bond for each
maturity, in the name of Cede & Co., as nominee for The Depository Trust Company,
New York, New York, as registered owner of all the Bonds to which principal and
interest payments will be made. Individual purchases of interests in the Bonds will be
made only in book -entry form (as described herein), in minimum denominations of
$100,000 each or any multiple of $5.000 above 5100,000. Purchasers of such book -entry
interests in the Bonds will not receive physical delivery of bond certificates. See "THE
BONDS -- Book Entry System." Principal of and premium, if any, on the Bonds will be
payable at the principal corporate trust office of Norwest Bank Minnesota, National
Association, as Trustee and Paying Agent (the "Trustee"), and interest on the Bonds at
the Variable Rate until the Conversion Date will be computed on the basis of a 366 -day
year and charged for the actual number of days elapsed (payable on the first Business
Day of each month, commencing Mav 1, 1997) and will be pavable by check or draft
mailed to the persons shown as the registered owners of the Bonds on the fifteenth day
of the month preceding each interest payment date (or another special record date
established pursuant to the Indenture) by the Trustee, or any successor as Paving Agent;
provided that, upon written request by any registered owner of not less than $1,000,000
principal amount of Bonds, payment will be made by wire transfer.
The Bonds are subject to mandatory, optional and extraordinary redemption prior
to maturity as described herein. See "THE BONDS -- Redemption of Bonds Prior to
Maturity."
The Bonds are offered, subject to prior sale, when, as and if accepted by the
Underwriter named below and subject to an opinion as to validity and tax exemption by
Holmes & Galey, Ltd., Minneapolis, Nlinnesota. Bond Counsel, and certain other
conditions. Certain legal matters will be passed upon for the Underwriter by Best &
Flanagan, Professional Limited Liability Partnership, Minneapolis, Minnesota, and for
the Company by Winthrop & Weinstine. P.A.. St. Paul and Minneapolis, Minnesota. It
is expected that delivery of the Bonds will be made through the facilities of The
Depository Trust Company on or about March 1997 ('Bond Closing") against
payment therefor. The Underwriter expects, but is not required, to engage in secondary
market trading in the Bonds subject to applicable securities laws. For information with
respect to the Underwriter, its compensation and other matters, see
"UNDERWRITING" herein.
PIPER JAFFRAY INC.
The date of this Limited Offering Memorandum is March 20. 1997.
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION BY REASON OF THE PROVISIONS
OF SECTION 3(a)(2) OF THE SECURITIES ACT OF 1933, AS AMENDED. THE
REGISTRATION OR QUALIFICATION OF THESE SECURITIES UNDER THE
SECURITIES OR BLUE SKY LAWS OF THE STATES IN WHICH THEY HAVE BEEN
REGISTERED OR QUALIFIED, IF ANY, AND THE EXEMPTION FROM
REGISTRATION OR QUALIFICATION IN OTHER STATES SHALL NOT BE
REGARDED AS RECOMMENDATION THEREOF. NEITHER THESE STATES NOR
ANY OF THEIR AGENCIES RAVE PASSED UPON THE MERITS OF THESE
SECURITIES OR THE ACCURACY OR COMPLETENESS OF THIS LIMITED
OFFERING MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY MAY
BE A CRIMINAL OFFENSE.
TABLE OF CONTENTS
PAGE
SUMMARY INFORMATION .......................................
INTRODUCTORY STATEMENT .....................................
i
ESTIMATED SOURCES AND USES OF FUNDS .........................
4
THEBONDS.....................................................5
SECURITY AND SOURCES OF PAYMENT FOR THE BONDS .............
13
THE ISSUER ....................................................
14
THE COMPANY .................................................
14
THE PROJECT' ..................................................
14
THE INVESTMENT AGREEMENT AND IN -VESTMENT AGREEMENT
PROVIDER...................................................
15
THE LOAN DOCUMENTS .........................................
15
LEGAL MATTERS ...............................................
16
RELATIONSHIPS AMONG THE PARTIES .............................
16
TAX MATTERS .................................................
16
ENFORCEABILITY OF OBLIGATIONS ...............................
14
LITIGATION....................................................
19
UNDERWRITING .................................................
19
MISCELLANEOUS ...............................................
19
EXHIBIT A INDENTURE OF TRUST ............................... A-1
EXHIBIT B LOAN AGREEMENT' .................................. B-1
EXHIBIT C INVESTMENT AGREEMENT ............................ C-1
-i-
No person has been authorized by the Issuer, the Company, or the Underwriter to
give any information regarding the Bonds, the offering contained herein and related
matters, or to make any representations other than those contained in this Limited
Offering Memorandum and, if given or made, such other information or representations
must not be relied upon as having been authorized by any of the foregoing. This
Limited Offering Memorandum does not constitute an offer to sell or the solicitation of
an offer to buy in any state in which it is unlawful for any person to make such offer or
solicitation. The information set forth herein has been provided by the Company. The
Underwriter makes no guarantee as to accuracy or completeness of such information,
and its inclusion herein is not to be construed as a representation by the Underwriter.
The delivery of this Limited Offering Memorandum at any time does not imply that the
information herein is correct as of any time subsequent to its date.
The Bonds offered hereby are being offered for private placement with a limited
number of sophisticated investors No secondary market is expected for the Bonds and
each investor should be purchasing Bonds for investment with no present view toward
resale. The Bonds will not be registered under the Securities Act of 1933, as amended,
or the securities laws of any state and neither the Issuer, the Company, nor anv other
party is or will be required to so register them.
Each prospective investor is presumed to possess the experience, expertise and
sophistication to undertake such independent investigation of the facts and
circumstances relevant to its investment decision as it considers appropriate and each
prospective investor is responsible therefor.
SUMMARY INFORMATION
The following is a summary of certain information contained in this Limited
Offering Memorandum. The summary is not comprehensive or complete and is qualified
in its entirety by reference to the remainder of the Limited Offering Memorandum.
Undefined capitalized terms used below are defined in the documents attached as
Exhibits A, B and C attached hereto or elsewhere in this Limited Offering
Memorandum.
The Bonds $1,650,000 Multifamily Housing Revenue Bonds (Park
Acres Apartments Project) Series 1997, to be issued by the
City of New Hope. Minnesota (the "Issuer") in minimum
denominations of $100,000 or any larger denominations in
$5,000 increments thereof. See "THE BONDS."
Payment Prior to the Conversion Date, interest accrues on the
Bonds at the Variable Rate and is payable on the first
Business Day of each month through and including the
Conversion Date (commencing the first Business Day of
May, 1997) by check or draft of the Trustee mailed on such
dates to the persons who were the registered owners of
Bonds 8 of the 15th day of the month preceding each
interest payment date (or as of certain special record dates
upon certain events); provided that, upon written request
by any registered owner of not less than $1,000.000 in
principal amount of Bonds, payment will be made by wire
transfer to such registered owner. Principal. Purchase Price
and premium, if any. will be payable at the principal office
of the Trustee. See 'THE BONDS -- General."
Conversion Date and
Mandatory Tender All Bonds are reouired to be delivered to the Trustee for
mandatory tender on the Conversion Date, at a price equal
to the par amount thereof, plus accrued interest to such
date. The Conversion Date will occur on any Business Day
on or after September 1. 1997, and on or before March 1,
1998; provided that the Conversion Date may be extended
to a date no later than March 1. 2000 upon satisfaction of
certain conditions specified in the Indenture, including the
approval of 100% of the Bondholders. The Conversion
Date will be the first Business Day for which the Company
has given not less than twenty (20) days' written notice to
the Trustee and Remarketing Agent requesting that the
rate of interest on the Bonds be adjusted to the Fixed
Rate. If the Company does not deliver notice of
conversion on or before (i) February 8, 1998; or (ii) the
date twenty (20) days prior to the extended Conversion
Date, but in no event later than March 1, 2000; or if all
Bonds are not remarketed on the Conversion Date (or
funds are not otherwise provided by or on behalf of the
Company for such purchase), all Bonds will be redeemed
on the Conversion Date at their par amount, plus accrued
interest to the Conversion Date. See "THE BONDS --
Mandatory Purchase of Bonds on the Conversion Date."
Redemption and
Prepayment As more fully described herein, the Bonds are subject to
redemption and prepayment prior to the Conversion Date
as follows: (a) optional redemption in whole at the
direction of the Company on any date on or after
September 1, 1997 through and including the Conversion
Date at a redemption price equal to the par amount
thereof plus accrued interest, (b) extraordinary mandatory
redemption on (i) March 1, 1998, if the Company has not
delivered notice of conversion by February 8, 1998, or (ii) if
the Conversion Date is duly extended in accordance with
the Indenture, such redemption shall occur on the extended
date if notice of conversion is not delivered in accordance
with the Indenture; but in no event shall such redemption
occur later than March 1. 2000, if the Conversion Date
shall not have occurred by such date, (c) mandatory
redemption on the Conversion Date, if all Bonds tendered
(or deemed tendered on the Conversion Date) are not
remarketed on such date or if the Company shall not have
othenvise provided sufficient funds for mandator, purchase
on such date. (d) mandatory redemption due to a
Determination of Taxability, (e) special mandatory
redemption due to the occurrence of certain events of
casualty, condemnation or change in law, and (f)
acceleration due to an Event of Default occurring under
the Indenture, from and after the Conversion Date, the
Bonds shall be subject to redemption and prepayment as
described in the Indenture, including mandatory
redemption due to the operation of a mandatory sinking
fund. See "THE BONDS -- Redemption of Bonds Prior to
Maturity."
The Project;
Use of Proceeds After the Conversion Date, proceeds of the Bonds,
together with certain other funds, will be used by the
Company to acquire a multifamily rental housing project to
be owned by the Company and located in the City of New
Hope, Minnesota (the 'Project"); pay certain expenses of
-iv-
rehabilitation of a Project, fund a debt service reserve fund
and pay costs of issuance. See "ESTIMATED SOURCES
AND USES OF FUNDS" and "THE PROJECT."
Security for the Bonds;
The Investment
Agreement Prior to the Conversion Date, the Bonds are secured and
payable from (i) an assignment and pledge of the interests
of the Issuer in the Loan Agreement (except for certain
right to indemnification and payments of fees and
expenses), (ii) Bond proceeds and all other amounts held
under the Indenture which until the Conversion Date will
be invested in the Investment Agreement, and (iii)
investment earnings on the foregoing. On the date of
Bond Closing, the Company will not have ownership of the
Project, and the Bonds will not be secured by any interest
in the Project. The Bonds are not general obligations of
the Issuer and are not payable from any taxes, revenues or
assets of the Issuer, except for the Issuer's interest in the
Loan Agreement. See "SECURITY AND SOURCES OF
PAYMENT FOR THE BONDS" and "THE
INVESTMENT AGREEMENT AND INVESTMENT
AGREEMENT PROVIDER."
The Company Reprise Associates Limited Partnership, a Minnesota
limited partnership. See "THE COMPANY."
Trustee Norwest Bank Minnesota, National Association, a national
banking association.
-v-
LIMITED OFFERING MEMORANDUM
$1,650,000
CITY OF NEW HOPE, MINNESOTA
MULTIFAMILY HOUSING REVENUE BONDS
(PARK ACRES APARTMENTS PROJECT)
SERIES 1997
INTRODUCTORY STATEMENT
The following is a brief introduction as to matters discussed elsewhere in this
Limited Offering Memorandum and is qualified in its entirety by such discussion and the
text of the actual documents described or referenced.
General
This Limited Offering Memorandum provides information regarding the above -
referenced bonds (the "Bonds") to be issued by the City of New Hope, Minnesota (the
"Issuer") pursuant to an Indenture of Trust, in the form attached hereto as Exhibit A
(the "Indenture"), between the Issuer and Norwest Bank Minnesota, National Assocation.
a national banking association (the "Trustee").
The Bonds will be issued by the Issuer and the proceeds thereof loaned to
Reprise Associates Limited Partnership, a Minnesota limited partnership (the
"Company") pursuant to a Loan Agreement between the Issuer and the Company. in the
form attached hereto as Exhibit B (the "Loan Agreement") and will be used, together
with certain other funds, by the Company to acquire a 41 -unit multifamily rental housing
project (the 'Project"), located in New Hope. Minnesota, pay certain expenses of
rehabilitation of a Project, fund a debt service reserve fund and pay costs of issuance.
The Bonds will be payable from and secured by a pledge of certain revenues and
other amounts to be received by the Issuer pursuant to the Loan Agreement, between
the Issuer and the Company, which revenues and amounts are calculated and expected to
be sufficient to pay the principal of. premium, if any, and interest on the Bonds as the
same become due.
Initial Application of Proceeds
Upon delivery of the Bonds. the entire proceeds thereof will be deposited in the
Project Fund. Until the Conversion Date, unless all Holders of the Bonds otherwise
consent, the Trustee is required to invest all amounts in the Project Fund pursuant to an
Investment Agreement, dated as of Bond Closing (the "Investment Agreement") between
the Trustee and Bayerische Landesbank Girozentrale (the "Investment Agreement
Provider"). Sums invested under the Investment Agreement will bear interest at a
variable rate equal to sixty-one percent (61%) of Morgan Guaranty Trust Company's
"prime rate," as such prime rate may change from time to time. See "THE
INVESTMENT AGREEMENT AND INVESTMENT AGREEMENT PROVIDER"
and EXHIBIT C.
Disbursements from the Project Fund prior to the Conversion Date are permitted
only from investment earnings distributed to the Trustee under the Investment
Agreement and only if such disbursements are applied to pay interest on the Bonds.
Conversion Date; Mandatory Tender of Bonds
All Bonds are subject to mandatory tender on the Conversion Date. The
Conversion Date shall occur on any Business Day on or after September 1, 1997 which is
designated by the Company pursuant to a written notice delivered to the Trustee and
Remarketing Agent not less than twenty (20) days prior to such designated date.
Pursuant to the Indenture the Conversion Date must occur on a date on or after
September 1, 1997 and on or before March 1, 1998; provided that if on or prior to
February 8, 1998 the Company shall request an extension of the Conversion Date, the
Conversion Date may occur on any later date on or prior to March 1, 2000 if (i) an
opinion of Bond Counsel is delivered to the Trustee to the effect that such extension will
not adversely effect the exclusion from gross income of interest on the Bonds and (ii) all
Bondholders shall have consented to such extension of the Conversion Date. If the
Company does not deliver notice of conversion on or prior to February 8, 1998 and if no
extension is given as above provided, all Bonds will be redeemed on March 1, 1998. If
an extension is given in accordance with the Indenture, all Bonds will be redeemed on
such extended date if the Company has not given notice of conversion on or prior to
twenty (20) days preceding such extended date. In any event, if the Conversion Date has
not occurred on or prior to March 1, 2000, all Bonds will be redeemed on such date.
The redemption price for Bonds redeemed as above provided shall be equal to the par
amount thereof, plus accrued interest to the redemption date.
The purchase price for the Bonds on the Conversion Date shall be an amount
equal to the par amount thereof plus accrued interest (the 'Purchase Price"). The
Trustee shall deliver a notice of mandatory tender to all holders of the Bonds not less
than fifteen (15) days prior to the Conversion Date. All Bonds must be tendered for
purchase to the Remarketing Agent on or prior to the Business Day prior to the
Conversion Date. Interest on all Bonds required to be tendered on the Conversion Date
shall cease to accrue to the benefit of the Holder of record prior to the Conversion Date
from and after the Conversion Date and thereafter the Holder will not be entitled to
retain such Bonds. The Purchase Price is payable from amounts required to be paid by
or on behalf of the Company on the Conversion Date, including amounts derived from a
remarketing of the Bonds. If all Bonds are not remarketed or if other sufficient funds
are not provided by the Company to pay the Purchase Price on the Conversion Date, all
Bonds will be redeemed on such date from proceeds of the Bonds and investment
earnings thereon. See "THE BONDS -- Mandatory Tender of Bonds on the Conversion
Date."
The Bonds are subject to optional, mandatory and extraordinary redemption and
acceleration of principal prior to maturity as described under the heading "THE BONDS
-- Redemption of Bonds Prior to Maturity" herein. This Limited Offering Memorandum
contains information on the Bonds for the period prior to the Conversion Date only.
This Limited Offering Memorandum contains brief descriptions and references to
the Issuer, the Bonds and the Company. These descriptions are only summaries and do
not purport to be comprehensive or definitive, and with respect to any of the documents
mentioned, reference is made to each such document for a full description of the
provisions thereof. Copies of the Loan Agreement, the Indenture and the Investment
Agreement are attached as Exhibits hereto, and the form of the Bonds may be obtained
from the principal office of the Trustee and, during the initial offering period, at the
principal office of the Underwriter in Minneapolis, Minnesota.
Investment Evaluation
A complete statement of the Company's business is not provided herein, nor is
information provided herein regarding the expected value of the Project or the financial
condition or full history and experience of the Company or its partners. Moreover, the
obligations of the Company to make Basic Payments under the Loan Agreement are
nonrecourse to the Company, meaning it has no personal liability for failure to make
such payments. Prior to the Conversion Date. no investor should rely on the
creditworthiness of the Company or Cn the value or expected operation of the Project.
THIS OFFERING IS BEING NLADE ONLY ON A PRIVATE CONFIDENTIAL
BASIS. NO ONE SHOULD PURCHASE BONDS PURSUANT TO THIS OFFERING
WHO IS NOT HIGHLY EXPERIENCED IN FINANCIAL MATTERS AND IN
INVESTING IN INVESTMENTS SIMILAR TO THE BONDS. UNTIL THE
CONVERSION DATE, BONDS SHOULD BE PURCHASED TO BE HELD FOR
INVESTMENT AS NO NLYRKET IN THE BONDS IS EXPECTED TO EXIST PRIOR
TO SUCH DATE.
IN ASSESSING THE SECURITI OF AN INVESTMENT IN THE BONDS,
INVESTORS SHOULD RELY SOLELY ON THEIR OWN EVALUATION OF THE
SECURITY PROVIDED BY THE INVESTMENT AGREEMENT, A COPY OF WHICH
IS ATTACHED HERETO AS EXHIBIT C.
Use of Memorandum
Except as expressly provided herein, this Memorandum provides information
relevant to the Bonds only until the Conversion Date and should not be relied upon with
respect to matters occurring thereafter.
3-
Limited Obligations of Issuer
The Bonds are not general obligations of the Issuer and are not secured by the
full faith and credit or taxing power of the Issuer, the State of Minnesota or anv other
political subdivision thereof. The Bonds are payable solely and exclusively from funds
held by the Trustee pursuant to the Indenture. No Bondholder may assert a valid claim
against any assets of the Issuer other than those pledged pursuant to the Indenture.
Miscellaneous
Certain capitalized terms are defined in the text hereof or in the documents
attached hereto. Any capitalized terms not so defined herein are used with the same
meanings assigned such terms in the Indenture, the Loan Agreement or the Investment
Agreement. All references to documents described herein are qualified in their entirety
by reference to such documents, and references herein to the Bonds are qualified in
their entirety by reference to the form thereof included in the Indenture and the
information with respect thereto included in the aforementioned documents, copies of all
of which are available for inspection at the principal corporate trust office of the Trustee.
ESTIMATED SOURCES AND USES OF FUNDS
Prior to the Conversion Date all of the proceeds of the Bonds will be deposited in
the Project Fund and invested in the Investment Agreement. Following the Conversion
Date the proceeds of the Bonds will be available to pay the costs of the Project. The
following are the estimated sources and uses of funds for the acquisition and
rehabilitation of the Project after the Conversion Date.
Sources
Bond Proceeds
MHFA Reserves
Taxable Debt
TOTAL
Uses
Acquisition'
Rehabilitation'
Costs of Issuance
Reserves
Real Estate Related Costs
TOTAL
S 1.650,000
321.700
�4.�00
S 2.026.200
S 1,540.200
160,000
120,000
132.000
74.000
$ 2,036.200
1 Required rehabilitation expenditures. which may be advanced in part by the seller of the Project and repaid as
additional acquisition price.
In
THE BONDS
General
The Bonds, in the aggregate principal amount of $1.650,000 will be dated as of
the date of delivery thereof and will bear interest at the Variable Rate from such date
through the Conversion Date. The "Variable Rate" is the rate equal to fifty-nine percent
(59%) of the Morgan Guaranty Trust Company's prime rate, as such prime rate shall
change from time to time (the "Prime Rate"). The interest rate on the Bonds shall
change effective as of any date of a change in the Prime Rate. The Bonds are issued
only in fully registered form and are in minimum denominations of $100,000 or any
larger denominations in $5,000 increments thereof. The principal of the Bonds
(including principal paid as a result of prepayment. Mandatory Tender or redemption of
the Bonds) will be paid upon presentation of the Bonds at the principal corporate trust
office of Norwest Bank Minnesota, National Assocation, as Paying Agent and Trustee, or
any successor as such Paying Agent and Trustee. Prior to the Conversion Date, interest
on the Bonds will be paid (commencing on the first Business Day of May, 1997) on the
first Business Day of each month (each, a "Variable Rate Interest Pavment Date"), by
check or draft mailed by the Trustee to the registered owner of each Bond as such owner
appears on the Bond Register maintained by the Trustee as of the fifteenth day of the
preceding month (the "Record Date"), or as to Bonds on which interest is in default,
such defaulted interest shall be payable on a date selected by the Trustee, to such owners
appearing on the Bond Register at tl � close of business on the Special Record Date
selected by the Trustee which shall be at least ten (10) days but not more than thirty (30)
days before the date selected by the Trustee for payment of such defaulted interest;
provided however that any Holder of not less than $1,000.000 principal amount of Bonds
may file with the Trustee an instrument satisfactory to the Trustee requesting amounts
pavable to such Holder to be paid by wire transfer on the day such payment is due;
provided further that is such amount represents a payment of principal, such Bond shall
have been presented to the Trustee.
Prior to the Conversion Date, the Bonds will mature and bear interest as set forth
on the cover of this Memorandum. Interest on the Bonds shall be computed on the
basis of a 365-dav year and charged for the actual number of days elapsed.
The Bonds will be subject to redemption upon the terms and conditions described
under the subception 'Redemption of the Bonds," and will be subject to required tender
as described under the subcaption "Mandatory Tender of Bonds on the Conversion
Date."
Each Bond will be registered in the name of the Holder of such Bond upon the
books and records of the Trustee maintained for that purpose. Bonds of one
denomination may be exchanged for one or more Bonds of a different Authorized
Denomination (as defined in the Indenture), and the Bonds may be transferred and
assigned to others, in either case upon presentation of such Bond(s) to the Trustee
(together with a proper assignment form or authorization for exchange form, as the case
may be, in form and with guaranty of signature reasonably satisfactory to the Trustee,
-5-
duly executed by the Holder or by its duly authorized attorney), and the payment of a
sum sufficient to pay any tax or other governmental charge payable in connection with
such transfer, assignment or exchange. The Trustee shall not be required to transfer any
Bond after the notice calling such Bond for redemption has been mailed or during the
ten (10) days next preceding mailing of a notice of redemption of any Bonds.
No Additional Bonds or other parity obligations may be issued under the
Indenture which have a prior or parity claim on, or prior or parity right to receive
payments derived from, the revenues pledged under the Indenture.
The Bonds are special, limited obligations of the Issuer, payable solely from the
sources set forth in the Indenture and summarized under the caption "SECURITY AND
SOURCES OF PAYMENT FOR THE BONDS" contained in this Limited Offering
Memorandum In no case will the general revenues (including tax revenues) of the Issuer
be used to pay the principal of, purchase price, premium, if any, or interest on the
Bonds. The Bonds do not constitute a general or moral obligation of the Issuer, the
State of Minnesota or any other political subdivision thereof, within the meaning of any
constitutional or statutory provision, nor a charge against their general credit or taxing
power.
Book Entry System
The Bonds will be issued and issuable as one fully registered typewritten Bond for
each maturity, in the name of Cede & Co. as nominee for The Depository Trust
Company, New York, New York ("DTC'), as registered owner of all the Bonds. The
fullv registered Bonds will be retained and immobilized in the custody of DTC.
DTC (or any successor securities depository) or its nominee for all purposes
under the Bond proceedings and the Indenture will be considered by the Issuer and the
Trustee to be the owner or holder of the Bonds.
Owners of any book entry interests in the Bonds (the "book entry interest
owners"), described below, will not receive or have the right to receive physical delivery
of Bonds, and will not be considered by the Issuer and the Trustee to be, and will not
have any rights as. owners or holders of Bonds under the Bond proceedings and
Indenture except to the extent, if any, expressly provided thereunder.
CERTAIN INFORMATION REGARDING DTC, DTC PARTICIPANTS AND
INDIRECT PARTICIPANTS IS SET FORTH BELOW. THIS INFORMATION HAS
BEEN PROVIDED BY DTC. THE ISSUER. THE UNDERWRITER, THE
COMPANY, THEIR RESPECTIVE COUNSEL AND BOND COUNSEL ASSUME
NO RESPONSIBILITY FOR THE ACCURACY OF SUCH STATEMENTS.
DTC advises that it is a limited purpose trust company organized under the laws
of the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. DTC was created to hold securities of its
Participants (described below), and to facilitate the clearance and settlement of
transactions in those securities among its Participants through electronic book entry
changes in accounts of its Participants, thereby eliminating the need of physical
movement of certificates.
DTC advises that DTC Participants (the 'DTC Participants") include securities
brokers and dealers, banks, trust companies, clearing corporations, and certain other
organizations, some of which own DTC. Access to the DTC system is also available to
banks, brokers, dealers, trust companies and other organizations (the "indirect
Participants") that clear through or maintain a custodial relationship with a DTC
Participant, either directly or indirectly. DTC Participants that are book entry interest
owners will receive a credit balance in the records of DTC. The book entry interest of
each person who purchases a book entry interest from a DTC Participant or indirect
Participant (an "Ultimate Book Entry Interest Owner," which may include a Participant
who holds a book entry interest for its own account) will be recorded through the
records of the DTC Participant or of the indirect Participant from whom such person
purchases such book entry interest. DTC advises that Ultimate Book Entry Interest
Owners should expect to receive, from the DTC Participant or indirect Participant, a
written confirmation of their purchase of such book entry interest which will include
certain details of the Bonds in which book entry interests are acquired. The DTC
Participant or indirect Participant will record such Ultimate Book Entry Interest on its
records, and will be responsible for providing information to such Ultimate Book Entry
Interest Owner as to the Bonds in which book entry interest is held, debt service
payments received thereon, redemption of the Bonds, and other matters.
Purchases, transfers and sales of book entry interests by the Ultimate Book Entry
Interest Owners may be made through book entries made by DTC Participants or
indirect Participants on the records maintained by such Participants or others who act for
the Ultimate Book Entry Interest Owner. The Issuer and the Trustee have no role in
those purchases, transfers or sales.
The Issuer and the Trustee will recognize and treat DTC (or any successor
securities depository) or its nominee as the holder and owner of the Bonds for all
purposes under the Indenture. including payment of debt service, notices, enforcement of
remedies, and voting. Crediting of debt service payments and transmittal of notices and
other communications, by DTC to DTC Participants, by DTC Participants to indirect
Participants, and by DTC Participants and indirect Participants to the Ultimate Book
Entry Interest Owners, are the responsibilities of those persons and will be handled by
arrangements between them.
Payments of debt service on the Bonds will be made by the Trustee to DTC (or
any successor securities depository) or its nominee. DTC advises that its current practice
is to immediately credit, in next day funds, the accounts of DTC Participants in
accordance with their respective book entry interests as shown on DTC's records. The
methods and timing of payments or crediting of payments by DTC Participants and
indirect Participants to the Ultimate Book Entry Interest Owners will be governed by
-7-
standing instructions among them and customary practices, will be the responsibility of
the DTC Participant or indirect Participant, and will not be the responsibility of the
Issuer, the Trustee or DTC.
ULTIMATE BOOK ENTRY INTEREST OWNERS SHOULD CONSULT
WITH THE DTC PARTICIPANT OR INDIRECT PARTICIPANT FROM WHOM
THEY PURCHASE A BOOK ENTRY INTEREST TO OBTAIN INFORMATION
CONCERNING THE SYSTEM MAINTAINED BY SUCH DTC PARTICIPANT OR
INDIRECT PARTICIPANT TO RECORD SUCH INTERESTS, TO MAKE
PAYMENTS, TO FORWARD NOTICES OF REDEMPTION AND OF OTHER
INFORMATION.
THE ISSUER, TRUSTEE AND COMPANY HAVE NO RESPONSIBILITY
OR LIABILITY FOR ANY ASPECTS OF THE RECORDS OR NOTICES
RELATING TO, OR PAYMENTS MADE ON ACCOUNT OF, BOOK ENTRY
INTEREST OWNERSHIP, OR FOR MAINTAINING, SUPERVISING OR
REVIEWING ANY RECORDS RELATING TO THAT OWNERSHIP.
The Trustee and the Issuer, so lone as a book entry method of recording and
transferring interests in the Bonds is used, will send any notice of redemption or of any
Indenture amendment or other notices to bondholders under the Indenture only to DTC
(or any successor securities depository) or its nominee. Any failure of DTC to advise
any DTC Participant, or of any DTC,,, Participant or indirect Participant to notify any
Ultimate Book Entry Interest Owner, of any such notice and its content or effect will not
affect the validity of the redemption of the Bonds called for redemption, the Indenture
amendment, or any other action premised on notice given under the Indenture. DTC
advises that in the event of a call for redemption, the Trustee's notification to DTC will
initiate DTC's standard call process and, if a partial call, its lottery process under which
the call is randomly allocated to DTC Participants and indirect Participants holding book
entry interests in the Bonds. It will then be the responsibility of DTC Participants and
indirect Participants to allocate the call among the Ultimate Book Entry Interest Owners,
to notify such Ultimate Book Entry Interest Owners of such call, and to subsequently
credit such Ultimate Book Entry Interest Owners with the proceeds once the Bonds are
redeemed.
The Issuer, the Trustee and the Companv cannot and do not give any assurances
that DTC, DTC Participants, indirect Participants or others will distribute payments of
debt service on the Bonds made to DTC or its nominee as the registered owner of the
Bonds, or any redemption or other notices, to the Ultimate BookEntryInterest Owners,
or that they will do so on a timely basis, or that DTC will serve and act in a manner
described in this Official Statement.
DTC advises that the current "Rules" applicable to DTC are on file with the
Securities and Exchange Commission, and that the current "Procedures" of DTC to be
followed in dealing with DTC Participants are on file with DTC.
10
Revision of Book Entry System; Replacement Bonds
The Indenture will provide for issuance of fully registered Bonds (the
"Replacement Bonds") to persons other than DTC only (i) in the event that DTC is no
longer willing or able to continue to act as securities depository for the Bonds or (ii) the
Partnership determines that it is not in the best interests of the Ultimate Book Entry
Interest Owners to continue the book entry system.
Upon the termination of the services of DTC as provided in the preceding
paragraph, and if no substitute securities depository willing to undertake the functions of
DTC under the Indenture can be found which, in the opinion of the Partnership is
willing and able to undertake such functions upon reasonable or customary terms, or if
the Partnership determines that it is in the best interests of the Partnership or the
Ultimate Book Entry Interest Owners of the Bonds that the Ultimate Book Entry
Interest Owners be able to obtain certificates for the 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 denominations of $5,000 or any integral
multiple thereof in whatever name or names the Bondholders shall designate at that time
to the Trustee in accordance with the Indenture. To the extent that the Ultimate Book
Entry Interest Owners are designated as the transferee by the Bondholders, the Bonds
will be delivered to the Ultimate Book Entry Interest Owners.
Debt service on Replacement Bonds will be payable when due without deduction
for the services of the paying agent.'Principal and any redemption premium will be
payable to the registered owner upon presentation and surrender of the Replacement
Bonds on or after the date of maturity or redemption at the principal corporate trust
office of the Trustee in Minneapolis, Minnesota. Interest will be payable by the Trustee
by check or draft mailed to the registered owner of record on the registration books
maintained by the Trustee as of the close of business on the 15th day of the month
preceding the Interest Payment Date (the record date), irrespective of any transfer or
exchange of such Bond subsequent to such record date and prior to such Bond Payment
Date, unless the Issuer defaults in the payment of interest due on such Bond Payment
Date. In the event of any such default, the Trustee will establish a special interest
payment date and a special record date for such defaulted interest by notice mailed to
the registered owners of Replacement Bonds not less than ten days preceding such
special record date.
Notwithstanding the foregoing, upon written direction to the Trustee from anv
registered owner of 5100,000 aggregate principal amount or more of the Replacement
Bonds, interest may be paid by wire transfer to an account of the owner thereof, such
direction to be given at least five days before the regular record date for the payment
which such direction shall be effective.
Replacement Bonds will be transferable only upon presentation and surrender at
the principal office of the Bond registrar together with an assignment executed by the
rezistered owner or by such owner's duly authorized representative in a form satisfactory
to the Bond registrar. Replacement Bonds will be exchangeable for a like amount of
W2
Bonds of the same interest rate and maturity in accordance with the terms of the
Indenture. All fees and costs of the transfer shall be paid by the transferor. The
Trustee will not be required: (i) to transfer Replacement Bonds during a period
beginning at the opening of business 10 days before the day of mailing of notice of
redemption or purchase of Bonds and ending with the close of business on the day of
such publication or mailing, or (ii) to transfer Replacement Bonds selected or called for
redemption in whole or in part.
Mandatory Tender of Bonds on the Conversion Date
On the Conversion Date all Bonds are required to be purchased by or on behalf
of the Company and all owners are required to tender their Bonds for purchase at a
Purchase Price equal to the par amount thereof, plus accrued interest to the Conversion
Date, without premium. The Conversion Date shall occur on any Business Day, on or
after September 1, 1997 and on or prior to March 1, 1998, selected by the Company by
delivery of written notice to the Trustee and the Remarketing Agent not less than twenty
(20) days prior to such selected date, stating:
Rate;
(i) the Company's election to convert the Variable Rate to a Fixed
(ii) the date upon which the Conversion Date shall occur;
(iii) the date upon which the Fixed Rate shall be established (the
"Computation Date"), which shall not be less than five Business Days prior to the
Conversion Date; and
(iv) directing the Trustee to give notice of the Conversion Date to
Holders of the Bonds.
Such request shall be accompanied by an opinion of Bond Counsel to the effect
that conversion to the Fixed Rate is authorized and permitted by the Indenture and
certain other documents required by the Indenture and will not impair the exclusion
from gross income of interest on the Bonds. Notwithstanding the foregoing, the
Company shall have the option of extending the Conversion Date to a date later than
March 1, 1998; provided that on or before February 8, 1998, the Company shall provide
to the Trustee and Remarketing Agent:
(i) an opinion of Bond Counsel to the effect that such extension will
not impair the exclusion from gross income of interest on the Bonds; and
(ii) written consent from Holders of all Bonds to such extension.
IN NO EVENT SHALL THE CONVERSION DATE BE EXTENDED TO
ANY DATE AFTER MARCH 1, 2000.
-10-
The Trustee shall give written notice by first class mail of the Conversion Date to
all owners of the Bonds not less than fifteen (15) days prior to the Conversion Date.
Failure to give such notice shall not invalidate the conversion to the Fixed Rate nor the
effect thereof as provided in the Indenture.
Owners of the Bonds will be required to tender their Bonds to the Remarketing
Agent for purchase at the Purchase Price, or if not so tendered, such Bonds shall be
deemed tendered and all Bonds shall cease to accrue interest from and after the
Conversion Date. Any Bonds not so tendered on the Conversion Date, for which there
has been irrevocably deposited in trust with the Trustee an amount of moneys sufficient
to pay the Purchase Price of the Bonds, shall be deemed to have been tendered. The
Company shall engage the Remarketing Agent to use its best efforts to remarket the
Bonds on behalf of the Company. All funds for the mandatory tender of the Bonds
(including remarketing proceeds) are required to be deposited with the Trustee on or
before the Conversion Date.
On the Conversion Date, all Bonds shall be redeemed unless the same are
purchased as above provided, at a redemption price equal to the par amount thereof plus
accrued interest.
From and after the Conversion Date, the Bonds shall bear interest and shall be
subject to mandatory tender and redemption as provided in the Indenture.
Redemption of Bonds Prior to Maturity
The Bonds are subject to redemption and prepayment at the times and in the
amounts as follows:
Optional Redemption. Prior to the Conversion Date, the Bonds are subject
to redemption, at the option of the Company, in whole, but not in part, on
September 1, 1997 and any date thereafter. upon at least 15 days notice to the
Holders, at a redemption price of 1001c of the principal amount thereof. together
with interest accrued to the date of such redemption.
Afandatory Sinking Fund Redemption. The Bonds are subject to mandatory
redemption by lot on March 1 and September 1 in principal increments of 55.000
through mandatory sinking fund installments as provided in the Indenture. This
Memorandum provides information relevant to the Bonds only until the
Conversion Date. and does not purport to contain information regarding
mandatory sinking fund redemptions of the Bonds.
Alandarory Redemption Upon Determination of Taxability. The Outstanding
Bonds shall be subject to mandatory redemption, at the principal amount thereof,
without premium, in whole upon the occurrence of a Determination of Taxability.
Any such redemption shall be made upon the first day of the first calendar month
for which notice of redemption can be given pursuant to the Indenture.
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A Determination of Taxability may not occur for a substantial period of
time after interest first becomes includable in the gross income of owners of the
Bonds. In such event, the tax liability of owners of the Bonds may extend to years
for which interest was received on the Bonds and for which the relevant statute of
limitations has not yet run. Owners of Bonds will not receive any additional
interest, premium or other payment to compensate them for federal income taxes
interest and penalties which may be assessed with respect to such interest. See
"TAX MATTERS" herein.
Damage or Destruction of Project. After the Conversion Date, if the Project
is damaged or destroyed, or taken by condemnation, the Company has the option
under certain circumstances, of prepaying the Loan and redeeming the Bonds, in
whole, on any Interest Payment Date. This Memorandum provides information
relevant to the Bonds only until the Conversion Date, and does not purport to
contain information regarding the redemption of the Bonds in the event of
damage to or destruction of the Project.
Acceleration. In addition to the foregoing, the Bonds are subject to
acceleration and prepayment upon the occurrence of an Event of Default under
the Indenture as more fully described in the form of Indenture attached hereto.
Special Mandatory Redemption for Failure to Convert to a Fixed Rate or
Upon Failure to Remarket. The Bonds shall be subject to special mandatory
redemption on March 1. 1998, if the Company has failed to deliver to the Trustee
and Remarketing Agent on or before February 8, 1998, either (1) a written
request that the interest rate on the Bonds be converted from the Variable Rate
to the Fixed Rate, accompanied by other items required by the Indenture, or
(2)(a) an opinion of Bond Counsel to the effeci that an extension of the
Conversion Date will not adversely affect the tax exempt status of the Bonds; and
(b) the written consent of all Bondholders to the extension of the Conversion
Date. In the event the Conversion Date is extended, the Bonds shall be subject
to special mandatory redemption on the extended Conversion Date. which will be
no later than March 1, 2000. If the Company fails to deliver to the Trustee on or
before 20 days prior to the extended Conversion Date the written request that the
interest rate on the. Bonds be converted from the Variable Rate to the Fixed Rate
accompanied by the other items required by the Indenture, the Bonds shall be
subject to special mandatory redemption on the Conversion Date.
The Bonds shall be subject to mandatory redemption on the Tender Date if the
Resale Proceeds and other funds provided by the Company are insufficient to purchase
any Bonds properly tendered on the Tender Date.
-12-
Selection of Bonds to be Redeemed
Following the Conversion Date, if less than all of the Bonds are to be redeemed,
except to the extent otherwise provided in the Indenture, the Bonds to be redeemed
shall be selected by maturity by the Companv, and within any maturity the Trustee shall
select by lot, or by such other method as the Trustee deems fair, those Bonds to be
redeemed from among the Bonds subject to redemption, and for this purpose the
Trustee shall treat each Bond as representing that number of Bonds which is obtained by
dividing the principal amount of such Bond by $5,000. Any Bond in a denomination
greater than $5,000 and to be redeemed only in part is required to be surrendered by the
Holder thereof and the Issuer is required to execute and the Trustee to authenticate and
deliver to such Holder, without charge, a new Bond of any Authorized Denomination
requested by such Holder in an aggregate principal amount equal to the unredeemed
portion of the Bond so surrendered.
Notice and Effect of Redemption or Purchase
The Trustee shall give notice of the redemption of the Bonds to be redeemed,
which notice shall be mailed not less than 15 days nor more than 40 days prior to the
date fixed for redemption to the Holders of the Bonds to be redeemed. No further
interest shall accrue on the principal of any Bond duly called for redemption after the
redemption date if payment therefor has been duly provided.
SECURITY AND SOURCES OF PAYMENT FOR THE BONDS
General
The Bonds are special limited obligations of the Issuer payable solely from the
revenues and assets pledged therefor pursuant to the Indenture.
Prior to the Conversion Date, the Bonds will be secured and payable from (i) an
assignment and pledge of the interests of the Issuer in the Loan Agreement (except for
certain rights to indemnification and payments of fees and expenses), (ii) Bond proceeds
and all other amounts held under the Indenture, which until the Conversion Date will be
invested in the Investment Agreement and (iii) investment earnings on the foregoing.
See "THE INVESTMENT AGREEMENT AND THE INVESTMENT AGREEMENT
PROVIDER" and EXHIBIT C. The obligation of the Company to make Basic
Payments under the Loan Agreement in amounts sufficient to pay the Bonds is non-
recourse as to the Company; therefore, investors in the Bonds should not base their
investment evaluation on the creditworthiness of the Company or the value of the
Project. No representation is made herein as the to the security or sources of payment
for the Bonds after the Conversion Date.
-13-
Limited Obligations
The Bonds, premium, if any, and interest thereon shall not constitute a debt of
the Issuer, the State of Minnesota or any political subdivision thereof within the meaning
of any constitutional or statutory limitation, and shall not constitute or give rise to a
pecuniary liability of the Issuer, the State of Minnesota, or any department or agency
thereof, 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 Issuer other
than its interest in the Loan Agreement.
THE ISSUER
The City of New Hope, Minnesota is a municipal corporation organized and
existing under the Constitution and laws of the State of Minnesota. The Issuer is
authorized by Minnesota Statutes, Chapter 469, as amended (the "Act"), to issue the
Bonds and lend the proceeds thereof to the Company to finance the Project, to secure
the Bonds by a pledge of certain amounts payable by the Company under the Loan
Agreement and to enter into the Loan Agreement, the Indenture, the Remarketing
Agreement, the Regulatory Agreement and the Bond Purchase Agreement.
THE COMP.kNY
The Company is Reprise Associates Limited Partnership, a Minnesota limited
partnership formed on January 29. 1997 for the sole purpose of acquiring, owning and
operating the Project as well as similar multifamily housing projects. Reprise, Inc. is the
general partner of the Company (the "General Partner"). The General Partner is wholly-
owned by Mr. Robert J. Boisclair, who has owned, operated and managed multifamily
housing projects for more than 25 years.
THE PROJECT
General Description
Park Acres Apartments is located in the Ciry of New Hope, Minnesota (the
"City"). The City is located approximately seven miles northwest of the downtown area
of Minneapolis. Minnesota and is accessible by north -south and east -west freeways. The
population of the City is approximately 21.651 persons.
The Project consists of Park Acres Apartments, a 41 unit townhome and
apartment complex, occupying an approximately 10 acre site located at Wisconsin
Avenue and Bass Lake Road in New Hope, Minnesota. The Project contains 6 three-
bedroom townhomes, 17 one -bedroom apartments, 12 two-bedroom apartments, and 5
three-bedroom apartments. The apartments are contained in one three-story building.
The Project, constructed in 1978, includes the following amenities: elevator, a children's
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play area, underground garages, separate laundry facility for the apartments and
individual laundry facilities in each of the townhomes. All of the Project's units were
occupied as of March 1, 1997.
Management
It is expected that upon or prior to the Conversion Date the Project will continue
to be managed by Boisclair Corporation (the "Managing Agent") pursuant to a
Management Agreement between the Company andtheManaging Agent. Under the
Management Agreement, the Managing Agent will be responsible for the dav-to-dav
maintenance, operation, leasing and financial reporting with respect to the Project. The
Managing Agent will additionally be responsible for monitoring compliance and all
reporting requirements related to low-income set aside requirements.
THE INVESTMENT AGREEMENT AND INVESTMENT AGREEMENT PROVIDER
Bayerische Landesbank Girozentrale (the "Investment Agreement Provider"), will
enter into an Investment Agreement (the "Investment Agreement") with the Trustee at
Bond Closing. All proceeds of the Bonds will be invested and held pursuant to the
Investment Agreement until the Conversion Date. The termination date of the
Investment Agreement is March 1, 1998. Amounts invested pursuant to the terms of the
Investment Agreement shall bear inti<rest at a variable rate equal to sixty-one percent
(61%) of the rate of interest publicly announced by Morgan Guaranty Trust Company, in
New York. New York, from time to time as its Prime Rate, payable on each Variable
Rate Interest Pavinent Date. Interest shall be calculated on the basis of a 365-dav vear
and charged for the actual number of days elapsed. The Trustee may withdraw amounts
invested pursuant to the Investment Agreement upon not less than seven (7) days'
written notice.
No financial information regarding the Investment Agreement Provider is
provided in this Memorandum. Information with respect to the Investment Agreement
Provider may be obtained by contacting the Investment Agreement Provider at
212-310-9891 (telephone) or 21=-310-9870 (teletax) or by writing to the Investment
Agreement Provider at 560 Lexington Avenue, New York, New York 10022.
A copy of the Investment Agreement is appended hereto as Exhibit C for a
complete recital of its terms.
THE LOAN DOCUMENTS
Copies of the Indenture and the Loan Agreement are attached hereto as Exhibits
A and B for a complete recital of their terms.
-15-
LEGAL MATTERS
The issuance and delivery of the Bonds are subject to the approving opinion of
Holmes & Galey, Ltd., Minneapolis, Minnesota, as Bond Counsel. Certain legal matters
will be passed upon for the Underwriter by Best & Flanagan, Professional Limited
Liability Partnership of Minneapolis, Minnesota, and for the Company by Winthrop &
Weinstine, P.A., Saint Paul and Minneapolis, Minnesota.
RELATIONSHIPS AMONG THE PARTIES
In connection with the issuance of the Bonds, the Issuer, the Company and the
Underwriter are being represented by the attorneys or law firms identified above under
the heading "LEGAL MATTERS" and Holmes & Galev, Ltd., is acting as Bond Counsel.
In other transactions not related to the Bonds each of these attorneys or law firms may
have acted as Bond Counsel or represented the Issuer, the Company, or the Underwriter
or their affiliates, in capacities different from those described under "LEGAL
MATTERS," and there will be no limitations imposed as a result of the issuance of the
Bonds on the ability of any of these firms or attorneys to act as Bond Counsel or
represent any of these parties in any future transactions, or to represent any person or
firm who may purchase a nonprofit corporation interest in the Company. Furthermore,
the Company, the Underwriter and their affiliates, are not limited in engaging in future
business transactions together or in ahv combination with each other. Potential
purchasers of the Bonds should not assume that the Issuer, the Company, and the
Underwriter or their respective counsel or Bond Counsel have not previously engaged in,
or will not after the issuance of the Bonds engage in, other transactions with each other
or with any affiliates of any of them, and no assurance can be given that there are or will
be no past or future relationships or transactions between or among any of these parties
or these attorneys or law firms.
TAX MATTERS
In the opinion of Holmes & Galev, Ltd., Minneapolis, Minnesota, based upon
present Minnesota and federal laws, regulations, rulings and decisions in effect on the
date of delivery of the Bonds, the Bonds, as of their date of issuance, bear interest,
unless the Holder is a "substantial user" of the Project or a "related person" to the
"substantial user," not includable in gross income for federal income tax purposes or in
gross income and taxable net income of individuals, estates or trusts for Minnesota
income tax purposes. Interest on the Bonds is includable in taxable income of
corporations and financial institutions for purposes of the Minnesota franchise tax.
Interest on the Bonds is subject to the federal alternative minimum tax applicable to
individuals and corporations and the Minnesota alternative tax applicable to individuals,
estates and trusts. No opinion will be expressed by Bond Counsel with respect to any
other federal income tax consequences arising with respect to ownership of the Bonds, or
with respect to the tax exempt status of interest on the Bonds from and after the
Mandatory Tender Date.
-16-
The Internal Revenue Code of 1986, as amended (the "Code"), establishes certain
requirements (the "Federal Tax Requirements") that must be met subsequent to the
issuance of the Bonds in order that, for federal income tax purposes, interest on the
Bonds not be included in gross income pursuant to Section 103 of the Code. The
Federal Tax Requirements include, but are not limited to, requirements relatine to the
expenditure of Bond proceeds, restrictions on the investment of Bond proceeds prior to
expenditure, certain restrictions as to the use and operation of the Project, and the
requirement that certain earnings on the "gross proceeds" of the Bonds be paid to the
federal government. The Federal Tax Requirements also include the requirement that at
least 40% of the completed residential units in the Project will be occupied by individuals
and families with adjusted income, calculated in the manner prescribed in Treasury
Regulation Section 1.167(k) -3(b)(3), which does not exceed 60% of the median gross
income for the area in which the Project is located, as further described in the
Regulatory Agreement, dated as of March 1, 1997 (the "Regulatory Agreement") among
the Issuer, the Company and the Trustee. Noncompliance with the Federal Tax
Requirements may cause interest on the Bonds to become subject to federal and
Minnesota income taxation retroactive to their date of issue irrespective of the date on
which such noncompliance occurs or is ascertained. In expressing its opinion, Bond
Counsel will assume compliance by the Issuer, the Company and the Trustee with the tax
covenants contained in the Loan Aereement, the Regulator, Agreement and the
Indenture.
Except as stated above, Bond Counsel will express no opinion as to any federal,
state or local tax consequences resulting from the ownership of, receipt of interest on or
disposition of, the Bonds.
Other Federal Tax Considerations
Branch Profits Tac. A tax is imposed on any foreign corporation in an amount
equal to thirry percent (30%) of the "dividend equivalent amount" for the taxable year.
The "dividend equivalent amount" is the foreign corporation's "effectively connected
earnings and profits" reduced for increases (or increased for decreases) in "United States
-et Equity." According to the Conference Committee Report provided in connection
with the adoption of the Tax Reform Act of 1986. "the conferees intend that a branch's
earnings and profits include income that would be effectively connected with a United
States trade or business if such income were taxable, such as tax-exempt municipal bond
interest."
Foreign Insurance Companies. The federal Omnibus Budget Reconciliation Act of
1987 subjects foreign companies carving on an insurance business in the United States
to a tax on income which is effectively connected with their conduct of any trade or
business in the United States. According to the conference report accompanying the law
such income includes tax-exempt interest.
Passive Investment Income of S Corporation. Treasury regulations state that
"passive investment income" also includes tax-exempt interest. Passive investment
income, including interest on the Bonds, may be subject to federal income taxation under
-17-
Section 1375 of the Code for S corporations that have subchapter C earnings and profits
at the close of the taxable year if more than 25 percent of the gross receipts of such S
corporations is passive investment income and may subject the S corporation to
termination of its S corporation status under Section 1362(d) of the Code.
Financial Institutions. The Code limits the ability of financial institutions to
deduct any portion of the interest expense allocable to the ownership of certain tax-
exempt obligations acquired after August 7, 1986. The Bonds have not been designated
as "qualified tax exempt obligations," and therefore financial institutions will not be
allowed to deduct the portion of their interest expense allocable to the Bonds.
Property and Casualty Insurance Companies. Under the Code, property and
casualty insurance companies are required, for taxable years beginning after
December 31, 1986, to reduce the amount of their loss reserve deduction by 15 percent
of the amount of tax-exempt interest received or accrued during the taxable year on
certain obligations acquired after August 7, 1986, including interest on the Bonds.
Other Tax Consequences; Changes of Law. The above is not a comprehensive list
of all federal tax consequences which may arise from the receipt of interest on the
Bonds. Investors should be aware that there may be other tax consequences applicable
to the acquisition and ownership of the Bonds. Investors should consult their tax
advisors regarding applicability of those consequences as well as the applicability of the
above itemized taxes to their situation. Anv or all of the foregoing is subject to future
laws, rulings, or decisions which may modify, in whole or in part, the foregoing and. in
certain instances, such modification may be deemed retroactive to the date or issuance of
the Bonds.
ENFORCEABILITY OF OBLIGATIONS
On the closing date for delivery of the Bonds to the Underwriter herein named,
Holmes & Galey, Ltd., Minneapolis, Minnesota, Bond Counsel, will deliver its opinion
that the Bonds, the Indenture, the Loan Agreement and the Bond Purchase 2reement
are valid and legally binding on the Issuer, enforceable in accordance with their terms.
Also on the closing date, Winthrop & Weinstine, P.A., Saint Paul and Minneapolis,
Minnesota, counsel to the Company, will deliver its opinion that the Loan Agreement,
Bond Purchase Agreement and Regulatory Agreement are valid and legally binding on
the Company, enforceable in accordance with their terms. The foregoing opinions will
be qualified in general to the extent that the enforceability of the respective instruments.
in accordance with their terms may be limited by laws, decisions and equitable principles
affecting remedies and by bankruptcy or insolvency or other laws, decisions and equitable
principles affecting creditors' rights generally.
While the Bonds are secured or payable pursuant to the Indenture and the Loan
Agreement, the practical realization of payment from any security will depend upon the
exercise of various remedies specified in the respective instruments. These and other
remedies are dependent in many respects upon judicial action, which is subject to
in
discretion and delay. Accordingly, the remedies specified by the Indenture and the loan
Agreement may not be readily available or may be limited.
LITIGATION
There is no controversy or litigation of any nature pending or threatened
restraining or enjoining the issuance, sale, execution or delivery of the Bonds, or in any
way contesting or affecting the validity of the Bonds or any proceedings of the Issuer
taken with respect to the issuance or sale thereof, the pledge or application of any
moneys or securities provided for the payment of the Bonds, the existence or powers of
the Issuer or the title of any officers of the Issuer to their respective offices.
UNDERWRITING
The Bonds are being purchased from the Issuer by the Underwriter. The
Underwriter has agreed to purchase the Bonds at par from the Issuer. The Underwriter
will be paid a fee of $4,125 plus reimbursement for expenses paid by the Underwriter
according to the terms of a Bond Purchase Agreement among the Issuer, the Company
and the Underwriter. The Bond Purchase Agreement provides that the Underwriter
shall purchase all of the Bonds if any are purchased, and that the obligation to make
such purchase is subject to certain terns and conditions set forth in the Bond Purchase
Agreement, the approval of certain legal matters by counsel and certain other conditions.
The initial public offering prices of the Bonds set forth on the cover page hereof may be
changed from time to time by the Underwriter. The Company has agreed in the Bond
Purchase Agreement to indemnify the Underwriter, the Issuer and the Trustee for
certain liabilities, including certain liabilities under the federal and state securities laws.
:MISCELLANEOUS
The foregoing does not purport to be comprehensive or definitive and all
references to the documents are qualified in their entirety by reference to each such
document. A11 references to the Bonds are qualified in their entirety by reference to the
forms thereof and the information with respect thereto included in the aforesaid
documents. Copies of these documents are available for inspection during the period of
the offering at the offices of the Underwriter in Minneapolis. Minnesota. and thereafter
at the principal corporate trust office of the Trustee.
The Company has duly approved the information in and the delivery and use of
this Limited Offering Memorandum.
ibi167944
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EXHIBIT A
Indenture of Trust
A-1
EXECUTION COPY
CITY OF NEW HOPE. MINNESOTA
Issuer
and
NORWEST BAND MINNESOTA, NATIONAL ASSOCIATION
Trustee
INDENTURE OF TRUST
Dated as of March 1, 1997
S1,650,000
Multifami1v Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
This instrument was drafted by:
HOUNIES & GALEY, LTD.
One Financial Plaza Suite 1200
120 Sixth Street
Minneapolis. Minnesota 55402
^ VPW:0'00i DnrqNOENMR DOC INDENTURE OF TRUST
TABLE OF CONTENTS
PARTIES .........
RECITALS.......
Pase
ARTICLE 1
Definitions, Exhibits and General Provisions
Section1.01. Definitions........................................................................................................... 4
Section 1.02. Rules of Interpretation....................................................................................... 12
Section 2.01.
Section 2.02.
Section 2.03.
Section 2.04.
Section 2.05.
Section 2.06.
Section 2.07.
Section 2.08.
Section 2.09.
Section 2.10.
Section 2.1 1.
Section 2.12.
Section 2.13.
Section 2.14.
Section 3.01.
Section 3.02.
Section 3.03.
Section 3.04.
Section 3.05.
Section 3.06.
ARTICLE 2
The Bonds
Authorized Amount and Form of Bonds ...........................................
InitialIssue.........................................................................................
VariableRate.....................................................................................
Execution...........................................................................................
Authentication.....................................................................................
Delivery of Initial Issue......................................................................
Mutilated. Lost. Stolen. Destroyed or Untendered Bonds ..................
Ownershipof Bonds...........................................................................
Preparation of Definitive Bonds: Temporary Bonds ..........................
Reeistration. Transfer and Exchan_ee of Bonds ..................................
Interest Riehts Preserved..................................................................
Cancellation of Bonds.........................................................................
FixedRate - ---------- ------ ------------------------------- --------- -
Book-Entn- Provisions: Replacement Bonds
ARTICLE 3
Redemption of Bonds Before Maturity
... 14
............... 23
............... 24
............... 24
............... 26
............... 26
............... 26
.............. 27
.............. 28
.............. 28
.............. 28
.............. 31
Redemption Provisions...................................................................................... 34
Partial Redemption of Bonds............................................................................. 35
Procedure for Redemption................................................................................. 36
Payment of Bonds Upon Redemption................................................................ 36
No Partial Redemption After Default................................................................ 36
Cancellation....................................................................................................... 37
ARTICLE 4
Mandatory Tender and Remarketing of Bonds
Section 4.01. Mandatory Tender of Bonds.............................................................................. 38
Section 4.02. Duties of Trustee................................................................................................ 38
D:INEW200'•001'DOCS 'INDEN'TUR DOC i MDENTURE OF TRUST
Section 4.03.
Remarketing of Bonds.......................................................................................
39
Section 4.04.
Purchase of Tendered Bonds.............................................................................
39
Section 4.05.
Intentionally Omitted.........................................................................................
39
Section 4.06.
Purchase Not to Constitute a Redemption.........................................................
39
Section 4.07.
Untendered Bonds..............................................................................................
39
ARTICLE 6
Funds and Accounts
Section 6.01.
ARTICLE 5
43
Section6.02.
General Covenants
43
Section 5.01.
Payment of Principal, Premium and Interest .....................................................
41
Section 5.02.
Performance of and Trustee for Covenants........................................................
41
Section 5.03.
Instruments of Further Assurance......................................................................
41
Section 5.04.
Recording and Filing..........................................................................................
41
Section 5.05.
Books and Records.......................................................................I....................42
46
Section 5.06.
Bondholders' Access to Bond Resister..............................................................
42
Section 5.07.
Rights Under Loan Agreement..........................................................................
42
ARTICLE 6
Funds and Accounts
Section 6.01.
"Trust Monevs" Defined....................................................................................
43
Section6.02.
Project Fund...............I.......................................................................................
43
Section6.03.
Bond Fund..........................................................................................................
44
Section 6.04.
Bond Purchase Fund..........................................................................................
45
Section 6.05.
Excess Investment Earnings Fund.....................................................................
46
Section6.06.
Reserve Fund...........................................................................................
I......... 46
Section 6.07.
Deposit of Funds with Paving Agent.................................................................
46
ARTICLE 7
Intentionally Omitted ...................................................... 48
ARTICLE 8
Investments
Section 8.01.
Investments by Trustee......................................................................................
49
Section 8.02.
Return on Investments.......................................................................................
49
Section 8.03.
Computation of Balances in Fund......................................................................
50
Section 8.04.
Rebate to United States......................................................................................
51
ARTICLE 9
Discharge of Lien
Section 9.01. Payment of Bonds; Satisfaction and Discharge of Bonds and
Obligation to Bondholders............................................................................ 52
Section 9.02. Discharge of the Indenture................................................................................. 53
D !NEK'200'001'DOCSJNDENTUR DOC ii INDENTURE OF TRUST
Section9.03. Tax Call.............................................................................................................. 53
ARTICLE 10
Default Provisions and Remedies
Section 10.01.
Events of Default...............................................................................................
==
Section10.02.
Acceleration.......................................................................................................
63
Section10.03.
Remedies............................................................................................................
56
Section 10.04.
Direction of Proceedings By Bondholders.........................................................
56
Section 10.05.
Waiver of Stav or Extension Laws....................................................................
57
Section 10.06.
Priority of Payment and Application of Moneys ...............................................
57
Section 10.07.
Remedies Vested in Trustee...............................................................................
58
Section 10.08.
Rights and Remedies of Holders........................................................................
59
Section 10.09.
Termination of Proceedings...............................................................................
59
Section 10.10.
Waiver of an Event of Default...........................................................................
59
Section 10.11.
Company as Agent of Issuer..............................................................................
60
ARTICLE 11
The Trustee
Section 11.01.
Acceptance of the Trustee..................................................................................
61
Section 11.02.
Trustee's Fees. Charge's and Expenses...............................................................
63
Section 11.03.
Notice to Holders of Default..............................................................................
64
Section 11.04.
Intervention by Trustee......................................................................................
64
Section 11.05.
Successor Trustee...............................................................................................
64
Section 11.06.
Resignation by Trustee.......................................................................................
64
Section 11.07.
Removal of Trustee............................................................................................
65
Section 11.08.
Appointment of Successor Trustee....................................................................
6=
Section 11.09.
Acceptance by Successor Trustees.....................................................................
65
Section 11.10.
Right of Trustee to Pay Taxes and Other Charges .............................................
66
Section 11.11.
Trustee Protected in Relying Upon Resolutions ................................................
66
Section 11.12.
Successor Trustee as Custodian of Bond Fund and Paying Agent ....................
66
Section11.13.
Co-Trustee.........................................................................................................
66
Section 11.14.
Obligation to Trustee as to Reporting................................................................
68
Section 11.1=.
Successor PavinIz Agent.....................................................................................
68
Section 11.16.
Confirmation of the Trustee...............................................................................
68
Section 11.17.
Remarketing Agent............................................................................................
70
Section 11.18.
Qualifications of Remarketing Agent: Resignation: Removal ..........................
70
ARTICLE 12
Supplemental Indentures
Section 12.01. Supplemental Indentures Not Requiring Consent of Bondholders .................... 71
Section 12.02. Supplemental Indentures Requiring Consent of Holders ................................... 71
Section 12.03. Rights of Trustee................................................................................................ 72
D''V'Fw`n'M PDOCS'!]DENTIR DOC iii INDENTURE OF TRUST
ARTICLE 13
Amendments to Agreement and Related Documents
Section 13.01. Amendments Not Requiring Bondholder Consent ............................................ 74
Section 13.02. Amendments Requiring Bondholder Consent ................................................... 74
ARTICLE 14
Miscellaneous Provisions
Section14.01.
Consent..............................................................................................................
76
Section 14.02.
Rights Under Indenture......................................................................................
76
Section 14.03.
Meetings of Bondholders...................................................................................
76
Section14.04.
Severability........................................................................................................
79
Section14.05.
Notices...............................................................................................................
79
Section 14.06.
Required Approvals...........................................................................................
80
Section14.07.
Counterparts.......................................................................................................
80
Section 14.08.
Limitation of Issuer and its Officers, Employees and Agents ............................
80
Section 14.09.
Amounts Remaining in Funds...........................................................................
81
TESTIMONIUM
SIGNATURES
EXHIBIT A Notice of Mandatory Tender Date
O'NEW200`00I DOCSNDENTUR DOC Iv INDENTURE OF TRUST
Ito11 4111 J."KIIara ll"
THIS INDENTURE OF TRUST (the "Indenture") dated as of March 1. 1997, by and
between the City of New Hope, a Minnesota municipal corporation (the "Issuer"). and Norwest
Bank Minnesota. National Association, a national banking association. authorized to accept and
execute trusts of the character herein set out, with its principal office in Minneapolis. Minnesota
(the "Trustee"):
WITNESSETH:
al ffi.1:1Nf_GI
1. The Issuer is authorized by Minnesota Statutes. Chapter 462C. as amended (the
"Act"), to issue rental housing revenue bonds to finance or refinance in whole or in part the cost
of a 'Project" (as hereinafter defined) for the public purposes expressed in the Act; and
2. The Issuer has made the necessary arrangements with Reprise Associates Limited
Partnership, a Minnesota limited partnership (the "Company"), for the acquisition and
rehabilitation of an existin_ residential rental project (the 'Project"), which will be of the
character and accomplish the purposes provided by the Act. and the Issuer has entered into a
revenue agreement with the Company (in the form of the Loan Agreement as hereinafter defined)
which specifies the terms and conditions of said acquisition and improvement and provides for
the Issuer to finance a portion of the costs of the Project by making a loan (the "Loan") to the
Company to be funded through the issuance of Multifamily Housing Revenue Bonds (Park Acres
Apartments Project) Series 1997. in the aggregate principal amount of S1.650,000 (the 'Bonds"):
and
3. As security for the payment of the Bonds. the Issuer has agreed to assign and
pledge to the Trustee. among other things. all right. title and interest of the Issuer in and to the
Loan Agreement (except certain rights reserved to the Issuer under the terms of this Indenture).
including the Basic Payments (as hereinafter defined): and
4. In connection with the issuance of the Bonds. the company will enter into a
Regulatory Agreement dated as of March 1, 1997. with the Issuer and Trustee (the "Regulator
Agreement") relating to compliance with certain federal. state and local requirements applicable
to the Project.
All things necessary to make the Bonds, when authenticated by the Trustee and
issued as in this Indenture provided. valid. binding and legal limited obligations of the Issuer
according to the import thereof. and to constitute this Indenture a valid contract for the security
of the Bonds. have been done and performed: and the creation, execution and delivery of this
Indenture. and the creation. execution and issuance of said Bonds, subject to the terms hereof,
have in all respects been duly authorized;
NOW THEREFORE, KNOW ALL PERSONS BY THESE PRESENTS, THIS
INDENTURE WITNESSETH:
0-`.NEWN0%00 DDOCSMDENTUR.DOC I MDENTURE Of TRUST
The Issuer, in consideration of the premises and the acceptance by the Trustee of the
trusts hereby created and of the purchase and acceptance of the Bonds by the Holders (as herein
defined) thereof, in order to secure the payment of the principal of and interest and premium, if
any, on the Bonds according to their tenor and effect and the performance and observance by the
Issuer of all the covenants expressed or implied herein and in the Bonds, does hereby grant, grant
a security interest in, assign, transfer in trust, and pledge to the Trustee, and to its successors in
trust, and to them and their assigns forever, the following:
FIRST
All rights, title, interest and privileges of the Issuer in, to and under the Loan Agreement.
including, but not limited to, all sums which the Issuer is entitled to receive from the Company
pursuant to the Loan Agreement and in particular the Basic Payments (but excluding the rights of
the Issuer to indemnification and certain direct payments to be made to it pursuant to Sections
4.04, 7.04 and 9.05 of the Loan Agreement), and all other sums (including Bond proceeds) which
are required to be deposited in the trust accounts in accordance with Article VI hereof, except for
the Bond Purchase Fund and Excess Investment Earnings Fund which are not a part of the Trust
Estate; and the earnings derived from the investment of any of the foregoing sums as provided
herein; and
SECOND
Any and all other property of every name and nature which may from time to time
hereafter by delivery or by writing of any kind be subjected to the lien hereof by the Issuer or by
anvone in its behalf or with its written consent, including, but not limited to, the interests of the
Issuer. if anv, under the Collateral Documents, and the Trustee is hereby authorized to receive
any and all such property at any and all times and to hold and apply the same as additional
security hereunder subject to the terms hereof. and
TO HAVE AND TO HOLD all the same (herein called the "Trust Estate") with all
privileges and appurtenances hereby granted and assigned. or agreed or intended so to be, to the
Trustee and its successors in trust and to them and their assigns forever:
SUBJECT TO the rights of the Company under the Loan Agreement;
IN TRUST NEVERTHELESS. upon the terms and trusts herein set forth for the equal
and proportionate benefit. security and protection of all Holders from time to time of the Bonds
issued under and secured by this Indenture, without privilege. priority or distinction as to lien or
otherwise of any of the Bonds over any of the others except as otherwise provided herein:
PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall well and truly
pay, or cause to be paid, or provide fully for payment as herein provided of the principal of the
Bonds and the interest due or to become due thereon (together with premium, if any), at the time
and in the manner set forth in the Bonds according to the true intent and meaning thereof, and
shall make the payments into the Bond Fund as required under Article VI or shall provide, as
permitted hereby, for the payment thereof by depositing with the Trustee sums sufficient for
payment of the entire amount due or to become due thereon as herein provided, and shall well
D WFW'00100 MOCS' WDENTURDOC W DENTURE OF TRUST
and truly keep, perform and observe all the covenants and conditions pursuant to the terns 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 this
Indenture and the rights hereby granted shall cease, terminate and be void except as otherwise
provided herein; otherwise, this Indenture shall be and remain in full force and effect.
UNDER THE PROVISIONS OF THE ACT the Bonds may not be payable from or be a
charge upon any funds of the Issuer other than the revenue pledged to the payment thereof nor
shall the Issuer be subject to any pecuniary liability thereon and no Holder or Holders of the
Bonds shall ever have the right to compel any exercise of the taxing power of the Issuer to pay
any Bonds or the interest and premium, if any, thereon, or to enforce payment thereof against any
property of the Issuer, except as above provided; the Bonds shall not constitute a charges, lien or
encumbrance, legal or equitable, upon any property of the Issuer, except as above provided: and
no Bond shall constitute a debt of the Issuer within the meaning of anv constitutional or statutory
limitation, but nothing in the Act impairs the rights of Holders of Bonds issued under this
Indenture to enforce the covenants made for the security thereof as provided in this Indenture and
in the Act, and by authority of the Act the Issuer and the Trustee mutually covenant and agree, to
the extent specifically provided herein, for the equal and proportionate benefit of all Holders of
the Bonds, as follows:
D INE`1.200\001`DOCSdNDENTURDOC J INDENTURE OF TRUST
ARTICLE 1
Definitions, Exhibits and General Provisions
Section 1.01. Definitions.
In this Indenture the following terms have the following meanings unless the context
hereof clearly requires otherwise, and any other terms defined in the Loan Agreement shall have
the same meanings when used herein as assigned them in the Loan Agreement unless the context
or use thereof indicates another or different meaning or intent:
Act: Minnesota Statutes, Chapter 462C, as amended;
Act of Bankruptcv: any of the following events:
(a) If the Company shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian. trustee, liquidator or the like, or of all or a
substantial part of their property. (ii) commence a voluntary case under the Federal
Bankruptcy Code (as now or hereafter in effect), or (iii) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization, winding -up
or composition or adjustment of debts: or
(b) A proceeding or case shall be commenced, without the application or
consent of the Compan,. in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization. dissolution. winding -up, or the composition or adjustment of
its debts. (ii) the appointment of a trustee. receiver, custodian. liquidator or the like of the
Company, or of all or any substantial part of its assets, or (iii) similar relief in respect of
the Company under any law relating to bankruptcy. insolvency. reorganization.
winding -up or composition or adjustment of debts:
Additional Charges: the payments required by Section 4.04 of the Loan Agreement;
Affiliated Pam: as to a particular Person. an} Person directly and. indirectly controlling
or controlled by or under direct or indirect common control with such specified Person.
"Control". when used with respect to a particular Person, means the possession, directly or
indirectly. of the power to direct management and policies of such Person whether through the
ownership of voting stock. by contract or otherwise. and the terms "controlling" and 'controlled"
have meanings correlative to the foregoing:
.authorized Denominations: $100.000 or any multiple of S5.000 in excess of $100,000;
Basic Pavments or Loan Payments: the payments required by Section 4.02 and Section
4.03 of the Loan Agreement;
Beneficial Owner: the person for which a Depository Participant holds an interest in the
Bonds. as shown on the books and records of the Depository Participant;
D'' NEw2001.0011DOCS'INDENTUR.DOC 4 INDENTURE OF TRUST
Bond Closine: the date on which there is delivery by the Issuer of; and payment for, the
Bonds;
Bond Counsel: any firm of nationally recognized bond counsel experienced in tax
exempt bond financing selected by the Trustee and acceptable to the Issuer, and the Company;
Bond Fund: the fund so designated in Section 6.03 from which the principal of and
interest on the Bonds are payable;
Bond Purchase Fund: the fund so designated in Section 6.04;
Bond Resister: the register maintained by the Trustee pursuant to Section 3.10;
Bondholder or Holder: a Person in whose name a Bond is registered in the Bond
Register;
Bonds: the $1,650,000 Multifamily Housing Revenue Bonds (Park Acres Apartments
Project) Series 1997 to be issued pursuant hereto;
Bond Year: any twelve (12) month period ending on the anniversary of the Bond
Closing;
Business Dav: any day on which the Trustee. the Investment Agreement Provider or the
Federal Reserve Bank of New York are not authorized by law to close;
Cede R Co.: Cede & Co. or Cede &: Co.'s successor as nominee of DTC;
Code or Internal Revenue Code: the Internal Revenue Code of 1986, as amended, and all
applicable Treasury Regulations:
Collateral Documents: any written instrument other than the Loan Agreement and this
Indenture wherebv any property or interest in propem of any kind is granted, pledged, conveyed.
assigned. or transferred to the Issuer or Trustee, or both, as security for payment of the Bonds or
performance by the Company of its obligations under the Loan Agreement:
Company Reprise Associates Limited Partnership, a Minnesota limited partnership, its
successors and assigns or other Person which may assume its obligations under the Loan
Agreement;
Condemnation: the word "Condemnation" or phrase "eminent domain" as used herein
shall include the taking or requisition by governmental authority or by a Person, acting under
governmental authority and a conveyance made under threat of Condemnation. provided such
conveyance is made with the approval of the Trustee. which approval shall not be unreasonably
withheld. and "Condemnation award" shall mean payment for property condemned or conveyed
under threat of Condemnation:
Conversion Date: any Business Day, which day shall be no earlier than September 1,
1997 nor later than April 1, 1998, unless such date is extended in accordance with Section
D:`NEW700100i'DOCSMDENTUR.DOC 5 rNDENTURE OF TRUST
2.13(a) hereof, as of which the interest rate on the Bonds converts from a Variable Rate to a
Fixed Rate as such date is established pursuant to Section 2.13 hereof;
Credit Facility: shall have the meaning assigned to such term in the Loan Agreement:
Date of Taxabilirv: the date as of which the interest on the Bonds is deemed taxable
tinder a Determination of Taxability;
Defaulted Interest: shall have the meaning stated in Section 2.02 hereof,
Depository or DTC: a book -entry securities depository for the Bonds. initially Depository
Trust Company, New York, New York. a limited purpose trust company organized under the
laws of the State of New York, or any successor book -entry securities depository for the Bonds
appointed pursuant to Section 2.14;
Depository Bonds: Bonds in the form of one immobilized global certificate for each
maturity, registered in the Bond Register in the name of the Depository or its Nominee asne
Bondowr and governed by Section 2.14 hereof.
Depository Participant: any broker-dealer, bank or other financial institution from time to
time for which the Depository holds Bonds or securities as depository;
Determination of Taxability: Er determination that the interest income on any Bond is
includable in zross income for federal income tae purposes under Section 103 of the Code for
any reason, other than that the Holder is a Substantial User of the Project or a Related Person
thereto, which determination shall be deemed to have been made upon the occurrence of the first
to occur of the following:
(a) the date on which the Company determines that the interest income on any
of the Bonds is includable in gross income for federal income tax purposes: or
(b) the date on which any change in law or regulation becomes effective or on
which the Internal Revenue Service has issued any private ruling, technical advice or any
other written communication to the effect that the interest income on any of the Bonds is
includable in cross income for federal income tax purposes: or
(c) the date on which the Company shall receive notice from the Trustee in
writing that the Trustee has been advised by any Holder that the Internal Revenue Service
has issued a thirty -day letter or other notice which asserts that the interest on such Bond is
includable in gross income for federal income tax purposes; provided that no
Determination of Taxability shall be deemed to have occurred as a result of a
determination by the Company pursuant to clause (a) above unless such determination is
supported by a written opinion of counsel satisfactory to the Trustee that the interest
income on the Bonds is includable in gross income for federal income tax purposes;
Discharee Date:
Article LY;
the date on which all Outstanding Bonds are discharged under
D" NEW 200\0010OCSINDENTUR DOC 6 INDENTURE OF TRUST
Event of Default: any of the events set forth in Section 10.01 hereof.
Facility: the existing 41 -unit rental housing facility known as Park Acres Apartments, and
all related improvements and equipment, together with all additions to. replacements of and
substitutions for any of the foregoing;
Federal Bankruotcv Code: the United States Bankruptcy Reform Act of 1978. as
amended, or any similar or succeeding federal bankruptcy law;
Final Conversion Date: March 1. 2000:
Final Maturity Date: the Maturity Date. Discharge Date or Redemption Date on which all
outstanding Bonds either mature. are redeemed or discharged. whichever is earlier:
Fixed Rate: the interest rate established in accordance with Section 2.13 hereof;
Fixed Rate Period: the period from and including the Conversion Date to and including
the date next preceding the payment in full of the Bonds;
Fixed Rate Interest Pavment Date: the first March 1 or September 1 next succeeding the
Conversion Date. and each March 1 and September 1 thereafter until payment in full of the
Bonds:
Government Obligations: shall mean direct general obligations of. or obligations the
prompt payment of the principal of and the interest on which are fully and unconditionally
guaranteed bv, the United States of.America:
Holder or Bondholder: the Person in whose name a Bond is registered in the Bond
Register:
Indenture: this Indenture of Trust by and between the Issuer and the Trustee. as the same
may from time to time be amended or supplemented as herein provided.-
Independent
rovided;
Independent Accountant: a certified public accountant or firm of certified public
accountants registered and qualified to practice as such under the laws of the State of Minnesota.
who does not have any direct financial interest in the Company, other than the payment to be
received under contract for services performed and who is not connected with the Company as an
officer. employee, underwriter. partner. affiliate. subsidiary, or person performing similar
functions and is not a trustee or director of the Company;
Independent Counsel: any attorney duly admitted to practice law before the highest court
of any state. who may be counsel to the Company or the Issuer but who may not be an officer or
a full time employee of the Company or the Issuer;
Interest Payment Date: each Fixed Rate Interest Payment Date. each Variable Rate
Interest Payment Date and the Conversion Date;
D`NEW2001001`DOCSrNDENTUR DOC 7 rNDENTURE OF TRUST
Interest Period: the period from and including an Interest Payment Date to and including
the day next preceding the next Interest Payment Date, except that the first Interest Period shall
be the period from and including the date of the first authentication and delivery of the Bonds
hereunder to and including April 30, 1997;
Investment Agreement Provider: Bayerische Landesbank Girozentrale;
Investment Agreement: the Investment Agreement dated March 27, 1997 between the
Trustee and the Investment Agreement Provider;
Interest Payment Date: the Conversion Date and each Fixed Rate Interest Payment Date
and Variable Rate Interest Payment Date;
Internal Revenue Code or Code: the Internal Revenue Code of 1986, as amended, and all
applicable Treasury Regulations;
Issuer: the City of New Hope, Minnesota:
Letter of Representations: the Letter of Representations or other documentation required
by the Depository as a condition to its acting as book -entry depository for the Bonds. together
with any replacement thereof or amendment or supplement thereto (and including any standard
procedures or policies referenced therein or applicable thereto) respecting the procedures and
other matters relating to the Depository's role as book -entry depository for the Bonds:
Loan: the loan of Bond proceeds by the Issuer to the Company described in Section 4.01
of the Loan agreement:
Loan Aszreement: the Loan Agreement of even date herewith by and between the Issuer
and the Company. as the same may from time to time be amended or supplemented as provided
therein and in this Indenture:
Loan Pavments or Basic Payments: the payments the Company is obligated to make
pursuant to Sections 4.02 and 3.03 of the Loan Agreement:
Mandatory Redemption Payments: the payments which are required to be made under
Section 3.01(a)(ii) or 3.01(a)(iii) to redeem the Bonds in accordance with the Mandatory
Redemption Schedule after appropriate credits. if any, have been made;
Mandatory Redemption Schedule: the mandatory redemption schedule for the Bonds set
forth in Section 1.01(a)(ii) or 3.01(a)(iii).
Mandatory Tender Date: the Conversion Date:
Mandatory Tender Notice: has the meaning assigned to it in Section 4.01(b);
Maturity Date or Maturity: any date on which principal of or interest or premium, if any,
on the Bonds is due, whether at maturity, on a scheduled interest payment date, or upon
redemption, defeasance, acceleration, or otherwise;
D'4EW'00`OOIDOCS' INDE4TCR.DOC 8 INDENTURE OF TRUST
Moody's: Moody's Investors Service, Inc., a corporation organized and existing tinder the
laws of the State of New York, its successors and assigns, and, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a municipal securities rating
agency, "Moody's" shall be deemed to refer to any other nationally recognized municipal
securities rating agency designated by the Issuer (other than Standard & Poor's Corporation);
Notice by Mail: notice of any action or condition by mail shall mean a written notice
meeting the requirements of this Indenture mailed by first-class mail, postage prepaid, to the
Holders of specified Bonds at the addresses shown in the Bond Register;
Orieinal Purchaser: the first Person(s) who purchase the Bonds from the Issuer at Bond
Closing;
Outstanding Bonds: as of the date of determination. all Bonds theretofore issued and
delivered under this Indenture except:
(a) Bonds theretofore canceled by the Trustee or Paying agent or delivered to
the Trustee or Paying Agent canceled or for cancellation:
(b) Bonds for which payment or redemption moneys or securities (as provided
in Article IX) shall have been theretofore deposited with the Trustee in trust for the
Holders of such Bonds: provided, however. that if such Bonds are to be redeemed. notice
of such redemption shall have been duly given pursuant to this Indenture or irrevocable
action shall have been taken to call such Bonds for redemption at a stated Redemption
Date: and
(c) Bonds in exchange for or in lieu of which other Bonds shall have been
issued and delivered pursuant to this Indenture, including Untendered Bonds; provided.
however, that in determining whether the Holders of the requisite principal amount of
Outstanding Bonds have given any request. demand, authorization, direction. notice.
consent or waiver hereunder. Bonds owned by the Company shall be disregarded and
deemed not to be Outstanding Bonds, except that in determining whether the Trustee
shall be protected in relying upon any such request. demand. authorization, direction.
notice, consent, or waiver, only Bonds which the Trustee knows to be owned by the
Company shall be disregarded:
Paving Agent: the Trustee or any other entity designated pursuant to this Indenture as the
agent of the Issuer and the Trustee to receive and disburse the principal of and premium, if any,
and interest on the Bonds:
Pavittent Date: anv Interest PaNment Date. any Stated Maturity, the Discharge Date, the
Mandatory Tender Date or anv Redemption Date;
Permitted Investments:
(a) Government Obligations;
D'`NE W 200%001`DOCS\INDENTUR.DOC 9 INDENTURE OF TRUST
(b) Shares of an investment company registered under the Federal Investment
Company Act of 1940, whose shares are registered under the Federal Securities Act of
1933, and whose only investments are obligations described in clause (a) above;
(c) Any general obligation of the State of Minnesota or any of its political
subdivisions, provided that securities described in clause (a) above have been irrevocably
deposited in escrow to effect discharge of the general obligations in the same manner and
subject to the same conditions required to effect discharge of the Bonds under Article rX;
(d) Certificates of deposit with fixed maturities, time deposits, repurchase
agreements or any other direct obligation with or of either the Trustee or any other
national or state bank or federally chartered savings and loan association whose senior
debt obligations are rated A or better by a Rating Agencv or anv other bank if the debt
obligations for which such bank's letters of credit are the primary basis are rated A or
better by a Rating Agency which initially rated the Bonds; and
(e) the Investment Agreement.
Person: any natural person, corporation, limited liability company, joint venture,
cooperative, partnership, trust or unincorporated organization, govermnent or governmental body
or agency, political subdivision or other legal entity, as in the context may be appropriate;
Prime Rate: the rate of interest publicly announced by Morgan Guaranty Trust Co.. in
New York, New York, or its successor as its "prime rate" or "reference rate," which rate shall
change when and as such prime rate changes;
Project: the Project Premises. the Facility and the Improvements, including all Project
Equipment, as they may at any time exist:
Proiect Equipment: any and all (i) fixtures or tangible personal property now or hereafter
attached or affixed to the Project Premises. (ii) other tangible personal property now or hereafter
located within or used in connection with the Project Premises or the Facility and (iii) anv
additions to. replacements of and substitutions for any of the foregoing:
Proiect Premises: the real estate legally described in Exhibit A attached to the Loan
Agreement, together with all additions to, replacements of and substitutions for the foregoing;
Rating Agencv: Standard & Poor's Ratings Group or Moody's;
Rating Category: one of the generic rating categories of a Rating Agency. without regard
to any refinement or gradation of such Rating Category by a numerical or other modifier:
Rebate Amounts: the amount determined pursuant to Section 7.07(14) of the Loan
Agreement to be rebated to the United States;
Record Date: the 15th day of the calendar month next preceding an Interest Payment
Date, whether or not such day is a Business Day;
D^NEa700\001'D( ,INDENTLR.DOC 10 rNDENTURE OF TRUST
Redemption Date: when used with respect to any Bond to be redeemed shall mean the
date on which it is to be redeemed pursuant hereto;
Redemption Price: when used with respect to any Bond to be redeemed shall mean the
price at which it is to be redeemed pursuant hereto:
Regular Interest Payments: all interest payments on the Bonds, other than Special Interest
Payments;
Regulatory Agreement: the Regulatory Agreement dated as of March 1, 1997, by and
between the Trustee, the Issuer and the Company, as the same may be amended from time to
time;
Related Documents: the Loan Agreement and the Regulatory Agreement:
Related Person: with reference to any Substantial user, means a "related person" within
the meaning of Section 147(a)(2) of the Code:
Remarketine Agent: Piper Jaffrav Inc. or any successor Remarketing Agent appointed
and serving in such capacity pursuant to this Indenture.
Remarketing Agreement: the Remarketing .-Agreement, dated as of March 1. 1997.
between the Company. the Remarketiiau agent. and the Trustee. as the same may be amended
from time to time. and if a successor Remarketing Agent is appointed in accordance with the
Indenture. "Remarketing Agreement" shall mean such other similar agreement between the
Company. the Trustee and such successor Remarketing agent:
Replacement Bonds: Bonds which are not Depository Bonds and which are delivered to
replace Depository Bonds pursuant to Section 2.14 hereof:
Reoresentative: the City Manager of the Issuer or a general partner of the Company. or
any other person at any time designated to act on behalf of the Issuer or the Company, as the case
may be. as evidenced by a written certificate furnished to the other party and the Trustee
containing the specimen signature of such person and signed for the Issuer by its City Manager or
for the Company by a general partner of the Company:
Resale Proceeds: all proceeds from the remarketing of the Bonds pursuant to Section
4.03 hereof:
Responsible Aaent: any Person duly authorized and designated by the Trustee to act on
its behalf in carrying out the applicable duties and powers of the Trustee as set forth in this
Indenture any action required by the Trustee under this Indenture may be taken by a Responsible
Agent):
Restricted Construction Funds: any Bond proceeds, including interest thereon, which are
required to be transferred on the Completion Date from the Project Fund to the Bond Fund and
which the Trustee is required under Section 6.03(b) to apply towards the prepayment or pro rata
payment of Bonds:
D• NEw700'001' DOCS' INDENTI: R DOC I I MDENTURE OF TRUST
Special Interest Payments: all payments of (or with respect to) interest on the Bonds
made upon the acceleration of the Bonds pursuant to Section 10.02;
Special Record Date: the date fixed by the Trustee pursuant to Section 2.02 hereof
relating to the payment of any Defaulted Interest;
Standard & Poor's Ratines Group: Standard & Poor's Ratings Group, a corporation
oreanized and existing under the laws of the State of New York, its successors and their assigns.
and if such corporation shall be dissolved or liquidated or shall no longer perform the functions
of a municipal securities rating agency 'Standard & Poor's Ratings Group shall be deemed to
refer to any other nationally recognized municipal securities rating agency designated by the
Issuer (other than Moody's);
Stated Maturitv: when used with respect to any Bond or any installment of interest
thereon shall mean the date specified in such Bond as the fixed date on which principal of such
Bond or such installment of interest is due and payable.
Substantial User: a "Substantial User' within the meaning of Section 147(a)(1) of the
Code;
Tender Price: the principal and accrued interest due on the Bonds on any Mandaton
Tender Date:
Trust Estate: the Trust Estate as defined and set forth in the Granting Clauses hereof;
Trustee: Norwest Bank Minnesota. National Association in Minneapolis. Minnesota.
and any co -trustee or successor trustee appointed, qualified and then acting as such under the
provisions of this Indenture:
Underwriter: Piper Jaffray Inc.:
Unoaid Bonds: all Outstanding Bonds and any other Bonds which have neither matured
nor been redeemed or purchased and canceled under this Indenture:
Untendered Bond: shall have the meaning set forth in Section 4.07 hereof,
Variable Rate: the variable interest rate established in accordance with Section 2.03
hereof.
Variable Rate Interest Pavment Date: shall mean the first Business Day of May, 1997,
and the first Business Day of each month thereafter through the Conversion Date;
Variable Rate Period: the period during which the Bonds bear interest at a Variable Rate;
Section 1.02. Rules of Interoretation.
(a) This Indenture shall be interpreted in accordance with and governed by the laws of
the State of Minnesota.
O �NF.w,nn'n0lDOCS' I] DE�'P: R DOC 1 2 INDENT1RtE OF TRUST
(b) The words "herein" and "hereof' and "hereunder" and words of similar import.
without reference to any particular section or subdivision, refer to this Indenture as a whole rather
than to any particular section or subdivision of this Indenture.
(c) References in this Indenture to any particular article, section or subdivision hereof
are to the designated article, section or subdivision of this Indenture as originally executed.
(d) All accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles; and all computations provided
for herein shall be made in accordance with generally accepted accounting principles consistently
applied and applied on the same basis as in prior years.
(e) The Table of Contents and titles of articles and sections herein are for
convenience only and are not a part of this Indenture.
(f) Unless the context hereof clearly requires otherwise, the singular shall include the
plural and vice versa and the masculine shall include the feminine and vice versa.
(g) Articles. sections, subsections and clauses mentioned by number only are those so
numbered which are contained in this Indenture.
(h) For purposes of this Indenture and the Loan Agreement, an Act of Bankruptcy
shall be deemed no longer pending if either (a) the petition is dismissed by order of a court of
competent jurisdiction and no further appeal rights exist from such order or (b) the Company
notifies the Trustee that such a dismissal has occurred.
(i) Any opinion of counsel called for herein shall be a written opinion of such
counsel.
0) References to the Bonds as "tax-exempt" or to the "tax-exempt status of the
Bonds" are to the exclusion of interest from gross income pursuant to Section 103(a) of the Code.
irrespective of such forms of taxation as the altemative minimum tax or environmental tax or
branch profits tax on foreign corporations. as is consistent with the approach taken in Section
X96) of the Code.
D NEW200' W UDOCSINDENTUR DOC 13 MDENTURE OF TRUST
ARTICLE 2
The Bonds
Section 2.01. Authorized Amount and Form of Bonds.
Bonds secured by this Indenture shall be issued in fully registered form. without coupons.
in any Authorized Denominations, in substantially the form set forth herein with such appropriate
variations, omissions and insertions as are permitted or required by this Indenture, and in
accordance with the further provisions of this Article II. The total principal amount of the Bonds
that may be outstanding hereunder is expressly limited to $1,650,000, unless duplicate Bonds are
issued as provided in Section 2.09. Portions of the text of the Bonds may be printed on the back
of the Bonds to permit the printing of Bonds of a size which can be registered by machine. If a
portion of the text of the Bond is to be printed on the back of the Bond, the face of the Bond shall
contain a provision in substantially the following form:
"REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND WHICH ARE SET FORTH ON THE REVERSE HEREOF. AND SUCH PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE."
Additionally, at the request of the Trustee the following notation may appear at an
appropriate location on the Bonds to facilitate registration of the Bonds:
"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:
TEN COM - as tenants in common
TEN ENT - as tenants by entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common
UTMA - as custodian for under the
(cust) (minor)
Uniform Transfers to Minors Act.
(state)
Additional abbreviations may also be used though not in the above list."
The Bonds prior to the Conversion Date, together with the Trustee's Certificate of
Authentication, the form of Assignment and the registration information thereon. shall be in
substantially the following form:
THIS BOND IS REQUIRED TO BE TENDERED FOR PURCHASE ON A
MANDATORY TENDER DATE UPON TERMS .-kIND CONDITIONS HEREIN DESCRIBED
AT A PRICE EQUAL TO 100% OF THE PRINCIPAL AMOUNT HEREOF PLUS ACCRUED
INTEREST HEREON. FROM AND AFTER A MANDATORY TENDER DATE INTEREST
SHALL CEASE TO ACCRUE ON THIS BOND. THIS BOND SHALL NO LONGER BE
DEEMED OUTSTANDING, AND THE HOLDER OF THIS BOND SHALL THEREAFTER
D' NE W:00'00VDOCS'lNDENTUR.DOC 14 INDENTURE OF TRUST
LOOK ONLY TO FUNDS HELD IN THE BOND PURCHASE FUND (WHICH IS NOT PART
OF THE TRUST ESTATE) FOR PAYMENT OF THE PURCHASE PRICE OF THIS BOND.
No. R -
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF NEW HOPE, MINNESOTA
MULTIFAMILY HOUSING REVENUE BONDS
(PARK ACRES APARTMENTS PROJECT)
SERIES.1997
S
Interest Maturity Date of CUSIP
Rate Date Original Issue
Variable March 1, 2032 March , 1997
REGISTERED HOLDER:
PRINCIPAL AMOUNT:
(1) KNOW ALL PERSONS BY THESE PRESENTS that the City of New Hope, in
the County of Hennepin and State of Minnesota (the "Issuer"), for value received. promises to
pay to the registered holder named above. or registered assigns, but only from the Bond Fund (as
defined in the Indenture described below), and upon presentation and surrender hereof at the
principal corporate trust office of the Trustee named below, the principal sum specified above. on
the maturity date specified above, or. if this Bond is prepayable as stated below, or a prior date on
which it shall have been duly called for redemption, and to pay interest on said principal sum to
the Record Date Holder hereof as defined below, solely from the Bond Fund, until the principal
sum is paid or discharged. at the rates and on the dates provided herein, on the basis of a
365r366-dav year and charged for the actual number of days elapsed.
This Bond shall bear interest from the date of original issue set forth above, or in the case
of transfer or exchange. from the most recent Interest Payment Date (hereinafter defined) to
which interest has been paid or provided for. The "Record Date Holder" is the person in whose
name this Bond is registered in the Bond Register maintained by the Trustee named below or its
successor in trust (the "Registered Holder" or "Holder" hereof) on the fifteenth day of the
calendar month next preceding an Interest Payment Date, whether or not such day is a Business
Day. Interest shall be payable by check or draft mailed to the Registered Holder at his or her
address as it appears on the Bond Register on the Record Date, except as otherwise provided in
the Indenture.
The principal of and interest and premium, if any, on this Bond are payable in lawful
money of the United States of America. Upon notice to the Trustee accompanied by proper wire
7NDENTUR.DOC 15 INDENTURE OF TRUST
instructions, any Holder of Bonds in an aggregate principal amount equal to or greater than
$1,000,000 may elect to be paid the interest on such Bonds payable on any Interest Payment Date
by Federal Reserve wire transfer in immediately available funds to any bank in the united States
specified by such Holder.
Interest not timely paid or duly provided for will be paid by check mailed to the person in
whose name this Bond is registered on the Bond Register at the close of business on a date (the
"Special Record Date") fixed by the Trustee, notice of which is to be mailed to all Bondholders.
(2) This Bond is one of an issue in the aggregate principal amount of $1,650,000 (the
"Bonds"), all of like nominal date of original issue and tenor, except as to number and amount,
issued in accordance with an Indenture of Trust, dated as of March 1, 1997 (the "Indenture"),
duly executed and delivered by the issuer to Norwest Bank Minnesota, National Association in
Minneapolis, Minnesota (the "Trustee"), setting forth the terms upon which the Bonds are issued.
The Bonds are equally and ratably secured and entitled to the protection of the Indenture. The
Bonds are issued for the purpose of financing a rental project within the meaning of Minnesota
Statutes, Chapter 462C (the 'Project") owned by Reprise Associates Limited Partnership, a
Minnesota limited partnership (the "Company"). The Company has agreed under a Loan
Agreement dated as of March 1, 1997, between the Issuer and the Company (the "Loan
Agreement") to repay all amounts necessary to repay the Bonds. together with interest thereon, in
amounts and at times sufficient to pay the principal of, premium. if any, and interest on the
Bonds as the same shall become due and payable (the 'Basic Payments"). The Company, the
Issuer and the Trustee have entered into a Regulatory Agreement dated March 1, 1997 with
respect to each Project (collectively, the 'Regulatory Agreement') requiring compliance with
certain requirements of federal and state law relating to the construction and operation of the
Project as a residential rental housing project. Pursuant to the Indenture, the Issuer has assigned
and pledged to the Trustee, for the equal and ratable benefit of the Holders of the Bonds, the
Basic Payments due under the Loan Agreement.
(3) Reference is hereby made to the Loan Agreement, Regulatory Agreement, and
Indenture, including all indentures supplemental thereto, for a description of the property
encumbered and assigned. the provisions, among others. with respect to the nature and extent of
the securirv, the rights of the Issuer, and the rights. duties and obligations of the Company, the
Trustee and the Holders of the Bonds and the terms upon which the Bonds are issued and
secured.
(4) The term 'Business Day" shall mean any day on which the Trustee, the
Investment Agreement Provider or the Federal Reserve Bank of New York are not authorized by
law to close. If the date for making any payment or the last date for performance of any act or the
exercising of any right, as provided in this Bond, is not a Business Day, such payment may be
made or act performed or right exercised on the next succeeding Business Day.
(5) Prior to the Conversion Date, interest on the Bonds shall be payable on the first
Business Day of May 1997, and on the first Business Day of each month thereafter (each a
"Variable Rate Interest Pavment Date"). Interest on the Bonds shall be payable on the
Conversion Date. After the Conversion Date, interest on the Bonds shall be payable on the first
day of each March and September following the Conversion Date, until payment in full of this
O WE W 2001001'DOCS'.INDENTLRt DOC 16 MDENTURE OF TRUST
Bond and on the date of payment in full of this Bond (each a "Fixed Rate Interest Payment
Date").
(6) Prior to the Conversion Date. this Bond shall bear interest at the Variable Rate as
defined in the Indenture (the "Variable Rate"). On and after the Conversion Date. this Bond shall
bear interest at the Fixed Rate, as defined in the Indenture. The interest rate on this Bond shall be
converted from the Variable Rate to the Fixed Rate. on a one-time basis at the option of the
Company upon the conditions set forth in the Indenture. In such case, the Fixed Rate shall be the
interest rate computed in accordance with the Indenture and announced by the Remarketing
Agent, effective on and after the Conversion Date.
(7) Subject to the provisions of (b) and (c) below, the Holder hereof shall be required
to tender this Bond to the Trustee on or before 12:00 noon. Minneapolis time on the Business
Day prior to the Mandatory Tender Date, for purchase on the Mandatory Tender Date at a
purchase price equal to the principal amount hereof plus accrued interest thereon, all as more
fully provided herein and in the Indenture.
(a) Notice of a Mandatory Tender Date (a "Mandatory Tender Notice") shall
be given by the Trustee. by certified mail, return receipt requested, to the Holder of this
Bond at its address appearing on the re=istration books for the Bonds maintained by the
Trustee, not less than thirty days prior to the Mandatory Tender Date. Such Mandatory
Tender Notice shall specify the. Mandatory Tender Date and state (i) that all Bonds shall
be purchased on the Mandator} Tender Date at a purchase price equal to the principal
amount thereof plus accrued interest thereon. and (ii) that all Bonds must be tendered for
purchase at or before 12:00 noon. 'Minneapolis time on the Business Day prior to the
Mandatory Tender Date, together with an appropriate instrument of transfer executed in
blank and any such Bond which is not tendered but for which there has been irrevocably
deposited in the Bond Purchase Fund (as such ter -in is defined in the Indenture) with the
Trustee an amount sufficient to pay the purchase price thereof (an "Untendered Bond")
shall not be entitled to receive interest on such Bond on and after the Mandatory Tender
Date.
(b) This Bond shall be tendered to the Trustee for purchase at or before 12:00
noon. Minneapolis time on the Business Day prior to the Mandatory Tender Date. by
delivering this Bond to the Trustee together with an appropriate instrument of transfer
duly executed in blank. and on the Mandatory Tender Date, the Trustee shall purchase
this Bond or cause this Bond to be purchased at a purchase price equal to the principal
amount hereof.
(c) If this Bond is not tendered on or before the Mandatory Tender Date, then
the Holder hereof shall not be entitled to receive interest on this Bond for any period
beginning on or after the Mandatory Tender Date, and upon surrender of this Bond to the
Trustee, the Holder of this Bond shall be paid only an amount equal to the purchase price
of this Bond due on the Mandatory Tender Date and interest through the Mandatory
Tender Date.
D'NEW200`001DOCSINDENTUR DOC 17 INDENTURE OF TRUST
(8) The Bonds are subject to redemption prior to maturity as provided in the Indenture
as follows:
(a) Optional Redemption On or Prior to the Conversion Date. Prior to the
Conversion Date, the Bonds are subject to redemption in whole on any date on or after
September 1, 1997 at the option of the Company, at a redemption price equal to the
principal amount of the Bonds to be redeemed plus accrued interest thereon.
(b) Mandatory Sinking Fund Redemption Prior to Conversion Date. The
Bonds maturing on March 1, 2032 (the "Term Bonds") are subject to mandatory
redemption by lot in the principal increments of $6,000, at par and accrued interest
without premium. on March 1 of the vears and in the principal amounts set forth below
(unless and to the extent a credit against any such amount is applied as provided in the
Indenture):
Year
Amount
Year
Amount
2002
S 15.000
2018
S 45.000
2003
15.000
2019
45.000
2004
15.000
2020
50.000
2005
15.000
2021
66.000
2006
20.000
2022
66.000
2007
20.000
2023
60.000
2008
20.000
2024
65.000
2009
20.000
2025
70.000
2010
2:.000
2026
75.000
2011
26.000
2027
85.000
2012
30.000
2028
90.000
2013
30.000
2029
96.000
2014
30.000
2030
100.000
2015
3:.000
2031
110.000
2016
3:.000
2032
-160.000
2017
-10.000
(c) Optional and \Iandaton Redemption From and After Conversion Date.
From and after the Conversion Date. the Bonds shall be subject to optional and
mandatory sinking fund redemptions on the dates and at the prices determined by the
Remarketing .agent as provided in the Indenture.
(d) Calamity Redemption. After the Conversion Date, in the event of (i)
damage to or destruction of the Project or any part thereof or Condemnation of the Project
or any part thereof to the extent provided in Section 8.04 of the Agreement, or in the
event of any changes in the Constitution or laws of the United States of America or the
State of Minnesota as provided in Section 8.04 of the Loan Agreement and (ii)
termination of the Loan Agreement upon the occurrence of one of those events, all Bonds
shall be redeemed by the Issuer on the earliest date for which timely notice of call can be
DL NEWN0'001'DOCSMDENTUR DOC 18 INDENTURE OF TRUST
given, at a redemption price equal to the principal amount to be redeemed, without any
premium, plus accrued interest to the redemption date.
(e) Tax Redemption. This Bond is subject to mandatory redemption in whole
on the first day of the first calendar month for which notice of redemption can properly be
given as provided herein upon the occurrence of a Determination of Taxability as such
term is defined in the Indenture) at a redemption price equal to one hundred percent
(100%) of the principal amount of this Bond plus accrued interest thereon to the
redemption date.
(f) Special Mandatory Redemption for Failure to Convert to a Fixed Rate or
Upon Failure to Remarket.
(i) The Bonds shall be subject to special mandatory redemption on
March 1, 1998, if the Company has failed to deliver to the Trustee and
Remarketing Agent on or before February 8, 1998, either (A) a written request
that the interest rate on the Bonds be converted from the Variable Rate to the
Fixed Rate, accompanied by other items required by Section 2.13 of the Indenture.
or (B) an opinion of Bond Counsel to the effect that an extension of the
Conversion Date will not adversely affect the tax exempt status of the Bonds: and
the written consent of all Bondholders to the extension of the Conversion Date. In
the event the Conversiort Date is extended, the Bonds shall be subject to special
mandatory redemption on the extended Conversion Date, which will be no later
than March 1. 3000, if the Company fails to deliver to the Trustee on or before 20
days prior to the extended Conversion Date the written request that the interest
rate on the Bonds be converted from the Variable Rate to the Fixed Rate
accompanied by the other items required by Section 2.13 of the Indenture. If the
Company fails to deliver a Credit Facility (as defined in the Loan Agreement) to
the Trustee on or prior to the Conversion Date, the Bonds shall be subject to
special mandatory redemption on the Conversion Date.
(ii) The Bonds shall be subject to mandatory redemption on the
Mandatory Tender Date if the Resale Proceeds and other hinds provided by the
Company are insufficient to purchase any Bonds properly tendered on the
Mandator, Tender Date.
(9) In the case of anv partial redemption of the Bonds of the same maturity, the
particular Bonds to be redeemed shall be selected by the Trustee in such manner as the Trustee
shall deem fair and equitable and the Bonds shall be redeemed in the principal amounts specified
in the Indenture. Anv Bond which is to be redeemed only in part shall be surrendered to the
Trustee (i) for payment of the Redemption Price (including accrued interest thereon to the
Redemption Date) of the portion thereof called for redemption and (ii) for exchange for Bonds in
any authorized denomination or denominations in aggregate principal amount equal to the
unredeemed portion of such Bond.
(10) Notice of redemption shall be mailed at least fifteen (15) days but not more than
forty (40) days prior to the date fixed for redemption to each Registered Holder of a Bond to be
0 WEW200'00 VDOCS%INDENTUR.DOC 19 INDENTURE OF TRUST
redeemed. All Bonds so called for redemption, provided funds for their redemption have been
duly deposited, will cease to bear interest on the specified redemption date and (except for the
purpose of payment) shall no longer be protected by the Indenture and shall not be deemed
Outstanding under the Indenture, and shall thereafter be payable solely from the funds provided
for payment.
(11) In addition to the foregoing, if under certain circumstances an Event of Default, as
defined in the Indenture, shall occur, the principal of all the Bonds and all interest accrued
thereon may, without prior notice to the Bondholders, be declared due and payable in the manner
and with the effect provided in the Loan Agreement and Indenture.
(12) This Bond and the series of which it forms a part are issued pursuant to and in full
compliance with the Constitution and laws of the State of Minnesota. particularly Minnesota
Statutes, Chapter 462C, and pursuant to a resolution adopted and approved by the Issuer. which
resolution authorized the financing of the Project and the execution and delivery of the Indenture,
and the issuance of the Bonds as special, limited obligations payable solely from revenues
derived from the Loan Agreement except that under certain circumstances the Bonds may be
payable from Bond proceeds. The loan repayments under the Loan Agreement are scheduled to
be sufficient to pay the principal of, premium, if any, and interest on the Bonds as the same
become due and payable and are to be paid to the Trustee for the account of the Issuer and
credited to the Bond Fund as a special trust fund account created by the Issuer and have been and
are hereby pledged for that purpose.
(13) The Bonds. including principal, premium and any other payments however
designated, and the interest due thereon do not and shall never constitute a general indebtedness
of the Issuer within the meaning of anv state constitutional or statutory provision and do not and
shall not constitute orgive rise to a pecuniary liability or moral obligation of the Issuer. the State
of Minnesota or any of its political subdivisions, or a charge against its general credit or taxing
powers. or to the extent permitted by law, any pecuniary liability of any officer. employee or
agent of the Issuer. The provisions of this paragraph are controlling notwithstanding anything
herein to the contrary.
(14) The Registered Holder of this Bond shall have no right to enforce the provisions
of the Indenture or to institute action to enforce the covenants therein, or to take any action with
respect to any Event of Default under the Indenture. or to institute, appear in or defend any suit or
other proceedings with respect thereto, except as provided in the Indenture. Modifications or
alterations of the Indenture, or of any indenture supplemental thereto, may be made only to the
extent and in the circumstances permitted by the Indenture.
(15) With the consent of the Issuer, the Company and the Trustee, as appropriate, and
to the extent permitted by and as provided in the Indenture, the terms and provisions of the
Indenture, the Loan Agreement and the Letter of Credit, or of any instrument supplemental
thereto, may be modified or altered by the consent of the Registered Holders of at least 51% in
aggregate principal amount of the Bonds then Outstanding thereunder.
(16) The Indenture also contains provisions permitting Holders of a majority in
aggregate principal amount of the Bonds at the time Outstanding, on behalf of all the Holders of
D `NE W'_M001' DOCS' INDENTIR DOC 20 INDENTURE OF TRUST
all the Bonds, to waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such consent or waiver by
the Registered Holder of this Bond shall be conclusive and binding upon such Registered Holder
and on an future Registered Holders of this Bond and of any Bond issued in lieu hereof whether
or not notation of such consent or waiver is made upon this Bond.
(17) The Bonds are issued as fully registered Bonds without coupons in the Authorized
Denomination. The Bonds are interchangeable for one or more Bonds in Authorized
Denominations and of the same series, aggregate principal amount, interest rate and maturity
date, upon surrender thereof by the Holder at the principal office of the Trustee, in the manner
and subject to the limitations provided in the Indenture. The Issuer, the Trustee and any
additional paying agents may deem and treat the Registered Holder hereof as the absolute owner
hereof (whether or not this Bond shall be overdue) for the purpose of receiving payment of or on
account of principal hereof and interest (except as otherwise herein above provided with respect
to the Record Date) due hereon and for all other purposes, and the Issuer, the Trustee and any
additional paying agents shall not be affected by any notice to the contrary.
(18) Subject to the limitations provided in the Indenture, this Bond is only transferable
by the Registered Holder hereof upon surrender of this Bond for transfer at the principal
corporate trust office of the Trustee, duly endorsed or accompanied by a written instrument or
instruments of transfer in the form printed on this Bond or in another form satisfactory to the
Trustee and executed and with guaranty of signature by the Registered Holder hereof or his
attomey duly authorized in writing, containing written instructions as to the details of the transfer
of the Bond. Thereupon the Issuer shall execute (if necessary) and the Trustee shall authenticate
and deliver. in exchange for this Bond, one or more new Bonds in the name of the transferee (but
not registered in blank or to "bearer" or a similar designation), of an authorized denomination. in
aggregate principal amount equal to the principal amount of this Bond, and the same maturity,
and bearing interest at the same rate.
(19) No service charge shall be made to the Registered Holder for any registration.
transfer or exchange hereinbefore referred to, but the Trustee may require payment of a sum
sufficient to cover anv tax. fee or other governmental charge that may be imposed in connection
with anv transfer or exchange of Bonds. other than exchanges expressly provided in the Indenture
to be made without charge. to Bondholders.
(=0) IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required to exist. to happen and to be performed precedent to and in the
execution and delivery of the Indenture and the issuance of this Bond to exist, have happened and
have been performed in due time, form and manner, as required by law, and that the issuance of
this Bond and the series of which it forms a part, together with all other obligations of the Issuer,
does not exceed or violate any constitutional or statutory limitation.
(21) This Bond shall not be valid or become obligatory for any purpose or be entitled
to anv security or benefit under the Indenture unless the Certificate of Authentication hereon
shall have been executed by the Trustee.
D`NFW! OOI'DOCS IVDFN'TI'R DOC 21 INDENTURE OF TRUST
(22) IN WITNESS WHEREOF, the City of New Hope, Minnesota, by its governing
body, has caused this Bond to be executed in its name by the facsimile signatures of its Mayor
and its City Manager and by the manual signature of a Responsible Agent of the Trustee acting as
authenticating agent.
CITY OF NEW HOPE, MINNESOTA
Mayor
City Manager
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture.
Date of Registration:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION. Trustee
M
Responsible Agent
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and does herebv irrevocably
constitute and appoint attomey to transfer the Bond on the books kept for
the registration thereof, with Full power of substitution in the premises.
Dated:
Notice: The assignor's signature to this assignment must correspond with the name as it
appears upon the face of the within Bond in every particular, without alteration or
any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a member of a Medallion Signature Program.
The Trustee will not effect transfer of this Bond unless the information concerning the
transferee requested below is provided.
DNEw7W100 PDOCTWDENTUR DOC 17 fNDENTURE OF TRUST
Name and Address:
(Include information for all joint owners if the Bond
is held by joint account)
Insert social security or other identifying number of Transferee
After the Conversion Date, the form of the Bonds shall be modified so as to accurately reflect the
terms of the Bonds as they then exist.
shall:
Section 2.02. Initial Issue.
The bonds shall be initially issued in the aggregate principal amount of $1.650.000 and
(a) be dated as of their date of original issuance. or the date of their
registration as provided in Section 2.10:
(b) be issued and delivered to the Original Purchaser as fully registered bonds
without coupons in any authorized Denomination and be numbered R-1 upward:
(c) subject to the provisions of Section' 05 hereof, mature on March I. 2032.
and bear interest from Bond Closing, (i) until the Conversion Date, at the Variable Rate
provided in Section 2.03 computed on the basis of actual days elapsed in a 36 -5/366 -day
year: (ii) from and after the Conversion Date until the Final Maturity Date. at the Fixed
Rate provided in Section '_.13 hereof computed on the basis of a 360 -day year composed
of twelve 30 -day months:
(.d) prior to the Conversion Date. interest on the Bonds shall be payable on the
first Business Day of May. 199,. and on the first business Day of each month thereafter
(each a "Variable Rate Interest Pa«ttent Date"). Interest on the Bonds shall also be
payable on the Conversion Date. After the Conversion Date. interest on the Bonds shall
be payable on each March 1 and September I until payment in full of this Bond and on
the date of payment in full of this Bond leach a "Fixed Rate Interest Payment Date"):
(e) subject to the provisions of Section 2.13 hereof, be subject to redemption
upon the terms and conditions and at the prices specified in .-knicle III hereof.
(f) be payable in such coin or currency of the united States of America as at
the time of payment is legal tender for payment of public and private debts, at the
principal trust office of the Trustee acting as the paying Agent, or a duly appointed
successor Paving Agent, except that interest on the Bonds will be payable by check or
draft mailed by the Trustee to the Holders of such Bonds on the applicable Record Date
(the "Record Date Holders" as defined in the Bond) at the last addresses thereof as shown
D' NEW200'001 `DOCS` INDENTUR.DOC 23 INDENTURE OF TRUST
in the premium on any Bonds shall be payable at the principal office of the Trustee;
provided that any interest on any Bond which is payable but which is not punctually paid
or duly provided ("Defaulted Interest") shall be payable, on a date selected by the Trustee,
to the Person in whose name such Bond is registered in the Bond Register at the close of
business on a Special Record Date selected by the Trustee and which shall be at least ten
days but not more than 30 days before the date selected by the Trustee and which shall be
at least ten days but not more than 30 days before the date selected by the Trustee for
payment of such Defaulted Interest. The Trustee shall give Notice by Mail of the Special
Record Date and date for payment of Defaulted Interest at least ten days before the
Special Record Date; and
(g) be subject to Mandatory Tender as provided in Section 2.13 hereof. and be
subject to redemption upon the terms and conditions and at the prices specified in Article
III hereof.
Notwithstanding the foregoing, if the date for payment of the principal of, premium, if
any, or interest on any Bond shall be a day which is not a Business Day, then the date for such
pavment shall be the next succeeding day which is a Business Day, and payment on such later
date shall have the same force and effect as if made on the nominal date of payment.
Notwithstanding the foregoing any Record Holder of at least $1.000.000 in principal
amount of the Outstanding Bonds may file with the Trustee an instrument satisfactory to the
Trustee requesting the interest payable by the Trustee to such Holder be paid by transferring by
wire transfer in immediately available funds. on the day such payment is due, the amount to be
distributed to such Holder to a designated account maintained by such Holder at any bank in the
United States. The Trustee shall pay all amounts payable by the Trustee hereunder to such
Holder by transfer directly to said designated bank in accordance with the provisions of any such
instrument. provided that if such amount represents a payment of the principal of any Bond. such
Bond shall have been presented to the Trustee. All payments so made shall be valid and effectual
to satisfy and discharge the liabilin upon such Bonds.
Section 2.03. Variable Rate.
Prior to the Conversion Date. the Bonds shall bear interest at the Variable Rate, which
shall be a rate equal to fifty-nine percent (5940) of the Prime Rate. The interest rate on the Bonds
shall change effective as of the effective date of any change in the Prime Rate.
Section 2.04. Execution.
The Bonds shall be executed on behalf of the Issuer by the signature of its Mavor and
Citv Manager and be sealed with the seal of the Issuer; provided, however, that the seal of the
Issuer may a printed facsimile or may be omitted; provided further that an of such signatures
may be printed or photocopied facsimiles, in which event the Bonds shall also be executed
manually by the Trustee as authenticating agent as provided in Section 2.05 and Minnesota
Statutes, Section 475.55. In the event of disability or resignation or other absence of either such
officer, the Bonds may be signed by the manual or facsimile signature behalf of such absent or
disabled officer. In case of that officer who may act in behalf of such absent or disabled officer.
D9NEW?00N001'DOCFINDENTUR DOC 24 INDENTURE OF TRUST
In case either such officer whose signature or facsimile of whose signature shall appear on the
Bonds shall cease to be such officer before the delivery of the Bonds, such signature or facsimile
shall nevertheless be valid and sufficient for all purposes, the same as if he had remained in
office until delivery. The Bonds may be issued and delivered as typewritten bonds or as printed
bonds, provided that if the typewritten bonds are delivered, the facsimile signatures of the Issuer
may be confirmed signatures.
Section 2.05. Authentication.
No Bond shall be valid or obligatory for any purpose or be entitled to any security or
benefit under this Indenture unless a Certificate of Authentication on such Bond, substantially in
the form hereinabove set forth, shall have been duly executed manually by a Responsible Agent.
Certificates of Authentication on different Bonds need not be signed by the same person. The
Trustee shall authenticate the signatures of officers of the Issuer on each Bond by execution of
the Certificate of Authentication on the Bond; and the executed Certificate of Authentication on
each Bond shall be conclusive evidence that it has been authenticated and delivered under this
Indenture.
Section 2.06. Delivery of Initial Issue.
Upon the execution and delivery of this Indenture the Issuer shall execute and deliver to
the Trustee. and the Trustee shall authenticate, the Bonds in the aggregate amount of $1.650.000
and the Trustee shall deliver the Bonds to the Original Purchaser as hereinafter provided after
filing with the Trustee the following:
(a) original executed counterparts of the Loan Agreement. Regulatory
Agreement. Remarketing Agreement, and this Indenture;
(b) a copy. duly certified by the Issuer's Secretary of the resolutions adopted
and approved by the governing body of the Issuer. authorizing the execution and delivery
of this Indenture and the Loan Agreement and the issuance of the Bonds:
(c) a request and authorization ( which may be part of a certificate of the
Issuer) to the Trustee on behalf of the Issuer. signed by its Mayor and City Manager to
deliver the Bonds to the Original Purchaser therein identified upon payment to the
Trustee for the account of the Issuer of a specified sum plus accrued interest;
(d) the opinion of the Company's attorney in the form required by Bond
Counsel:
(e) the opinion of Bond Counsel approving the legality of the Bonds issued
pursuant to this Indenture;
(1) any other documents or opinions as Bond Counsel may require for
purposes of rendering its opinion required under subsection (e) of this section.
D'sEW!00.001DOCS' INDENTUR.DOC 25 INDENTURE OF TRUST
Section 2.07. Mutilated. Lost. Stolen. Destroyed or Untendered Bonds.
(a) In case any Bond issued hereunder shall become mutilated or be destroyed or lost.
the Issuer shall, if not then prohibited by law, cause to be executed. and the Trustee shall
authenticate and deliver, a new Bond of like series. amount, maturity date and tenor in exchange
and substitution for and upon cancellation of any such mutilated Bond, or in lieu of and in
substitution for any such Bond destroyed or lost, upon the Holder's paying the reasonable
expenses and charges of the Trustee and Issuer and. in the case of a Bond destroyed or lost. the
filing with the Trustee evidence satisfactory to the Trustee that such Bond was destroyed or lost.
and of the ownership thereof, and furnishing the Issuer and the Trustee with indemnity
satisfactory to them. If the mutilated, destroyed or lost Bond has already matured or been called
for redemption in accordance with its terms. it shall not be necessary to issue a new Bond prior to
pavment.
(b) In addition, the Issuer may execute and the Trustee may authenticate and deliver
Bonds of the same Stated Maturity, principal amount and tenor in lieu of and in substitution for
an Untendered Bond.
(c) In executing a new Bond and in furnishing the Trustee with the written
authorization to authenticate and deliver a new Bond as provided for in this Section, the Issuer
may rely conclusively on a representation of the Trustee that the Trustee is satisfied with the
adequacy of the evidence presented concerning the mutilation. loss. theft or destruction of any
Bond.
Section 2.08. Ownership of Bonds.
The Issuer, Trustee and Paving Agent may deem and treat the Holder of any Bond.
whether or not such Bond shall be overdue. as the absolute owner of such Bond for the purpose
of receiving payment thereof and for all other purposes whatsoever, and the Issuer (or any agent
thereof). Trustee and Paying Agent shall not be affected by any notice to the contrary.
Section 2.09. Prenaration of Definitive Bonds: Temnorary Bonds.
The definitive Bonds shall be lithographed or printed on steel engraved borders. Until the
definitive Bonds are prepared. the Issuer may execute. in the same manner as is provided in
Section 2.04 (except that manual signatures and a manual seal may be used), and deliver. in lieu
of definitive Bonds. but subject to the same provisions. limitations and conditions as the
definitive Bonds, except as to the denominations thereof. one or more temporary Bonds (which
shall be registered as to principal and interest), substantially of the tenor of the definitive bonds.
in anv Authorized Denomination. and with such omissions. insertions and variations as may be
appropriate to temporary Bonds. The Issuer shall prepare and execute and, upon the surrender of
such temporary Bonds for exchange therefor. at the principal corporate trust office of the Trustee.
definitive Bonds of the same aggregate principal amount as the temporary Bonds surrendered.
Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and
security as definitive bonds issued pursuant to this Indenture. All temporary Bonds surrendered
in exchange for a definitive bond or Bonds shall be forthwith canceled by the Trustee.
D INEW'_00\00]'DOCS'.INDENTUR.DOC 26 INDENTURE OF TRUST
Section 2.10. Registration. Transfer and Exchange of Bonds.
(a) The Issuer will cause to be kept at the principal corporate trust office of the
Trustee a Bond Register in which, subject to such reasonable regulations as the Trustee may
prescribe, the Issuer shall provide for the registration of Bonds and the registration of transfers of
Bonds; and the Trustee is hereby appointed "Bond Registrar" for the purpose of registering the
Bonds and transfers of the Bonds as herein provided. The Bond Register shall contain a record
of every Bond at any time authenticated hereunder, together with the name and address of the
Holder thereof, the date of authentication, the date of transfer or payment, and such other matters
as are appropriate for the Bond Register in the estimation of the Trustee.
(b) Upon surrender for transfer of any Bond at the principal corporate trust office of
the Trustee. the Issuer shall execute (if necessary), and the Trustee shall authenticate and deliver.
in the name of the designated transferee or transferees (but not registered in blank or to "bearer"
or a similar designation), one or more new Bonds of any Authorized Denomination, having the
same Stated Maturity and interest rate, as requested by the transferor; provided that until
termination of the book -entry only system pursuant to Section 2.14 hereof, the Bonds may only
be registered in the name of DTC or its nominee. The execution by the Issuer of any Bond of any
denomination shall constitute full and due authorization of such denomination and the Trustee
shall thereby be authorized to authenticate and deliver such Bond.
(c) At the option of the Holder. Bonds may be exchanged for other Bonds of the same
series of any Authorized Denomination' of a like aggregate principal amount and Stated Maturity.
upon surrender of the Bonds to be exchanged at the principal corporate trust office of the Trustee.
and upon payment. if the Issuer shall so require. of the tares, if any. hereinafter referred to.
Whenever any Bonds are so surrendered for exchange, the Issuer shall execute, and the Trustee
shall authenticate and deliver, the Bonds which the Holder making the exchange is entitled to
receive.
(d) All Bonds surrendered upon any exchange or transfer provided for in this
Indenture shall be promptly canceled by the Trustee and thereafter disposed of as directed by the
Issuer.
(e) All Bonds delivered in exchange for or upon transfer of Bonds shall be valid
special obligations of the Issuer evidencing the same debt. and entitled to the same benefits under
this Indenture. as the Bonds surrendered for such exchange or transfer.
(f) Transfer of a Bond may be made on the Issuer's books by the registered owner in
person or by the registered owner's attomev duly authorized in writing. Every Bond presented or
surrendered for transfer or exchange shall (if so required by the Issuer or the Trustee) be duly
endorsed or be accompanied by a written instrument or instruments of transfer, in the form
printed on the Bond or in another form satisfactory to the Trustee, duly executed and with
guaranty of signature of the Holder thereof or his attorney duly authorized in writing and shall
include written instructions as to the details of the transfer of the Bond.
(g) No service charge shall be made to the Holder for any registration. transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any tax, fee or other
D:1NEW200100VDOCS.INDENTUR.DOC 27 INDENTURE OF TRUST
governmental charge that may be imposed in connection with any transfer or exchange of Bonds,
other than exchanges expressly provided in this Indenture to be made without expense or without
charge to Bondholders.
(h) Subject to the provisions of subsection (i) below, the Trustee as Bond Registrar
shall endeavor to comply with rules applicable to transfer agents registered with the Securities
and Exchange Commission as to the 72 -hour "turnaround" standard established for the transfer of
registered corporate securities.
(i) The Trustee shall not be required (i) to transfer or exchange any Bond during a
period beginning at the opening of business 10 days before the day of the first publication or the
mailing (if there is no publication) of a notice of redemption of Bonds under this Indenture and
ending at the close of business on the day of such publication or mailing, or (ii) to transfer or
exchange any Bond so selected for redemption in whole or in part.
0) The Bond Registrar shall insert in each Bond the date of registration which, for
purposes of delivering the original Bonds to the original Purchaser, shall be the date of original
issue, and which for all other events shall be the last Interest Payment Date preceding the date of
authentication to which interest on the Bond has been paid or made available for payment, unless
the date of authentication is an interest payment date to which interest has been paid or made
available for payment, in which case the Bond shall be dated as of the date of authentication.
Each Bond shall be so dated that neither gain nor loss in interest shall result from any transfers.
exchange or substitution provided for herein.
Section 2.11. Interest Rights Preserved.
Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall
cam' all the rights to interest accrued and unpaid, and to accrue, which were carried by such
other Bond.
Section 2.12. Cancellation of Bonds.
Whenever anv Outstanding Bond shall be delivered to Trustee for cancellation pursuant
to this Indenture, upon payment of the principal amount and interest represented thereby or for
replacement pursuant to Section 2.07 or transfer pursuant to Section 2.10, such Bond shall be
canceled and, subject to the Trustee's business practices, destroyed by Trustee and counterparts of
a certificate of destruction evidencing such destruction shall be furnished by the Trustee to the
Issuer.
Section 2.13. Fixed Rate.
(a) On and after the Conversion Date and until the Final Maturity Date, the Bonds
shall bear interest at the Fixed Rate. The Company shall have a one-time option to convert the
interest rate on the Bonds from the Variable Rate to the Fixed Rate pursuant to this Section upon
satisfaction of the following conditions: (i) delivery of written notice from the Company to the
Trustee and the Remarketing Agent stating (A) its election under this Section to convert the
interest rate on the bonds to the Fixed Rate, (B) the date on which such conversion shall occur
D"NEW 200N001'DOCS`JNDENTUR DOC 28 INDENTURE OF TRUST
(the "Conversion Date"), which shall be any Business Day occurring on or after September 1,
1997 and no later than March I, 1998, unless extended in accordance witl. provisions of
paragraph (i) below, and not less than 20 days from the date the Company gives such notice, (C)
the date on which the Fixed Rate shall be established. which shall be not less than 20 days prior
to the Conversion Date (the "Computation Date"). and (D) directing the Trustee to give notice of
the Conversion Date, as provided in paragraph (d) below; (ii) delivery to the Trustee and
Remarketing Agent not less than 20 days prior to the Conversion Date, of an opinion of Bond
Counsel, addressed to the Company, the Issuer, the Remarketing Agent and the Trustee, stating
that such conversion to the Fixed Rate is authorized and permitted by this Indenture and will not
impair the tax exempt status of the Bonds: (iii) delivery to the Trustee of a commitment to
provide a Credit Facility from a provider and upon terms acceptable to the Remarketing Agent:
(iv) delivery to the Trustee of an agreement of the Company undertaking to provide the annual
financial statements and material event notices as described in 17 CFR § 240.15c2 -12(b)(5) and
(v) delivery to the Trustee of evidence satisfactory to the Trustee, which may be determined in
reliance on an opinion of Bond Counsel, that a local unit of government or the Minnesota
Housing Finance Agency will participate in the financing of the acquisition and rehabilitation of
the Project (in addition to the issuance by the Issuer of the Bonds). The Company must deliver
the documents referred to above no later than February 8. 1998, unless the Conversion Date is
extended in accordance with the provisions of paragraph (i) hereof. in which event the
February 8, 1998 deadline for the notice shall be extended to a date 20 days prior to the extended
Conversion Date. The Fixed Rate shall be the interest rate or rates on the Bonds established by
the Remarketing Agent on the Computation Date in accordance with the provisions of paragraph
(e) hereof. to be effective on and after the Conversion Date.
(b) On the Computation Date. in accordance with the provisions of clauses (i) and (ii)
below, the Remarketing Agent shall establish the principal payment schedule and the optional
redemption schedule to become effective on the Conversion Date.
(i) The amount of principal due on March I of each year under the proposed
principal payment schedule (whether by serial maturity installments or sinking fund
installments or a combination thereof) will be such that scheduled annual debt service on
the Bonds will be approximately level. The Bonds shall be so dated that neither gain nor
loss in interest shall result from any transfers. exchange or substitution provided for
herein.
(ii) The optional redemption schedule shall be such that the Bonds
Outstanding after the Conversion Date will be subject to redemption on any Interest
Payment Date on or after the tenth year following the Conversion Date, in whole or in
part. at the redemption prices (expressed as percentages of the principal amounts) set
forth in the table below plus accrued interest to the Redemption Date:
D' NEW200`001'DOCS'INDENTUR.DOC 29 rNDENTURE OF TRUST
Redemption Dates
Redemption Price
March 1 or September I of the tenth year following the 102%
Conversion Date
March 1 or September 1 of the eleventh year following the 101 °/o
Conversion Date
March 1 or September 1 of the twelfth year following the 100%
Conversion Date and thereafter
provided that, the Remarketing Agent, with the consent of the Company, may establish any other
optional redemption provisions the Remarketing Agent deems desirable which will permit the
Bonds to be remarketed at par at the lowest possible interest rate. if an opinion of Bond Counsel
is delivered to the Trustee that the establishment of such optional redemption schedule will not
impair the tax exempt status of the Bonds.
The Remarketing Agent shall notify the Company and the Trustee, by telephone, which
notice shall be immediately confirmed in writing, of the principal payment schedule and optional
and mandatory redemption provisions.
(c) Upon receipt of notice.of the principal payment schedule, the Trustee shall
determine the identifying numbers of the Bonds to mature at each maturity date by first selecting
by lot from among all Outstanding Bonds. in such manner as the Trustee may determine, such
Bonds as are sufficient to equal the aggregate principal amount of Bonds to mature on the last
maturity date, and then by selectins by lot from among all remaining Outstanding Bonds.
beginning with the earliest matunty date and ending with the second to last maturity date, such
Bonds as are sufficient to equal the aggregate principal amount of Bonds to mature on each such
maturity date.
(d) The Trustee shall give Notice by Mail of the Mandatory Tender Date (in
substantially the form attached to this Indenture as Exhibit A to all Bondholders not less than
thirty (30) days prior to the Conversion Date. Failure to give such notice shall not invalidate the
conversion to the Fixed Rate nor the effect thereof as provided herein.
(e) On the Computation Date the Remarketing Agent shall determine the Fixed Rate.
which shall be the annual interest rate or rates, which. in the determination of the Remarketing
Agent, would result as nearly as practicable in the market value of each maturity of the Bonds on
the Conversion Date, giving effect to the principal payment schedule, optional redemption and
any mandatory purchase provisions established pursuant to subparagraph (b), above, being 100%
of the principal amount thereof. In determining the Fixed Rate pursuant to this Section, the
Remarketing Agent shall have due regard for general financial conditions and such other or
special conditions as in the judgment of the Remarketing Agent may have a bearing on the Fixed
Rate.
(f) If for any reason the position of Remarketing Agent is vacant or the Remarketing
.Agent fails to act, the Fixed Rate shall be determined, on the Computation Date, by the Trustee,
D^NEW200`001'1)OCS'JNDENTUR. DOC 30 INDENTURE OF TRUST
and shall be equal to ninety-five percent (95%) of the average yield on the basis of a term
approximately equal to the earlier of the Final Maturity Date of the Bonds or the next succeedine
Mandatory Purchase Date, if any, of United States Treasury Bonds, as such yield is reported in
the Wall Street Journal. The optional and mandatory redemption provisions, the principal
repayment schedule, and all other terms of the Bonds shall be the same as those in effect
immediately prior to the Conversion Date.
(g) The determination of the Fixed Rate by the Remarketing Agent, or the Trustee, as
provided herein, shall be conclusive and binding upon the Issuer, the Company, the Trustee and
the Holders of the Bonds.
(h) The Company may, at any time prior to the Trustee giving notice of the
Conversion Date to the Bondholders, cancel the conversion to a Fixed Rate by eiving written
notice of cancellation to the Trustee, the Issuer and the Remarketing Agent.
(i) The Conversion Date may be extended. at the option of the Company, if the
Company delivers to the Trustee and Remarketing Agent on or prior to March 11. 1998. an
opinion of Bond Counsel to the effect that extending the Conversion Date to a date certain will
not adversely affect the tax exempt status of the Bonds, and the written consent of all
Bondholders to the extension of the Conversion Date. In no event may the Conversion Date be a
date later than March 1, 2000.
(j) On the Conversion Date. the Company shall deliver to the Trustee the documents
required by Section 3.05(3) of the Loan Agreement.
Section 3.14. Book-Entn, Provisions: Renlacement Bonds.
(a) Notwithstanding the other provisions of this Indenture regarding registration.
ownership. transfer. payment and exchange of the Bonds, unless the Issuer determines to permit
the exchange of Depository Bonds for Bonds in the Authorized Denominations, the Bonds shall
be issued as Depository Bonds in denominations of the entire principal amount of each maturity
of Bonds (or. if a portion of said principal amount is prepaid, said principal amount less the
prepaid amount); and such Bonds shall be registered in the name of the Depository or its
Nominee. With respect to Depository Bonds. neither the Issuer nor the Trustee shall have any
responsibility or obligation to any Depository Participant or to any Beneficial Owner. Without
limiting the immediately preceding sentence. neither the Issuer nor the Trustee shall have any
responsibility or obligation with respect to (i) the accuracy of the records of the Depository or its
Nominee or of any Depository Participant with respect to any ownership interest in the Bonds.
(ii) the delivery to any Depository Participant, any Beneficial Owner or any other person, other
than the Depository, of any notice with respect to the Bonds. (iii) the payment to any Depository
Participant, any Beneficial Owner or any other person. other than the Depository, of any amount
with respect to the principal of or premium, if any. or interest on the Bonds, or (iv) the failure of
the Depository to provide any information or notification on behalf of any Depository Participant
or Beneficial Owner.
The Issuer and the Trustee may treat the Depository as, and deem the Depository to be.
the absolute owner of each Bond for the purpose of payment of the principal of and premium (if
D-' NEW'_001001`DOCSINDENTI.'R DOC 31 INDENTURE OF TRUST
any) and interest on such Bond, for the purpose of all other matters with respect to such Bond, for
the purpose of registering transfers with respect to such Bonds, and for all other purposes
whatsoever (except for the giving of certain Bondowrter consents, in accordance with the
practices and procedures of the Depository as may be applicable thereto). The Trustee shall pay
all principal of and premium, if any, and interest on the Bonds only to or upon the order of the
Bondowners as shown on the Bond Register, and all such payments shall be valid and effective
to fully satisfy and discharge the Issuer's obligations with respect to the principal of and
premium, if any, and interest on the Bonds to the extent so paid. Notwithstanding the provisions
of this Indenture to the contrary (including without limitation surrender of Bonds, registration
thereof, and authorized denominations), as long as the Bonds are Depository Bonds full effect
shall be given to the Letter of Representations and the procedures and practices of the Depository
thereunder, and the Trustee shall comply therewith.
(b) upon (i) a determination by the Issuer based solely upon the instruction of the
Company that the Depository is no longer able to carry out its functions or is otherwise
determined unsatisfactory by the Issuer based solely upon the instruction of the Company, or (ii)
a determination by the Depository that the Bonds are no longer eligible for its depository services
or (iii) a determination by the Trustee that the Depository has resigned or discontinued its
services for the Bonds, the Issuer shall, (A) designate a satisfactory substitute Depository in
accordance with Section 2.14(d) or, if a satisfactory substitute is not found, (B) provide for the
exchange of Depository Bonds for Replacement Bonds in Authorized Denominations.
(c) If the Issuer determines pursuant to Section 2.14(b) to provide for the exchange of
Depository Bonds for Bonds in Authorized Denominations, the Issuer shall so notify the Trustee
and shall provide the Trustee with a supply of executed unauthenticated Bonds to be so
exchanged. The Trustee shall thereupon notify the Holders of the Bonds and provide for such
exchange. and to the extent that the Beneficial Owners are designated as the transferee by the
Holders, in accordance with Section 2.10 the Bonds will be delivered in appropriate form,
content and authorized denominations to the Beneficial Owners, as their interests appear.
(d) Any substitute Depository shall be designated in writing by the Issuer to the
Trustee. and the Issuer shall also certify to the Trustee that the substitute qualifies as Depository
under this section. Any such substitute Depository shall be a "clearing corporation" as defined in
the Minnesota Uniform Commercial Code. Minnesota Statutes, Section 336.8-102. and shall be a
qualified and registered "clearing agency" as provided in Section 17A of the Securities Exchange
Act of 1934, as amended. The substitute Depository shall provide for (i) immobilization of the
Depository Bonds, (ii) registration and transfer of interests in the Depository Bonds by book
entries made on records of the Depository or its Nominee and (iii) payment of principal of,
premium. if any, and interest on the Bonds in accordance with and as such interests may appear
with respect to such book entries.
(e) So long as the Bonds are Depository Bonds, the following provisions shall apply,
notwithstanding anything to the contrary in this Indenture. The principal of the Bonds shall be
payable by the Trustee when due by wire transfer in same day funds. The transfers permitted
pursuant to Section 2.10 shall occur only with respect to Bonds of a minimum denomination of
the remaining principal amount of an entire maturity thereof so long as the Bonds are Depository
Bonds. Depository Bonds are not exchangeable for fully registered Bonds of smaller
D"NEw'_00'00VDOCS'INDENTUR DOC 32 INDENTURE OF TRUST
denominations. Upon a partial payment of a Bond which results in the stated amount thereof
being reduced. the Holder may in its discretion make notation on the register of partial payments
portion of the Bond of such payment, stating the amount so paid. but such notation. if made by
the Holder, shall be for reference only and may not be relied upon by any person as being in any
way determinative of the principal amount of the Bond Outstanding.
D-NEw7M' 00?'DOCSINDEN'TUR DOC J J NDENTURE OF TRUST
ARTICLE 3
Redemption of Bonds Before Maturity
Section 3.01. Redemption Provisions.
(a) The Bonds are subject to redemption and prepayment as follows:
(i) Optional Redemption on or Prior to the Conversion Date. The Bonds are
subject to redemption in whole on any date on or after September 1, 1997, by the Issuer at
the direction of the Company at a Redemption Price equal to the principal amount of the
Bonds to be redeemed plus accrued interest thereon to the Redemption Date.
'(ii) Initial Mandatory Redemption Schedule. Subject to the provisions of
Section ? 13, the Bonds are subject to Mandatory Sinking Fund redemption by lot on
March 1 of the years and in the principal amounts stated below at a Redemption Price
equal to their principal amount plus accrued interest to the Redemption Date. without any
premium:
Year
Amount
Year
Amount
2002
S -15.000
2018
S 45.000
2003
15.000
2019
45.000
2004
15.000
2020
50.000
2005
15.000
2021
55.000
2006
20.000
2022
55,000
2007
20.000
2023
60.000
2008
20.000
2024
65.000
2009
20.000
2025
70.000
2010
25.000
202_6
75,000
2011
25.000
2027
85.000
2012
30.000
2028
90.000
2013
30.000
2029
95.000
2014
30.000
2030
100.000
2015
35.000
2031
110,000
2016
35.000
2032
260.000
2017
40.000
or if less than such amount of Bonds is outstanding on any such Mandatory Sinking Fund
Payment Date, an amount equal to the aggregate principal amount of all Bonds then
Outstanding.
(iii) Optional and Mandatory Redemption From and After Mandatory Tender
Date. Effective as of the Mandatory Tender Date, the Bonds shall be subject to optional
and mandatory sinking fund redemption provisions or conversion to serial maturities, at
the times and prices established by the Remarketing Agent pursuant to Section 2.13.
D'NEW200'00I DOCSINDENTUR.DOC 34 MDENTURE OF TRUST
(iv) Tax Redemption. Following the occurrence of a Determination of
Taxability all of the Bonds shall be redeemed in whole on the first day of the first
calendar month for which notice of redemption can properly be given in accordance with
Section 3.03 at a redemption price equal to one hundred percent (100%) of the principal
amount of the Bonds to be redeemed plus accrued interest thereon to the Redemption
Date.
(v) Calamity Redemption. After the Conversion Date. in the event the
Company exercises its option to direct the redemption of all Outstanding Bonds upon the
occurrence of any of the events described in Section 8.04 of the Loan Agreement. all of
the Bonds shall be subject to redemption and shall be redeemed, in whole but not in part,
on the next succeeding Interest Payment Date for which notice of redemption shall
properly be given. at their principal amount. plus accrued interest. without premium.
(vi) Special Mandatory Redemption Capon Failure to Convert to the Fixed Rate
or Upon Failure to Remarket.
(A) The Bonds shall be subject to special mandatory redemption on
March 1, 1998. if the Company has failed to deliver to the Trustee and
Remarketing Agent on or before February 8, 1998, either (1) a written request that
the interest rate on the Bonds be converted from the Variable Rate to the Fixed
Rate accompanied by the other items required by Section =.13 hereof, or (_') (a) an
opinion of Bond Counsel to the effect that the extension of the Conversion Date to
a date certain will not adversely affect the tax exempt status of the Bonds. and (b)
the written consent of all Bondholders to the extension of the Conversion Date. In
the event the Conversion Date is extended, the Bonds shall be subiect to special
mandatory redemption on the extended Conversion Date which shall be on a date
not later than March 1, 2000. If the Company fails to deliver to the Trustee on or
before 20 days prior to the extended Conversion Date the written request that the
interest rate on the Bonds be converted from the Variable Rate to the Fixed Rate
accompanied by the other items required by Section ''.13 hereof. the Bonds shall
be subject to mandator` redemption on such extended Conversion Date. If the
Company fails to deliver a Credit Facility to the Trustee on or prior to the
Conversion Date. the Bonds shall be subject to special mandatory redemption on
the Conversion Date.
(B) In addition. the Bonds shall be subject to mandatory redemption in
part on the 'Mandatory Tender Date if and to the extent Resale proceeds and other
funds provided by the Company are insufficient to purchase the Bonds properh
tendered (or deemed tendered) on the Nlandatory Tender Date.
Section 3.02. Partial Redemption. of Bonds.
In the case of any partial redemption of Bonds of the same maturity pursuant to any
provision of this Indenture, the particular Bonds or portions thereof to be redeemed shall be
selected by the Trustee in such manner as the Trustee shall deem fair and equitable; provided that
if at the time of selection of any Bonds for redemption any Bonds are Company Bonds, such
D:'NEW200100I'DOCS'•INDENrUR.DOC 35 INDENTURE OF TRUST
Company Bonds shall be selected for redemption prior to any other Bonds. In the case of any
partial redemption of a Bond in a denomination greater than 55.000 then for all purposes in
connection with such redemption, the first $5,000 of face value of such Bond shall be treated as
though it were a separate Bond in the denomination of $5.000 and each remaining $5.000 of face
value of such Bond shall be treated as though it were a separate Bond in the denomination of
$5,000, and such Bond shall be redeemed only in a principal amount sufficient to redeem one or
more of such separate Bonds in full. Any Bond which is to be redeemed only in pan shall be
surrendered to the Trustee (i) for payment of the Redemption Price (including accrued interest
thereon to the Redemption Date) of the portion thereof called for redemption and (ii) for
exchange for Bonds in any Authorized Denomination in aggregate principal amount equal to the
unredeemed portion of such Bond without charge therefor. For all purposes of this Indenture,
unless the context otherwise requires, all provisions relating to the redemption of Bonds shall
relate, in the case of any Bond redeemed or to be redeemed only in part, to the portion of the
principal of such Bond which has been or is to be redeemed.
Section 3.03. Procedure for Redemption.
In the event the Company shall Live notice to the Trustee of any redemption of the Bonds
under 3.01(1) and (v), the Trustee shall give notice, in the name of the Issuer, of the redemption
of such Bonds. which notice shall (1) specify the Bonds (or portions thereof) to be redeemed, the
Redemption Date, the redemption price and the place or places where or, if a partial redemption
the manner in which the amounts due upon such redemption will be payable and (2) state that on
the Redemption Date the Bonds (or portions thereof) to be redeemed shall cease to bear interest.
Such notice may set forth any additional information relating to such redemption. The Trustee
shall give such Notice By Mail at least fifteen (15) days nor more than forty (40) days prior to the
date fixed for redemption, to the Holders of the Bonds to be redeemed.
Any Bonds and portions of Bonds which have been duly selected for redemption and
which are deemed to be paid in accordance with Article IX hereof shall cease to bear interest on
the specified Redemption Date.
Section 3.04. Payment of Bonds Unon Redemption.
The Redemption Price of Bonds or portions thereof called for redemption in accordance
with Section 3.0 shall be payable on the date of redemption upon presentation and surrender of
such Bonds at the place or places of payment. If. on the Redemption Date, sufficient moneys
shall have been deposited with the Trustee to effect such redemption in accordance with this
Indenture. then interest shall cease to accrue on all Bonds or portions thereof so called for
redemption.
Section 3.05. No Partial Redemption After Default.
Anything in this Indenture to the contrary notwithstanding, if there shall have occurred
and be continuing an Event of Default, there shall be no redemption of less than all of the Bonds
at the time Outstanding.
D `NEW200)001`DOCSRDENTUR.DOC 36 INDENTURE OF TRUST
Section 3.06. Cancellation.
All Bonds which have been redeemed shall be canceled by the Trustee as provided in
Section 2.12 and shall not be reissued.
D"NEw^NWI'DM fNDENTI'R DOC 37 INDENTURE OF TRUST
ARTICLE 4
Mandatory Tender and Remarketing of Bonds
Section 4.01. Mandatory Tender of Bonds.
(a) Subject to the provisions of subsection (c) below, the Holder of each Bond shall
tender such Bond to the Trustee for purchase on the Mandatory Tender Date, all as more fully
provided in this Section 4.01.
(b) Notice of a Mandatory Tender Date (a "Mandatory Tender Notice") shall be given
by the Trustee, by first-class mail, postage prepaid, to the Holders of all Bonds at their addresses
appearing on the Bond Register maintained by the Trustee not less than 15 days prior to the
Mandatory Tender Date. Such Notice shall specify the Mandatory Tender Date and state (i) that
all Bonds shall be purchased on the Mandatory Tender Date at a purchase price equal to the
principal amount thereof, and (ii) that all Bonds must be tendered for purchase at or before 12:00
noon, Minneapolis time, on the Business Day prior to the Mandatory Tender Date together with
an appropriate instrument of transfer executed in blank, and the Holder of any such Bond which
is not so tendered but for which there has been irrevocably deposited with the Trustee an amount
sufficient to pay the purchase price thereof (an "i;ntendered Bond") shall not be entitled to
receive interest on such Bond for any period beginning on or after the Mandatory Tender Date.
A copy of any Mandatory Tender Notice shall be delivered by the Trustee to the Remarketing
Agent and the Company.
(c) All Bonds shall be tendered to the Trustee for purchase at or before 12:00 noon
Minneapolis time on the Business Day prior to the Mandatory Tender Date, by delivering such
Bonds to the Trustee together with an appropriate instrument of transfer duly executed in blank.
On the Mandatory Tender Date the Trustee acting on behalf of the Company and for the benefit
of the Holders of the Bonds from time to time shall purchase or cause to be purchased all Bonds
at a purchase price equal to the principal amount thereof plus accrued interest thereon. Funds for
the payment of the purchase price of such Bonds shall be drawn by the Trustee from the Bond
Purchase Fund as provided in Section 6.04.
Section 4.02. Duties of Trustee.
The Trustee agrees, and will cause each of its agents to agree, that it will:
(a) hold all Bonds delivered to it pursuant to Section 4.01 hereunder in trust
solely for the benefit of the respective Bondholders which shall have so tendered such
Bonds for purchase until the payment of the purchase price with respect to such Bonds;
and
(b) hold all moneys delivered to it hereunder for the purchase of such Bonds
in trust solely for the benefit of the Holders which shall have so tendered such Bonds for
purchase until such moneys shall have been delivered to or for the account of such
Bondholders.
n NFW?00'001'DOCS'INDENTI.'R DOC 38 INDENTURE OF TRUST
Section 4.03. Remarketing of Bonds.
(a) Pursuant to the terms of the Remarketing Agreement, the Remarketing Agent
shall offer for sale and use its best efforts to sell the Bonds on the Mandatory Tender Date at a
purchase price of par plus accrued interest.
(b) At or prior to 10:00 a.m.. Minneapolis. Minnesota. time, on the third Business
Day prior to the Mandatory Tender Date, the Remarketing Agent shall give notice (the
"Remarketing Notice"), by telephone, telex or telecopier, promptly confirmed in writing, to the
Company and the Trustee specifying the total principal amount and denominations of the Bonds.
if any, sold for settlement on such Mandatory Tender Date and shall include in the Remarketing
Notice given to the Trustee the name, address and taxpayer identification number of the
purchaser. On or prior to 12:00 noon, Minneapolis. Minnesota, time on the Mandatory Tender
Date, the Remarketing Agent shall deliver to the principal office of the Trustee, in immediately
available funds, an amount equal to the purchase price of the total principal amount of Bonds so
specified in the Remarketing Notice, plus accrued interest, if any. If in the Remarketing Notice.
the Remarketing Agent shall have specified the name(s) in which each remarketed Bond is to be
registered together with the purchaser's address and taxpayer identification number of the
purchaser, and the denomination in which each remarketed Bond is to be issued, delivery of such
Bonds, properly executed on behalf of the Issuer and authenticated by the Trustee, registered in
the name(s) and issued in the denomination(s) so specified, shall be made to the Remarketing
Agent by 12:00 noon. Minneapolis time at its Minneapolis address on the Mandatory Tender
Date against payment by the Remarketing Agent as aforesaid.
Section 4.04. Purchase of Tendered Bonds.
On the Mandatory Tender Date. the Trustee shall pay, but only from funds in the Bond
Purchase Fund, the purchase price for all Bonds properly tendered. (or deemed tendered) for
purchase pursuant to Section 4.01 hereof. at a purchase price equal to 100% of the principal
amount thereof.
Section 4.0=. Intentionally Omitted.
Section 1.06. Purchase Not to Constitute a Redemption.
The Issuer and the Trustee recognize and acknowledge that, in carving out their
responsibilities under this Article IV, the Trustee and the Remarketing Agent shall be acting
solely for the benefit of the Holders from time to time of the Bonds and the Company. No
delivery of Bonds to the Trustee or purchase of Bonds under this Article shall constitute a
redemption of the Bonds or an extinguishment of the debt evidenced thereby.
Section 4.07. Untendered Bonds.
Any Bond which is not tendered on or prior to the Mandatory Tender Date with respect to
such Bond (an "Untendered Bond"), as to which there has been irrevocably deposited with the
Trustee an amount sufficient to pay the purchase price thereof shall be "deemed tendered" for
purposes of this Indenture and shall cease to accrue interest on such Mandatory Tender Date, as
n �'FW'60'P01'D0CS9]'DE-M:R DnC 39 MDENFURE OF TRUST
the case may be, and the Holder thereof shall not be entitled to any payment other than the
purchase price for such Untendered Bond, and shall no longer be entitled to the benefits of this
Indenture, except for payment of the purchase price therefor and interest thereon through the
Mandatory Tender Date from moneys held by the Trustee for such purpose upon presentment of
such Bond to the Trustee. In lieu of and in substitution for such Untendered bonds. Bonds shall
be issued in accordance with Section 2.07 hereof.
D,vFw'nm0n1'DOCSINDFN7'R DOC 40 INDENTURE OF TRUST
014#14AM
General Covenants
Section 5.01. Payment of Principal. Premium and Interest.
Solely from the moneys derived from the Loan Agreement (other than to the extent
payable from proceeds of the Bonds or temporary investments), the Issuer will duly and
punctually pay the principal of, premium, if any, and interest on the Bonds in accordance with the
terms of the Bonds and this Indenture. Moneys derived from the Loan Agreement include all
moneys derived from the Granting Clauses set forth herein. including, but not limited to, Basic
Payments under the Loan Agreement and trust funds deposited in the funds and accounts
established under Article VI herein to the extent and in the manner provided in said Article.
Nothing in the Bonds or in this Indenture shall be considered as assigning or pledging funds or
assets of the Issuer other than those covered by the Granting Clauses set forth herein.
Section 5.02. Performance of and Trustee for Covenants.
The Issuer covenants that it is duly authorized under the Act to issue the Bonds
authorized hereby, to execute this Indenture. to loan the Bond proceeds to the Company and to
assign and pledge the payments from the Loan Aereement in the manner and to the extent herein
set forth: that all action on its part for the issuance of the Bonds and the execution and delivery of
this Indenture has been duly and effectively taken.
Section 5.03. Instruments of Further Assurance.
The Issuer covenants that it has not made, done, executed or suffered, and will not make.
do, execute or suffer, any act or thing whereby its interest in the Loan Agreement or any part
thereof is now or at any time hereafter impaired. changed or encumbered in any manner
whatsoever, except as may be expressly permitted herein: and that it will do, execute.
acknowledge and deliver or cause to be done. executed, acknowiedeed and delivered, such
instruments supplemental hereto and such further acts. instruments and transfers as the Trustee
may reasonably require for the better assuring, transferring, pledging. assigning and confirming
unto the Trustee all and singular the sums assigned and pledged hereby to the payment of the
principal of and interest on the Bonds.
Section 5.04. Recording and Filing.
The Trustee covenants that solely from available Additional Charges it will require the
Company to cause this Indenture. all supplements thereto, to be kept, recorded and filed in such
manner and in such places as may be required by law in order to preserve and protect fully the
security of the Holders of the Bonds and the rights of the Trustee hereunder and under any other
instruments aforesaid.
01.14EW2001001%DOCS INDENTUR. DOC 41 INDENTURE OF TRUST
Section 5.05. Books and Records.
The Trustee covenants that so long as any Outstanding Bonds issued hereunder and
secured by this Indenture shall be unpaid, the Trustee will keep proper books or records and
accounts, in which full, true and correct entries will be made of all its financial dealings or
transactions in relation to the Project and the payments derived from the Loan Agreement and
this Indenture. At reasonable times and under reasonable regulations established by the Trustee.
such books shall be open to the inspection of Holders and such accountants or other agents as the
Trustee made from time to time designate.
Section 5.06. Bondholders' Access to Bond Resister.
Except as otherwise may be provided by la,.v. the Bond Register shall not be deemed a
public record and shall not be made available for inspection by the public, unless and until notice
to the contrary is given to the Trustee by the Issuer.
Section 5.07. Rights Under Loan Agreement.
The Loan Agreement sets forth covenants and obligations of the Issuer and the Company,
and reference is hereby made to the same for a detailed statement of said covenants and
obligations. The Issuer agrees to cooperate in the enforcement of all covenants and obligations
of the Company under the Loan Agreement and agrees that the Trustee in its name or in the name
of the Issuer may enforce all rights of=the Issuer and all obligations of the Company under and
pursuant to the Loan Agreement and on behalf of the Holders. whether or not the Issuer has
undertaken to enforce such rights and obligations.
D'INEu'200`001'DOCS'%.rNDENTUR DOC 42 INDENTURE Of TRUST
ARTICLE 6
Funds and Accounts
Section 6.01. "Trust Monevs" Defined.
All moneys received by the Trustee:
(a) as elsewhere herein provided to be held and applied under this Article VI.
or required to be paid to the Trustee and whose disposition is not elsewhere herein
otherwise specifically provided for, including, but not limited to the investment income of
all Trust Funds held by the Trustee under this Indenture (but excluding amounts on
deposit in the Excess Investment Earnings Fund); or
(b) as proceeds from the sale of the Bonds: or
(c) as Loan Payments, or as otherwise payable under the Agreement;
(all such moneys being herein sometimes called "Trust Moneys") shall be held by the Trustee as
a part of the Trust Estate, and, upon the exercise by the Trustee of any remedy specified in
Article X hereof, such Trust Moneys shall be applied in accordance with Section 10.06 hereof.
except to the extent that the Trustee is holding in trust moneys or Government Obligations. as the
case may be. for the payment of any specified Bonds which are no longer deemed to be
Outstanding under the provisions of Article IX hereof. which moneys or Government Obligations
shall be applied only as provided in said Article IX. Prior to the exercise of any such remedy, all
or any part of the Trust Moneys shall be held, invested, withdrawn, paid or applied by the
Trustee, from time to time. as provided in this article VI, in Article VII and article VIII hereof.
Section 6.02. Project Fund.
(a) There is hereby created a Project Fund.
Until the Conversion Date, all proceeds of the Bonds shall be deposited in the Project
Fund held by the Trustee and invested in the Investment Agreement. Prior to the Conversion
Date. the Trustee shall transfer the interest earnings on Bond proceeds held in the Project Fund to
the Bond Fund on each Variable Rate Interest Payment Date and on the Conversion Date. Not
less than seven (7) days prior to the Conversion Date, the Trustee shall request a repayment of all
principal invested pursuant to the Investment agreement in accordance with its terms.
(b) If (i) the Company has not delivered to the Trustee the written notice that it has
exercised its option to convert the interest on the Bonds from the Variable Rate to the Fixed Rate
at least 15 days prior to the Conversion Date, as it may be extended from time to time, or (ii) if
the Trustee has not received sufficient Resale Proceeds together with other funds from the
Company to effect purchase of all of the Bonds on the Mandatory Tender Date, which have been
properly tendered (or deemed tendered) as to a Mandatory Tender Date, the funds held under the
Investment Agreement shall be transferred to the Bond Fund and applied exclusively to redeem
the Bonds in accordance with Section 3.01(vi) hereof.
D'%NE W20W01'DOCS fNDENTUR.DOC 43 INDENTURE OF TRUST
(c) On the Conversion Date, amounts on deposit in the Project Fund in the amount of
$140,000 shall be transferred to the Reserve Fund. From and after the Conversion Date, or the
Discharge Date, the remaining proceeds of the Bonds shall be disbursed by the Trustee to or for
the account of the Company from the Project Fund in accordance with the applicable provisions
of Article III of the Loan Agreement.
(d) Any sums in the Project Fund in excess of any amount required to pay all Costs of
the Project shall be transferred to the Bond Fund at the time or times and in the manner provided
in Article III of the Loan Agreement.
(e) Any funds deposited in the Project Fund by the Company shall be disbursed
before anv Bond proceeds, including any earnings thereon, shall be disbursed.
(f) Anv interest earned on sums held in the Project Fund after the Conversion Date
but prior to the Completion Date shall remain a part of the Project Fund.
(g) In the event the Bonds are to be redeemed on the Conversion Date pursuant to
Section 3.01(vi) hereof. the Trustee shall apply the proceeds of the Investment Agreement to the
redemption of the Bonds.
Section 6.03. Bond Fund.
There is herebv created the Multifamily Housing Revenue Bonds (Park Acres Apartments
Project) Series 1997 Bond Fund, also referred to herein as the Bond Fund.
(a) There shall be credited to the Bond Fund. as and when received:
(i) each payment received by the Trustee under and pursuant to any of
the provisions of this Indenture or the Loan Agreement which is required to be
paid into the Bond Fund, or which is accompanied by directions that such
payment is to be credited to the Bond Fund.
(ii) all income derived from the investment of amounts described in
clause (i), as realized.
(iii) each Basic Payment made directly by the Company pursuant to
Section 4.02 or 4.03 of the Loan Agreement.
(b) The Trustee shall disburse, from time to time, sufficient moneys from the
Bond Fund as specified below to pay the principal of. premium if any, and the interest on.
the Bonds as the same become due and payable.
(c) If any Bond shall not be presented for payment at Maturity, provided
moneys sufficient to pay such Bond shall have been made available to the Trustee and are
held by the Trustee for the benefit of the Holder thereof, all liability of the Issuer to the
Holder thereof for the payment of such Bond shall forthwith cease, determine and be
completely discharged, and thereupon it shall be the duty of the Trustee to hold such
moneys, without liability for interest thereon, for the benefit of the Holder of such Bond,
0 VFW 2p6'00i' DnCS INDENTUR DOC 44 INDENTURE OF TRUST
who shall thereafter be restricted exclusively to such monevs for any claim of whatever
nature on his part hereunder or on, or with respect to, such Bond.
(d) Any moneys remaining in the Bond Fund after payment in full of all
Bonds, and payment of the fees. charges and expenses of the Trustee, the Paying Agent.
the Issuer and any Co -Paving Agent which have accrued and which will accrue and all
other items required to be paid hereunder. shall be paid to the Company.
(e) Moneys in the Bond Fund shall be invested as provided in Section 8.01
hereof.
Section 6.04. Bond Purchase Fund.
(a) There is hereby created a Bond Purchase Fund which shall be used to pay the
purchase price of Bonds to be purchased pirsuant to Section 4.01.
(b) Pa, T=ents Into the Bond Purchase Fund.
(i) There shall be paid into the Bond Purchase Fund, as and when received:
(A) the proceeds of the remarketing of Bonds by the Remarketing
Agent pursuant to Section 3.03 (which proceeds (together with any investments
thereof and the income: therefrom and proceeds thereof) shall at all times be
traceable by the Trustee to their source and shall not be derived directly or
indirectly from the Company); and
(B) all other moneys received by the Trustee under and pursuant to any
of the provisions of this Indenture or the Loan Agreement or otherwise which are
required or accompanied by directions that such moneys are to be credited to the
Bond Purchase Fund.
(c) Use of Monevs in the Bond Purchase Fund.
(i) Except as provided in subsection (e) hereof and this subsection (c), money
in the Bond Purchase Fund shall be used solely for the payment of the purchase price of
Bonds to be purchased pursuant to Section 4.01.
(ii) On the Mandaton- Tender Date, the Trustee shall disburse from the Bond
Purchase Fund sufficient moneys to pay the purchase price of all Bonds to be purchased
on such date pursuant to Section 4.01.
(d) 'ylonev to be Held in Trust. All moneys paid over to the Trustee for the account of
the Bond Purchase Fund under any provision hereof shall be held (subject to the provisions of
subsection (e)) in trust by the Trustee for the benefit of the Holders of the Bonds.
(e) No Payments to the Comoanv from the Bond Purchase Fund. Anv monevs held
by the Trustee in the Bond Purchase Fund shall be retained by the Trustee exclusively for the
benefit of Holders of Bonds not vet presented for payment of the purchase price thereof until paid
D'NEW22001001'DOCS' fNDENTUR.DOC 45 WDENfURE OF TRUST
to such Holders; and such moneys shall not, under any circumstances or at any time whatsoever,
be paid to the Company or to any Person other than the Holders of Bonds entitled thereto, and
such Holders shall look only to such moneys for the payment of the purchase price of such
Bonds.
Section 6.05. Excess Investment Eamines Fund.
(a) There is hereby created an Excess Investment Earnings Fund. The Trustee shall
deposit in the Excess Investment Earnings Fund, upon receipt, all rebate amounts deposited with
the Trustee in accordance with Section 7.07(14) of the Loan Agreement; and for purposes of
making such deposits the Trustee shall, at the direction of the Company, transfer from the
appropriate Fund to the Excess Investment Earnings Fund a sum equal to any rebate amounts
attributable to sums held in the Bond Fund, the Project Fund and Reserve Fund.
(b) The Trustee shall cooperate with the Company in making the determinations for
each computation required pursuant to Section 7.07(14) of the Loan Agreement; and to that end.
the Trustee shall, within 30 days after the end of the fifth Bond Year, prepare and file with the
Company a report with respect to the Bond Fund, the Project Fund and Reserve Fund setting
forth the total amount invested during the preceding five Bond Years, the investments made with
the moneys in the Bond Fund. Project Fund and Reserve Fund and the investment earnings (and
losses) resulting from such investments, together with such additional information concerning the
Bond Fund and the investments therein as the Issuer or the Company shall reasonably request.
(c) Upon written direction of the Company, the Trustee shall remit sums in the
Excess Investment Earnings Fund to the United States as provided in Section 7.07(14) of the
Loan Agreement.
(d) Upon written direction of the Company, the Trustee shall remit to the Company.
or transfer to the Bond Fund. any surplus rebate sums held in the Excess Investment Eamings
Fund as provided in Section 7.07(14) of the Loan Agreement.
Section 6.06. Reser: e Fund.
There is herebv created a Reserve Fund which shall be funded on the Conversion Date in
the amount of S140.000 transferred from the Proiect Fund. Amounts on deposit in the Reserve
Fund shall be transferred to the Bond Fund on any Interest Payment Date to the extent amounts
then on deposit in the Bond Fund are insufficient for the purpose of paying principal and interest
on the Bonds then due.
Section 6.07. Deposit of Funds with Paving agent.
(a) The Trustee shall transfer and remit sums from the Bond Fund to the Paying
Agent in advance of each interest and principal due date and redemption date, from the balance
then on hand in the Bond Fund, sufficient to pay all principal, interest and redemption premiums
then due on Bonds. The Paying Agent shall hold in trust for the Holders of such Bonds all sums
so transferred to it until paid to such Holders or otherwise disposed of as herein provided.
D'NEW200MI'DOCSINDE`1TUR DOC 46 INDENTURE OF TRUST
(b) Interest on each Bond including accrued interest to the date of deposit and
interest, to the extent permitted by law, on overdue installments of interest at the rate borne by
such Bond, (i) shall cease on its maturity date, or on any prior date on which it shall have been
duly called for redemption as herein provided, provided that funds sufficient for the payment
thereof with accrued interest and any redemption premium have been deposited with the Payine
Agent on or before the maturity date or redemption date, as the case may be, and in the case of
redemption, that the requirements of Article III have been complied with, or (ii) shall cease on
any date after maturity on which such deposit has been made, and the Holder shall have no
further rights with respect to the Bonds or under this Indenture except to receive the payment so
deposited.
(c) If any Bond is not presented for payment when due and funds sufficient to pay
such Bond shall have been paid to the Trustee (or other Paying Agent, if any): (i) all liability of
the Issuer for payment of such Bond shall forthwith cease. (ii) such Bond shall forthwith cease to
be entitled to any lien, benefit or security under this Indenture, and the Holder of such Bond shall
forthwith have no rights in respect thereof except to receive payment thereof. and (iii) the Trustee
(or other Paying Agent, if any) shall hold such funds, without liability for interest thereon, for the
benefit of the Holder of such Bond. Any moneys still held by the Trustee (or other Paving Agent.
if any) after two years and eleven months from the date on which the Bond with respect to such
amount was paid to the Trustee (or other Paying Agent, if any), shall. if and to the extent
permitted by law, be paid by the Trustee (or other Paying Agent. if any to the Company and shall
be discharged from the trust and all liability of the Paying Agent or the Trustee with respect to
such trust money shall cease; and the Bondholders shall thereafter be entitled to look only to the
Company for payment. and the Company shall not be liable for any interest thereon.
(d) If there is any Paying Agent who is not the Trustee. the Trustee will cause such
Paying Agent to execute and deliver to it an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section 6.07. that such Paying Agent will:
(i) hold all sums held by it for the payment of principal of (and premium, if
any) or interest on Bonds in trust for the benefit of the Holders of such Bonds until such
sums shall be paid to such Holders or othenise disposed of as herein provided: and
(ii) at any time during the continuance of any default in the making of any
such payment of principal (and premium, if any) or interest, upon the written request of
the Trustee forthwith pay to the Trustee all sums so held in trust by such Paying agent.
The Trustee, acting as Paying Agent, shall also be bound by the terms of the foregoing
requirements.
O •NEW^pry 001'DOCSINDENT! R DOC 47 INDENTURE OF TRUST
AR'T'ICLE 7
Intentionally Omitted
D"NEW200`001DOCS'JNDENTUR DOC 48 INDENTURE OF TRUST
ARTICLE 8
Investments
Section 8.01. Investments by Trustee.
(a) Except during the continuance of an Event of Default, and subject to the
provisions of Section 8.02, moneys held for the credit of the Funds established by Article VI
shall be held by the Trustee as required by law and shall at the written request of the
Representative of the Company, to the extent practicable and permitted by the Act, and except as
provided below with respect to the moneys in the Bond Fund be invested as received and
reinvested by the Trustee in Permitted Investments (including investments in securities
authorized by Minnesota Statutes. Section 471.56, through a common trust fund or similar fund
maintained by a bank exclusively for the collective investment and reinvestment of moneys
contributed thereto by the bank in its capacity as trustee, certificates of deposit, and repurchase
agreements).
Subject to Minnesota Statutes, Sections 471.56 and 475.66. as to the investment of sums
(other than Bond proceeds) held in the Bond Fund, the type, amount and maturity of such
investments shall be as specified by the Representative of the Company; provided that sums in
the Bond Fund and may in any event only be invested in securities which mature or are subject to
redemption or repurchase at the option of the Trustee on or prior to the date or dates on which the
Trustee anticipates that cash funds will be required.
("b) The Trustee shall sell and reduce to cash funds a sufficient portion of investments
under the provisions of this Section whenever the cash balance in the fund for which the
investment was made is insufficient for its current requirements. Securities so purchased as an
investment of money shall be held by the Trustee, shall be registered in the name of the Trustee if
registration is required, and shall be deemed at all times a part of the applicable Fund, and the
interest accruing thereon and any profit realized from such investments shall be credited to the
Fund from which the investment was made, subject to any transfer to another Fund as herein
provided. Any loss resulting from such investment shall be charged to the Fund from which the
investment was made.
(c) The Trustee may purchase from or sell to itself, or through any affiliated
company, as principal or agent, securities herein authorized so long as such purchase or sale is at
fair market value.
Section 8.02. Return on Investments.
(a) In directing investments_ pursuant to Section 8.03 of the Loan Agreement, the
Company will not instruct the Trustee to use the proceeds of the Bonds or other sums pledged to
the payment of the Bonds, directly or indirectly, to acquire any securities or obligations the
acquisition of which would cause any of the Bonds to be an "arbitrage bond" as defined in
Section 148 of the Code, and for this purpose the Trustee, in order to restrict yield on
investments, may invest in SLGS (and accordingly is hereby authorized to act as agent of the
Issuer for such Propose). The Trustee shall be fully protected in relying on an opinion of Bond
D'NFR"_00100 VDOCS'INDENTUR DOC 49 INDENTURE OF TRUST
Counsel with respect to whether the acquisition of any securities or obligations would have the
effect prohibited by this Section.
(b) The Bonds are subject to the limitation on investment in nonpurpose obligations
imposed by Section 148(d)(3) of the Code. At no time during any Bond year (as such term is
defined in the Treasury Regulations) may the amounts in the Bond Fund which are (i) not entitled
to a temporary period provided in 148(c) of the Code or the Treasury Regulations and (ii) in
excess of one hundred fifty percent (150110) of the debt service on the Bonds for any Bond Year
(which amount shall be promptly and appropriately reduced as the amount of outstanding
obligations of the Bonds is reduced) be invested in nonpurpose obligations with a yield higher
than the yield on the Bonds, and the Trustee may assume that investments directed by the
Company do not violate such requirements. In applying such requirement, however, no sale or
disposition will be required if it would result in a loss which exceeds the amount of the rebate
which would be paid to the United States. (but for such sale or disposition) at the time of such
sale or disposition. The Trustee shall acquire nonpurpose investments at their fair market value,
provided that, in the case of any investment in United States Treasury obligations unless
otherwise directed by the Company, the Trustee shall purchase such obligations directly from the
United States Treasury, if such obligations are reasonably available to the Trustee for purchase.
or, if such obligations are not so available. the Trustee shall purchase such obligations for the
best price available in an arm's-length transaction, determined in accordance with the Trustee's
customary procedure.
(c) No moneys in any fund or account shall be invested in investments which cause
the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. If at
anv time the monevs in all funds and accounts relating to the Bonds exceed. within the meaning
of Section 149(a) of the Code. (i) amounts invested for an initial temporary period until the
moneys are needed for the purpose for which the Bonds were issued, (ii) investments of a bona
fide debt service fund. and (iii) investments of a reserve which meet the requirement of Section
148(d) of the Code, then moneys in excess of such amounts shall be invested at the direction of
the Company pursuant to Section 8.03 of the Loan Agreement in (A) bonds issued by the United
States Treasury. (B) other investments permitted under regulations. or (C) obligations which are
(a) not issued bv. or guaranteed bv. or insured bv. the United States or any agency or
instrumentality thereof or (b) not federalh insured deposits or accounts. all within the meaning of
Section 149(6) of the Code. The Trustee shall not take anv action or do anything the effect of
which shall be to cause the Bonds to be "federally <=uaranteed" within the meaning of Section
149(6) of the Code.
(d) The provisions of this Section 8.0-2 shall survive discharge and release of the
Indenture.
Section 8.03. Computation of Balances in Fund.
(a) In computing the assets of any Fund established hereunder, investments and
accrued but unpaid interest thereon shall be deemed a part thereof, and such investments shall be
valued at par value, or at the redemption price thereof. if then redeemable at the option of the
holder; provided that in any event for purposes of determining whether any balance in a Fund
may only be invested at a restricted yield to comply with Section 148 of the Code and the Federal
n NFu^nnonlDOCS ITDEN7:R DOC 50 INDENTURE OF TRUST
arbitrage regulations, any investments in the Fund shall be valued at their par value or the price
(less accrued interest) at which they were purchased, whichever is the greater.
Section 8.04. Rebate to United States.
The Bonds are subject to the rebate to the United States of earnings in excess of the yield
on the Bonds imposed by Section 148 of the Code and Section 1.148-0 through 1.148-11 of the
Treasury Regulations. The Trustee shall have no obligation to calculate the amount of, or make.
any required rebate as provided in Section 6.05. The Trustee shall cooperate with the Company
in determining the amount of any rebate.
0 \TW_9n'0P1'D0CSI]DFN'n'R DOC 51 MDENTURE OF TRUST
ARTICLE 9
Discharge of Lien
Section 9.01. Payment of Bonds: Satisfaction and Dischame of Bonds and Obligation to
Bondholders.
Whenever the conditions specified in either clause (i) or clause (ii) of the following
subsection (a) and the conditions specified in the following subsections (b) and (c) to the extent
applicable, shall exist, namely:
(a) either:
(i) all Bonds have been canceled by the Trustee or delivered to the
Trustee for cancellation, excluding, however,
(A) Bonds for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Paying Agent or
Trustee and thereafter repaid to the Company or discharged from such
trust. and
(B) Bonds alleged to have been destroyed. lost or stolen which
have been replaced or paid as provided in Section '_'A7 hereof, and (1)
which, prior to the satisfaction and discharge of this Indenture as
hereinafter provided, have not been presented to the Paying .Agent or the
Trustee with a claim of ownership and enforceability by the Holder
thereof. or (2) whose enforceability by the Holder thereof has been
determined adversely to the Holder by a court of competent jurisdiction or
other competent tribunal: or
(ii) the Issuer or the Company has deposited or caused to be deposited
as trust funds:
(A) with the Paying Agent. cash which shall be sufficient, or
(B) with the Trustee, cash and/or Goverrunent Obligations,
which do not permit the redemption thereof at the option of the issuer
thereof. the principal of, premium. if any, and interest on which when due
(or upon the redemption thereof at the option of the holder), will, without
reinvestment, provide cash which together with the cash. if any, deposited
with the Trustee at the same time. shall be sufficient, to pay and discharge
the entire indebtedness on Bonds not theretofore canceled by the Trustee
or delivered to the Trustee for cancellation by the payment of interest on
and principal (and premium, if any) of the Bonds which have become due
and payable or which shall become due at their stated maturity or
redemption date, as the case may be, and which are to be discharged under
the provisions hereof, and has made arrangements satisfactory to the
D'tiEW:00.001'DOCSINDENTL'R DOC 52 INDENTUREOFTRUST
Trustee for the giving of notice of redemption, if any, by the Trustee in the
name, and at the expense, of the Company in the same manner as is
provided by Section 3.02 hereof, and
(b) the Issuer or the Company has paid, caused to be paid or made
arrangements satisfactory to the Trustee for the payment of all other sums payable
hereunder and under the Loan Agreement, and the Related Documents by the Trustee or
the Company until the Bonds are so paid: and
(c) the Company has delivered to the Trustee a report of an Independent
Accountant stating that the payments to be made on the security referred to in clause (ii)
of subsection (a) above will be sufficient to pay when due the principal of. premium, if
any, and interest on the Bonds to be defeased:
(d) if discharge is to be effected under clause (ii) of subsection (a), an opinion
of Bond Counsel is delivered to the Trustee stating in effect that such discharge will not
impair the tax exempt status of the Bonds: then, except as otherwise provided in Article
VII and Sections 8.02 and 9.03, the rights of the Bondholders shall be limited to the cash
or cash and securities deposited as provided in paragraph (a), clauses (i) or (ii) above. and
upon the Company's request the rights and interest hereby granted or granted by the Loan
Agreement and the any collateral security documents entered into in connection with the
Conversion Date to or for the benefit of the Trustee or Bondholders shall cease, terminate
and become null and void. and the Issuer and the Trustee shall. at the expense of the
Company, execute and deliver such instruments of satisfaction and transfer as may be
necessary. and forthwith the estate, right, title and interest of the Trustee in and to all of
the Project and in and to all rights under the Loan Agreement and this Indenture (except
the moneys or securities or both deposited as required above and except as may otherwise
be provided in .article VII and Sections 8.02 and 9.03 shall thereupon be discharge and
satisfied: except that in any event the obligations of the Company under Sections 7.04.
7.07, 7.08 and 10.10 of the Loan :agreement shall survive.
Section 9.02. Discharge of the Indenture
Notwithstanding the fact that the lien of this Indenture upon the Trust Estate may have
been discharged and canceled in accordance with Section 9.01 hereof, this Indenture and the
rights °ranted and duties imposed hereby, to the extent not inconsistent with the fact that the lien
upon the Trust Estate may have been discharged and canceled, shall nevertheless continue and
subsist until the principal of and the interest on. all of the Bonds shall have actually been paid in
full and the Trustee shall have applied in accordance with Section 5.04 or 6.08 hereof. as
applicable. all funds theretofore held by the Trustee for payment of any Bonds not theretofore
presented for payment or purchase. as, the case may be. which funds shall be held in trust solely
for the Holders of such Bonds pending their application in accordance herewith.
Section 9.03. Tar Call.
Notwithstanding any provisions herein_ to the contrary, if (1) the Bonds have been
discharged under Section 9.01 hereof, (2), any principal thereof has not become due and payable,
D' NEW200\001'DOCS'.rNDENTUR.DOC 53 NDENTURE OF TRUST
and (3) the Company is required to provide for the prepayment of the Bonds under Section 7.08
of the Loan Agreement if a Determination of Taxability should occur. the Trustee shall undertake
to prepay the Bonds due under Section 3.01(a(iv) hereof. and this obligation of the Trustee shall
survive release and discharge of this Indenture.
D'NE WNOTO I'DOCS` W DENTUR DOC 54 INDENTURE OF TRUST
ARTICLE 10
Default Provisions and Remedies
Section 10.01. Events of Default.
Each of the following events is hereby defined as. and declared to be and to constitute. an
"Event of Default" hereunder:
(a) default in the due and punctual payment of any interest on any Bond: or
(b) default in the due and punctual payment of the principal of any Bond at its
Maturity: or
(c) default in the due and punctual payment of the purchase price of Bonds
required to be purchased pursuant to Section 4.01 when payment of such amount has
become due and payable; or
(d) If default shall be made in the due and punctual payment of any other
moneys required to be paid to the Trustee under the provisions hereof and such default
shall have continued for a period of 30 days after written notice thereof. specifying such
default. shall have been given by the Trustee to the Issuer and the Company, or to the
Trustee Issuer. the Company and the Tree by the Holders of not less than twenty-five percent
(25%) in aggregate principal amount of the then Outstanding Bonds: or
(e) If default shall be made in the performance or observance of any other of
the covenants, agreements or conditions on the part of the Issuer contained in this
Indenture or in the Bonds. and such default shall have continued for a period of 30 days
after written notice thereof given in the manner provided in clause (c) above: or
(f) the occurrence of an Act of Bankruptcy; or
(g) the occurrence of an "Event of Default" under the Loan Agreement.
Section 10.02. Acceleration.
(a) Upon the occurrence of an Event of Default referred to in Section 10.01 hereof.
the Trustee may. and at the written request of the Holders of not less than 25% in aggregate
principal amount of the Outstanding Bonds shall. by notice in writing delivered to the Issuer and
the Company declare the principal of all Bonds immediately due and payable. whereupon the
same shall become immediately due and payable any time herein or in the Bonds to the contrary
notwithstanding.
(b) upon any declaration of acceleration, or occurrence resulting in acceleration under
this Section 10.02. the Trustee shall immediately declare the Basic Payments required to be made
by the Company under the Loan Agreement to be immediately due and payable in accordance
with Section 9.02 of the Loan Agreement.
D"NEWIGM0 VDOCS`NDENTtRt DOC 55 INDENTURE OF TRUST
(c) Upon any acceleration required under this Section 10.02, interest shall cease to
accrue on the Bonds as of the date of declaration of such acceleration.
(d) Except as provided in this Section 10.02, under no other circumstances may the
Trustee accelerate the payment of the Bonds.
Section 10.03. Remedies.
(a) Subject to the provisions of Sections 10.02. upon the occurrence of an Event of
Default and acceleration of the Bonds, the Trustee may proceed to pursue any available remedy
by suit at law or in equity to enforce all rights of the Bondholders, including without limitation
the right to the payment of the principal or premium, if any, and interest on the then Outstanding
Bonds. Upon the occurrence of an Event of Default under the Loan Agreement, the Trustee may
also enforce any and all rights. if any, of the Issuer thereunder. The Issuer may also exercise any
of its rights as provided in Section 9.12 of the Loan Agreement.
(b) If any Event of Default shall have occurred, and if it shall have been requested to
do so by the Holders of seventy-five percent (75%) in aggregate principal amount of the then
Outstanding Bonds. and if it shall have received an indemnity bond as provided in Section 11.01
hereof. the Trustee shall be obliged to exercise such rights and powers conferred on the Trustee
by this Section and Section 10.02 as the Trustee (being advised by Independent Counsel), shall
deem most expedient in the interests.of the Bondholders: provided, however, that the Trustee
shall have the right to decline to comply with any such request if the Trustee shall be advised by
Independent Counsel that the action so requested may not lawfully be taken or if the Trustee in
good faith shall determine that such action would be unjustly prejudicial to the Bondholders not
parties to such request.
(c) No remedy by the terms of this Indenture conferred upon or reserved to the
Trustee for to the Bondholders) is intended to be exclusive of any other remedy, but each and
every such remedv shall be cumulative and shall be in addition to any other remedy (i) given to
the Trustee or to the Holders hereunder or (ii) now or hereafter existing at law or in equity or by
statute.
(d) 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 even such right and power may be exercised from
time to time and as often as may be deemed expedient.
(e) No waiver of any Event of Default hereunder. whether by the Trustee or by the
Holders, shall extend to or shall affect any subsequent Event of Default or impair any rights or
remedies consequent thereon.
Section 10.04. Direction of Proceedings By Bondholders.
The Holders of a majority in aggregate principal amount of the then Outstanding Bonds
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
n , NF%v,nn nn I, DOCS' NDENTUR DOC 56 fNDENTURE OF TRUST
in connection with the enforcement of the terms and conditions of this Indenture, the Loan
Agreement or for the appointment of a receiver or any other proceedings hereunder; provided.
that such direction shall not be otherwise than in accordance with the provisions of law and of
this Indenture.
Section 10.05. Waiver of Stav or Extension Laws.
Upon the occurrence of an Event of Default, to the extent that such rights may then
lawfully be waived, neither the Issuer nor anyone claiming through it or under it shall or will set
up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption
laws now or hereafter in force, in order to prevent or hinder the enforcement of this Indenture,
but the Issuer, for itself and all who may claim through or under it, hereby waives to the extent
that it lawfully may do so the benefit of all such laws and all right of appraisement and
redemption to which it may be entitled under the laws of the State of Minnesota.
Section 10.06. Priority of Payment and Application of Moneys.
All moneys received by the Trustee pursuant to any right given or action taken under the
provisions of this Article shall, after payment of the costs and expenses of the proceedings
resulting in the collection of such other moneys and of the related expenses. liabilities and
advances incurred or made by the Issuer or the Trustee, be deposited in the Bond Fund. All
moneys in the Bond Fund shall be applied. subject to the provisions of Article VI, as follows:
(a) Unless the principal of all the Bonds shall have become or shall have been
declared due and payable. all such moneys shall be applied:
FIRST: To the payment to the Persons entitled thereto of all installments
of interest then due on the Bonds, in the order of the maturity of the installments
of such interest and. if the amount available shall not be sufficient to pay in full
any particular installment, then to the payment ratably. according to the amounts
due on such installment. to the Persons entitled thereto. without any
discrimination or privilege:
SECOND: To the payment to the Persons entitled thereto the unpaid
principal of any of the Bonds which shall have become due in the order of their
due dates with interest on such Bonds at the applicable rate and, if the amount
available shall not be sufficient to pay in full the unpaid principal on Bonds due
on any particular due date, then to the payment ratably, according to the amount of
principal and premium, if any, due on such date. to the Persons entitled thereto.
without anv discrimination or privilege; and
(b) If the principal of all Bonds shall have become due or shall have been
declared due and payable, all such moneys shall be applied first to the payment of the
principal and interest then due and unpaid upon the Bonds, (other than Company Bonds)
without preference or priority of principal or any redemption premium over interest or of
interest over principal or any redemption premium, or of any installment of interest over
any other installment of interest, or of any Bond over any other Bond, ratably, according
— Nrq^nn on IDOCS' I]DENTUR DOC 57 INDENTURE OF TRUST
to the amounts due respectively for principal and interest, to the Persons entitled thereto.
without any discrimination or privilege, and second, to the payment of the principal and
interest in the Company Bonds in the same manner.
(c) If the principal of all the Bonds shall have been declared due and payable.
and if such declaration shall thereafter have been rescinded and annulled under the
provisions of this Article, then, subject to the provisions of paragraph (b) of this Section
in the event that the principal of all the Bonds shall later become due or be declared due
and payable, the moneys shall be applied in accordance with the provisions of paragraph
(a) of this Section.
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 (i) 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 and (ii) on or before such date set aside the moneys necessary to effect such
application. The Trustee shall give to the Bondholders mailed notice of the deposit with it of anv
such moneys and of the fixing of any such date. Neither the Trustee nor any Paying Agent shall
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 10.06, and all expenses and charges of the Trustee and the Issuer have been paid. any
balance remaining shall be paid to the person entitled to receive the same pursuant to Section
14.09.
Section 10.07. Remedies Vested in Trustee.
All rights of action (including the right to file proof of claims) under this Indenture or
under any of the Bonds may be enforced by the Trustee without the possession of any of the
Bonds or the production thereof in any trial or other proceedings 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, and any recovery or
judgment shall be for the equal benefit of the Holders of the Outstanding Bonds to the extent and
in the manner provided herein. The Issuer and the Trustee hereby agree, without in any way
limiting the effect and scope thereof, that the pledge and assignment hereunder to the Trustee of
all rights included within the Trust Estate shall constitute an agency appointment coupled with an
interest on the part of the Trustee which, for all purposes of this Indenture. shall be irrevocable
and shall survive and continue in full force and effect notwithstanding the bankruptcy or
insolvency of the Issuer or its default hereunder or on the Bonds.
D `NEW'_00`001'DOCS'.IN'DENTUR DOC 58 INDENTURE OF TRUST
Section 10.08. Rights and Remedies of Holders.
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, the Loan Agreement, or for the execution
of any trust hereof or any remedy hereunder or thereunder or for the appointment of a receiver.
unless: (i) a default thereunder shall have become an Event of Default and the Holders of
seventy-five percent (75%) in aggregate principal amount of the Bonds then Outstanding shall
have made written request to the Trustee and shall have offered it reasonable opportunity either
to proceed to exercise the powers hereunder granted or to institute such action. suit or proceedine
in its own name; (ii) such Holders shall have offered to indemnity the Trustee as provided in
Section 11.01; and (iii) the Trustee shall thereafter fail or refuse to exercise within a reasonable
period of time the remedies hereunder granted. or to institute such action, suit or proceeding in its
own name. Such notification, request and offer of indemnity are hereby declared in even, 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 the enforcement of this Indenture.
the Loan Agreement, or for the appointment of a receiver 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 its. his or their
action or to enforce any right thereunder 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 then Outstanding: provided.
however, that nothing herein shall be Construed to preclude any Bondholder from enforcing, or
impair the right of any Bondholder to enforce. the payment by the Trustee of principal of. and
interest and premium. if any, on any Bond of such Bondholder at or after its date of maturity, if
and to the extent that such payment is required to be made to such Bondholder by the Trustee
from available funds in accordance with the terms hereof.
Section 10.09. Termination of Proceedings.
In case the Trustee shall have proceeded to enforce any right under this Indenture or the
Loan Agreement by the appointment of a receiver. by entry and possession or otherwise. and
such proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee. then and in even- such case the Issuer and the Trustee shall
be restored to their former positions and rights hereunder with respect to the property herein
conveyed, and all rights, remedies and powers of the Trustee shall continue as if no such
proceedings had been taken.
Section 10.10. Waiver of an Event of Default.
The Trustee may waive anv Event of Default and its consequences and shall do so upon
written request of the Holders of a majorin in aggregate principal amount of all the Bonds then
Outstanding. No Event of Default giving rise to mandatory acceleration may be waived. No
such waiver or rescission shall extend to any subsequent or other Events of Default, or impair
any right consequent thereon.
0 INEW200'001DOCS'INDENTCR DOC 59 INDENTURE OF TRUST
Section 10. 11. Comoanv as Agent of Issuer.
(a) No default under Section 10.01(g) of this Indenture shall constitute an Event of
Default until actual notice of such default by registered or certified mail shall be given by the
Trustee to the Issuer, the Company, and the Issuer and the Company shall have had the time
permitted by the applicable subsection after receipt of such notice to correct said default or cause
said default to be corrected and the Issuer or Company shall not have corrected said default or
caused said default to be corrected within said time.
(b) With regard to any alleged default concerning which notice is given to the
Company under the provisions of this Section 10. 11, the Issuer hereby names and appoints the
Company as its attorney-in-fact and agent with full authority to perform any covenant or
obligation of the Issuer alleged in said notice to constitute a default, in the name and stead of the
Issuer with full power to do any and all things and acts to the same extent that the Issuer could do
and perform any such things and acts and with power of substitution, provided that the Company
shall give the Issuer notice of its intention so to perform on behalf of the Issuer, and provided
further that the Issuer may at any time, by a writing addressed to the Company withdraw. limit or
modify the appointment hereby made.
DNFW'_MTOI' DOCS'INDENT4R DOC 60 INDENTURE OF TRUST
ARTICLE 11
The Trustee
Section 11.01. Acceptance of the Trustee.
The Trustee, prior to the occurrence of an Event of Default, undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture; and no implied
covenants or obligations should be read into this Indenture against the Trustee. In case an Event
of Default has occurred, the Trustee agrees to perform such trusts as an ordinarily prudent trustee
under a corporate indenture, but in any such event, only upon and subject to the following
express terms and conditions:
(a) 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, but shall be
answerable for the conduct of the same in accordance with the standard specified above.
and shall be entitled to advice of counsel concerning all matters of trusts hereof and
duties hereunder, and may in all cases pay such reasonable compensation to any attorney.
anent, receiver or employee retained or employed by it in connection herewith. The
Trustee may act upon the written opinion or written advice of any attorney, surveyor.
engineer or accountant selected by it in the exercise of reasonable care or, if selected or
retained by the Issuer, approvedby the Trustee in the exercise of such care, provided that
the only legal advice or opinion that the Trustee may rely upon for purposes of securing
advice or an opinion relating to the tax exempt status of the Bonds is given by Bond
Counsel. The Trustee shall not be responsible for any loss or damage resulting from any
action or nonaction in good faith in reliance upon such opinion or advice.
(b) The Trustee shall not be responsible for any recital herein. or in the Bonds
(except with respect to the certificate of the Trustee endorsed on the Bonds) or for the
investment of moneys as herein provided. except as may be provided in Section 8.02, or
for the validity of the execution by the Issuer of this Indenture, or of any -supplemental
indentures or instruments of further assurance. or for the sufficiency of anv securin for
the Bonds issued hereunder or intended to be secured hereby, or for the value of title of
the property herein conveyed, if any, or otherwise as to the maintenance of the security
hereof, except as otherwise provided in Section 5.04 and except that in the event the
Trustee enters into possession of a part or all of the property conveyed pursuant to any
provisions of this Indenture, it shall use due diligence in preserving such property. The
Trustee may, but shall be under no duty to, require of the Company full information and
advice as to the performance of the covenants, conditions and agreements in the Loan
Agreement as to the condition of the Project and the performance of all other obligations
thereunder and shall use its best efforts, but without any obligation, to advise the Issuer
and the Company of any impending Event of Default known to the Trustee.
(c) The Trustee shall not be accountable for the use or application by the
Issuer or the Company of any of the Bonds or the proceeds thereof (except as herein
expressly provided) or for the use or application of any money paid over by the Trustee in
accordance with the provisions of this Indenture or for the use and application of money
=•a..�� nn DO. CTrye=Vr •a DOC 61 rrMENTUIKE of rnusr
received by any Paving Agent. The Trustee may become the owner of Bonds secured
hereby with the same rights it would have if not Trustee.
(d) The Trustee shall be protected in acting upon any written notice, order.
requisition, request, consent, certificate, opinion (including an opinion of Independent
Counsel or Bond Counsel), affidavit, letter, telegram or other paper or document
reasonably believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons. Any action taken by the Trustee pursuant to this Indenture
upon the request or authority or consent of any person who at the time of making such
request or giving such authority or consent is the Holder of any Bond, shall be conclusive
and binding upon all future Holders of the same Bond and upon Bonds issued in
exchange therefor, upon transfer thereof. or in place thereof.
(e) As to the existence or non-existence of any fact or as to the sufficiency or
authenticity of any instrument, paper or proceeding, the Trustee shall be entitled to rely
upon a certificate of the Issuer signed by its Deputy Clerk under the seal of the Issuer as
sufficient evidence of the facts stated therein as the same appear from the books and
records under the Deputy Clerk's custody or control or are otherwise known to him. The
Trustee may accept a certificate of the Deputy Clerk of the Issuer under the seal of the
Issuer to the effect that a motion, resolution or ordinance in the form therein set forth has
been adopted by the governing body of the Issuer as conclusive evidence that such
motion, resolution or ordinance has been duly adopted. and is in full force and effect. and
may accept such motion, resolution or ordinance as sufficient evidence of the facts stated
therein and the necessity or expediency of any particular dealing, transaction or action
authorized or approved thereby. but may at its discretion. secure such further evidence
deemed necessary or advisable, but shall in no case be bound to secure the same.
(f) The Trustee shall not be answerable except for its own negligence or
willful default.
(g) The Trustee shall not be personally liable for any debts contracted or for
damages to persons or to personal propem injured or damaged, or for salaries or
nonfulfillment of contracts during any period in which they may be in possession of or
managing the real and tangible personal property as in this Indenture provided.
(h) At any and all reasonable times, the Trustee, and its duly authorized
agents. attorneys, experts, engineers, accountants and representatives, shall have the right
fully to inspect any and all of the property comprising the Project, including all books.
papers and records of the Issuer pertaining to the Project and the Bonds, and to take such
memoranda from and with regard thereto as may be desired.
(i) The Trustee shall not be required to give any bond or surety with respect to
the execution of said trusts and powers or otherwise in respect to the premises.
0) Notwithstanding any thing elsewhere in this Indenture contained. the
Trustee shall have the right, but shall not be required, to demand, with respect to the
authentication of any Bonds, the withdrawal of any cash, the release of any property or
. 1',, , _.., h^ MDENTURE OF TRUST
any action whatsoever within the purview of this Indenture, any showings. certificates.
opinions (including opinions of Independent Counsel), appraisals or other information. or
corporate action or evidence thereof, in addition to that by the terms hereof required as a
condition of such action by the Trustee, deemed desirable for the purpose of establishing
the right of the Issuer to the authentication of any Bonds, the withdrawal of any cash. the
release of any property, or the taking of any other action by the Trustee.
(k) Before taking any action under this Indenture. the Trustee may require that
they be furnished an indemnity bond satisfactory to them for the reimbursement of all
expenses to which they may be put and to protect them against all liability except liability
which is adjudicated to have resulted from the negligence or willful default of the
Trustee, by reason of any action so taken by the Trustee.
(1) All moneys received by the Trustee. the Paving Agent. any Co -Paving
Agent or the Remarketing Agent for the Bonds shall, until used or applied or invested as
herein provided, be held in trust for the purposes for which they were received but need
not be segregated from other funds except to the extent required herein or by law.
Neither the Trustee, the Paving Agent. any Co -Paving Agent nor the Remarketing Agent
shall be under any liability for interest on any moneys received hereunder except such as
may be agreed upon.
(m) No provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance of any of their
duties hereunder. or in the exercise of any of their rights or powers. if they shall have
reasonable grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to them.
(n) The Trustee shall make no representation as to the validity or adequacy of
this Indenture or the Bonds. it shall not be accountable for the Issuer's use of the proceeds
of the Bonds or any money paid to the Issuer or upon the Issuer's direction under any
provision hereof. it shall not be responsible for the use or application of any money
received by any Paving Agent other than the Trustee and it shall not be responsible for
any statement or recital herein or any statement in the Bonds or any other document in
connection with the sale of the Bonds or pursuant to this Indenture other than its
certificate of authentication.
Section 11.02. Trustee's Fees. Charges and Expenses.
The Trustee and any Paying Agent shall be entitled to payment and/or reimbursement for
reasonable fees for services rendered hereunder and all advances, counsel fees and other
expenses reasonably and necessarily made or incurred by the Trustee in and about the execution
of the trusts created by this Indenture and in and about the exercise and performance of the
powers and duties of the Trustee hereunder and for the reasonable and necessary costs and
expenses incurred in defending 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). In this regard the Issuer has made provisions in Section 4.04 of the Loan Agreement
for the payment of said fees, advances, counsel fees, costs and expenses and reference is hereby
n •NF.R^�0n01'DOCS!NT)ENTUR DOC 63 INDENTURE OF TRUST
made to the Loan Agreement for the provisions so made; and the Issuer shall not otherwise be
liable for the payment of such stuns. Upon an Event of Default, but only upon an Event of
Default, the Trustee shall have a first lien with right of payment prior to payment on account of
interest on or principal or premium, if any, of any Bond and upon the money received by it
hereunder, for said fees, advances, counsel fees. costs and expenses incurred by it. except that the
Trustee shall have no right to apply funds on deposit in the Excess Investment Eamings Fund to
the payment of its fees, charges and expenses.
Section 11.03. Notice to Holders of Default.
The Trustee shall give to the Bondholders written notice of all Events of Default known
to the Trustee, within ninety (90) days after the occurrence of an Event of Default; provided that,
except in the case of an Event of Default in the payment of the principal of or interest on any of
the Bonds, the Trustee shall be protected in withholding such notice if and so long as the Board
of Directors, the executive committee or a trust committee of directors or chief executive officer
of the Trustee in good faith determine that the withholding of such notice is in the interest of the
Holders.
Section 11.04. Intervention by Trustee.
In any judicial proceeding to which the Issuer is a pan and which in the opinion of the
Trustee and its counsel has a substantial bearing on the interests of Holders of Bonds. the Trustee
may intervene on behalf of Holders and shall do so if requested in writing by the Holders of at
least twenry-five percent (25%) of the aggregate principal amount of Outstanding Bonds. The
rights and oblications of the Trustee under this Section are subject to the approval of a court of
competent j urisdiction.
Section 11.05. Successor Trustee.
Any corporation. association or agency 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. mercer. consolidation or transfer to which it is a pan, ipso facto, shall
be and become successor Trustee and Paving Agent under this Indenture 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
contran notwithstanding.
Section 11.06. Resignation by Trustee.
The Trustee and any successor trustee may at anv time resign from the trusts hereby
created by giving thirty (30) days written notice to the Issuer and to the Company and by first
class mail to each Holder of Bonds as shown on the Bond -Register, and such resignation shall
take effect upon the appointment of a successor trustee by the Holders or by the Issuer. Such
notice to the Issuer and the Company may be served personally or sent by registered mail.
yr•y�na nn �, nnrg Ong 64 INDENTURE OF TRUST
Section 11.07. Removal of Trustee.
The Trustee may be removed at any time by an instrument or concurrent instruments in
writing delivered to the Trustee, to the Company and to the Issuer. and signed by the Holders of a
majority in aggregate principal amount of then Outstanding Bonds. Such removal shall only take
effect upon the appointment of a successor trustee.
Section 11.08. Appointment of Successor Trustee.
In case the Trustee hereunder shall resign or be removed. or be dissolved or shall be in
course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in
case it shall be taken under the control of any public officer or officers, or of a receiver appointed
by a court. a successor may be appointed by the Holders of a majority in aggregate principal
amount of the then Outstanding Bonds, by an instrument or concurrent instruments in writing
signed by such Holders, or by their anomey-in-fact, duly authorized. Nevertheless, in case of
such vacancy the Issuer by resolution of its governing body may appoint a temporary trustee to
fill such vacancv until a successor trustee shall be appointed by the Holders in the manner above
provided: and any such temporary trustee so appointed by the Issuer shall immediately and
without further act be superseded by the trustee so appointed by such Holders. Every such
Trustee appointed pursuant to the provisions of this Section 11.08 shall be a trust company or
bank having trust powers and having a reported capital and surplus not less than S"'5.000.000. if
there be such an institution willing. qualified and able to accept the trust upon reasonable or
customary terms.
Section 11.09. Acceptance by Successor Trustees.
Every successor Trustee appointed hereunder shall execute, acknowledge. and deliver to
its predecessor. to the Company and also to the Issuer, 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 predecessors as Trustee and Paving Agent: but such predecessor shall.
nevertheless. on the written request of the Issuer. or of its successor Trustee. execute and deliver
an instrument transferrins to such successor Trustee all the estates. 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 instrument in writing
from the Issuer be required by any successor Trustee for more fully and certainly vesting in such
successor the estates, rights, powers and duties hereby vested or intended to be vested in the
predecessor trustee, any and all such instruments in writing shall, on request, be executed.
acknowledged and delivered by the Issuer. The resignation of anv Trustee and the instrument or
instruments removing any Trustee and appointing a successor hereunder, together with all other
instruments provided for in this Article. shall be forthwith filed or recorded or both by the
successor Trustee in each recording office where the Indenture shall have been filed or recorded
or both.
;cq •nn — •-"n .. n" 65 MDENTURE OF TRUST
Section 11. 10. Right of Trustee to Pay Tares and Other Charles.
If any tax, assessment or governmental or other charge upon any part of the Trust Estate
is not paid as required herein, the Trustee may pay such tax, assessment or charge, without
prejudice, however, to any rights of the Trustee or the Bondholders hereunder arising in
consequence of such failure; and any amount at any time so paid under this Section, or under the
Loan Agreement, with interest thereon (to the extent permitted by law) from the date of such
payment until paid to the Trustee in full at a rate per annum equal to the Prime Rate, shall
become so much additional indebtedness secured hereby, and the same shall be given a
preference in payment over the principal of and the interest on, the Bonds and shall be paid out of
the revenues and receipts from the Trust Estate, if not otherwise caused to be paid; provided.
however, that payments of any such tax, assessment or charge shall not have any such preference
with respect to and shall not be paid from any proceeds from the Remarketing of the Bonds by
the Remarketing Agent pursuant to Section 1.0.1 hereof. The Trustee shall not be under an
obligation to make any such payment unless it shall have been requested to do so by the Holders
of at least 25% in principal amount of the Bonds then Outstanding and shall have been provided
with sufficient moneys for the purpose of making such payment.
Section 11.11. Trustee Protected in Relving Upon Resolutions.
The resolutions, orders. requisitions, 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 full warrant. protection and authority to the Trustee.
Section 11.1'_'. Successor Trustee as Custodian of Bond Fund and Paving Agent.
In event of a change in the office of Trustee the predecessor trustee which has resigned or
been removed shall cease to be custodian of the funds prescribed in Article V and shall cease to
act as the Paying Agent for principal and interest on the Bonds. and the successor trustee shall be
and become such custodian and Paying Agent.
Section 11.13. Co -Trustee.
At any time or times. for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust Estate may at the time be located, the Issuer and the
Trustee shall have the power to appoint, and. upon the request of the Trustee or of the Holders of
at least fifty-one percent (51 %) in aggregate principal amount of the then Outstanding Bonds. the
Issuer shall for such purpose join with the Trustee in the execution, delivery and performance of
all instruments and agreements necessary or proper to appoint one or more persons approved by
the Trustee either to act as co -trustee or co -trustees, jointly with the Trustee, of all or any part of
the Trust Estate, or to act as separate trustee or separate trustees of all or any part of the Trust
Estate, and to vest in such person or persons. in such capacity, such right to the Trust Estate or
any part thereof, and such rights. powers, duties, trusts or obligations as the Issuer and the
Trustee may consider necessary or desirable subject to the remaining provisions of this Section
11.13.
` vF�t^mmnn IDOCS f1'DFNnlR DOC 66
MDENTLRtE OF TRUST
If the Issuer shall not have joined in such appointment within fifteen (15) days after the
receipt by it of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have power to make such appointment.
The Issuer shall execute, acknowledge and deliver all such instruments as may be
required by any such co -trustee or separate trustee for more fully confirming such title. rights.
powers, trusts, duties and obligations to such co -trustee or separate trustee.
Every co -trustee or separate trustee shall. to the extent permitted by law but to such extent
only, be appointed subject to the following terms, namely:
(a) The Bonds shall be authenticated and delivered, and all rights, powers.
trusts, duties and obligations by this Indenture conferred upon the Trustee in respect of
the custody, control or management of moneys, papers securities and other personal
property shall be exercised solely by the Trustee.
(b) All rights, powers, trusts, duties and obligations conferred or imposed
upon the trustees shall be conferred or imposed upon and exercised or performed by the
Trustee, or by the Trustee and such co -trustee or co -trustees or separate trustee or separate
trustees jointly, as shall be provided in the instrument appointing such co -trustee or
co -trustees or separate trustee or separate trustees, except to the extent that. under the law
of any jurisdiction in which any particular act or acts are to be performed. the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event such act or
acts shall be performed by such co -trustee or co -trustees or separate trustee or separate
trustees.
(c) Any request in writing by the Trustee to any co -trustee or separate trustee
to take or to refrain from taking anv action hereunder shall be sufficient warrant for the
taking. or the refraining from taking. of such action by such co -trustee or separate trustee.
(d) Any co -trustee or separate trustee may delegate to the Trustee the exercise
of any right, power. trust. dun or obligation. discretionary or otherwise.
(e) The Trustee at any time, by an instrument in writing, with the concurrence
of the Issuer. may accept the resignation of or remove any co -trustee or separate trustee
appointed under this Section 11.1:. and. in case of a continuing Event of Default the
Trustee shall have power to accept the resignation of, or remove. any such co -trustee or
separate trustee without the concurrence of the Issuer. upon the request of the Trustee.
the Issuer shall join with the Trustee in the execution, delivery and performance of all
insti-aments and agreements necessan' or proper to effectuate such resignation or removal.
A successor to any co -trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section 11.13.
(f) No trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder.
0'NFW?00'001 DOCSINDENTUR DOC 67 INDENTURE OF TRUST
(g) Any demand, request, direction, appointment, removal, notice, consent.
waiver or other action in writing delivered to the Trustee shall be deemed to have been
delivered to each co -trustee or separate trustee.
(h) Any moneys, papers, securities or other items of personal property
received by any such co -trustee or separate trustee hereunder shall forthwith, so far as
may be permitted by law, be turned over to the Trustee.
Upon the acceptance in writing of such appointment by any such co -trustee or separate
trustee, it or he shall be vested with such interest in and to the Trust Estate or any part thereof.
and with such rights, powers, duties or obligations, as shall be specified in the instrument of
appointment jointly with the Trustee (except insofar as local law makes it necessary for any such
co -trustee or separate trustee to act alone) subject to all the terms of this Indenture. Every such
acceptance shall be filed with the Trustee.. Any co -trustee or separate trustee may. at any time by
an instrument in writing, constitute the Trustee its or his attomey-in-fact and agent, with full
power and authority to do all acts and things and to exercise all discretion on its or his behalf and
in its or his name.
In case any co -trustee or separate trustee shall die, become incapable of acting, resign or
be removed. the title to the Trust Estate and all rights. powers. trusts. duties and obligations of
said co -trustee or separate trustee shall. so far as permitted by law, vest in and be exercised by the
Trustee unless and until a successor .co -trustee or separate trustee shall be appointed in the
manner herein provided.
Section 11.14. Obligation to Trustee as to Reporting.
The Trustee shall. at the request of the Company. cause to be filed any reports lawfully
required by any public agency to be filed under any applicable security laws and any other reports
lawfully required by any public agency to be filed under the Act or any other applicable state law.
For this purpose the Trustee is entitled to require the Company to cause to be furnished to the
Trustee whatever information is necessary to comply with such reporting requirements at the
Company's sole expense.
Section 11.15. Successor Paving Agent.
The provisions of Sections 11.05 through 11.09 with respect to removal, resignation and
appointment of a successor trustee shall be equally applicable to resignation, removal and
appointment of a successor to the Paying Agent. The Trustee shall be eligible for appointment as
successor to the Paying Agent.
Section 11.16. Confirmation of the Trustee.
(a) At any time while Bonds remain Outstanding under this Indenture and in any of
the following circumstances. to the extent permitted by law, to -wit:
(i) The Trustee is in doubt as to whether or not the Indenture or any Related
Document or instrument requires Bondholders' consent or the consent of the Company,
any guarantor, or the Issuer in connection with any proposed action;
,, 1 ro• -1" ";-r. c " 68 INDENTURE Or TRUST
(ii) The Trustee has substantial doubt as to whether its consent to a proposed
action, although authorized, should in the particular circumstances be given;
(iii) The Trustee's consent is sought or deemed necessary in connection with a
proposed action which is not specifically dealt with or contemplated by the Indenture or
any other Related Document, or it is unclear whether the Indenture or other Related
Document is intended to deal with the proposed action:
(iv) There is a disagreement between any of the parties to the Indenture or any
other Related Document as to whether a proposed action may be taken or is required to be
taken;
(v) There appears to be a conflict. ambiguity or inconsistency between or
among the provisions of the Indenture and any other Related Document other than as
provided for in Sections 12.01 and 13.01 hereof:
(vi) There is doubt as to whether or not a proposed action falls within one of
the provisions of Sections 12.01 and 13.01 hereof authorizing such action without
Bondholders' consent:
(vii) Bondholders' consent is required by this Indenture or Related Document
but consent cannot be obtained because:
(A) it is not possible to comply with requirements of this Indenture or
any other Related Document as to the notice to be given to Bondholders with
respect to the proposed matter requiring consent; or V
(B) if action is to be taken at a meeting of Bondholders, the requisite
number of Bondholders (the quorum) necessan, to be present at a meeting in order
for a proposed action to be taken was not present at such meeting or any
adjourned meeting:
(viii) The Trustee wishes to depart from the procedures set forth in Section
14.03 for purposes of calling or conductive a meeting of the Bondholders. or in any other
evenmalin• in which it shall be necessan- to determine a question arising under or to
construe this Indenture or any other Related Document:
the Trustee may. and upon request of the Issuer. the Company or the Holders of 5% or more in
principal amount of Outstanding Bonds shall, proceed in accordance with the provisions of
Minnesota Statutes. Section 501.33 through 501.38. as amended.
If Bondholder's consent cannot be obtained because of the circumstances
described in (a)(vii) above a court of competent jurisdiction may amend or supplement
the Loan agreement or Indenture or any Related Document upon a proper showing of the
necessity therefor.
(b) In construing and interpreting the Indenture and any other Related Document, the
objective shall always be to ascertain and effectuate the intention of the parties. So far as
D:\NEW?OOWO 10OCSSINDENTUR.DOC 69 INDENTURE OF TRUST
possible and appropriate, and to the extent that it does not conflict with the provisions of the
Indenture or the other Related Documents, the principles of statutory construction enunciated in
Sections 645.16, 645.17, 645.18, 645.19 and 645.20, Minnesota Statutes, as amended, shall be
applied in the interpretation and construction of the Indenture and other Related Documents.
(c) The Trustee or successor Trustee shall not be answerable for actions taken in
compliance with any final order of the court. The Trustee or successor Trustee shall not be
entitled to require an indemnity bond pursuant to Section 11.01(k), prior to taking any action
directed by final order of the court.
Section 11.17. Remarketing Agent.
The Issuer shall, at the direction of the Company. appoint any successor Remarketing
Agent for the Bonds, subject to the conditions set forth in Section 11.18 hereof. Any successor
Remarketing Agent shall designate to the Trustee its principal office for purposes hereof. which
shall be the office of such Remarketing Agent at which all notices and other communications in
connection herewith may be delivered to it, and signify its acceptance of the duties and
obligations imposed upon it hereunder by a written instrument of acceptance delivered to the
Issuer, the Company and the Trustee under which such Remarketing Agent will agree particularly
to use its best efforts to sell any Bond delivered to the Trustee for purchase pursuant to Article IV
or to assist the Company in selling such Bonds, and (ii) keep books and records with respect to
its activities hereunder available for inspection by the Issuer, and the Trustee and the Company at
all reasonable times.
The Issuer shall cooperate with the Trustee and the Company to cause the necessan
arrangements to be made and to be thereafter continued whereby funds from the sources
specified in Section 6.04 will be made available to pay the purchase price of Bonds presented at
the principal corporate trust office of the Trustee.
Section 11.18. Qualifications of Remarketing -gent: Resignation: Removal.
The Remarketing Agent shall be an institution capable of performing all the duties
imposed upon it by this Indenture. The Remarketing Agent may at any time resign and be
discharued of the duties and obligations created by this Indenture in accordance with the
provisions of the Remarketing Agreement. The Remarketing Agent may be removed at any time.
at the direction of the Company. in accordance with the provisions of the Remarketing
Agreement.
D `NE W200`.001`DOCSSMDENTURDOCl 70 rNDENTURE OF TRUST
ARTICLE 12
Supplemental Indentures
Section 12.01. Supplemental Indentures Not Requiring Consent of Bondholders.
The Issuer and the Trustee may, from time to time and at any time, without the consent
of, or notice to, any of the Holders, and when so required by this Indenture shall. enter into an
indenture or indentures supplemental to this Indenture as shall not be inconsistent with the terms
and provisions hereof (which supplemental indenture or indentures shall thereafter form a part
hereof), so as to thereby (1) cure any ambiguity or formal defect or omission in this Indenture or
in any supplemental indenture, (2) grant to or confer upon the Trustee for the benefit of the
Holders anv additional rights, remedies. powers, authority or security that may lawfully be
granted to or conferred upon the Holders• or the Trustee. (3) more precisely identify the Trust
Estate, or any other property which may become a part of the Trust Estate. (4) subject to the lien
and pledge of this Indenture additional revenues. properties or collateral. (5) evidence the
appointment of a separate trustee or a co -trustee or the succession of a new Trustee and/or Paying
Agent hereunder, (6) modify, eliminate and/or add to the provisions of this Indenture to such
extent as shall be necessary to prevent any interest on the Bonds from becoming taxable under
the Federal income tax laws or 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, (7) make anv other change which is required by any provision of
this Indenture or which is deemed by the Trustee necessary to reconcile the Indenture with the
Related Documents or any amendments thereto. or (8) make any other change which in the
judgment of the Trustee is necessary or desirable and will not materially prejudice any
non -consenting Holder of a Bond.
Section 12.02. SSu elemental Indentures Requiring Consent of Holders.
Exclusive of supplemental indentures covered by Section 1 2.01 hereof and subject to the
terms and provisions contained in this Section. and not otherwise. the Trustee. upon receipt of an
instrument evidencing the, consent to the below -mentioned supplemental indenture by the
Holders of not less than fifty-one percent (. 1 "'0) of the aggregate principal amount of the then
Outstanding Bonds, shall join with the Issuer in the execution of such other indenture or
indentures supplemental hereto as shall be deemed necessary and desirable 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
nothing herein contained shall permit or be construed as permitting (1) an extension of the
maturity of the principal or of the interest on any Bond issued hereunder, or (2) a reduction in the
principal amount of any Bond or the rate of interest thereon or any premium thereon, or (3) a
privilege or priority of anv Bond or Bonds over anv other Bond or Bonds except as may be
otherwise expressly provided herein. or (4) a reduction in the aggregate principal amount of the
Bonds required for consent to such supplemental indenture, or (5) modifying any of the
D:1NEW200kOO I`DOCSINDENTUR.DOC 71 INDENTURE OF TRUST
provisions of this section without the consent of the Holders of one hundred percent (100%) of
the principal amount of all Bonds adversely affected thereby ("100% Bondholders' Consent").
If at any time the Issuer shall request the Trustee to enter into any such supplemental
indenture for any of the purposes of this Section which does not require 100% Bondholders'
Consent, the Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause
notice of the proposed execution of such supplemental indenture to be mailed by first class mail,
postage prepaid, to the Holders of the Bonds at the addresses shown on the Bond Register. Such
notice shall briefly set forth the nature of the proposed supplemental indenture and shall state that
copies thereof are on file at the principal office of the Trustee for inspection by all Bondholders.
The Trustee shall not, however, be subject to any liability to any Bondholder by reason of its
failure to mail such notice to any particular Bondholder if notice was generally mailed to
Bondholders, and any such failure shall not affect the validity of such supplemental indenture
when consented to and approved as provided in this Section. If the Holders of not less than
fifty-one percent (51 %) in aggregate principal amount of the then Outstanding Bonds at the time
of the execution of any 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 any
of the terms and provisions contained herein or the operation thereof. orinany manner to
question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Issuer
from executing the same or from taking any action pursuant to the provisions thereof. upon the
execution of any such supplemental indenture as in this Section permitted and provided. this
Indenture shall be and is deemed to be modified and amended in accordance herewith.
Anything herein to the contrary notwithstanding, a supplemental indenture under this
Article YII which adversely affects the right of the Company under the Loan Agreement shall not
become effective unless and until the Company shall have consented (either in writing or by
inaction as provided below) to the execution and delivery of such supplemental indenture. In this
regard. the Trustee shall cause notice of the proposed execution and delivery of any such
supplemental indenture. together with a copy of the proposed supplemental indenture, to be
mailed by certified or registered mail to the Company at least fifteen (15) days prior to the
proposed date of execution and delivers of any such supplemental indenture. The Company shall
be deemed to have consented to the execution and delivers. of any such supplemental indenture if
the Trustee does not receive a letter signed by a Representative of the Company of protest or
objection thereto on or before 4:30 p.m., Central Standard or Central Daylight Time, whichever
is then in effect, of the fifteenth day after the maiiing of said notice and a copy of the proposed
Sur) indenture to the Company unless such fifteenth day falls on a Sunday or legal
holiday, in which event the letter of objection must be received on the next succeeding business
day.
Section 12.03. Rights of Trustee.
If. in the opinion of the Trustee, any supplemental indenture provided for in this Article
affects the rights, duties or immunities of the Trustee under this Indenture or otherwise, the
Trustee may, in its discretion, decline to execute such supplemental indenture, except to the
extent that this may be required in the case of a supplemental indenture entered into under
Section 12.01. The Trustee shall be entitled to receive, and shall be fully protected in relying
D'!NEW]OOW0VDOCSdNDENTLR.DOC 72 INDENTURE OF TRUST
upon, an opinion of Independent Counsel as conclusive evidence that any such supplemental
indenture conforms to the requirements of this Indenture.
D'NEW200'001'DOCS'INDENTUR.DOC 73 INDENTURE OF TRUST
ARTICLE 13
Amendments to Agreement and Related Documents
Section 13.01. Amendments Not Requiring Bondholder Consent.
The Issuer and/or the Trustee may, without the consent of or notice to the Bondholders.
consent to any amendment, change or modification of the Related Documents:
(a) which may be required or permitted without Bondholder consent by the
provisions of the Related Documents or this Indenture:
(b) for the purpose of curing any ambiguity or formal defect or omission:
(c) to reconcile the Related Documents with any amendment or supplement to
the Indenture; or
(d) to effect anv other change to the Related Documents which, in the
judgment of the Trustee. will not materially prejudice any non -consenting Holder of a
Bond.
Section 13.02. Amendments Requiring Bondholder Consent
Except for amendments. changes or modifications described in Section 13.01 above.
neither the Issuer nor the Trustee shall consent to any other amendment, change or modification
of the Related Documents, without Living notice and the written approval or consent of the
Holders of not less then fifty-one percent (5 1 %) in aggregate principal amount of the Bonds then
Outstanding given and procured as provided in this Section: provided that in no event shall such
amendment. change or modification relieve the Company of the obligation under the Related
Documents to make when and as due any payments required for the payment of principal. interest
and any premium due or to become due on the Bonds unless the consent of the Holders of all
Bonds adversely affected thereby is first secured. If at anv time the Issuer and the Company shall
request the consent of the Trustee to any such proposed amendment. change or modification any
Related Documents the Company shall request consent of the Trustee to any such proposed
amendment. change or modification. the Trustee shall. upon being satisfactorily indemnified with
respect to expenses. cause notice of such proposed amendment, change or modification to be
given in the same manner as provided in Section 12.02 hereof with respect to supplemental
indentures. Such notice shall briefly set forth the nature of such proposed amendment. change or
modification and shall state that copies of the instrument embodying the same are on file at the
principal office of the Trustee for inspection by all Holders. The Trustee shall not. however, be
subject to any liability to any Holder by reason of its failure to mail such notice to any particular
Bondholder if notice was generally mailed to Bondholders, and any such failure shall not affect
the validity of such amendment, change or modification when consented to and approved as
provided in this Section. If the Holders of not less than fifty-one percent (51%) in aggregate
principal amount of the Bonds then Outstanding at the time of the execution of any such
amendment shall consent to 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 the
D NFw7nn•nnI DOCS INDFNTUR DOC 74 rNDENTURE OF TRUST
operation thereof, or in any manner to question the propriety of the execution thereof. or to enjoin
or restrain the Trustee or the Issuer from executing the same or from taking any action pursuant
to the provisions thereof. Upon the execution of any such amendment. the affected Related
Document shall be deemed to be modified and amended in accordance therewith. Nothine in this
Section shall permit or be construed as permitting any reduction in the payments required to be
made (i) by Sections 4.02 or 4.03 of the Loan Agreement or (ii) permitting a reduction or change
in the Stated Maturities of the Bonds.
I - NF'.k2^nnn, DOCS INDENTCR DOC 75 INDENTURE OF TRUST
ARTICLE 14
Miscellaneous Provisions
Section 14.01. Consent.
Anv consent, request, direction, approval, objection or other instrument required by this
Indenture to be signed and executed by the Holders may be in any number of concurrent writings
of similar tenor and must be signed or executed by such Holders in person or by agent appointed
in writing. Proof of the execution of any such consent, request, direction, approval. objection or
other instrument or of the writing appointing any such agent and of the ownership of Bonds, if
made in the following manner, shall be sufficient for any of the purposes of this Indenture• and
shall be conclusive in favor of the Trustee with regard to any action taken bv_ it under such
request or other instrument, namely:
(a) The fact and date of the execution by any Person of any such writing may
be proved by the certificate of any officer in any jurisdiction who by law has power to
take acknowledgments within such jurisdiction that the Person signing such writing
acknowledged before him the execution thereof, or by an affidavit of any witness to such
execution.
(b) The fact of the ownership by any Person of Bonds and the amounts and
numbers of such Bonds, and the date of the holding of the same. may be proved only by
reference to the Bond Register.
Section 14.02. Rights Under Indenture.
With the exception of rights herein expressly conferred, nothing expressed or mentioned
in or to be implied from this Indenture or the Bonds is intended or shall be construed to give any
person or company other than the parties hereto. and the Bondholders, any legal or equitable
right, remedy, or claim under or in respect to this Indenture or any covenants, conditions and
provisions herein contained: this Indenture and all of the covenants. conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and
the Holders of the Bonds hereby secured as herein provided.
Section 1.1.03. Meetings of Bondholders.
(a) A meeting of Bondholders may be called at any time and from time to time
pursuant to this Section to facilitate any of the following purposes:
(i) to give any notice to the Issuer, the Company or the Trustee, or to give any
directions to the Trustee. or to consent to the waiving of any default under this Indenture,
or to take any other action authorized to be taken by the Bondholders under this
Indenture:
(ii) to remove the Trustee or to appoint a successor trustee pursuant to
Sections 11.07 and 11.08 of this Indenture;
D'NEW'00`001'DOCS`rIDENTUR DOC 1 76 INDENTURE OF TRUST
(iii) to consent to the execution of a supplemental indenture pursuant to
Section 12.02 hereof, or to consent to the execution of an amendment, change or
modification of any Related Document pursuant to Section 13.02 hereof, or
(iv) to take any other action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of the Bonds under any other
provision of this Indenture or under applicable law.
(b) Meetings of Bondholders may be held at such place or places as the Trustee or. in
case of its failure to act, the Bondholders calling the meeting, shall from time to time determine.
(c) The Trustee may at any time call a meeting of Bondholders to be held at such time
and at such place as the Trustee shall determine. Notice of every meeting of Bondholders setting
forth the time and the place of such meeting and in general terms the action proposed to be taken
at such meeting, shall be mailed by first class mail. postage prepaid, to the Holders of the Bonds
at the address shown on the Bond Register. Any failure of the Trustee to mail such notice to a
particular Bondholder, or any defect therein shall not, however, in any way impair or affect
the -validity of any such meeting if notice was generally mailed to Bondholders. In the event that
the Holders of at least 10% in aggregate principal amount of the Outstanding Bonds 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
accomplished the mailing of notice of such meeting within 20 days after receipt of such request.
then such Bondholders may determine the time and the place for such meeting and may call such
meeting to take any action authorized in paragraph (a) of this Section by giving notice of such
meeting in accordance with the provisions of this paragraph (c).
(d) To be entitled to vote at any meeting of Bondholders, a person shall be a Holder
of one or more Bonds Outstanding, or a person appointed by an instrument in writing as proxy
for a Bondholder by such Bondholder. The only persons who shall be entitled to be present or to
speak at any meeting of Bondholders shall be the persons entitled to vote at such meeting and
their counsel and any representatives of the Trustee, the Company and the Issuer and their
counsel.
(e) Notwithstanding any other provisions of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any meeting of Bondholders in regard
to proof of the ownership 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. Except as otherwise permitted or required by any
such regulations, the ownership of Bonds shall be proved in the manner specified in Section
14.01 of this Indenture and the appointment of any proxy shall be proved in the manner specified
in said section or by having the signature of the person executing the proxy witnessed or
Guaranteed by any bank, banker or trust company authorized by said Section to certify to the
ownership of Bonds:
(i) The Trustee or, if the Bondholders have called the meeting, the
Bondholders shall, by an instrument in writing, appoint a temporary chairperson of the
01NEW200MI'DOMNDENTURt.DOC 77 INDENTURE OF TRUST
meeting. A permanent chairperson and a permanent secretary of the meeting shall be
elected by vote of the Holders of a majority of the Bonds represented at the meeting and
entitled to vote.
(ii) At any meeting such Bondholder or proxy shall be entitled to one vote for
each $5,000 of principal amount of Outstanding Bonds owned or represented by him or
her; provided, however, that no vote shall be cast or counted at any meeting in respect of
any Bond challenged as not Outstanding and ruled by the chairperson of the meeting to be
not Outstanding. The chairperson of the meeting shall have no right to vote, except as a
Bondholder or proxy.
(iii) At any meeting of Bondholders, the presence of persons owning or
representing Bonds in an aggregate principal amount sufficient under the appropriate
provision of this Indenture to take action upon the business for the transaction of which
such meeting was called shall constitute a quorum. Any meeting of 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.
(f) 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 Bondholders or of their
proxies and the number or numbers of the Bonds Outstanding held or represented by them. The
permanent chairperson 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 triplicate of all votes cast at the meeting.
A record, at least in triplicate. of the proceedings of each meeting of Bondholders shall be
prepared by the secretary of the meeting. The original reports of the inspectors of votes on an}'
vote by ballot taken at such meeting. 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
published or mailed as provided in this Section shall be attached to such record. Each copy shall
be signed and verified by the affidavits of the permanent chairperson and secretary of the meeting
and one such copy shall be delivered to the Issuer, another to the Company and another to the
Trustee to be preserved by the Trustee which copy shall have attached thereto the ballots voted at
the meeting. Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
(g) At any time prior to the preparation of the record of the meeting in accordance
with the terms of this Section for delivery to the Trustee evidencing 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 the number of which is included
in the Bonds, the Holders of which have consented to such action. may, by filing written notice
with the Trustee at its Principal corporate trust office and upon proof of holding as provided in
Section 14.01 of this Indenture. revoke such consent so far as it concerns 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, upon transfer thereof, or in lieu thereof, irrespective of whether or not any
0 NEW100`00!`D0CS'1NDENTUR DOC 78 INDENTURE OF TRUST
notation in regard thereto is made upon such Bond. Any action taken by the Holders of the
percentage in aggregate principal amount of the Bonds specified in this Indenture in connection
with such action shall be conclusively binding upon the Issuer, the Company, the Trustee and the
Holders of all the Bonds.
(h) Nothing in this Section 14.03 is intended to limit or prevent the Trustee from
taking any action permitted under Section 11.16 of this Indenture, including but not limited to the
Trustee's right to apply to a court of competent jurisdiction for confirmation of appointment, or
for instructions in accordance with the provisions of Minnesota Statutes, Sections 501.33 through
501.38, as amended.
Section 14.04. Severability.
If any provision of this Indenture shall be held or deemed to be or shall, in fact, be
inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions
or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or
statute or rule of public policy, or for any other reason, such circumstances shall not have the
effect of rendering the provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provisions herein contained invalid, inoperative or
unenforceable to any extent whatever.
The invalidity of any one or_frtore phrases, sentences, clauses or paragraphs in this
Indenture contained shall not affect the`remaining portions of this Indenture or any part thereof.
Section 14.05. Notices.
All notices, certificates or other communications hereunder shall be in writing (except as
otherwise expressly provided herein) and shall be sufficiently given and shall be deemed given
when mailed by first class mail. postage prepaid, with proper address as indicated below. The
Issuer, the Companv, the Bondholders and the Trustee may, by written notice given by each to
the others, designate any address or addresses to which notices, certificates or other
communications to them shall be sent when required as contemplated by this Indenture. Until
otherwise provided by the respective parties, all notices, certificates and communications to each
of them shall be addressed as follows:
To the Issuer: City of New Hope. Minnesota
4401 Xylon Avenue North
New Hope. Minnesota 55428-4898
Attn: City Manager
To the Company: Reprise Associates Limited Partnership
Reprise, Inc.
3005 Ottawa Avenue
St. Louis Park. Minnesota 55416
Atm: President
n,tipw^np-OOI`DOCSNDF``TI'R DOC 79 MDENTURE OF TRUST
To the Trustee: Norwest Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attn: Corporate Trust Department
To the Remarketing Agent: Piper Jaffray Inc.
222 South Ninth Street. 15th Floor
Minneapolis. Minnesota 55402
Attn: Head of Municipal underwriting
Section 14.06. Required Approvals.
Consents and approvals required by this Indenture to be obtained from the Company, the
Remarketing Agent, the Issuer or the Trustee shall be in writing and shall not be unreasonably
withheld or delayed.
Section 14.07. Counterparts.
This Indenture 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 14.08. Limitation of Issuer and its Officers. Employees and Aaents.
No covenant, provision or agreement of the Issuer herein or in the Bonds or in any other
document executed by the Issuer in connection with the issuance, sale and delivery of the Bonds.
or any obligation herein or therein imposed upon the Issuer or breach thereof. shall give rise to a
pecuniary liability of the Issuer or a charge against its general credit or taxing powers or shall
obligate the Issuer financially in any way except with respect to this Indenture and the application
of revenues therefrom and the proceeds of the Bonds. No failure of the Issuer to comply with
any term, condition, covenant or agreement therein shall subject the Issuer to liability for any
claim for damages. costs or other financial or pecuniary charges except to the extent that the
same can be paid or recovered from this ,agreement or revenues therefrom or proceeds of the
Bonds. No execution on any claim, demand, cause of action or judgment shall be levied upon or
collected from the general credit, general funds or taring powers of the Issuer. In making the
agreements, provisions and covenants set forth herein. the Issuer has not obligated itself except
with respect to this Agreement and the application of revenues hereunder as hereinabove
provided. The Bonds constitute special obligations of the Issuer, payable solely from the
revenues pledged to the payment thereof pursuant to this Indenture. and does not now and shall
never constitute an indebtedness or a loan of the credit of the Issuer, or the State of Minnesota or
any political subdivision thereof or a charge against general taxing powers within the meaning of
any constitutional or statutory provision whatsoever. It is further understood and agreed by the
Company in the Loan Agreement and by the Holders that the Issuer shall not incur pecuniary
liability hereunder nor shall it be liable for any expenses related hereto, all of which the Company
has agreed to pay. If, notwithstanding the provisions of this Section, the Issuer incurs any
expense, or suffers anv losses, claims or damages or incurs any liabilities, the Company has
agreed in the Loan Agreement that it will indemnify and hold harmless the Issuer from the same
and to reimburse the Issuer for any legal or other expenses incurred by the Issuer in relation
D' V E W700 001 DOCS NDENTCR DOC 80 INDENTURE OF TRUST
thereto, and such covenant to indemnify, hold harmless and reimburse the Issuer shall survive
delivery of and payment for the Bonds. The liability of the Issuer is further restricted as provided
in the Act.
Section 14.09. Amounts Remaining in Funds.
Upon expiration or sooner termination of the Loan Agreement as provided therein and
after adequate provision has been made to discharge the Bonds in accordance with Article IX and
make all other payments required hereunder and under the Loan Agreement, the Trustee
forthwith shall, pay all remaining amounts in the Funds established in Article VI hereof to the
Company.
D:.NEWI0M001`DOCS`R.'DENT[IR.DOC 81 INDENTURE OF TRUST
IN WITNESS WHEREOF, the Issuer has caused this Indenture of Trust to be signed in
its name on its behalf by its Mayor and City Manager, and to evidence its acceptance of the trusts
hereby created the Trustee has caused these presents to be simed in its name and behalf by its
duly authorized officers, all as of the 1 st day of March, 1997.
CITY OF NEW HOPE, MINNESOT?.
By
Its Mayor
By
Its Citv Manager
D'\NEW20M00FDOCS'JNDENTUR DOC 82 INDENTURE OF TRUST
NORWEST BANK MINNESOTA.
NATIONAL ASSOCIATION
a
Its Assistant Vice President
D^NEW?00W1`DOCS`INDENTI,R.DOC 81 INDENTURE OF TRUST
EXHIBIT A
Notice of Mandatory Tender Date
To the Holders of: City of New Hope. Minnesota
Multifamily Housins Revenue Bonds
(Park Acres Apartments Project)
Series 1997
NOTICE IS HEREBY GIVEN, pursuant to the provisions of the Indenture of Trust (the
"Indenture"), dated March 1, 1997, between the City of New Hope, Minnesota and Norwest Bank
Minnesota. National Association, as Trustee, that the above entitled Bonds will be purchased on
(the "Mandatory Tender Date"), at a price of 100% of the principal
amount (the "Purchase Price").
You are hereby instructed to deliver to the Trustee on or before 12:00 noon. Minneapolis
time on the Business Day prior to the Mandatory Tender Date all of your Bonds for purchase
with form of assignment executed in blank. Payment of the Purchase Price and accrued interest
on each Bond shall be made only upon delivery of such Bond to the Trustee, together with proper
instruments of assignment of the Bond to the Remarketine Agent.
BONDS NOT TENDERED FOR PURCHASE ON THE MANDATORY TENDER
DATE SHALL NEVERTHELESS BE DEEMED TENDERED FOR PURCHASE. HOLDERS
OF BONDS REQUIRED TO BE SURRENDERED FOR PURCHASE ARE NOT ENTITLED
TO HOLD SUCH BONDS OR TO ANY ACCRUAL OF INTEREST THEREON ON OR
AFTER THE MANDATORY TENDER DATE.
NORWEST BANK MINNESOTA.
NATIONAL ASSOCIATION
¢F,%^nn'Mm !)O § NMFN7,R DOC A-1 INDENTURE OF TRUST
EXHIBIT B
Loan Agreement
MM
EXECUTION COPY
LOAN AGREEMENT
between
CITY OF NEW HOPE, MINNESOTA
and
REPRISE ASSOCIATES LIMITED PARTNERSHIP
relating to
51.650.000
Multifamily Housing Revenue Bonds
(Park .acres Apartments Project)
Series 1997
Dated as of March 1, 1997
With the exception of certain reserved rights. the interest of the City of New Hope. Minnesota. in
this Loan Agreement has been assi_ened to Norwest Bank Minnesota, National Association in
Minneapolis. Minnesota.
This instrument was drafted by:
HOLMES & GALEY, LTD.
One Financial Plaza. Suite 1200
120 South Sixth Street
Minneapolis, Minnesota 55402
cru^�� ��, !,nr5-! o, N Onc LOAN AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is not a part of the Loan .Agreement. but is included only
for convenience of reference.)
PAGE
PARTIES........................................................................................................................................ 1
ARTICLE 1
Definitions, Exhibits and Miscellaneous
Section1.01. Definitions...........................................................................................................
Section1.02. Exhibits................................................................................................................ 3
Section 1.03. Company's Acts ................................................................................................... 3
Section 1.04. Rules of Intetpretation......................................................................................... 3
ARTICLE 2
Representations of Issuer and Company
Section 2.01. Representations of the Issuer...............................................................................
Section -1.02. Representations of the Company......................................................................... 6
.ARTICLE 3
Rehabilitation of Project
Section 3.01.
Acquisition and Rehabilitation of Project by Company ......................................
9
Section 3.02.
Payment of Costs by Company............................................................................
9
Section 3.03.
.authorization byIssuer......................................................................................
10
Section 3.04.
Issuance of Bonds..............................................................................................
11
Section 3.0=.
Disbursements from Project Fund.....................................................................
11
Section 3.06.
Establishment of Completion Date....................................................................
12
Section 3.07.
Intentionally Omitted.........................................................................................
I.
Section 3.03.
Enforcement of Contract....................................................................................
12
ARTICLE 4
The Loan, Basic Payments. Additional Charges and Additional Financing
Section4.01.
The Loan ............................................................................................................
13
Section4.02.
Basic Payments..................................................................................................
13
Section 4.03.
Basic Payments on .account of the Purchase Price of Bonds ............................
14
Section 4.04.
Additional Charges............................................................................................
14
Section 4.05.
Company's Obligations Unconditional ..............................................................
14
Section 4.06.
Assignment of Issuer's Rights............................................................................
15
Section 4.07.
Company's Remedies.........................................................................................
15
c�•.i'7�^enl'f?f�rg�ne.; nnr I LOAN AGREEMENT
ARTICLE 5
Project Covenants
Section 5.01.
Project Operation and Maintenance...................................................................
16
Section 5.02.
Sale or Lease of Project.....................................................................................
16
Section 5.03.
Intentionally Omitted.........................................................................................
16
Section5.04.
Advances............................................................................................................
16
Section 5.05.
Alterations to the Project and Removal of Project Equipment ..........................
16
ARTICLE 6
Damage, Destruction and Condemnation
Section 6.01. Damage and Destruction.................................................................................... 18
Section6.02. Condemnation..................................................................................................... 18
ARTICLE 7
Company's Covenants
Section 7.01.
Covenant for the Benefit of the Trustee and Bondholders .................................
19
Section 7.02.
Inspection and Access........................................................................................
19
Section 7.03.
Annual Statement. Audit. Certificate of Compliance and Other Reports..........
19
Section 7.04.
Indernnity by Comparty......................................................................................
20
Section 7.05.
Status of Companyy.............................................................................................
21
Section 7.06.
Filing of Financing Statements..........................................................................
22
Section 7.07.
Assurance of Tai Exemption.............................................................................
2'
Section 7.08.
Determination of Taxability...............................................................................
24
ARTICLE 8
Company's Options
Section 8.01.
Assignment and Transfer...................................................................................
26
Section8.02.
Prepayment........................................................................................................
26
Section 8.03.
Direction of Investments...................................................................................._6
Section 8.04.
Termination of Loan Agreement........................................................................
26
ARTICLE 9
Events of Default and Remedies
Section 9.01.
Events of Default...............................................................................................
29
Section9.02.
Remedies............................................................................................................
29
Section 9.03.
Disposition of Funds..........................................................................................
30
Section 9.04.
Nonexclusive Remedies.....................................................................................
30
Section 9.05.
Attorneys' Fees and Expenses............................................................................
30
Section9.06.
Effect of Waiver.................................................................................................
.
Section 9.07.
Waiver of Stay or Extension..............................................................................
31
Section 9.08.
Issuer May File Proofs of Claim........................................................................
31
D-•NEW=00'001`DOCS'LOAN DOC n LOAN AGREEMENT
Section 9.09. Restoration of Positions..................................................................................... 31
Section 9.10. Suits to Protect the Project................................................................................. 31
Section 9.11. Performance by Third Parties............................................................................ 32
Section 9.12. Exercise of the Issuer's Remedies by Trustee .................................................... .
Section 9.13. Non -Recourse Obligation.................................................................................. 32
ARTICLE 10
General Provisions
Section 10.01.
Amounts Remaining in Funds...........................................................................
33
Section10.02.
Notices...............................................................................................................
33
Section10.03.
Bindine Effect....................................................................................................
34
Section10.04.
Severabilit'........................................................................................................
34
Section 10.05.
Amendments. Changes. and Modifications.......................................................
34
Section 10.06.
Execution Counterparts......................................................................................
34
Section 10.07.
Required Approvals...........................................................................................
34
Section 10.08.
Limitations on Issuer's Liability.........................................................................
34
Section 10.09.
Representations of CompanN..............................................................................
35
Section10.10.
Termination........................................................................................................
35
TESTIMONIUM
SIGNATURES
EXHIBIT A Legal Description
EXHIBIT B Definitions
D'NEW200'001 DOCS' LOAN DOC nl LOAN AGREEMENT
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of the 1 st day of March. 1997.
by and between the City of New Hope, a Minnesota municipal corporation (the "Issuer") and
Reprise Associates Limited Partnership. a Minnesota limited partnership (the "Company").
The Issuer and Company, each in consideration of the representations. covenants and
agreements of the other as set forth herein. mutually represent. covenant and agree as follows:
D91Fw10nP 1 DOCS LOON DOC I LOAN AGREEMENT
ARTICLE 1
Definitions, Exhibits and Miscellaneous
Section 1.01. Definitions.
In this Agreement, the following terms have the following meanings, unless the context
clearly requires otherwise, and any other capitalized terms defined in Section 1.01 of the
Indenture (attached hereto as Exhibit B and incorporated herein by reference) shall have the same
meanings when used herein as assigned them in the Indenture unless the context or use thereof
indicates another or different meaning or intent:
Agreement: this Loan Agreement by and between the Issuer and Company, as the same
may from time to time be amended or supplemented as provided herein and in the Indenture:
Bondholder or Holder: the Person in whose name a Bond is registered in the Bond
Register;
Bond Purchase Agreement: the agreement dated March 1, 1997, by and among the
Issuer, the Company and the Underwriter pursuant to which the Underwriter agrees to purchase
the Bonds;
Comoletion Date: the date the Company certifies that the acquisition and rehabilitation
of the Facility have been completed:
Credit Facility: a letter of credit. promissory note. insurance policy. guaranty, mortgage
or other form of credit support acceptable to the Remarketing Agent;
Date of this Agreement: March 1. 1997:
Disbursing Agreement an agreement to be entered into by the Company, the Trustee and
the provider of the Credit Facility specifying the conditions for the disbursement of Bond
proceeds to pa\ Project Costs:
Event of Default: anv of the events set forth in Section 9.01 hereof.
Indenture: the Indenture of Trust by and between the Issuer and Trustee, of even date
herewith. as the same may from time to time be amended or supplemented as therein provided:
Improvements: the improvements constituting "rehabilitation expenditures" within the
meaning of Section 147(d)(3) of the Code to be made to the Facility;
Issuance Expenses: anv and all costs and expenses relating to the issuance, sale and
delivery of the Bonds incurred or payable by the Company, including, but not limited to,
Underwriter's discount, remarketing fees and expenses, all fees and expenses of legal counsel, the
Trustee, financial consultants, feasibility consultants and accountants, any fee to be paid to the
Issuer, the cost of preparation and printing of this Loan Agreement, the Indenture, the Disbursing
Agreement, the Regulatory Agreement, any preliminary and final official statement or offering
O NEW200`001•DOCSLOAN DOC 7 LOAN AGREEMENT
memorandum, the Bonds and all other related closing documents. the costs of rating the Bonds.
and all other expenses relating to the issuance, sale and delivery of the Bonds and any other costs
which are treated as "issuance costs" within the meaning of Section 147(g) of the Code.
Issuer: City of New Hope, Minnesota, and any successor to its functions:
Loan: the loan of Bond proceeds by the Issuer to the Company pursuant to Section 4.01
hereof,
Net Bond Proceeds: proceeds of the Bonds. including interest earnings thereon, less such
proceeds of the Bonds, including interest earnings thereon. used to fund the Reserve Fund:
Proiect Costs: the cost items enumerated in Section 3.02 hereof.
Term of this Agreement: the period of time commencing on the Date of this Agreement
and terminating on the date set forth in Section 10.10 or such earlier date as provided by Sections
7.08 or 8.04, whichever date occurs sooner:
Working Capital Expense: any (a) Bond proceeds, including interest thereon. used to pay
interest accruing on the Bonds subsequent to the construction period. (b) Bond proceeds.
including interest thereon used to provide a credit against current payments of Basic Payments
and treated by the Internal Revenue Service as a working capital expense under Section 144(a) of
the Internal Revenue Code, and (c) Project Costs or other expenses which are paid or reimbursed
from Bond Proceeds, including interest thereon. and which the Internal Revenue Service treats as
a working capital expense or inventory under Section 144(a) of the Internal Revenue Code.
Section 1.02. Exhibits.
The following Exhibits are attached to and by reference made a part of this Agreement:
(1) Exhibit A: le_al description of the Project Premises: and
(2) Exhibit B: definitions from the Indenture.
Section 1.03. Comnanv's Acts.
Where the Company is permitted or required to do or accomplish any act or thing
hereunder, the Company may cause the same to be done or accomplished by a third party selected
by the Company with the same force and effect as if done or accomplished by the Company.
Section 1.04. Rules of Interpretation.
(1) This Agreement shall be interpreted in accordance with and governed by the laws
of the State of Minnesota.
(2) The words "herein," "hereof' and "hereunder" and words of similar import,
without reference to any particular section or subdivision, refer to this Agreement as a whole
rather than to any particular section or subdivision of this Agreement.
D'NEW200'00VDGCS'LOAN DOC 3 LOAN AGREEMENT
(3) References in this instrument to any particular article, section or subdivision
hereof are to the designated article, section or subdivision of this instrument as originally
executed.
(4) All accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles: and all computations provided
for herein shall be made in accordance with generally accepted accounting principles consistently
applied and applied on the same basis as in prior years.
(5) The Table of Contents and titles of articles and sections herein are for
convenience of reference only and are not a part of this Agreement, and shall not define or limit
the provisions hereof.
(6) Unless the context hereof clearly requires otherwise, the singular shall include the
plural and vice versa and the masculine shall include the feminine and vice versa.
(7) Articles. sections, subsections and clauses mentioned by number only are those so
numbered which are contained in this Agreement.
(8) For purposes of this Agreement and the Indenture, an Act of Bankruptcy shall be
deemed no longer in effect if either (a) the petition initiating the Act of Bankruptcy is dismissed
by order of a court of competent jurisdiction and no further appeal rights exist from such order or
(b) the Company notifies the Trustee that such a dismissal has occurred.
(9) Any opinion of counsel required hereunder shall be a written opinion of such
counsel.
(10) References to the Bonds as "tae exempt" or to the "tax exempt status of the
Bonds" are to the exclusion of interest on the Bonds from gross income pursuant to Section
103(a) of the Code. irrespective of such forms of taxation as the alternative minimum tax.
environmental tar or branch profits tax on foreign corporations.
n'NPW7DO DO r DOCS Ln -IN DOC 4 LOAN AGREEMENT
ARTICLE 2
Representations of Issuer and Company
Section 2.01. Representations of the Issuer.
The Issuer makes the following representations and warranties as the basis for its
covenants herein:
(1) The Issuer is a municipal corporation organized and existing under the
laws of the State of Minnesota and is authorized to issue the Bonds to finance the Project
pursuant to the Act:
(2) In authorizing the Project, the Issuer's purpose is, and in its judgment the
effect thereof will be, to promote the public welfare by providing a multifamily rental
housing development within the meaning of the Act and assisting low and moderate
income persons within the Issuer to obtain decent. safe and sanitary housing at rentals
they can afford: and facilitating the development of rental housing opportunities for
residents of the Issuer:
(3) A public hearing on the proposal to finance the Project was called and held
on November 12. 1996. at which time all persons who appeared were given an
opportunity to express their views with respect to the proposal to undertake and finance
the Project:
(4) The Issuer's program for financing the Project was submitted to the
Metropolitan Council as required by the Act and was approved by its City Council on
November 12. 1996:
(5) The issuance and sale of the Bonds, the execution and delivery of this
Agreement, the Indenture, the Regulator. .agreement. the Bond Purchase Agreement and
the performance of all covenants and agreements of the Issuer contained in this
Aureement, the Regulatory .agreement, the Bond Purchase .agreement and the Indenture
and of all other acts and things required under the Constitution and laws of the State to
make this Agreement, the Indenture and the Bonds valid and binding obligations of the
Issuer in accordance with their terms. are authorized by the Act and have been duly
authorized by resolutions of the governing body of the Issuer adopted at a meeting thereof
duly called and held on February 10. 1997, by the affirmative vote of not less than a
maioriry of its members:
(6) Under the provisions of the Indenture, the Issuer's interest in this
Agreement and certain payments due hereunder are pledged and assigned to the Trustee
as security for the payment of the principal and purchase price of, interest, and premium,
if any, on the Bonds: and
(7) No public official of the Issuer has either a direct or indirect financial
interest in this Agreement, nor will anv public official either directly or indirectly benefit
D" NEU1_00`001DOCS'LOAN DOC 5 LOAN AGREEMENT
financially from this Agreement within the meaning of Minnesota Statutes, Sections
412.311 and 471.87.
(8) The Issuer has authorized the Company, in accordance with the provisions
of the Act and subject to the terms and conditions set forth in Article 3 of this Agreement,
which terms and conditions the Issuer has deemed to be necessary and proper, to provide
for the acquisition and rehabilitation of the Project by such means as shall be available to
the Company and in the manner determined by the Company, and with or without
advertisement for bids as may be required for the acquisition and rehabilitation of
facilities by the Issuer; and has ratified. confirmed and approved all actions heretofore by
the Company consistent with and in anticipation of such authority;
(9) The Bonds are issued as "qualified residential rental bonds" within the
meaning of Section 142(a)(7) of the Code.
(10) The Issuer has received an allocation of tax exempt bonding authority for
the Bonds pursuant to Minnesota Statues. Chapter 474A.
Section 2.02. Representations of the Companv.
The Company makes the following representation: and warranties as the basis for its
covenants herein:
(1) The Company is a limited partnership duly organized under the laws of the
State of Minnesota. is duh• authorized to conduct its business in the State of Minnesota.
has power to enter into this Agreement. the Bond Purchase Agreement. the Remarketing
Agreement, and the Regulatory Aereement. and to use the Project for the purpose set
forth in this Agreement and by proper action has authorized the execution and delivery of
this Agreement. the Regulator}' Aereement, the Remarketing Agreement. the Bond
Purchase Agreement. and has approved the Indenture:
(2) The execution and delivery of this Agreement, the Regulatory Agreement.
the Remarketing Agreement. the Bond Purchase Agreement. and the consummation of
the transactions contemplated thereby. and the fulfillment of the terms and conditions
thereof do not and will not conflict with or result in a breach of any of the terns or
conditions of the partnership agreement of the Company. any restriction or any agreement
or instrument to which the Company is now a parry or by which it is bound or to which
any property of the Company is subject. and do not and will not constitute a default under
any of the foregoing, or cause the Company to be in violation of any order, decree,
statute. rule or regulation of any court or any state or federal regulatory body having
jurisdiction over the Company or its properties, including the Project, and do not and will
not result in the creation or imposition of any lien, charge or encumbrance of any nature
upon any of the property or assets of the Company contrary to the terms of any instrument
or agreement to which the Company is a party or by which it is bound;
(3) The Project will be operated as a multifamily rental housing development
as contemplated by the Act; and subject to the other provisions of this Agreement, it is
n wEw'00•onPDOCS'LOaS DOC 6 LOAN AGREEMENT
presently intended and reasonably expected that the Company will own and operate the
Project on the Project Premises throughout the Term of this Agreement in the normal
conduct of the Company's business;
(4) The Company has obtained or will obtain prior to construction. all
necessary and material approvals of and licenses, permits, consents and franchises from
federal, state, county, municipal or other governmental authorities having jurisdiction
over the Project to acquire, rehabilitate and operate the Project and to enter into, execute
and perform its obligations under this Agreement, the Bond Purchase Agreement. the
Regulatory Agreement, and the Remarketing Agreement:
(5) The proceeds of the Bonds, together with any other funds to be contributed
to the Project by the Company or otherwise in accordance with this Agreement. will be
sufficient to pay the cost of acquiting and rehabilitating the Project in a manner suitable
for operation as a multifamily housing development as required in Article 3;
(6) The Bonds are issued within the exemption provided under Section 142(d)
of the Code with respect to residential rental property; and "substantially all" of the
proceeds of the Bonds will be used for expenditures chargeable to the capital account of
the Project.
(7) Any Project Costs heretofore incurred by the Company for which the
Company will seek reimbursement from the proceeds of the Bonds were incurred in
anticipation of reimbursement from the proceeds of the Bonds of the Issuer if such
proceeds should become available on terms acceptable to the Company: and the Company
investigated the possibility of such financing prior to incurring such Project Costs. and, in
any event. the Company will not seek reimbursement for any such costs incurred prior to
August 3, 1996, a date 60 days prior to the date on which the Issuer gave preliminary
approval of the Project and the financinil thereof in whole or part through the Bonds:
(3) The Company is not in the trade or business of selling properties such as
the Project and the Company is acquiring the Project for investment purposes only or
otherwise for use by the Company in its trade or business. and therefore the Company has
no intention, now or in the foreseeable future to voluntarily sell, surrender or otherwise
transfen in whole of part. its interest in the Project:
(9) There are no actions. suits. or proceedings pending or. to the knowledge of
the Company, threatened against the Company or any property of the Company in any
court or before any federal.. state, municipal or other governmental agency, which, if
decided adversely to the Company. would have a material adverse effect upon the
Company or upon the business or properties of the Company or upon the validity or
enforceability of the instruments referred to in clause (1), or the ability of the Company to
perform its obligations thereunder; and the Company is not in default with respect to any
order of any court or governmental agency;
(10) The Company is not in default in the payment of the principal of or
interest on any indebtedness for borrowed money nor in default under any instrument or
"NE W200W r DOCS Ln4 V DOC 7 LOAN AGREEMENT
agreement under and subject to which any indebtedness for borrowed money has been
issued;
(11) The Company has filed all federal and state income tax returns which, to
the knowledge of the Company, are required to be filed and has paid all taxes shown on
said retums and all assessments and governmental charges received by it to the extent that
they have become due;
(12) The Company has reviewed and approved the provisions of the Indenture:
(13) To the best of the Company's knowledge, no public official of the Issuer
has either a direct or indirect financial interest in this Agreement nor will any public
official either directly or indirectly benefit financially from this Agreement within the
meaning of Minnesota Statutes, Section 471.87:
(14) No other obligations have been or will be issued under Section 103 of the
Code which are sold at substantially the same time as the Bonds. pursuant to the same
plan of financing, which are reasonably expected to be paid out of substantially the same
source of funds as the Bonds.
n-INEWIM00PDOCS'LOAN DOC 8 LOAN AGREEMENT
ARTICLE 3
Rehabilitation of Project
Section 3.01. Acquisition and Rehabilitation of Project by Company.
In connection with the acquisition and rehabilitation of the Project, the Company
represents and covenants that it will acquire the Project and will cause the Improvements to be
made to the Facility in an aggregate amount at each Facility, not less than 15% of the acquisition
price of the building financed out of Bond proceeds and all such expenditures will be incurred
not later than the date which is two years after the Project is acquired by the Company.
Section 3.02. Pavment of Costs by Company.
The Company agrees that it will provide any and all money required for the prompt and
full payment of all sums required to complete the Project. including all of the following items
which the Issuer agrees will be reimbursable from Bond proceeds from and to the extent and in
the manner provided in Sections 3.05 and 3.06 and subject to the provisions of the Act and the
Code:
(1) all expenses incurred and to be incurred in connection with the acquisition
and rehabilitation of the Project, including but not limited to cost of acquiring the Project.
the contract price of all labor, services, materials, supplies and equipment furnished under
any contract for rehabilitation of the Project or otherwise incurred in connection
therewith, including the cost of all rights-of-way for access and utility connections to and
from the Project, and all fees required for recording an financing statements and any title
documents relating to the Indenture, or Regulatory Agreement:
(2) the expense of preparation of the plans and specifications for the
Improvements. including utilities. and all other facilities necessary or desirable in
connection therewith. and all other architectural. engineering and supervisory services
incurred and to be incurred in the planning, construction and completion of the
Improvements:
(3) all legal (including Bond Counsel and counsel to the Issuer, Company,
Original Purchaser. and Trustee). abstractors'. financial and accounting fees and expenses.
administrative and rating agency fees (if any), printing and engraving costs and other
expenses incurred and to be incurred on or before or in connection with the Completion
Date with respect to ('i) the establishment of title to the Project Premises. (ii) the
authorization. sale and issuance of the Bonds. (iii) the preparation of this Agreement. the
Remarketing Agreement, the Indenture, the Regulatory Agreement, and all other
documents necessary to the Bond Closing or required by this Agreement or the Indenture.
or (iv) the establishment of the Completion Date, including compliance with any
governmental or administrative rules or regulations on or before such date; provided that
not more than 533.000 may be disbursed from Bond proceeds in payment or
reimbursement of any of the foregoing which constitute Issuance Expenses;
0 4E` "M''00 V DOCS' LOA V DOC 9 LOAN AGREEMENT
(4) all expenses incurred in seeking to enforce any remedy against an}'
contractor, or any subcontractor or any supplier in respect of any default under any
contract with such Person;
(5) all deed taxes, mortgage registry taxes, recording fees and other taxes.
charges and assessments and license and registration fees of every nature whatsoever
incurred and to be incurred in connection with acquisition or completion of the Project
including the financing thereof,
(6) the cost of all other labor, services, materials, supplies and equipment
necessary to complete the construction, acquisition and installation of the Improvements;
(7) without limitation by the foregoing, all other expenses which under
generally accepted accounting practice constitute necessary capital expenditures for the
completion of the Project or issuance of the Bonds, not including working capital or
expendable supplies (all of which are nevertheless to be supplied by the Company from
its own funds without reimbursement); provided that not more than $33.000 may be
disbursed from Bond proceeds in payment or reimbursement of any of the foregoing
which constitute Issuance Expenses: and
(8) all advances, payments and expenditures made or to be made by the Issuer.
the Trustee and any other person with respect to any of the foregoing expenses; provided
that not more than 533.000 may be disbursed from Bond proceeds in payment or
reimbursement of any of the foregoing which constitute Issuance Expenses:.
The Company shall be solely responsible for paying all such Project Costs until the
Conversion Date. Thereafter all Project Costs may be paid or reimbursed from available moneys
in the Project Fund to the extent and in the manner permitted in Sections 3.05 and 3.06. If.
however. such moneys are insufficient to pay in full Project Costs payable therefrom or are
otherwise unavailable to pay any Project Costs. the Company shall nevertheless promptly pay so
much of such Costs as may be in excess of such available moneys in the Project Fund or shall. at
the request of the Trustee. forthwith pay over to the Trustee such moneys as are necessary to pay
such Project Costs. The Company shall not by reason of the payment of such excess Project
Costs be entitled to any reimbursement from the Issuer in excess of any moneys available
therefor in the Project Fund or for any abatement or diminution of the Basic Payments or
Additional Charges.
Section 3.03. Authorization by Issuer.
In accordance with the Act. the Company is authorized by the Issuer, and the Company,
pursuant to such authorization, agrees:
(1) to acquire and rehabilitate the Project as provided in Section 3.01, upon
the Project Premises;
0 NEW200001'DOCSLOAN DOC 10 LOAN AGREEMENT
(2) to make, execute, acknowledge and deliver any contracts, orders, receipts,
writings and instructions, with any other Persons, and in general to do all things which
may be requisite or proper for acquiring, constructing and installing the Project:
(3) pursuant to the provisions of this Agreement, to pay any fees, costs and
expenses incurred in the acquisition, construction and installation of the Project from
funds made available therefor in accordance with this Agreement or otherwise subject to
the right to contest such fees, costs and expenses:
(4) so long as the Company is not in default under any of the provisions of this
Agreement to exercise all authority hereby conferred, which is granted and conferred
irrevocably to the Completion Date and thereafter until all activities in connection with
the acquisition and rehabilitation of the Project shall have been completed.
Neither the authorization granted in this Section nor any other provision of this
Agreement shall be construed as making the Company an agent or joint venturer with the Issuer.
Section 3.04. Issuance of Bonds.
The Issuer has contracted for the sale of the Bonds authorized by the Indenture. and the
Company has and does approve the terms of the Indenture. Forthwith upon execution of this
Agreement. the Bond Purchase Agregment, the Indenture, the Remarketing Agreement. the
Regulatory Agreement and all other documents required to be executed by the aforementioned
documents, or as soon thereafter as practicable, the Issuer will execute the Bonds and cause them
to be authenticated by the Trustee and delivered to the Underwriter upon payment of the purchase
price and filing with the Trustee of the opinion of Bond Counsel as to the legality of the Bonds
and the furnishing of all other documents required by this Agreement, the Remarketing
Agreement. the Bond Purchase Agreement and the Indenture to be furnished before delivery.
The Issuer will then cause the proceeds of the Bonds to be transmitted to the Trustee. who is
required by the Indenture to deposit the same in the Project Fund.
If for anv reason such documents are not fumished and the approving opinion of Bond
Counsel in customary form cannot be obtained. then this Agreement shall be terminated and be
void and of no effect and the Company shall be obligated to pay all costs and expenses
enumerated in Section 3.02 and incurred on or before the date of such termination.
Section 3.05. Disbursements from Proiect Fund.
(1) Prior to the Conversion Date and the delivery of the documents required by
paragraph ('_) hereof. no moneys shall be disbursed from the Project Fund, except for interest
earnings on the Bond proceeds held therein which shall be transferred to the Bond Fund on or
prior to each Variable Rate Interest Payment Date and applied as a credit against Basic Payments.
(2) The Issuer has in the Indenture authorized and directed the Trustee to disburse
money from the Project Fund on and after the Conversion Date, subject to the Disbursing
Agreement, to or upon the order of the Company, in payment or reimbursement of all items of
Cost enumerated in Section 3.02 and certified, in writing by the Company Representative,
p INp%%"O'nOVDOC<'LDaN DOC I I LOAN AGREEMENT
provided that in no event shall any Bond proceeds be disbursed until the Conversion Date and
until Company has delivered to the Trustee the Credit Facility and evidence satisfactory to the
Trustee that a local unit of government or the Minnesota Housing Finance Agency will
participate in the financing of the acquisition and rehabilitation of the Project (in addition to the
issuance by the Issuer of the Bonds).
Section 3.06. Establishment of Completion Date.
On the Completion Date any balance remaining in the Project Fund in excess of the
amount retained therein pursuant to the Disbursing Agreement shall be disbursed by the Trustee
to the Company or its order in such amount as may be necessary (and all thereof shall be
disbursed if necessary) to pay, or to reimburse to the Company for the payment of, any part of the
Project Costs which have not theretofore been paid by the Company or has not theretofore been
reimbursed to the Companv. as the case tray be, in accordance with the provisions of Section
3.05. Any balance remaining in the Project Fund in excess of any amount retained therein to
secure completion by any contractor shall be transferred by the Trustee to the Bond Fund.
Section 3.07. Intentionally Omitted.
Section 3.08. Enforcement of Contract.
Subject to the Disbursing Agreement, in the event of default of any contractor or
subcontractor under any construction contract or in the event of a breach of warranty with respect
to any materials, workmanship or performance, the Company will promptly proceed. either
separately or in conjunction with others, to exhaust its remedies against the contractor.
subcontractor or vendor in default and against any surety on a bond securing the performance of
such contract, provided. however. that the Company may on the advice of its counsel and with
the Trustee's consent refrain from exhausting such remedies if determined by the Company not to
be in its best interests and not necessary to complete the Project. The Company will promptly
advise the Trustee of the steps it intends to take in connection with any such default. Any
amounts recovered pursuant to any bond or by way of damages. refunds, adjustments or
otherwise in connection with the foregoing. after deduction of expenses incurred in such
recovery. other than any amounts resulting from the loss of income, shall be paid into the Project
Fund if received before the Completion Date, and otherwise shall be paid into the Bond Fund.
provided that the Company may obtain reimbursement for any payments made by the Company
in connection with such action as an item of Project Cost as provided in Section, 3.05.
•Vcp"��•���'r+ rc I_n..,N f?nC 12 LOAN AGREEMENT
ARTICLE 4
The Loan, Basic Payments, Additional Charges and Additional Financing
Section 4.01. The Loan.
The Issuer agrees, upon the terms and conditions herein specified, to lend to the Compan}
the proceeds received by the Issuer from the sale of the Bonds, excluding any accrued interest. by
causing such proceeds to be deposited with the Trustee for disposition as provided herein and in
the Indenture. The amount of the Loan shall be deemed to include any "discount" or any other
amount by which the aggregate price at which the Issuer sells the Bonds to the Underwriter is
less than the aggregate principal amount of the Bonds. plus accrued interest: and the obligation of
the Issuer to make the Loan shall be deemed fully discharged upon so depositing the proceeds of
the Bonds with the Trustee.
Section 4.02. Basic Payments.
Subject to the Company's right of prepayment granted in Section 8.02. the Company
agrees to repay the Loan in installments of Basic Payments as follows:
(1) As and for repayment of the Loan the Company shall pay to the Trustee for
the account of the Issuer an amount equal to the aggregate principal amount of the Bonds
Outstanding and. as interest on its obligation to pay such amount, an amount equal to
interest on the Bonds. such amounts to be paid in installments on the dates. in the
amounts and in the manner provided in this Loan agreement in order that the Issuer can
cause amounts to be deposited in the Bond Fund for the payment of the principal of.
premium, if any, and interest on the Bonds. whether at maturity, upon redemption or
otherwise as provided in the Indenture:
(2) In any event the sum of the Basic Payments payable under this Section
shall be sufficient to pad all principal, interest and premium. if any, on the Bonds as such
principal. interest and premiums become due. at maturity. upon redemption. acceleration
or otherwise.
(3) As provided in Internal Revenue Service Revenue Procedure 79-=.
Revenue Procedure 81-22 and 26 CFR 601.201. (and any subsequent amendments.
modifications or replacements thereot) Restricted Construction Funds in the Bond Fund
shall be used only to prepay Bonds which are subject to redemption at their earliest call
date without penalty or premium or to pay a pro rata portion of the principal of the Bonds
as provided in Section 6.03(b) of the Indenture.
(4) Except during the continuance of an Event of Default, all available
remaining sums on deposit in the Bond Fund not credited against currently payable
installments of Basic Payments or applied as provided in Sections 7.08, 8.02 or 8.04 shall
be credited against the last installments of Basic Payments.
•�s._t•-ten mrnnr, e,nn(, I3 LOAN AGREEMENT
(5) In no event shall any purchase of any Bonds made by or on behalf of the
Company result in the discharge of either (i) the Bonds so purchased, (ii) the obligations
under this Section 4.02 to make Basic Payments relating to the Bonds so purchased, or
.(iii) the Loan made hereunder to the extent of the Bonds so purchased. unless to the
extent the Bonds so purchased are surrendered to the Trustee and canceled.
Section 4.03. Basic Pavments on Account of the Purchase Price of Bonds.
The Company shall also pay to the Trustee amounts equal to the amounts to be paid by
the Trustee as the purchase price of Bonds pursuant to Section 4.01 of the Indenture, such
amounts to be paid by the Company to the Trustee one day prior to the dates such payments are
to be made pursuant to Section 4.01 of the Indenture.
Section 4.04. Additional Charges.
The Company agrees to pay. when due, each and all of the following:
(1) to or upon the order of the Trustee, when due, all reasonable fees of the
Trustee for services rendered under the Indenture and all reasonable fees and charges of
the Paying Agent, registrars, legal counsel, accountants, engineers, public agencies and
others incurred in the performance on request of the Trustee of services required under
the Indenture for which the Trustee and such other Persons are entitled to payment or
reimbursement: provided that the Company may, without creating a default hereunder,
contest in 000d faith the necessity or reasonableness of any such services. fees or
expenses:
(') the reasonable fees and expenses of the Issuer, including the fees and
expenses of counsel for the Issuer in connection with the issuance of the Bonds and any
issue which refunds the Bonds: and
(3) to the Trustee, the amount of all advances made by the Trustee, with
interest thereon. as provided in Section 5.04.
Section 4.05. Compam's Obligations Unconditional.
All Basic Payments and Additional Charges and all other payments required of the
Company hereunder shall be paid without notice or demand and without setoff, counterclaim, or
defense for any reason and without abatement or deduction or defense (except as provided in
Section 8.02). The Company will not suspend or discontinue any such payments, and will
perform and observe all of its other agreements in this Agreement, and, except as expressly
permitted in Sections 7.08 and 8.04, will not terminate this Agreement for any cause, including
but not limited to any acts or circumstances that may constitute failure of consideration,
destruction or damage to the Project or the Company's business, the taking of the Project or the
Company's business by Condemnation or otherwise, the lawful prohibition of the Company's use
of the Project or the Company's business, the interference with such use by any Person, the
invalidity or unenforceability or lack of due authorization or other infirmity of this Agreement,
the lack of right, power or authority of the Issuer to enter into this Agreement, eviction by
n,vFW'nm0o1'DOCVLOsN DOC 14 LOAN AGREEMENT
paramount title, commercial frustration of purpose. bankruptcy or insolvency of the Issuer or
Trustee, change in the tax or other laws or administrative rulings or actions of the united States
of America or of the State or any political subdivision thereofor failure of the Issuer to perform
and observe anv agreement, whether express or implied. or any dun•, liability or obligation
arising out of or connected with this Agreement. or for any other cause whether similar or
dissimilar to the foregoing, any present or future law to the contrary notwithstanding, it being the
intention of the parties hereto that the Basic Payments and other amounts payable by the
Company hereunder shall be paid in full when due without any delay or diminution whatever.
Section 4.06. Assignment of Issuer's Rights.
As security for the payment of the Bonds. the Issuer will pledge the amounts payable
hereunder and assign. without recourse or liabilin., to the Trustee. the Issuer's rights under this
Agreement. including the right to receive payments hereunder (except the right to receive
payments, if any, under Section 4.04, 7.04 and 9.05 hereof) and hereby directs the Company to
make said payments directly to the Trustee. The Company herewith assents to such assignment
and will make payments under this Agreement directly to the Trustee without defense or setoff
by reason of any dispute between the Company and the Trustee.
Section 4.07. Comoanv's Remedies.
Nothing contained in this Article shall be construed to release the Issuer from the
performance of any of its agreements herein, and if the Issuer should fail to perform any such
agreements. the Company may institute such action against the Issuer as the Company may deem
necessary to compel such performance so long as such action shall not violate the Company's
agreements in Section 4.04 or diminish or delay the amounts required to be paid by the Company
pursuant to Sections 4.02 and 4.03. The Company acknowledges. however, and agrees that any
pecunian• obligation of the Issuer created by or arising out of this Agreement except for anv
pecuniary obligation caused by the Issuer's negligence shall be payable solely out of the proceeds
derived from this .agreement and the sale of the Bonds.
D'NF.w'00'001 DOCS LOAN DOC 15 LOAN AGREEMENT
ARTICLE 5
Project Covenants
Section 5.01. Project Operation and Maintenance.
Upon acquisition of the Projects from proceeds of the Bonds, the Company shall pay all
expenses of the operation and maintenance of the Project including, but without limitation.
adequate insurance thereon and insurance against all liability for injury to Persons or property
arising from the operation thereof, and all taxes and special assessments levied upon or with
respect to the Project and payable during the Term of this Agreement, all in conformance with
and subject to any good faith contest provisions provided in any Credit Facility.
Section 5.02. Sale or Lease of Project.
So long as any Bonds are Outstanding, the Company will not lease the Project (except
residential leases in the normal course of business), in whole or in part, nor sell, mortgage or
otherwise encumber its interests in the Project, in whole or part. except as required in connection
with obtaining a Credit Facility and except as provided in Section 8.01; provided that in no event
shall such lease. assignment or sale be permitted if (a) the effect thereof would be to impair the
validity or the exclusion from gross income under Section 103 of the Code of the interest on the
Bonds, or (b) if any such transaction should release the Company of any of its obligations under
this Agreement (except as otherwise provided in Section 8.01). Before any such lease, sale or
assignment. the Compan; shall deliver to the Trustee an opinion of Bond Counsel. addressed to
the Trustee and in form and substance satisfactory to it, stating in effect that such lease, sale or
assignment will not impair the exclusion from gross income under Section 103 of the Code of
interest on the Bonds. The Company shall sive at least 30 days notice to the Trustee and Issuer
of any such sale, assignment or lease. unless such 30 day notice is waived by the Trustee and the
Issuer.
Section 5.03. Intentionally Omitted.
Section 5.04. Advances.
The Company acknowledges and agrees that under the Indenture the Trustee may take
certain action and make certain advances relating to the Project or to certain other matters as
expressly provided therein, and the Company shall be obligated to repay all such advances on
demand, with interest from the date of each such advance. at the rate and under the conditions set
forth in the Indenture.
Section 5.05. Alterations to the Project and Removal of Project Equipment.
The Company shall, have the right from time to time at its cost and expense, to remodel
and make such additions, modifications, alterations, improvements and changes (collectively
referred to as "alterations") in or to the Project or to remove any equipment therefrom as the
Company, in its discretion, may deem to be desirable for its uses and purposes, provided such
alterations or removal do not impair the character of the Project as a "project" within the meaning
WNEW2001001'DOCS'LOAN DOC 16 LOAN AGREEMENT
of the Act or othenuise impair the exclusion from cross income under Section 103 of the Code of
the interest on the Bonds.
D INE W2001001`DOCS`LOAN DOC 17 LOAN AGREEMENT
ARTICLE 6
Damage, Destruction and Condemnation
Section 6.01. Damage and Destruction.
If there are any Outstanding Bonds when the Project is damaged or destroyed by fire or
other casualty, the Company shall either restore the Project to the extent permitted by the
Indenture or, if Section 8.04 of this Agreement is applicable. exercise its option to prepay the
Loan pursuant to said Section.
Section 6.02. Condemnation.
If there are any Outstanding Bonds when the Project or any part thereof is taken by
Condemnation, the Company shall either restore the Project to the extent permitted by the
Indenture or. if Section 8.04 of this Agreement is applicable, exercise its option to prepay the
Loan pursuant to said Section.
D \NEW200\0011,DOCS'LOAN DOC 18 LOAN AGREEMENT
ARTICLE 7
Company's Covenants
Section 7.01. Covenant for the Benefit of the Trustee and Bondholders.
The Company recognizes the authority of the Issuer to assign its interest in and pledge
moneys receivable under this Agreement (other than certain payments required to be made to the
Issuer under Sections 4.04(2), 4.04(3), 4.04(5), 7.04 and 9.05) to the Trustee as security for the
payment of the principal and purchase price of and interest and redemption premiums, if any, on
the Bonds, and the payment of all fees and expenses of the Trustee; and hereby agrees to be
bound by, and joins with the Issuer in the Brant of, a security interest to the Trustee in anv right
and interest the Company may have in sums held in the Funds described in Article Six of the
Indenture, pursuant to the terms and conditions thereof, to secure payment of the Bonds. Each of
the terms and provisions of this Agreement is a covenant for the use and benefit of the Trustee
and Holders of the Bonds, so long as any thereof shall remain Outstanding; but upon payment in
full of the Bonds in accordance with Article Nine of the Indenture and of all fees and charges of
the Trustee and Paying Agent. all references in this Agreement to the Bonds, the Holders thereof
and the Trustee shall be ineffective. and neither the Trustee nor the Holders of any of the Bonds
shall thereafter have any rights hereunder, save and except those that shall have theretofore
vested or that arise from provisions hereunder which survive termination of this Agreement.
Section 7.02. Inspection and Access.
Upon acquisition of the Project from the proceeds of the Bonds, the Company agrees that
the Trustee and its duly authorized agents shall have the right at all reasonable times to examine
and inspect, and for that purpose to enter upon. the Project Premises, and shall also have such
right of access thereto as may be reasonably necessary to cause the Project to be properly
maintained in accordance with .Article 5 in the event of failure by the Company to perform these
obligations.
Section 7.03. Annual Statement. Audit. Certificate of Comnliance and Other Reports.
(1) The Company agrees that it will provide the Trustee and the Underwriter with any
financial statements provided to the issuer of a Credit Facility.
(2) At the time the Company causes to be furnished the annual financial statements.
the Company shall also furnish the Trustee a certificate executed by Company Representative.
declaring that during the same fiscal year covered by the statements and continuing to the date of
execution of the certificate. the Company has fully complied with the terms and conditions of
this Agreement.
(3) The Company will furnish the Issuer and the Trustee all reports required pursuant
to law and regulations of the Act.
(4) The Company will, and at the request of the Issuer, Trustee or Remarketing
.Agent, at the Company's expense, furnish to the Trustee, Remarketing Agent, and Issuer at such
D NEW2001001DOCS LOAN DOC 19 LOAN AGREEMENT
times and in such form as the Issuer, Trustee, Remarketing Agent. may reasonably require (i) a
copy of such other reports containing such information as is necessary to comply with any lawful
.reporting or continuing registration requirements imposed by any agency of the State under the
Act, the Minnesota Blue Sky Laws or any other applicable state law as it now exists or may
hereafter be amended or by any agency of any other state in which the Bonds have been sold. or
(ii) such information as is necessary to comply with federal securities law.
Section 7.04. Indemnity by Company.
The Company will, to the fullest extent permitted by law, protect, indemnify and save the
Issuer, and Trustee and their officers, agents, and employees and any Person who controls the
Issuer or Trustee within the meaning of the Securities Act of 1933 (an "Indemnified Party"),
harmless from and against all liabilities, losses. damages, reasonable costs, and expenses
(including reasonable attorneys' fees and expenses of the Trustee and the Issuer), taxes, causes of
action, suits, claims, demands and judgments of any nature arising from:
(1) except for any gross negligence or willful misconduct of an Indemnified
Party, any injury to or death of any person or damage to property in or upon the Project or
growing out of or connected with the use, non-use, condition or occupancy of the Project
or any part thereof, including any and all acts or operations relating to the construction or
installation of property or improvements. The foregoing indemnification obligations shall
not be limited in any way by any limitation on the amount or type of damages,
compensation or benefits payable by or for the Company, customers, suppliers or
affiliated organizations under any workers' Compensation Acts. Disability Benefit Acts
or other employee benefit acts:
(2) violation of any agreement, provision or condition of this Agreement.
except by the Indemnified Pam, unless the Indemnified Pam' acts pursuant to direction
of the Company;
(3) violation by the Company of any contract. agreement or restriction, which
shall have existed at the commencement of the Term of this Agreement or shall have
been approved by the Company:
(4) violation. except b% the Indemnified Pam'. of any law, ordinance, court
order or regulation affecting the Project or a pan thereof or the ownership. occupancy or
use thereof, and
(5) any statement or information relating to the expenditure of the proceeds of
the Bonds contained in the "Arbitrage Certificate" or similar document famished by the
Company to the Issuer or Trustee which. at the time made, is misleading, untrue or
incorrect in any material respect.
Promptly after receipt by the Indemnified Party, as the case may be, of notice of the
commencement of any action with respect to which indemnity may be sought against the
Company under this Section, such person will notify the Company in writing of the
commencement thereof, and, subject to the provisions hereinafter stated, the Company shall
D'`NEW2WOO 1'DOCS`LOAN DOC 20 LOAN AGREEMENT
assume the defense of such action (including the employment of counsel, who shall be counsel
satisfactory to the Indemnified Party, and the payment of expenses). Insofar as such action shall
relate to any alleged liability with respect to which indemnity may be sought against the
Company, the Issuer, Trustee or any such other indemnified person shall have the right to employ
separate counsel in any such action and to participate in the defense thereof. but the fees and
expenses of such counsel shall not be at the expense of the Company unless the employment of
such counsel has been specifically authorized by the Company. The Company shall not be liable
to indemnify anv Indemnified Parry for any settlement of any such action effected without its
consent.
The provisions of this Section 7.04 shall survive the payment and discharge of the Bonds.
Section 7.05. Status of Company.
Throughout the Term of this Agreement. the Company will maintain a limited partnership
organized under the laws of the State of Minnesota and will not wind up or otherwise dispose of
all or substantially all of its assets: provided that subject to the sale restrictions in section -5.02
and the assignment and transfer conditions in Section 8.01. the Company may. sell or otherwise
transfer to another Person all or substantially all of its assets in its entirety and thereafter wind up
if the transferee Person assumes all of the obli_ations of the Company under this Agreement and
the Regulatory Agreement by written instrument delivered to the Issuer and the Trustee. Every
such transferee shall be bound by all of the covenants and asreements of the Company herein
with respect to any further sale or transfer.
Upon any change in the identity of its general partner by way of substitution, sale or
otherwise of the Companv. the Trustee shall bepromptly informed and. if requested. each and
every general partner of the Company as newly constituted shall deliver to the Trustee for the
benefit of the Issuer and Bondholders an instrument in form satisfactory to the Trustee affirming
the joint and several liability of all then existing general partners for the obligations of the
Company hereunder for which the general partners remain liable.
The Issuer and Company agree that. upon any change in the status of the Company.
including a chanoe in the identity of its general partner. so long as the requirements. restrictions
and conditions of Section 5.02. Section 8.01. and the Regulatory Agreement with respect to such
change have been satisfied as provided therein. the general partner involved shall be discharged
from liabiliry hereunder. Tate Trustee by execution of the Indenture shall be deemed to have
agreed to execute such documents as may be necessary or desirable to indicate such discharge
upon receipt of evidence satisfactory to said parties that the requirements for this Section. Section
5.02. Section 8.01 and the Regulatory Agreement have been satisfied. and provided that no Event
of Default under this Agreement shall have happened and be continuing on the date of the
discharge.
The Company shall not effect such transfer or change if the result thereof would be to
violate any sale restrictions set forth in Section 5.02 of this Agreement, or to subject the interest
payable on the Bonds (in the hands of any Person who is not a "substantial user" of the Project or
a "related person") to federal income taxes under Section 103 of the Code.
n ' NFW'001001 DOCS LOAN DOC 21 LOAN AGREEMENT
Section 7.06. Filing of Financing Statements.
The Company agrees that it will, at its sole expense, file or cause to be filed any financing
statements and continuation statements required or requested by the Trustee to perfect the
security interest in this Agreement and the payments to be made hereunder granted to the Trustee
under the Indenture.
Section 7.07. Assurance of Tar Exemption.
In order to assure that the interest on the Bonds shall at all times be excluded from gross
income for the purposes of federal income taxation. the Company represents and covenants with
the Issuer, Trustee and all Holders of the Bonds as follows:
(1) the Company will fulfill all continuing conditions specified in section 142
of the Code and Regulation 1.103-8(b) promulgated thereunder, to qualify the Bonds as
residential rental property bonds thereunder; and the Company shall fulfill its obligations
under the Regulatory Agreement..
(2) the Company will not use (or permit to be used) the Project or use or
invest (or permit to be used or invested) the proceeds of the Bonds or any other sums
treated as "bond proceeds" under Section 148 of the Code and applicable federal income
tax regulations, including "investment proceeds," invested sinking funds" and
"replacement proceeds." in such a manner as to cause the Bonds to be classified
"arbitrage bonds" under Section 148 of the Code or "federally guaranteed obligations"
under Section 149(b) of the Code;
(3) at least 95% of Net Bond Proceeds will be used to finance costs properly
chargeable to the capital account of a qualified residential rental project within the
meaning of Section 142(d) and functionally related and subordinate property thereto;
(4) the Company will incur "rehabilitation expenditures" (as defined in
Section 147(d)(3) of the Code) with respect to each Facility in an amount equal to at least
i 50 o of the acquisition cost of the Facility within the later of _' years from (i) the date the
Facility was acquired. or (ii) the date the Bonds were issued;
(5) the Company has not permitted and will not permit any obligation or
obligations other than the Bonds to be issued within the meaning of Section 103(b) of the
Code so as to cause such obligations to become part of the same "issue of obligations" as
the Bonds so as to impair the tax exempt status of the Bonds;
(6) no portion of the proceeds of the Bonds are to be used to provide any
airplanes, skybox. or other private luxury box, health club facility, facility primarily used
for gambling or liquor store;
(7) no portion of the proceeds of the Bonds will be used to acquire (a)
property to be leased to the government of the United States of America or to any
department, agency or instrumentality of the government of the United States of America,
(b) any property not part of the residential rental housing portion of the Project, or (c) any
D `NE W'.00 001DOCSLOAN DOC 17 LOAN AGREEMENT
private or commercial golf course, country club, massage parlor, tennis club, skating
facility (including roller skating, skateboard and ice-skating), racquet sports facility
(including any handball or racquetball court), hot tub facility, suntan facility or racetrack:
(8) no portion of the proceeds of the Bonds (including investment earnings
thereon) shall be used (directly or indirectly) for the acquisition of land (or an interest
therein) to be used for farming purposes, and less than twenty-five percent (25%) of the
Bond proceeds (including investment earnings thereon) shall be used (directly or
indirectly) for the acquisition of land to be used for purposes other than farming purposes:
(9) the Company understands that the Code imposes a penalty for failure to
file with the Secretary of the Treasury an annual certification of compliance with low
income occupancy requirements, and if the requirements for a "qualified residential rental
project" are not met, does not allow deduction for interest paid on the Bonds which
accrues during the period beginning on the first day of the taxable year in which the
Project ceases to meet such requirements and ending on the date the Project again meets
such requirements;
(10) the average maturity of the Bonds does not and will not exceed 120% of
the average reasonably expected economic life of the Project within the meaning of
Section 147(b) and 1313(a) of the Code;
(11) the Companv shall provide the Issuer at Bond Closing with all information
required to satisfy the informational requirements set forth in Section 149(e) of the Code
including the information necessary to complete IRS Form 8038;
(12) no moneys in the Bond Fund. Project Fund or any other fund held or
created under the Indenture shall be invested in investments which cause the Bonds to be
federally guaranteed within the meaning of Section 149(b) of the Code. If at any time the
moneys in such Funds exceed, within the meaning of Section 149(b). (i) amounts
invested for an initial temporary period until the moneys are needed for the purpose for
which the Bonds were issued. (ii) investments of a bona fide debt service fund. and (iii)
investments of a reserve which meet the requirement of Section 148 (c) and (d) of the
Code. such excess moneys shall be invested in only those Permitted Investments or
Government Obligations, as otherwise appropriate. which are (A) obligations issued by
the United States Treasury. (B) other investments permitted under regulations, or (C)
obligations which are (a) not issued by. or guaranteed by. or insured by, the United States
or any agency or instrumentality• thereof or (b) not federally insured deposits or accounts.
and within the meaning of Section 149(b)(3)(B) of the Code;
(1 1) at no time during any Bond Year shall the amount invested in taxable
nonpurpose investments with a yield higher than the Bond yield exceed 150% of the debt
service on the Bonds for the Bond Year, all within the meaning of Section 148(d)(3) of
the Code; provided, however. that the Company "may take advantage of exemptions to
such requirement provided for the investment of sums for temporary periods;
D"NEEW'_00'001 DOCS'LOAN DOC 23 LOAN AGREEMENT
(14) the Company on behalf of the Issuer shall pay to the United States, as a
rebate, an amount equal to the stun of (i) the excess of (I) the aggregate amount earned on
all nonpurpose investments (other than investments attributable to an excess described in
this clause), over (II) the amount which would have been earned if all nonpurpose
investments were invested at a rate equal to the yield on the Bonds, plus (ii) any income
attributable to the excess described in clause (i), at the times and in the amounts required
by Section 148(f) of the Code. all within the meaning of Section 148(0 of the Code. The
Company and the Trustee shall maintain records of the interest rate bome by the Bonds
and the investments of the Project Fund and Bond Fund (and any other fund created under
the Indenture) and earnings thereon in adequate detail to enable the Company to calculate
the amount of any rebate required to be made to the United States at times and in
installments which satisfy Section 148(f) of the Code and the Regulations, at least once
every five (5) years and within sixty (60) days after the day on which the last of the Bonds
is redeemed. Calculations of the amount to be rebated shall be made at least once ever-,
five years (or at such other times as may be required by Section 148(f) of the Code and
the Treasury Regulations applicable thereto) and the Trustee shall be furnished with such
calculations within sixty (60) days of the time they are made. If the Trustee is not
furnished with such calculations) the Trustee may undertake to have such calculations
made at the expense of the Company. Such calculations shall be retained until six (6)
vears after the retirement of the last Bond. The rebate shall be calculated as provided in
Section 148(f) of the Code and Sections 1.148-0 through 1.148-11 of the Treasury
Regulations. including taking= into account the gain or loss on the disposition of
nonpurpose investments but not gross earnings of up to $100.000 on the portion. if any.
of the Bond Fund constituting a bona fide debt service fund. The Company shall acquire.
and shall cause the Trustee to acquire all nonpurpose investments at their fair market
value in arm's length transactions:
(15) the Company will not permit more than two percent of the proceeds of the
Bonds to be expended (or to be used to reimburse any person for an expenditure) to pay
Issuance Expenses as provided by Section 147(g) of the Code:
(16) neither the Company nor any "related person" thereto will enter into any
arrangement, formal or informal. for the Company or such "related person" to purchase
the Bonds: and
(17) the Company will not otherwise use Bond proceeds, including expenses,
earnings thereon. or take. or permit or cause to be taken. any action that would adversely
affect the exclusion from gross income of the interest on the Bonds. nor otherwise omit to
take or cause to be taken any action necessary to maintain such exclusion from gross
income: and. if it should take or permit. or omit to take or cause to be taken, as
appropriate. any such action. the Company shall take all lawful actions necessary to
rescind or correct such actions or omissions promptly upon having knowledge thereof.
Section 7.08. Determination of Taxability.
(1) Promptly after the occurrence of a Determination of Taxability, the Company
shall give written notice to the Issuer and Trustee of the Determination of Taxability and the
D'NEw200`00 T'DOCS'LOAN DOC 24 LOAN AGREEMENT
Company shall provide to the Trustee in immediately available funds, an amount which when
added to the amounts on deposit in the Funds, will equal the principal amount of all the Unpaid
Bonds plus accrued interest thereon to the Redemption Date, and the Bonds shall be redeemed
pursuant to Article Three of the Indenture.
(2) Upon a Determination of Taxability the Company shall also pay to the Trustee an
amount equal to the Paying Agent's. Trustee's fees. accrued and to accrue until final payment and
redemption of the Bonds, and all other advances, fees, costs and expenses reasonably incurred by
the Trustee, the Issuer and the Paving A-ent, including Bond Counsel and legal fees.
(3) If this Agreement has not been terminated under Section 8.04 prior to the
Redemption Date for the Bonds, this Agreement shall be terminated on said Redemption Date
and the closing for the termination of this Agreement shall be completed otherwise as provided
for termination of this Agreement upon exercise of the Company's options under Section 8.04.
(4) Neither the Company nor any Holder shall be required to contest or appeal any
notice of deficiencv, ruling, decision or legislative enactment which may give rise to a
Determination of Taxability: and the expenses of any such contest or appeal shall be paid by the
party initiating the contest or appeal.
0`14EW200'*001 DOCS LOAN DOC 25 LOAN AGREEMENT
Company's Options
Section 8.01. Assignment and Transfer.
The Company may assign its rights and obligations under this Agreement as an incident
thereto, transfer its interest in the Project without prior consent of the Issuer or the Trustee, but
subject to the provisions of Sections 5.02 and 7.05 hereof.
Section 8.02. Prepavment.
(1) The Company shall have the option to direct the Trustee to call for redemption
and prepayment of the Outstanding Bonds in whole or after the Conversion Date, in part as
provided in Section 3.01(a)(i), 3.01(a)(iii) or 3.01(a)(v) of the Indenture. The Bonds to be
redeemed shall be redeemed at a price equal to their principal amount plus accrued interest set
forth in Section 3.01 of the Indenture. In the event the Bonds are called for redemption in whole
or in part, the Company shall make a Basic Payment as provided in Section 4.02 hereof on such
Redemption Date.
(2) If, after the Company exercises its option to redeem all Bonds. no Bonds remain
Outstanding, the Indenture is discharged. and the Company has satisfied all of its obligations
hereunder. the Trustee and the Issuer shall execute and deliver to the Company such release and
other instruments as the Company reasonably determines are necessary to terminate this
Agreement. All further obligations of the Company hereunder, except as set forth in Section
10.10. shall thereupon terminate.
Section 8.03. Direction of Investments.
Except during the continuance of an Event of Default, the Company shall have the right
during the Term of this Agreement to direct the Trustee to invest or reinvest all money held for
the credit of Funds established by Article Fire of the Indenture in such securities as are
authorized by law for such funds, subiect. howe%e-, to the further conditions of Article Seven of
the Indenture and Section 7.07 hereof.
Section 8.04. Termination of Loan Agreement.
Except during the continuance of an Event of Default. after the Conversion Date, the
Company shall, have the option of terminating this Agreement subject to the following
conditions:
(1) such option may be exercised only if one of the following events shall
have occurred:
(A) if the Project shall have been damaged or destroyed to such extent
that in the reasonable judgment of the Company (i) the Project cannot reasonably
be restored within six (6) months to substantially its condition immediately
preceding such damage or destruction, or (ii) the Project cannot reasonably be
D'NEW20o'00 I'DOCS'LOAN DOC 26 LOAN AGREEMENT
used to carry on the normal operations of the Company for six (6) months, or (iii)
the reasonably estimated cost of restoration of the Project exceeds twenty percent
(20%) of the original face amount of the Bonds and is also reasonably estimated
to exceed the proceeds of property insurance payable therefor plus any deductible
amount for which the Company is self-insured. provided that such estimates shall
be approved by the Trustee; or
(B) if by reason of Condemnation. title shall have been taken to all or
substantially all of the Project or the Project Premises, or so much thereof that, in
the reasonable judgment of the Company, (i) the Company will be prevented from
carrying on its normal operations for six (6) months, or (ii) the reasonably
estimated cost of restoration of the Project exceeds twenty percent (20%) of the
original face amount of the Bonds and is also reasonably estimated to exceed the
proceeds of the Condemnation award, provided that such estimates shall be
approved by the Trustee; or
(C) if as a result of any changes in the Constitution of the State of
Minnesota or the Constitution of the united States of America, or of any
legislative or administrative action, whether state or federal, or of any final decree,
judgment or order of any court or administrative body, whether state or federal.
entered after the contest thereof by the Company in good faith. the agreements
contained in this Agreement shall have become impossible of performance in
accordance with the intent and purposes of the parties as expressed herein, or
unreasonable burdens or excessive liabilities shall have been imposed upon the
Company. including, but not limited to, the imposition of new state or local ad
valorem. property, income or other taxes not imposed on the date of this
Agreement, other than ad valorem taxes upon privately owned property and for
the same general purpose as the Project and special assessments levied in amounts
proportionate to and not exceeding the benefits of future public improvements to
the land included in the Project:
in any of the events stated in subsection (1), clauses (A) through (C)
above, if the Compan}determines to exercise its option to terminate this Agreement it
must live written notice to the Issuer and Trustee of its decision to exercise its option
within one hundred twenn (120) days after such event:
(_) the Company shall give written notice to the Issuer and Trustee of its
intention to exercise the option, statinsi therein a termination date not less than forty-five
(45) nor more than ninety (90) days after the date the notice is mailed, but in no event
prior to the date on which all Outstanding Bonds shall be deemed discharged under
.article Vine of the Indenture: and the Company shall make arrangements satisfactory to
the Trustee for the giving of any notice required for redemption of all of the Outstanding
Bonds on the date on which the Bonds are to be redeemed;
(4) the Company shall make a Basic Payment as provided in Section 4.02
hereof on the Redemption Date;
D'NEW200%001 DOCS'LOAN DOC 27 LOAN AGREEMENT
(5) the Company shall pay to the Trustee at least 5 days prior to the Discharge
Date, an amount equal to the Trustee's and Paving Agent's fees and expenses under the
Indenture, accrued and to accrue until final payment and redemption of the Bonds and all
other advances, fees, costs and expenses reasonably incurred and to be incurred on or
before the termination date by the Trustee and Paying Agent under the Indenture and by
the Issuer under this Agreement;
(6) on the termination date. a closing shall be held at the principal office of the
Trustee, or any other office mutually agreed upon. At the closing the Issuer and Trustee
shall, upon acknowledgment of receipt of the sum set forth in subsection (4) above,
execute and deliver to the Company such release and other instruments as the Company
reasonably determines are necessary to terminate this Agreement. All further obligations
of the Company hereunder, except under Sections 7.04, 7.07 and 7.08 and 10.10 shall
thereupon terminate; provided, however, that the Company shall also remain obligated to
pay or reimburse the Issuer and Trustee for the payment of all other fees, costs and
expenses unaccounted for in the sum paid in accordance with subsection (4) above and
reasonably incurred before or subsequent to such closing in connection with the Bonds.
D -NFw2n rnn IDnC$' U?AN DnC 28 LOAN AGREEMENT
ARTICLE 9
Events of Default and Remedies
Section 9.01. Events of Default.
Anv one or more of the following events is an Event of Default under this Agreement.
and the term "Event of Default," wherever used herein. means any one of the following events.
whatever the reason for such default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment. decree or order of any court or anv
order, rule or regulation of any administrative or governmental body:
(1) if the Company shall fail to pay any Basic Payments due under this
Agreement and such failure shall continue for ten (10) days;
(2) if the Company shall fail to pay any Additional Charges on or before the
date that the payment is due, and shall continue to be in arrears for thirty (30) days after
mailing of a notice to it by the Issuer or the Trustee that said Additional Charges have not
been received on the due date;
(3) if the Company shall fail to observe and perform or shall breach any other
covenant, condition or agreement on its part under this Agreement for a period of sixty
(60) days after mailing of a n6tice to it by the Issuer or the Trustee, stating that it is a
"Notice of Default" hereunder and specifying such default or breach and requesting that it
be remedied:
(4) if the Company shall be dissolved or liquidated (other than when a new
entity assumes the obligations of the Company under the conditions permitting such
action contained in Section 7.05);
(5) if any representation or warranty made by the Company herein, or by a
general partner or Representative of the Company in any document or certificate
fumished the Trustee or the Issuer or the Underwrite- in connection herewith or therewith
or pursuant hereto or thereto, shall prove at any time to be. in any material respect.
incorrect or misleading as of the date made. or
(6) if an event of default occurs and is continuing under the Indenture or any
Related Document.
Section 9.02. Remedies.
(1) Whenever any Event of Default shall have happened and be subsisting the Trustee
may, by written notice to the Company, declare all the Basic Payments payable for the remainder
of the Term of this Agreement (an amount equal to that necessary to pay in full all outstanding
Bonds and the interest thereon assuming acceleration of the Bonds under the Indenture and to pay
all other indebtedness thereunder) to be immediately due and payable whereupon the same shall
D'`NEW200''001'DOCSLOAN DOC 29 LOAN AGREEMENT
become immediately due and payable by the Company. The provisions of this Section 9.02 do
not limit the application of Section 9.01.
(2) Upon the occurrence of an Event of Default, the Trustee may also take whatever
action at law or in equity may appear necessary or appropriate to collect all sums then due and
thereafter to become due, or to enforce performance and observance of any obligation,
agreement, covenant, representation or warranty of the Company, under this Agreement, or any
related instrument: or to otherwise compensate the Issuer, Trustee or Bondholders for any
damages on account of such Event of Default.
(3) The Issuer (without the prior written consent of the Trustee if the Trustee is not
enforcing the Issuer's right in a manner to protect the Issuer or is otherwise taking action that
brings adverse consequences to the Issuer) may take whatever action at law or in equity may
appear necessary or appropriate to enforce its rights of indemnification under Section 7.04 and to
collect all sums then due and thereafter to become due to the Issuer under Sections 4.04, 7.04,
9.05 and 10.08 of this Agreement. Notwithstanding the foregoing, the Issuer is not precluded
from exercising any of its rights reserved to it as set forth in this Section, even if the Trustee is
exercising the rights of the Issuer hereunder.
Section 9.03. Disposition of Funds.
Any amounts collected pursuant to action taken under Section 9.02 (other than stuns
collected for the Issuer on account of its rights to indemnification and certain direct payments to
be made to the Issuer under Sections 4.03. 7.04, and 9.05 which sums shall be paid directly to the
Issuer) shall be applied in accordance with the provisions of the Indenture.
Section 9.04. Nonexclusive Remedies.
No remedy herein conferred upon or reserved to the Issuer or Trustee is intended to be
exclusive of anv other available remedy or remedies. but each and every such remedy shall be
cumulative and shall be in addition to even- other remedy given under this Agreement 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 thereof, but any such right and power may be exercised from time to
time and as often as maybe deemed expedient. In order to entitle the Issuer (or Trustee) to
exercise anv remedy reserved to it in this .-article. it shall not be necessary to give any notice,
other than such notice as may be herein expressly required or as may be required by law.
Section 9.05. Attomevs' Fees and Expenses.
If an Event of Default shall exist under this Agreement and the Issuer or Trustee should
employ attorneys or incur other expenses for the collection of any amounts due hereunder, or for
the enforcement of performance of any obligation or agreement on the part of the Company, the
Company will upon demand pay to the Issuer or Trustee the reasonable fees of such attorneys and
such other expenses so incurred.
D'NEW200`001' DOCS' LOAN DOC 3O
LOAN AGREEMENT
Section 9.06. Effect of Waiver.
In the event any agreement contained in this Agreement should be breached by either
party and thereafter waived by the other parr, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other breach hereunder.
Section 9.07. Waiver of Stav or Extension.
The Company covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any appraisement, valuation, stay, or extension law wherever enacted, now or at any
hereafter in force, which may affect the covenants in, or the performance of. this Agreement; and
the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of anv such law, and covenants that it will not hinder, delay or impede the execution
of anv power herein granted to the Issuer or Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 9.08. Issuer May File Proofs of Claim.
In case of the pendency of any receivership. insolvency, liquidation, bankruptcy,
reorganization. arrangement, adjustment, composition or other judicial proceeding relative to the
Company or the property of the Company, the Trustee or the Issuer with the prior consent of the
Trustee, shall be entitled and empowered, by intervention in such proceeding or otherwise:
(1) to file and prove a claim and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Issuer and Trustee (for
themselves and on behalf of Bondholders) (including anv claim for the reasonable
compensation, expenses. disbursements and advances of the Issuer and Trustee, their
agents and counsel) allowed in such judicial proceeding. and
(') to collect and receive anv mone%s or other properT payable or deliverable
on anv such claims. and to distribute the same.
Section 9.09. Restoration of Positions.
If the Issuer or Trustee have instituted anv proceeding to enforce any right or remedy
under this Agreement. and such proceeding has been discontinued or abandoned for any reason.
or has been determined adversely to the Issuer or Trustee. then and in every such case the
Company. Trustee and Issuer shall, subject to any determination in the proceeding, be restored to
the positions they held prior to commencement of such proceedings, and thereafter all rights and
remedies of the Issuer shall continue as though no such proceeding had been instituted.
Section 9.10. Suits to Protect the Proiect.
If the Company shall fail to do so after thirty (30) days prior written notice from the
Issuer or Trustee. the Issuer shall have power to institute and to maintain such proceedings as it
may deem expedient to prevent any impairment of the Project or any portion thereof, by any acts
which may be unlawful or in violation of this Agreement, and such suits and proceedings as the
I rFWI `m DncS. LQAS DSK' 31 LOAN AGREEMENT
Issuer may deem expedient to protect its interests in the Project or any portion thereof. including
power to institute and maintain proceedings to restrain the enforcement of or compliance with
any governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if
the enforcement of, or compliance with, such enactment, rule or order would impair or adversely
affect the Project or be prejudicial to the interests of the Bondholders.
Section 9.11. Performance by Third Parties.
The Trustee or the Issuer may permit third parties to perform any and all acts or take such
action as may be necessary for and on behalf of the Company to cure any Event of Default
hereunder. The acceptance by Issuer or the Trustee of any such performance by third parties
shall not in any way diminish or absolve the Company of primary liability hereunder.
Section 9.12. Exercise of the Issuer's Remedies by Trustee.
Whenever any Event of Default shall have happened and be subsisting the Trustee may.
but except as otherwise provided in the Indenture shall not be obliged to, exercise any or all of
the rights of the Issuer under this Article 9, without notice to the Issuer.
Section 9.13. Non -Recourse Oblieation.
It is recognized that the Loan is a non-recourse obligation of the Company, that as a result
thereof this Agreement is not intended to create anypersonal liability for the "debt" herein
created on account of the issuance of the Bonds and the obligation of the Company to make
Basic Pavments hereunder and that accordinely the remedies available to the Issuer and the
Trustee upon an Event of Default insofar as they related to the payment of any Basic Payments
are limited to the rights and remedies against such security to secure the repayment of the Loan
as is given the Issuer or the Trustee under the Related Documents, provided that nothing herein
shall be deemed to relieve the Company from personal liability for the performance of any
obligation of the Company hereunder other than the obligation to make Basic Payments and
discharee the Loan.
D: WEW700MUDOCS'LOAN DOC 32 LOAN AGREEMENT
ARTICLE 10
General Provisions
Section 10.01. Amounts Remaining in Funds.
Except during the continuance of an Event of Default any amounts remaining- in the
Funds created under Article Five of the Indenture upon expiration or earlier termination of this
Agreement, as provided herein, and after adequate provision has been made for payment in full
of the Bonds, in accordance with Article Nine of the Indenture, any Additional Charges payable
to the Trustee and Issuer, including Paying Agent's fees and expenses, and all other amounts
required to be paid under this Agreement. the Indenture, shall, forthwith be paid to the Company.
Section 10.02. Notices.
All notices, certificates or other communications hereunder shall be in writing (except as
otherwise expressly provided herein) and shall be sufficiently given and shall be deemed given
when mailed by first class mail, postage prepaid, with proper address as indicated below. The
Issuer, the Company, the Remarketing Agent. and Trustee may, by written notice given by each
of them to the others, designate any address or addresses to which notices, certificates or other
communications to them shall be sent when required as contemplated by this Agreement. until
otherwise provided by the respective parties, all notices, certificates and communications to each
of them shall be addressed as follows:
To the Issuer: City of New Hope. Minnesota
4401 Yvlon .avenue North
New Hope, Minnesota -55428-4898
Ann: City Ntanager
To the Company: Reprise Associates Limited Partnership
Reprise. Inc.
:005 Ottawa Avenue
St. Louis Park. Minnesota 55416
Attn: President
To the Trustee: Norwest Bank Minnesota. National Association
Sixth Street and Marquette Avenue
Minneapolis. Minnesota 55479
Attention: Corporate Trust Department
To the Remarketing Agent: Piper Jaffray Inc.
222 South Ninth Street, 15th Floor
Minneapolis, Minnesota 55402
Attn: Head of Municipal underwriting
D `NEW200,00T'DOCS'.LOAN DOC 33 LOAN AGREEMENT
Section 10.03. Bindin¢ Effect.
This Agreement shall inure to the benefit of and shall be binding upon the Issuer and
Company and their respective successors and assigns.
Section 10.04. Severabilitv.
In the event any provisions of this Agreement 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 10.05. Amendments. Changes. and Modifications.
Except as otherwise provided in this Agreement or in the Indenture, subsequent to the
issuance of the Bonds and before the lien of the Indenture is satisfied and discharged in
accordance with its terms, this Agreement may not be effectively amended, changed. modified.
altered or terminated without the written consent of the Trustee.
Section 10.06. Execution Counterparts.
This Agreement 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 10.07. Required Approvals.
Consents and approvals required by this Agreement to be obtained from the Company.
the Issuer or the Trustee shall be in writing and shall not be unreasonably withheld or delayed.
Section 10.08. Limitations on Issuer's Liabilitv.
No agreements or provisions contained in this Agreement nor any agreement. covenant or
undertaking by the Issuer contained in any document executed by the Issuer in connection with
the Proiect shall give rise to any pecuniary liability of the Issuer or a charge against its general
credit or taring powers. or shall obligate the Issuer financially in any way except with respect to
the Project and the application of revenues therefrom and the proceeds of the Bonds. No failure
of the Issuer to comply with any term, condition, covenant or agreement herein shall subject the
Issuer to liability for any claim for damages, costs or other financial or pecuniary charge except
to the extent that the same can be paid or recovered from the Project or revenues therefrom or
from proceeds of the Bonds: and no execution of any claim. demand. cause of action or judgment
shall be levied upon or collected from the general credit, general funds or taxing powers of the
Issuer. Nothing herein shall preclude a proper party in interest from seeking and obtaining
specific performance against the Issuer for any failure to comply with any term, condition,
covenant or agreement herein. provided. that no costs, expenses or other monetary relief shall be
recoverable from the Issuer except as may be payable from the Project or its revenues.
7' NEW,nO Onl' DOCS LOAN DOC 34 LOAN AGREEMENT
Section 10.09. Representations of Company.
All representations made in this Agreement by the Company are based on the Company's
independent investigation of the facts and law, and accordingly no such representations are made
in reliance upon any representations made or legal advice given by the Issuer, its Bond Counsel.
or any of its agents, officers or employees.
Section 10.10. Termination.
At anv time when no Bonds remain Outstanding and arrangements satisfactory to the
Issuer and Trustee have been made for the discharge of all liabilities under this Agreement, this
Agreement shall terminate. All obligations of the Company under Sections 7.04. 7.07 and 7.08
shall survive termination of this Agreement.
O'NEW200'00]'DOCS LOAN DOC jS LOAN AGREEMENT
IN WITNESS WHEREOF, the Issuer and the Company have caused this Loan
Agreement to be executed by their duly authorized officers.
CITY OF NEW HOPE, MINNESOTA
By
Its Mayor
By
Its City Manager
D NEW'_00'W DnCl ! OAN DOC 36 LOAN AGREEMENT
REPRISE ASSOCIATES LIMITED
PARTNERSHIP
By Reprise. Inc.
Its General Partner
UZ
Its President
D' NE W^_ W'n01' DOCS'LOAN DOC 37 LOAN AGREEMENT
EXHIBIT A
Legal Description
(The following Parcel is idenzif;ed as Brooklyn Park Elderly, and
is located at 74th and Zane Avenue Nor':",
Hennepin County,
, and is 'legally described as follows:
Brcok_yn Park, Minnesota
PARCEL A
Starting at a point 333 feet East of the NW corner of the South 686.6 feet
of the SE 1/4 of tIIa 1/4 of Section.28, Township 119, Range 21; thence pro-
ceeding East 200 feet along said N.6rth line of the South 686.6 feet of the
SE 1/4 of NW 1/4 of Section 28, Township 119, Range 21; thence proceeding
South along a line parallel with the West line of SE 1/4 of IiW 1/4 of Section
Township 119, Range 21 a distance of
toethethence South lineeofiSE 1/4East
of i4C'
distance of 100 eet along a line p proceeding North parallel
NW 1/4 of Section 28, Township 119, Range Section Z8, Township 119, Range 21 to
thence p 9
to the West line of SE 1/4 of NW 1/4 of Secti
its intersection with the South line of Twin Brook Center;
;al so beingook the
Center;
South line of 74th Ave. tap. as dedicated in said plat
thence proceeding West along said South line of Twin Brook Center to its Iq
intersection with a line extending North pa�ralleltSguythset alongesaidSEnter
of 14W 1/4 of Section -28, Township' -1191 Rang -21; thence
setting line to point of beginning.
PARCEL A-1ut
Starting at a point 333 feet East of the 17W corner of the South 636.6 feet o
the SE i/4 of the NW 1/4 of Section 28, Township 119,
Rangeceeding East 200 feet along said North line of the South 686.6 feet of the
SE 1/4 of the NW 1/4 of Section 28, Township 119, Range 21; thence proceeding
South along a line parallel with theW'distance of 64e75Ep
feet;thence f the Nproceedi
Section 28, Township Ila, Range 21, a
East a distance of 100 feet alone a line parallel to the South line of the
SE 1/4 of the N14 1/4 of Section 28, Township 119, Range 21 to point of "
beginning. Thence proceeding North parallel to the West line of the SE 1/4 of
the NW 1/4 of Thence
28,'Township 17., Range 21 to its intersection with the
South line of Twin Brook Center; also beino the South
rline n of lEastAalongpsaid
dedicated in said plat of Twin Brook Center, thence p 9
South line of Twin Brook Center, a distance of 49 feet; thence South a distara
of 269:64 feet parallel with said blest line Of the
fSE 1 i4 if the NW 1/4; then
West parallel to the South line thereof to p
A-1
EXHIBIT B
Definitions
Act: Minnesota Statutes, Chapter 462C, as amended;
Act of Bankruptev: anv of the following events:
(a) If the Company shall (i) apply for or consent to the appointment of. or the
taking of possession by, a receiver, custodian, trustee, liquidator or the like. or of all or a
substantial part of their property, (ii) commence a voluntary case under the Federal
Bankruptcy Code (as now or hereafter in effect), or (iii) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization, winding -up
or composition or adjustment of debts: or
(b) A proceeding or case shall be commenced, without the application or
consent of the Company, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, dissolution, winding -up, or the composition or adjustment of
its debts, (ii) the appointment of a trustee, receiver, custodian. liquidator or the like of the
Company, or of all or any substantial part of its assets, or (iii) similar relief in respect of
the Company under any law relating to bankruptcy, insolvency, reorganization.
winding -up or composition or adjustment of debts:
Additional Charges: the payments required by Section 4.04 of the Loan Agreement
Affiliated Party: as to a particular Person, any Person directly and, indirectly controlling
or controlled by or under direct or indirect common control with such specified Person.
"Control", when used with respect to a particular Person. means the possession. directly or
indirectly, of the power to direct management and policies of such Person whether through the
ownership of voting stock. by contract or otherwise. and the terms "controlling" and "controlled"
have meanings correlative to the foregoing:
Authorized Denominations: S 100.000 or any multiple of S5.000 in excess of S 100.000
Basic Pavments or Loan Payments: the payments required by Section 4.02 and Section
4.03 of the Loan Agreement:
Beneficial Owner: the person for which a Depository Participant holds an interest in the
Bonds, as shown on the books and records of the Depository Participant:
Bond Closing: the date on which there is delivery by the Issuer of, and payment for, the
Bonds:
Bond Counsel: any firm of nationally recognized bond counsel experienced in tax
exempt bond financing selected by the Trustee and acceptable to the Issuer, and the Company;
Bond Fund: the fund so designated in Section 6.03 from which the principal of and
interest on the Bonds are payable;
D"NEW200`001 1DOCS'LOAN DOC B-1 LOAN AGREEMENT
Bond Purchase Fund: the fund so designated in Section 6.04;
Bond Register: the register maintained by the Trustee pursuant to Section 2.10;
Bondholder or Holder: a Person in whose name a Bond is registered in the Bond
Register;
Bonds: the $1.650.000 Multifamily Housing Revenue Bonds (Park Acres Apartments
Project) Series 1997 to be issued pursuant to the Indenture:
Bond Yeaz: any twelve (12) month period ending on the anniversary of the Bond
Closing;
Business Day any day on which the Trustee, the Investment Agreement Provider or the
Federal Reserve Bank of New York are not authorized by law to close;
Cede & Co.: Cede & Co. or Cede & Co.'s successor as nominee of DTC:
Code or Internal Revenue Code: the Internal Revenue Code of 1986. as amended, and all
applicable Treasury Regulations:
Collateral Documents: any written instrument other than the Loan Agreement and the
Indenture whereby any property or interest in property of anv kind is granted, pledged, conveyed.
assigned, or transferred to the Issuer or Trustee. or both, as security for payment of the Bonds or
performance by the Company of its obligations under the Loan Agreement:
Company: Reprise Associates Limited Partnership. a Minnesota limited partnership, its
successors and assigns or other Person which may assume its obligations under the Loan
agreement:
Condemnation: the word "Condemnation" or phrase "eminent domain" as used herein
shall include the taking or requisition by governmental authority or by a Person, acting under
governmental authorin and a conveyance made under threat of Condemnation, provided such
conveyance is made with the approval of the Trustee, which approval shall not be unreasonably
withheld. and "Condemnation award" shall mean payment for property condemned or conveyed
under threat of Condemnation:
Conversion Date: any Business Dav, which day shall be no earlier than September 1.
1997 nor later than April 1. 1998, unless such date is extended in accordance with Section
=.13(a) hereof. as of which the interest rate on the Bonds converts from a Variable Rate to a
Fixed Rate as such date is established pursuant to Section 2.1-33 hereof;
Credit Facility: shall have the meaning assigned to such term in the Loan Agreement;
Date of Taxability: the date as of which the interest on the Bonds is deemed taxable
under a Determination of Taxability;
Defaulted Interest: shall have the meaning stated in Section 2.02 hereof;
0 NcW-nnPAPDOCS'LOAN DOC B-2 LOAN AGREEMENT
Depository or DTC: a book -entry securities depository for the Bonds, initially Depository
Trust Company, New York, New York, a limited purpose trust company organized under the
laws of the State of New York, or anv successor book -entry securities depository for the Bonds
appointed pursuant to Section 2.14;
Depository Bonds: Bonds in the form of one immobilized global certificate for each
maturity, registered in the Bond Register in the name of the Depository or its Nominee as
Bondowner and governed by Section 21. 14 hereof:
Depository Participant: any broker-dealer. bank or other financial institution from time to
time for which the Depository holds Bonds or securities as depository;
Determination of Taxabilitv: a determination that the interest income on any Bond is
includable in gross income for federal income tae purposes under Section 103 of the Code for
anv reason, other than that the Holder is a Substantial User of the Project or a Related Person
thereto, which determination shall be deemed to have been made upon the occurrence of the first
to occur of the following:
(a) the date on which the Company determines that the interest income on any
of the Bonds is includable in gross income for federal income tae purposes: or
(b) the date on which any change in law or regulation becomes effective or on
which the Internal Revenue Service has issued any private ruling, technical advice or any
other written communication to the effect that the interest income on any of the Bonds is
includable in gross income for federal income tae purposes; or
(c) the date on which the Company shall receive notice from the Trustee in
writing that the Trustee has been advised by anv Holder that the Internal Revenue Service
has issued a thirty -day letter or other notice which asserts that the interest on such Bond is
includable in gross income for federal income tax purposes; provided that no
Determination of Taxability shall be deemed to have occurred as a result of a
determination by the Company pursuant to clause (a) above unless such determination is
supported by a written opinion of counsel satisfactory to the Trustee that the interest
income on the Bonds is includable in gross income for federal income tae purposes;
Discharge Date: the date on which all Outstanding Bonds are discharged under
Article IX:
Event of Default: anv of the events set forth in Section 10.01 hereof.
Facilirv: the existing 41 -unit rental housing facility known as Park Acres Apartments, and
all related improvements and equipment, together with all additions to, replacements of and
substitutions for any of the foregoing;
Federal Bankruptcv Code: the United States Bankruptcy Reform Act of 1978, as
amended, or any similar or succeeding federal bankruptcy law;
Final Conversion Date: March 1, 2000;
D INEW200'00VDOCSLOAN DOC B-3 LOAN AGREEMENT
Final Maturity Date: the Maturity Date, Discharge Date or Redemption Date on which all
outstanding Bonds either mature, are redeemed or discharged, whichever is earlier;
Fixed Rate: the interest rate established in accordance with Section 2.13 hereof,
Fixed Rate Period: the period from and including the Conversion Date to and including
the date next preceding the payment in full of the Bonds:
Fixed Rate Interest Payment Date: the first March I or September 1 next succeeding the
Conversion Date, and each March 1 and September I thereafter until payment in full of the
Bonds;
Government Obligations: shall mean direct general obligations of, or obligations the
prompt payment of the principal of and the interest on which are fully and unconditionally
guaranteed by, the United States of America;
Holder or Bondholder: the Person in whose name a Bond is registered in the Bond
Register;
Indenture: the Indenture of Trust by and between the Issuer and the Trustee, as the same
may from time to time be amended or supplemented as herein provided;
Independent Accountant: a certified public accountant or firm of certified public
accountants registered and qualified to practice as such under the laws of the State of ':Minnesota.
who does not have any direct financial interest in the Company, other than the payment to be
received under contract for services performed and who is not connected with the Company as an
officer, employee, underwriter, partner. affiliate, subsidiary. or person performing similar
functions and is not a trustee or director of the Company:
Independent Counsel: any attorney duiv admitted to practice law before the highest court
of any state, who may be counsel to the Company or the Issuer but who may not be an officer or
a full time employee of the Company or the Issue.:
Interest Payment Date: each Fixed Rate Interest Payment Date, each Variable Rate
Interest Payment Date and the Conversion Date:
Interest Period: the period from and including an Interest Payment Date to and including
the day next preceding the next Interest Payment Date, except that the first Interest Period shall
be the period from and including the date of the first authentication and delivery of the Bonds
hereunder to and including April 30. 1997;
Investment Agreement Provider: Bayerische Landesbank Girozentrale;
Investment Agreement: the Investment Agreement dated March 27, 1997 between the
Trustee and the Investment Agreement Provider;
Interest Pavment Date: the Conversion Date and each Fixed Rate Interest Payment Date
and Variable Rate Interest Payment Date;
D':NEW2001001`DOCS'LOAN DOC B-4 LOAN AGREEMENT
Internal Revenue Code or Code: the Internal Revenue Code of 1986, as amended. and all
applicable Treasury Regulations;
Issuer: the City of New Hope, Minnesota;
Letter of Renresentations: the Letter of Representations or other documentation required
by the Depository as a condition to its acting as book -entry depository for the Bonds, together
with any replacement thereof or amendment or supplement thereto (and including any standard
procedures or policies referenced therein or applicable thereto) respecting the procedures and
other matters relating to the Depository's role as book -entry depository for the Bonds:
Loan: the loan of Bond proceeds by the Issuer to the Company described in Section 4.01
of the Loan Aareement:
Loan Agreement: the Loan Agreement of even date herewith by and between the Issuer
and the Company, as the same may from time to time be amended or supplemented as provided
therein and in the Indenture:
Loan Pavments or Basic Payments: the payments the Company is obligated to make
pursuant to Sections 4.02 and 4.03 of the Loan Agreement;
Mandatory Redemption Payments: the payments which are required to be made under
Section 3.01(a)(ii) or 3.01(a)(iii) to redeem the Bonds in accordance with the Mandatory
Redemption Schedule after appropriate credits. if any. have been made;
Mandator• Redemption Schedule: the mandator- redemption schedule for the Bonds set
forth in Section 3.01(a)(ii) or 3.01(a)(iii):
Mandatory Tender Date: the Conversion Date:
Mandatory Tender Notice: has the meaning assigned to it in Section 4.01(b);
Maturity Date or Maturity: anv date on which principal of or interest or premium, if any.
on the Bonds is due, whether at maturity, on a scheduled interest payment date. or upon
redemption, defeasance, acceleration, or otherwise:
lvioody's: Moody's Investors Service. Inc., a corporation organized and existing, under the
laws of the State of New York. its successors and assigns, and. if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a municipal securities rating
a_ency, ".Moody's" shall be deemed to refer to any other nationally recognized municipal
securities rating agency designated by the Issuer (other than Standard & Poor's Corporation);
Notice by Mail: notice of any action or condition by mail shall mean a written notice
meeting the requirements of the Indenture mailed by first-class mail, postage prepaid, to the
Holders of specified Bonds at the addresses shown in the Bond Register;
Original Purchaser: the first Person(s) who purchase the Bonds from the Issuer at Bond
Closing;
D • VE'A^00'001DOCS' LOAN DCC B-5 LOAN AGREEMENT
Outstanding Bonds: as of the date of determination, all Bonds theretofore issued and
delivered under the Indenture except:
(a) Bonds theretofore canceled by the Trustee or Paying Agent or delivered to
the Trustee or Paying Agent canceled or for cancellation:
(b) Bonds for which payment or redemption moneys or securities (as provided
in Article IX) shall have been theretofore deposited with the Trustee in trust for the
Holders of such Bonds; provided, however, that if such Bonds are to be redeemed, notice
of such redemption shall have been duly given pursuant to the Indenture or irrevocable
action shall have been taken to call such Bonds for redemption at a stated Redemption
Date; and
(c) Bonds in exchange for or in lieu of which other Bonds shall have been
issued and delivered pursuant to the Indenture, including Untendered Bonds; provided,
however, that in determining whether the Holders of the requisite principal amount of
Outstanding Bonds have given any request, demand, authorization, direction, notice.
consent or waiver hereunder. Bonds owned by the Company shall be disregarded and
deemed not to be Outstanding Bonds. except that in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization, direction,
notice, consent, or waiver, only Bonds which the Trustee knows to be owned by the
Company shall be disregarded
Paving Agent: the Trustee or any other entity designated pursuant to the Indenture as the
agent of the Issuer and the Trustee to receive and disburse the principal of and premium, if any,
and interest on the Bonds:
Payment Date: any Interest Payment Date, any Stated Maturity, the Discharge Date. the
Mandatory Tender Date or any Redemption Date:
Permitted Investments:
(a) Government Obligations:
(b) Shares of an investment company registered under the Federal Investment
Company Act of 1940. whose shares are registered under the Federal Securities Act of
1933, and whose only investments are obligations described in clause (a) above;
(c) Any general obligation of the State of Minnesota or any of its political
subdivisions. provided that securities described in clause (a) above have been irrevocably
deposited in escrow to effect discharge of the general obligations in the same manner and
subject to the same conditions required to effect discharge of the Bonds under Article IX;
(d) Certificates of deposit with fixed maturities, time deposits, repurchase
agreements or any other direct obligation with or of either the Trustee or any other
national or state bank or federally chartered savings and loan association whose senior
debt obligations are rated A or better by a Rating Agency or any other bank if the debt
D:•.NEw.001001'DOCS\LOAN DOC B-6 LOAN AGREEMENT
obligations for which such bank's letters of credit are the primary basis are rated A or
better by a Rating Agency which initially rated the Bonds; and
(e) the Investment Agreement.
Person: any natural person, corporation, limited liability company, joint venture.
cooperative, partnership, trust or unincorporated organization, government or governmental body
or agency, political subdivision or other legal entity, as in the context may be appropriate.-
Prime
ppropriate;Prime Rate: the rate of interest publicly announced by Morgan Guaranty Trust Co., in
New York, New York, or its successor as its "prime rate" or "reference rate," which rate shall
change when and as such prime rate changes;
Proiect: the Project Premises, the Facility and the Improvements. including all Project
Equipment, as they may at any time exist;
Proiect Equipment: any and all (i) fixtures or tangible personal property now or hereafter
attached or affixed to the Project Premises, (ii) other tangible personal propertynow or hereafter
located within or used in connection with the Project Premises or the Facility and (iii) any
additions to, replacements of and substitutions for any of the foregoing;
Proiect Premises: the real estate legally described in Exhibit A attached to the Loan
Agreement. together with all additions io. replacements of and substitutions for the foregoing;
Rating Agency: Standard & Poor's Ratings Group or Moody's:
Rating Categorv: one of the generic rating categories of a Rating Agency, without regard
to any refinement or gradation of such Rating Category by a numerical or other modifier:
Rebate Amounts: the amount determined pursuant to Section 7.07(1.3) of the Loan
Agreement to be rebated to the United States:
Record Date: the 15th day of the calendar month next preceding an Interest Payment
Date. whether or not such day is a Business Dae:
Redemotion Date: when used with respect to any Bond to be redeemed shall mean the
date on which it is to be redeemed pursuant to the Indenture:
Redemption Price: when used with respect to any Bond to be redeemed shall mean the
price at which it is to be redeemed pursuant to the Indenture:
Regular Interest Pavments: all interest payments on the Bonds, other than Special Interest
Payments:
Regulatory Agreement: the Regulatory Agreement dated as of March 1, 1997, by and
between the Trustee, the Issuer and the Company, as the same may be amended from time to
time;
D:!NEw200100 FDOCS'LOAN DOC B-7 LOAN AGREEMENT
Related Documents: the Loan Agreement and the Regulatory Agreement;
Related Person: with reference to any Substantial User, means a "related person" within
the meaning of Section 147(a)(2) of the Code;
Remarketing Aeent: Piper Jaffray Inc. or any successor Remarketing Agent appointed
and serving in such capacity pursuant to the Indenture:
Remarketing Agreement: the Remarketing Agreement, dated as of March 1, 1997,
between the Company, the Remarketing Agent, and the Trustee, as the same may be amended
from time to time. and if a successor Remarketing Agent is appointed in accordance with the
Indenture, "Remarketing Agreement" shall mean such other similar agreement between the
Company. the Trustee and such successor Remarketing Agent:
Replacement Bonds: Bonds which are not Depository Bonds and which are delivered to
replace Depository Bonds pursuant to Section 2.14 hereof;
Representative: the City Manager of the Issuer or a general partner of the Company, or
any other person at any time designated to act on behalf of the Issuer or the Company, as the case
may be, as evidenced by a written certificate furnished to the other part and the Trustee
containing the specimen signature of such person and signed for the Issuer by its City Manager or
for the Company by a general partner of the Company:
Resale Proceeds: all proceeds from the remarketing of the Bonds pursuant to Section
4.03 hereof:
Responsible Agent: any Person duly authorized and designated by the Trustee to act on
its behalf in carrying out the applicable duties and powers of the Trustee as set forth in the
Indenture (any action required by the Trustee under the Indenture may be taken by a Responsible
Agent):
Restricted Construction Funds: any Bond proceeds. including interest thereon, which are
required to be transferred on the Completion Date from the Project Fund to the Bond Fund and
which the Trustee is required under Section 6.03(b) to apply towards the prepayment or pro rata
payment of Bonds;
Snecial Interest Payments: all payments of (or with respect to) interest on the Bonds
made upon the acceleration of the Bonds pursuant to Section 10.0"_':
Snecial Record Date: the date fixed by the Trustee pursuant to Section 2.02 hereof
relating to the payment of any Defaulted Interest:
Standard & Poor's Ratines Group: Standard & Poor's Ratings Group, a corporation
organized and existing under the laws of the State of New York. its successors and their assigns,
and if such corporation shall be dissolved or liquidated or shall no longer perform the functions
of a municipal securities rating agency "Standard & Poor's Ratings Group" shall be deemed to
refer to anv other nationally recognized municipal securities rating agency designated by the
Issuer (other than Moody's);
D'NFW200'001DOCS' LOAN DOC B -R LOAN AGREEMENT
Stated Maturitv: when used with respect to any Bond or any installment of interest
thereon shall mean the date specified in such Bond as the fixed date on which principal of such
Bond or such installment of interest is due and payable;
Substantial User: a "Substantial User' within the meaning of Section 147(a)(1) of the
Code;
Tender Price: the principal and accrued interest due on the Bonds on any Mandatory
Tender Date;
Trust Estate: the Trust Estate as defined and set forth in the Granting Clauses hereof;
Trustee: Norwest Bank Minnesota. National Association in Minneapolis. Minnesota.
and any co -trustee or successor trustee appointed. qualified and then acting as such under the
provisions of the Indenture;
Underwriter: Piper Jaffray Inc.:
Unpaid Bonds: all Outstanding Bonds and any other Bonds which have neither matured
nor been redeemed or purchased and canceled under the Indenture;
Untendered Bond: shall have the meaning set forth in Section 4.07 hereof;
Variable Rate: the variable interest rate established in accordance with Section 2.03
hereof;
Variable Rate Interest Payment Date: shall mean the first Business Day of May. 1997.
and the first Business Day of each month thereafter through the Conversion Date:
Variable Rate Period: the period during which the Bonds bear interest at a Variable Rate.
D'NEW10T001DOCS' LOAN DOC B-9 LOAN AGREEMENT
EXHIBIT C
Investment agreement
C-1
i
KR DRAPTI
011211971
INVF.S lti 'T AGREEMENT
TMS IN" MMI M%4 ' AGREE JMNT (the 'Agreement") dated as of March 27, 1997 is entered
into by and between BAYERISCHE L iNDESBANK GIROZE,,NTRAI E (the "Depository"), aha
through its New York Branch, and NORWM BANK XDNN- 'SOTA, NATIONAL ASSOCIATION,
as trustee (the "Trustee"), under that Indenture of Trust dated as of March 1, 1997 (the "Indenture")
between the City of New Hope, Mtnnesom (the "Issuer") and the Trustee providing for the issuance of ,
$1,6,00,000 Principal amount of the Issuer's Muldfammiy Housing Revenue Bonds (Park Acres Apartment
Project) Series 1997 (the "Bonds").
WITNESSETH:
WHEREAS, the Indenture establishes various trust funds and accounts for the receipt and
disbursement of moneys, all as more fullv set forth in the Indenture;
WHEREAS, the Issuer has loaned the proceeds from the sale of the Bonds to Reprise Associates
Limited Partnership (the "Borrower") pursuant to that Loan Agreement dated March 1, 1997 between the
Issuer and the Borrower;
WHEREAS, pursuant to the indenture, the Borrower has directed the Trustee to invest certain
moneys received by the Trustee under the'Indenrore with the Depository pursuant to the terms and
provisions of this Agreement; and
WHEREAS, the Depository is willing,
on the terms and conditions set forth n this Agreement,
to accept the deposit of the moneys held or credited by the Tmstee in the fund (rhe "Fund") identified
in Exhibit A to this Agreement
NOW, TEE
7tE1"ORE in consideration of the fore;oing and of the mutual covenants herein set
forte, tae Depositor., and the Trustee hercby agree as foilows:
SECTION 1. DEPOSIT OF FLNDS
1.1. Delivery of Fonds. On March 77, 1997, the T_astee shall deliver $1,650,000 (the
'Invested Moneys') by wire transfer in immediately available`.mds to the Depository stunt to the
Deposirp yrs wire t a^sfer osy-t �e:s set forth In E.-chibit pursuant
A and the Depositor✓ shall accept the Invested
Moneys from 'I:-' Trustee.
1-2- Interest. Interest shall accrue on the daily outstanding balance of the Invested Moneys in
he rand az the rate set orh in Exhibit A (the "Rate of Earnings",l on the basis set forth in Exhibit A
therefor. All t etest eared (the "Earnings") shall be payable by wire transfer of immediately available
funds to the Trustee in arrears on each Interest Payment Date, as defined in Exhibit A. The Truster shall
prM-ide or cause to be provided wrMen notice m the Depository on or before the date of any change m
the Prime Rare (as defined in Exh(bit A); provided, however, notwithstanding the Trustee's failure to give
such notice, the Rate of Earnings hereunder shalI change with each change in the Prime Rate on the date
the Prime Rate changes. Such notice shall include the new Prime Rate and the date such change shall
"N71706.VN— awe-N-�tacu .3177
be effective. If any Interest payment Date is not a Business Day, payment will be made on the fust
Business Day thereafter, A "Business Day" shall mean any day other than a Saturday, Sunday or other
day on which commercial banks are required or authorized to be closed in New York, New York or
Minneapolis, Minnesota.
13. Withdrawal. On each of the withdrawal dates set forth in Exhibit A (each a "Withdrawal
Date" and, collectively, the "Withdrawal Dates") with respect to the Fund, the Depository shall pay to
the Trustee such =on= as may be requested by the T.- tutee. Withdrawals may be made only fur the
purposes specified in the Indenture. Withdrawals may not be made hereunder for reinvestment purposes.
If any Withdrawal Date is not a Business Day, payment will be made on the first Business Dav thereafter.
1.4. Early Withdrawal. Notwithstanding anything in this Agreement to the contr
event may withdrawals be made on any day other than a Withdrawal Date as set forth on Exhibit A hereto
unless: (a) the Depository shall have received ar least seven (7) days' prior written notice of the intended
withdrawal and the Trustee shall have paid to the Depository, if applicable, such charges for the
Depository's breakage costs as described in Section 6 hereof ("Break Costs") in respect of such j
withdrawal; or (b) in the event the Depository shall not have received at least seven (T) days' prior
written notice of the intended withdrawal, the Trustee shall have paid to the Depository the higher of
(i) the Depository's Break Costs in respect of such withdrawal or (ii) an early withdrawal penalty equal
to seven () days' simple interest on amounts so withdrawn.
1S. Form of Withdrawal. All amounts paid to the Trustee hereunder shall be remitted by wire
transfer of immediately available funds pursuant to the wire transfer instructions of the Trustee shown
in Exhibit A or at such other instructions as shall have been specified by the Trustee by no less than
seven (T) days' prior written notice to the Depository.
SECTION 2. TEIVYU ATION
This Agreement shall terminate upon the earlier to occur of: (a) the Termination Date set forth
in Exhibit A hereto with respect thereto or (b) upon withdrawal of all Invested Moneys and accrued and
unpaid Earnings on deposit in the Fund (such earlier date, the "lfatunr; Date"). At such time, all
=punts apt pr viously withdrawn from the Fund by the Trustee, together with all accrued and unpaid
Earnings, shall be paid to the Trustee in irnmedinely available funds.
SECTION 3. DEFAULT
3.1. Events of Default. The following events are defaults under this Agreement (each a
"Defauit"):
(a) A failure by the Depository to make any payment of principal or interest when
due pursuant to the provisions of this A; —nment which ccnrnues for one (1) Business Day
following receipt by the Depositor; of written notice thereof from the Trustee.
(b) I` the Depository commences a case in bankruptcy relating to it, is adjudicated
an insolvent or bankrupt, petitions or applies for the appointment of atry receiver or trustee for
itself or any substantial part of its property; or initiates any proceedingrrelating to it under any
reorganization, arrangement, or dissolution under applicable bankruptcy laws; or if any such
proceeding is initiated against it and if the Depository indicates in any manner its consent thereto
or if such procxding is not dismissed within ninety (90) days.
Os .M&:M .. H^P4.NRUHLBMn .3m
(c) A failure by the Depository to perform any of its Obligations under this
Agreement (other than those described in Section 3.1(a) hereof) which continues for ten (10)
Business Days or more after written notice thereof is given by the Trustee to the Depository.
3-2- Itights and Obligations Or Parties Upon Default.
(a) Upon the occurrence of a Default under Section 3.1(a) or Section 3.1(b) of this
Agreement, the Trusme, upon providing the Depository with seven (7) days' prior written notice,
may withdraw all Invested Moneys and Earnings from the Depository and shall not deliver anv
additional funds to the Depository pursuant to this Agreement. Upon the occurrence of a Default
under Section 3.1(c) of this Agreement or at any time thereafter as such Default remains uncured,
the Trustee may cause to be delivered to the Depository a notice setting forth the existence of a
Default in accordance with Section 3.1(c) above (the ":Notice of Default"). If such Default under
Section 3.1(c) is not cured prior to the close of business of the tenth Business Day following
delivery of the Notice of Default, the Trustee shall have the right. in addition to any other rights
and remedies, to withdraw all Invested Moneys and Earnings from the Depository.
(b) If the Trustee elects to withdraw Invested Moneys and Earnings pursuant to the
preceding paragraph, and is able to reinvest such funds (and any additional funds which would
have been delivered to the Depository pursuant to this Agreement) with another entity pursuant
to an agreement, the terms and conditions of which are substantially identical to this Agreement
and the substitution of which does not adversely affect the investment rating of the Bonds, the
Trustee shall terminate this Agreement by delivery of notice of such termination to the
Depository. if the Trustee is not able to reinvest the withdrawn Invested Moneys and Earnings
is such a manner, the Truster shall invest said funds (and any additional funds which would have
been delivered to the Depository pursuant to this Agreement) upon the best terms and conditions
which it may obtain through the exercise of reasonable efforts, in which case the Depository shall
pay to the Trustee on each Interest payment Date and each daze on which Invested Monevs would
have been withdrawn hereunder the difference between (i) the amounts which would have been
payable hereunder with respect to all such funds on suer' Interest Payment Date or Withdrawal
Date had such funds been left on deposit through the date of termination set forth in Section 3
hereof and (ii) the amounts actually realized by the Tr stee through each such date of calculation.
SECTION 4. REPRESENTATIONS AND WARX4-,71ES
4.1. Tae Trustee represents and warrants to the Depository that: (a) this Agreement constitutes
a valid and binding obligation of the Trustee; (b) to the best of its knowledee, the execution. delivery and
erfc`rr..ancs of this AgretMent by the Trustee does not and will not result in a breach or violation of or
cause a default under any provision of any law, regulation, order, license, decree, judgment indenture.
canes or agreement binding upon the Trustee or ins assets; (c) all moneys that the Trust-- invests with
the Depositary pursuant to this Agreement shall be derived :.oto .`ands and accounts established pursuant
to the indenture; and (d) the Trustee is authorized by the Indenture to make all investments on the terms
hereunder.
4-2. The Depository represents and warrants to the Trustee that (a) this Agreement constitutes
a vaiid and binding obligation of the Depository, and (b) to the best of its knowledge, the execution,
delivery and performance of this Agreement by the Depository does not and will not result in a breach
or violation of or cause a default Hader any provision of any law, regulation, order, license, decree,
judgment, indenture, contract or agreement binding upon the Depository or its assets.
0U7ta6=N.., x4. nwiecseeu • i s� 3
SECTION 5. ROI,,E OF THE DEPOSITORY
It is expressly understood and agreed that in performing its obligations neither the Depository nor
any of its directors, officers, employees or agents is acting as a fiduciary or agent of the Trustee, the
issuer, the Borrower or any other party, and neither the Depository nor any of its directors, officers,
employees or agents shall be Iiable or responsible for: (a) the payment of any amounts owing on or with
respect to the Bonds; (b) the use or application by the Trustee of any moneys payable to the Trustee
hereunder; (e) any acts or omissions of the Trustee under or with respect to the Bonds or the Indenture;
(d) the validity or enforceability of the Bonds or the Indenture; or (e) the Trustee's performance of its
obligations under this Agreement, the Indenture, the Bonds or any other agreement or instrument relating
to the Bonds or their issuance (collectively, the "Bond Documents"). Without limiting the foregoing,
regardless of whether the Depository has reviewed the Indenture or is generally familiar with the terms
of indentures of a similar type, the Depository shall have no duty to comply with the terms of the
Indenture or to ascertain whether the Trustee is in compliance therewith. The Trustee recognizes that
the Depository may have other business relationships with the Issuer, the Borrower and with other entities
or persons parry to any of the Bond Documents. The Trustee shall maintain complete and accurate
records identifying the principal amount of Invested Moneys and Earnings thereon.
SECTION 6. REIl UL9EMENT
If at any time during the term of this Agreement the Trustee shall make withdrawals (other than
those permitted under Section 1.2, Section L3, Section 3.2 or Section 7.11) which cause the Depository
to break its deposit(s) or other funding arrangements with other institutions, and provided that the early
withdrawal penalty specified in Section 1.40)(u) is not applicable, the Trustee shall promptly reimburse
the Depository in an amount equal to the penalties, losses, costs, expenses, damages and other charges
as are incurred by the Depository as a result of such breaking by the Depository of its deposit(s) or other
funding arrangements. A certncate as to the amount of such penalties, losses, costs, expenses, damages
or other charges submitted by the Depository to the Trustee shall be conclusive absent manifest error as
to the amount thereof.
SECTION 7. MISCEL"NEOLS
7.1. Information Regarding
the Depository. The T.-ustee and the Borrower hereby armee, that
they will not, nor will they permit any other person to, include in any offering circular, information
memorandum or other desc4ptiea of the Bonds any i:krmation re atinz to the Depository without the
Depository's prior written consent. The Depositery aercov ccments to the inclusion of its name as
provider of this Agreement in the Limited Offering Memorandum dated March 20, 1997 relating to the
Bonds.
7.2. Reserved.
7.3. No Waiver. No failure or delay on the part of the Depository or the Trustee in exercising
any right or remedy hereunder shall operate as a waiver thereof; nor shall any siugle or partial exercise
of any such right or remedy preclude any other right or remedy. The rights and remedies of the
Depository or the Trustee hereunder are cumulative and are not exclusive of any rights or remedies
provided by law or equity or is any ocher contract between the Trustee and the Depository. None of the
terms or provisions of this Agreement may be waived, modified or amended, except in writing duly
signed by the Depository and the Trustee.
OdY/1:oa.:l,1. - HV._ .amcarcil .)rn
4
7.4. Notices. Any notices or other commtmicauons to be given under this A .z� I
given by either party at the address as set forth in Exhibit A in writing by personal service or by
registered or certified mail, postage prepaid, by facsimile transmission, wire, mailnh or teleam, or
by courier service or messenger. Notice shall be deemed given only upon actual receipt thereof by the
patty to which it is directed. A party may change the address to which noti are tdune
by delivery of proper notice of such change to the other parry pursuant hereto. ces o be sen: at any
7.5. Survival. All warranties and representations made by the Trustee or the Denository in this
Agreemeat or in any of the instruments or documents delivered pursuant to this Agreement regardless I
Of any investigation made shall be considered to have been relied upon by the other party hereto and shall
survive the delivery of any instruments or documents.
7.6. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors. assigns and beneficiaries. Notwithstanding the
foregoing, this Agreement, and the obligations arising out of this Agreement or any part hereof, shall not
be sold, pledged, assigned or otherwise transferred by the Depository or the Trustee without the prior
written consent of the other parry hereto and any such attempted sale, pledge, assignment or transfer shall
be void ab infrfo; provided, however, that any successor to the Trustee as trustee under the Indenture
shall be considered a successor in interest to the Trustee with respect to this Agreement without the
necessity of obtaining the prior written consent of the Depository.
7.7. Applicable Law. THIS AGREENIE T SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE wTTH THE LAWS OF THE STATE OF NEW YORK
WMOUT REGARD TO CHOICE OF -LAW RULES.
7.8. No FDIC Insurance. The deposit made pursuant to this Agreement is not insured by
the Federal Deposit Insurance Corporation.
79. Counterparts. This Agreement may be execated in several counterpar's and, as so
executed shall constitute one agreement binding upon all of the parties hereto.
7.10. Contractual Relationship with Trustee. The deposit(s) made pursuant to this Agreement
with the Depository are made by Norwest Bann-Mmuesora, National Association solely in its capacity
as trustee under the Indenture, and the parties hereto reco_snize that this Agreement is a contractual
at-angement enterzd into between the Depos=tory and the Trustee, solely is its capacity as =tee under
:he L.dentu-e, and the Depository shall have no obiigadcn tc holders of the Bonds or to any person other
*ran the Trustee with respect to the deposits) made her order.
7.11. Downgrade.
(a) If the raring assigned to the Depository's senior nnsecred long-term debt
oblig�roas falls below 'Aa;" by Moody's Investors Se vice or "AA-' by Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc., du-ing the term of this
Agreement, the Depository shall, within tan (10) Business Days 2fher the Depository's receipt of
a written request from the Trustee, enter into a repurchase agreement, or such other agreement
as is mutually acceptable to the Depository and the Trustee, with the Trustee upon the same terms
and conditions (with appropriate changes in terminology) as are set forth in Exhibit A hereto,
Pursuant to which the Depository shall sell and deliver to and agree to repurchase from the
Trustee U.S. government obligations of the type set forth in Fchibit B hereto (the "Seauitiese),
aia a nape.v_nTLMII -3M
5
having a market value equal to not less than the applicable percentage amount set forth on
Exhibit B hereto (the "Required Percentage") of the then outstanding Invested Moneys and
accrued but unpaid Farness (the "Agreement Balance"). Upon each repurchase of Securities by
the Depository, the Trustee shall deliver to the Depository such portion of the Securities (the
"Excess Securities") as is necessary such that the ratio of (i) the market value of Securities
rem Aininao in the possession of the Trustee after delivery of the Excess Securities to the
Depository to (ii) the outstanding Agreement Balance shall equal the Required percentage. The
value of the Securities shall be marked to market weekly by the collateral custodian, with a cure
period of two (2) Business Days and one (1) Business Day for delivery of additional Securities
or redelivery of Excess Securities, respectively.
(b) If the Depository does not enter into the repurchase agreement as provided in
Subsection (a) of this Section j. 11, the Trustee shall thereafter have the right, but not the
obligation, to terminate this Agreement by providing the Depository with seven (7) days' prior
written notice, in which case on the withdrawal date specified in such notice the Depository shrill
pay to the Trustee ail amounts in the Fund in accordance with the provisions of Section 2 hereof.
7.12. Certain Prohibited Actions. The Borrower shall not sell to any third party an instrument
granting to the holder thereof any rights relating to the exercise of any call or redemption feature of the
Bonds.
7.13. Notice to Depository of Refunding, The Borrower or the Trustee shall immediately
notify the Depository in writing as soon as any action is taken to effect a partial or complete refunding
of the Bonds.
7.14. Consent to Jurisdiction and Venue, Etc. The Trustee and the Depository irrevocably
(a) agree that any suit, action or other legal proceeding arising out of or relating to this Agreement may
be brought in a court of record in the State of New York or in the Courts of the United States of America
loca<ed in such state, (b) consent to the jurisdiction of each such court in any such suit, action or
proceeding and (c) waive any objection which it may have to the laying of venue of any such suit, action
cr proceeding in any of such courts and any claim that any such suit, action or proceeding has been
brought in an inconvenient forum. The Trustee and the Depository also irrgvq"bly QonSvnt to the senrirf-
of a "„d all uwuas in any sncn acxon or proceeding by mailing of copies of such process to the
T.-ustee or the Depository, as applicable, at its respective address provided in Exhibit A attached hereto.
The Trustee and the Depository ag-ee that a final judgment in any such suit, action or proceeding shall
be ronciusive and may be enforced in other jursdictions by suit on the judgment or in any other manner
lrovzdzd bylaw. All mailings under this Sztion 7.14 shall be by certmified mail, return receipt requested.
7.15. Monthly Reports. The Depository shall provide mondily reports to the Trustee, by the
ti Fendt day of each month sexing forth as of the end of the preceding month, the amount of Invested
Moneys held hereunder and the accrued but unpaid Earnings thereon.
[Remainder of page intentionally left blank]
"'7LMZN— Heps.WuBLBM11 . vrr
i
IN Wn7NESS WHEREOF, the parties hereto have caused this Agreement to be duly executedi
and delivered as of the date and year fust written above.
BAYERISCHE LANDESBAIv'K
GIROZENMALE
By
ea
Bert von Smelpnagel
Executive Vice President
and :Manager
Ronald Bertolini
First Vice President
and Treasury Mauaaer
NORWEST BA*,NK NffNNESOTA, NATIONAL
ASSOCL9TI0N, as Trustee
By
Name
Title
The undersigned consents to the execution and delivery of this Agreement and agrees to the
provisions of Sections 1.3, 7.1, 7.1Z and 7.13 hereof:
Be Rer^se, Inc., as General Parmer
m
�^iscrwR. Ha MNMLZMu -ern 7
Fame
Title
EXM3rr A
The Depository: Bayerische Landesbank Girozentrale
New York Branch
560 Lexington Avenue
New York, NY 10022
Attention. Ms. Elizabeth Roman
Telephone No.: (212) 310-9891
Telecopy No.: (212) 310-9870
Wire Instructions: Account: The Clhase Manhamn Bank
ABA #: 02I-000-021
Account #: 544-7-07960
Account-. Bayerische Landesbaak OZ. New York Branch
Ref.: City of New Hope, Minnesota, Series 1997
CUSIP No.: [PLEASE PROVIDE]
The Trustee: Norwest Bank -Minnesota.
National Association
Sixth Street and Marquette Avenue
Minneapolis, IvLN 55479
Attention: Mr. Tim Manz
Telephone No.: (612) 66i-3 52
Telecopy No.: (612) 667-98--5
Wire Instructions: [PL.EASE PROVrDE]
The Borrower: Reprise Associates Limited Pa--mership
Reprise, Inc.
3005 Ottawa Avenue
St. Louis Park, 'vLN 55416
Attention: fir. Rob= BoisC:ai:
Telephone No.: (6i2? 922-3881
Telecony No.: (61_) 92-2-3071
The Interest
Pa; -Ment Dates:
Ilr=est Raze
Calculation Basis:
Fund:
The fust Business Day of each month, commencing ,•lay. 1997
A year of 365 or 366 days, as apnlicabie, and the actual number of days
elapsed.
Project Fund
Initial P.-incipai
Amount: S1,650,000
017L +M xw0'%0VM-B au -vs7
Raze of Earnings: 61 % of the Prime Rate. "Prime Rate" means the rate of interest publicly
announced by Morgan. Guaranty T."ast Co., in New York, New York, or
its successor as its "prime rate" or "reference rate," which rate shall
change when and as such prime rate changes.
Withdrawal Dazes: On any Business Day on or after September 1, 1997 upon receipt by the
Depositary of at least seven (7) clays' prior written notice from the
Trustee, which notice shall specify the purpose, amount and date of such
withdrawal.
Termination Date: March 1, 1998
Securisies
Requiredercentabe
1. Direct obligations of the United States of
America (including obligations issued or held in
book -entry form on the books of the Department
of the Treasury) or obligations the principal of
and interest on which are unconditionally
guaranteed by the United States of America. 103%
2. Obligations. debentures, notes or other evidences
o; indebtedness issued by the following federal
agencies:
Government National Mortgage Association
(unconditionally guaranteed by the United States)
(GNtviA) 103%
Federal Home Loan Mortgage Corporation
(rated "AAA" by S&P and "Aaa" by Moody's)
(FHL�IC)
103%
Federal National Mortgage Association (rated
"AAA" by S&P and "Aaa" by Moody's)
(FNMA) 1035
3. Cash
Oa71=2fRdob'vn 6 W"LBKIO • 3197
100,70
CERTIFICATE OF ISSUER
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
This Certificate has been prepared and executed in conjunction with the issuance by the
City of New Hope, Minnesota (the "Issuer") of its Multifamily Housing Revenue Bonds (Park
Acres Apartments Project), Series 1997 (the 'Bonds"), in the aggregate principal amount of
$1,650,000. The undersigned officials of the Issuer (hereinafter referred to collectively as the
"Issuer Officials"), do hereby certify, as follows:
1. The Issuer Officials are the duly chosen, qualified, and acting Mayor and City
Manager, respectively, of the Issuer and, as such, are familiar with the records and proceedings of
the Issuer.
2. The Issuer is a municipal corporation organized and existing under the laws and
the Constitution of the State of Minnesota.
I To the best knowledge of the Issuer Officials, there are no proceedings pending or
threatened, contemplating the liquidation or dissolution of the Issuer or threatening its existence.
4. On November 12, 1996, the City Council (the "City Council") of the Issuer
adopted a preliminary resolution giving preliminary approval to the issuance of up to $2,200,000
of Multifamily Revenue Bonds to finance the acquisition and rehabilitation by Reprise
Associates Limited Partnership, a Minnesota limited partnership (the "Company") of an existing
multifamily housing development located in the City of New Hope, Minnesota known as the Park
Acres Apartments Project, a 41 -unit townhome and apartment housing development for families
(the "Project'), and authorized staff to make application to the Minnesota Department of Finance
("Finance") for authority to issue tax-exempt bonds in such amounts for such purpose. A copy of
the preliminary resolution is attached hereto as Exhibit A.
5. On January 6, 1997, Finance awarded the Issuer an allocation of $1,650,000 in
bonding authority for the Project. A copy of the Certificate of Allocation is attached hereto as
Exhibit B.
6. On November 12, 1996, the City Council conducted a public hearing to consider
the adoption of a housing program (the 'Program") relating to the development of a multifamily
housing facility to be undertaken by the Company. A copy of the Program is attached hereto as
Exhibit C. The public hearing was held by the City Council at a regularly scheduled meeting
after a notice of public hearing was published in the official newspaper of the Issuer at least 15
days in advance thereof. An affidavit of publication of the public hearing notice is attached
hereto as Exhibit D.
DAN EW200\001\CC ]SSUER DOC t CERTIFICATE OF ISSUER
7. On or prior to the publication of the notice of public hearing, the Issuer submitted
its Program to the Metropolitan Council. A copy of the letter submitting the Program to the
Metropolitan Council and a copy of the letter of response by Metropolitan Council are attached
as Exhibit E.
8. Resolution No. 97-27 of the Issuer (the "Bond Resolution") was duly adopted by
the City Council, a majority voting in favor thereof, at a regular meeting of the City Council held
on February 10, 1997. The Bond Resolution authorized the issuance of the above -captioned
bonds (the 'Bonds"), and dealt with certain other matters related to the issuance of the Bonds.
The Bond Resolution is in full force and effect and has not been altered, amended, changed,
repealed, or revoked, nor have any conditions been placed on its effectiveness, as of the date
hereof. Such regular meetings were duly called, open to the public,, and held in accordance with
law. A certified copy of each of the Bond Resolution is attached to this Certificate as Exhibit F.
The Bond Resolution authorized the execution and/or the acceptance by the Issuer
Officials of: (a) the Indenture of Trust (the "Indenture"), dated as of March 1, 1997 and executed
by the Issuer and Norwest Bank Minnesota, National Association, as trustee (the "Trustee"); (b)
the Loan Agreement (the "Loan Agreement"), dated as of March 1, 1997, and executed by the
Issuer and the Company; (c) the Regulatory Agreement, dated as of March I, 1997 (the
"Regulatory Agreement'), and executed by the Issuer, the Company and the Trustee; and (d) the
Bond Purchase Agreement, (the 'Bond Purchase Agreement'), dated as of the date hereof and
executed by the Issuer, Piper Jaffray Inc., as underwriter, and the Company. The Bond
Resolution authorized execution and/or acceptance of such documents substantially in the form
of the Indenture, Loan Agreement, the Regulatory Agreement and Bond Purchase Agreement on
file with the Issuer on the date of the adoption of the Bond Resolution. To the best knowledge of
the Issuer Officials, the Indenture, Loan Agreement, the Regulatory Agreement and the Bond
Purchase Agreement have been prepared and executed in accordance with the terms of the Bond
Resolution.
9. The Bond Resolution authorized the issuance of the Bonds, substantially in the
form described in the Indenture on file with the Issuer on the date of the adoption of the Bond
Resolution, and designated the Issuer Officials as the officials authorized to execute the Bonds.
The true and genuine signatures of the Issuer Officials are subscribed below.
To the best knowledge of the Issuer Officials, $1,650,000 principal amount of registered
Bonds, in a form authorized in the Indenture, have been prepared and executed in accordance
with the terms of the Bond Resolution and the Indenture. The specimen bond contained in
Exhibit G to this Certificate is a true and complete specimen of the Bonds. To the best
knowledge of the Issuer Officials, the specimen bond is identical in all respects with the Bonds
delivered on behalf of the Issuer on the date hereof to the Trustee and authenticating agent for the
Issuer (the "Authenticating Agent'), and are substantially in the form described in the Indenture
and approved in the Bond Resolution.
10. The Issuer Officials hereby direct Holmes & Galey, Ltd. ('Bond Counsel"), to
deliver to the Trustee on the date hereof original executed counterparts of this Certificate, the
Bond Resolution, the Indenture, the Loan Agreement, the Bond Purchase Agreement and the
Regulatory Agreement.
D:\NEW2W00I,CC\ISSUER.DOC 2 CERTIFICATE OF ISSUER
11. The Issuer Officials hereby: (a) direct the delivery of the Bonds to the
Authenticating Agent; (b) authorize and direct the Authenticating Agent to authenticate the
Bonds by subscribing the manual signature of an authorized representative of the Authenticating
Agent on the Authenticating Agent's Certificate of Authentication on the Bonds; (c) authorize
and direct the delivery of the Bonds by the Authenticating Agent to the purchaser of the Bonds;
and (d) authorize and direct the Trustee to receive payment for the Bonds from the purchaser of
the Bonds; and (e) authorize and direct the Trustee to apply the proceeds of the Bonds in
accordance with Section 6.02 of the Indenture. To the best knowledge of the Issuer Officials, the
Bonds have been delivered to the Authenticating Agent, the Bonds have been authenticated by
the Authenticating Agent and delivered by the Authenticating Agent to the purchaser of the
Bonds on this date, and the Trustee has received payment for the Bonds in the principal face
amount of the Bonds (plus accrued interest, if any) on this date.
12. To the best knowledge of the Issuer Officials, all agreements to be complied with
and obligations to be performed by the Issuer on or prior to the date hereof under the Bonds,
Indenture, Loan Agreement, Regulatory Agreement and Bond Purchase Agreement have been
complied with and performed on or prior to the date hereof.
13. To the best knowledge of the Issuer Officials, the consummation of the
transactions contemplated by the Bond Resolution, the Bonds, the Indenture, the Loan
Agreement, the Bond Purchase Agreement and the Regulatory Agreement and compliance by the
Issuer with the provisions thereof will not result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, any indenture, lease, loan agreement or other
instrument to which the Issuer is a party or by which the Issuer may be bound, or result in the
creation or imposition of any lien, charge or encumbrance upon any properties or assets of the
Issuer other than the Project, or result in any violation of any provisions of law.
14. To the best knowledge of the Issuer Officials, no further approval, consent, or
withholding of objection on the part of any administrative or regulatory body, federal, state or
local, is required in connection with the issuance and sale of the Bonds, or the execution and
delivery, or acceptance of, the Indenture, the Loan Agreement, the Bond Purchase Agreement
and the Regulatory Agreement.
15. To the best knowledge of the Issuer officials, no litigation is pending to which the
Issuer is a party, or threatened against the Issuer, to restrain or enjoin the issuance, sale, or
delivery of the Bonds, or the payment, collection, or application of the proceeds thereof or other
moneys and securities pledged or to be pledged under the Loan Agreement or in any way
contesting or affecting any authority for or the validity of the Bonds, the Bond Resolution, the
Indenture, the Loan Agreement, the Bond Purchase Agreement and the Regulatory Agreement or
the existence of powers of the Issuer or the right of the Issuer to refinance the Project and to the
best knowledge of the Issuer Officials, there are no proceedings of any kind or nature pending, or
threatened, in any way contesting or affecting the title of the members of the City Council to their
respective offices by or before any federal, state, or local governmental or administrative
authority or agency.
16. To the best knowledge of the Issuer officials, the description of the Issuer in the
Limited Offering Memorandum is true and accurate in all material respects.
D:WEW200,00 I :CC`,ISSUER.DOC 3 CERTIFICATE OF ISSUER
This Certificate of Issuer is dated March C7 I , 1997.
CITY OF NEW HOPE, MINNESOTA
Its Mayor
Byjj
Its City Manage
D: \NEW 200\001 \CCVSSUER. DOC
CERTIFICATE OF ISSUER
EXHIBIT A
Preliminary Resolution
D9�NEW200`:001 CC ISSUER DOC A-1 CERTIFICA fE OF ISSUER
CERTIFICATE
CITY OF NEW HOPE
I, the undersigned being the duly qualified City Clerk of the
City of New Hope, Minnesota, hereby attest and certify that:
1. As such officer, I have the legal custody of the original
record from which the attached resolution was transcribed.
2. I have carefully compared the attached resolution with the
original record of the meeting held on November 12, 1996, at which
the resolution was acted upon.
3. I find the attached resolution to be a true, correct and
complete copy of the original:
RESOLUTION NO. 96-219
Resolution Approving a Housing Program for the
Issuance of Multifamily Housing Revenue Bonds
4. I further certify that the affirmative vote on said
resolution was 4 ayes, 0 nayes, an.d absent/abstention<l)_
5. Said meeting was duly held, pursuant to call and notice
thereof, as required by law, and a quorum was present.
WITNESS my hand officially as such Clerk this 19th day of
November 1 1996.
Valerie Leone, City Clerk
RESOLUTION NO. 96-219
RESOLUTION APPROVING A HOUSING PROGRAM FOR THE
ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS
BE IT RESOLVED by the City Council of the City of New Hope,
Minnesota (the "City"), as follows:
Section 1. Recitals.
1.1. The City has received a request from representatives of
Reprise Partners Limited Partnership, a Minnesota limited
partnership (the "Partnership"), that the City approve a housing
program (the "Program") pursuant to Minnesota Statutes, Chapter
462C (the "Act"), which provides for the issuance. by the City of
revenue bonds (the "Bonds") under the Act to finance the
acquisition and renovation by the Partnership of the PaFk Acre
Apartments, a 41 -unit rental housing development (the
"Development") located at 8007 Bass Lake Road in the City. A copy
of the Program has been presented to this Council and is ordered
placed on file with the City Clerk. The Program has been submitted
to the Metropolitan Council for review and comment as required by
the Act, and the City has received comments on the Program from the
Metropolitan Council.
1.2. Minnesota Statutes, Section 462C.04 and Section 147(f) of
the Internal Revenue Code of 1986, as amended and regulations
promulgated thereunder, requires that prior to the issuance of the
Bonds, this Council approve the Program and the issuance of the
Bonds after conducting a public hearing thereon. On November 12,
1996, this Council held a public hearing on the proposal to approve
the Program and issue the Bonds.
Section 2. Approvals and Authorizations.
2.1. The Program and the issuance by the City under the Act of
the Bonds in a principal amount of up to $2,200,000 as provided in
the Program is hereby approved. Notwithstanding the foregoing,
however, the adoption of this resolution shall not be deemed to
establish a legal obligation on the part of the City to issue or to
cause an issuance of the Bonds. All details of such revenue bond
issue and thQ,.provisions for payment thereof shall be subject to
the mutual agreement of the City, the Partnership and the purchaser
or purchases of the revenue bonds and such further conditions as
the City may specify, such agreement on the part of the City to be
evidenced by a resolution of this Council authorizing the issuance
of the Bonds on the terms and conditions agreed upon and
authorizing the execution of necessary documents. In all events, it
is understood that the Bonds shall not constitute a charge, lien or
encumbrance, legal or equitable, upon any property of the City
except the revenues pledged to payment of such Bonds, and each
Bond, when, as and if issued, shall recite in substance that the
Bond, including interest thereon, is payable solely from the
revenues received from the Project and any property pledged to the
payment thereof and shall not constitute a debt of the City within
the meaning of any constitutional or statutory limitation.
2.2. The Mayor and City Manager are authorized to take such
action as may be required to obtain a bond allocation for the Bonds
pursuant to Chapter 474A, Minnesota Statutes. All costs of the City
relating to the issuance of the Bonds, whether or not successfully
issued, shall be paid or reimbursed by the Partnership.
Adopted by the City Council of the City of New Hope on this
12th day of November, 1996.
May
Attest: `uCxiur-<,
City Clerk
EXHIBIT B
Certificate of Allocation
D:\NEW200\00I\MISSUER.DOC B-1 CERTIFICATE OF ISSUER
STATE OF MINNESOTA
DEPARTMENT OF FINANCE
CASH AND DEBT MANAGEMENT DIVISION
CF.RTMCATF. OF AIJ,OC'ATiC1N
Pursuant to Minnesota Statutes Chapter 474A as amended
TITLE OF PROPOSED ISSUE: Park Acres Apartments
Form C
Certificate
Number 724
.u• 1►Y • • a Y•► •�• a •� �..-.� �• Y�� .�� . 1111 ••
This Certificate of Allocation is not transferable.
This Certificate of Allocation shall expire and be deemed not to have been issued if the department has
not received a NOTICE OF ISSUE within five days of issuance of the obligations. A notice of issue is
required for each series of obligations if issued in series. Notice of Issue forms are available from the
department upon request. Unless otherwise specified, obligations must be issued within 120 days of the
allocation date (date of certificate). Penalties also apply for unused partial allocations. See Minnesota
Statutes Chapter 474A for complete instructions regarding applicable rules and procedures.
January 6' 1997
Date of Certificate
For further information, please contact:
Minnesota Department of Finance
400 Centennial Building
658 Cedar Street
St. Paul, Minnesota 55155
(612) 296-5900
Wayne Sim neau, Commissioner
Department of Finance
EXHIBIT C
Program
D, NEW200\001\CC,ISSUERDOC C-1 CERTIFICATE OF ISSUER
HOUSING PROGRAM
FOR ACQUISITION AND RENOVATION OF
PARK ACRE APARTMENTS
General
The City of New Hope (the "City') believes that a primary housing
need of the City is rehabilitation of existing multifamily rental housing in the City
in order to prevent blight and blighting conditions and to maintain decent, safe and
affordable housing in the City for persons of low and moderate income. A method
available to the City to facilitate renovation of existing multifamily rental housing is
the issuance of tax-exempt bonds under Minnesota Statutes, Chapter 462C, and
Sections 142(d) or 145, as appropriate, of the Internal Revenue Code of 1986, as
amended.
Housing Program to Meet Need
A separate section of this Program contains specific information
regarding a project to be undertaken by Reprise Partners Limited Partnership, a
Minnesota limited partnership (the "Developer"), to acquire and renovate an
existing multifamily rental housing development in the City.
Monitoring Methods
With respect to the specific development hereinafter discussed on
behalf of the Developer, no special monitoring by the City is necessary. Proceeds of
the bonds proposed to be issued to finance the development will be held and
disbursed by a trustee bank during construction, and it is believed the oversight
exercised by the trustee bank, and any title insurance company assisting the bank
with the disbursement of the proceeds, will be adequate to insure the development
as presented is in fact carried out.
Administrative Capacity of City to Supervise Program
No special administrative work by the City is anticipated in connection
with the development proposed to be undertaken by the Developer. As noted
above, construction disbursements will be handled by the trustee bank for the
proposed bonds. After construction, the facility must be operated by the Developer,
in accordance with various operating covenants (relating to such things as
maintenance, insurance, etc.) to be contained in a Loan Agreement to be entered
into by the City and the Developer, which Loan Agreement will be assigned by the
City to the trustee bank as security for the bondholders.
All costs incurred by the City in connection with the proposed
development will be paid by the Developer and therefore no administrative costs
will be incurred by the City. No additional staff will be required by the City in
carrying out the proposed development.
General Description of the Development
The Developer proposes to acquire and renovate Park Acre Apartments
a 41 -unit rental housing development located at 8007 Bass Lake Road in the City (the
"Project"). The Developer proposes that the City finance the Project by issuing
revenue bonds in an amount not to exceed $2,200,000 (the "Bonds") pursuant to the
authority of Minnesota Statutes, Section 462C.07.
following:
The costs of the Project are anticipated to be as follows:
Acquisition $1,765,000
Rehabilitation 250,000
Bond Reserves 185.000
$2,200,000
Rehabilitation to be undertaken as part of the Project consists of the
Windows
$ 80,000
Residing
65,000
Elevator
45,000
Structural Repair
35,000
Appliances
25.000
$ 250,000
The Project consists of 16 one -bedroom apartments, 13 two-bedroom
apartments and 6 three-bedroom townhomes.
Bond Allocation
An allocation of bonding authority is required under Section 146 of the
Code in order to issue the Bonds. The City intends to apply to the Minnesota
Department of Finance for an allocation of bonding authority in January 1997.
Revenue Bond Details
It is anticipated that the Bonds will be issued in the principal amount
of $2,200,000 and will mature in not more than forty (40) years following the date of
issue. the Bonds will be sold publicly if credit enhanced by FHA or FNMA or will be
privately placed with an institutional investor if not credit enhanced.
-2-
Meeting Needs of Low and Moderate Income Persons
Park Acre Apartments is subject to a Section 8 contract that is due to
expire in January 1998. The current owner is unlikely to renew the Section 8
contract, but the Partnership intends to obtain tax credits with respect to the Project
and renew the contract, this will result in the maintenance of units subject to a
Section 8 subsidy in the City.
-3-
EXHIBIT D
Affidavit of Publication
D:\NEW?00\00 11COISSUER.DOC D -I CERTIFICATE OF ISSUER
OCT 3 1 1996
bSUN
dPUB"TK MS
sv.Mw. a..nr sr.rs.a.
AFFIDAVIT OF PUBLICATION
STATE OF MINNESOTA)
ss.
COUNTY OF HENNEPIN)
Denis L. M i n d a k being duly sworn on an oath says that he/she is
the publisher or authorized agent and employee of the publisher of the newspaper known as
Sun -Post and has full knowledge of the facts
which are stated below.
(A) The newspaper has complied with all of the requirements constituting qualification as a
qualified newspaper, as provided by Minnesota Statue 331A.02, 331A.07, and other applicable
laws, as amended.
(B) The printed Notice of Public Hearing
City of New Hope
(Official Publication)
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the City Council!
of the City of New Hope, Minnesota (the City) will meet on
November 12, -1996, at 7:00 p.m.' at the city Hell' 4401
Xylon Avenue North, in the City of New Hope, Minnesota,
to conduct a public hearing on the proposal that the Citv
undertake a huusingprogram (the "Program') under Min-
casote Statutes, section 462C (the "Act), which provides
for the issuance by the City of its revenue bonds under the
Act in a principal amount not exceeding $2,200,000 (the
'Bonds? m order to finance a project consisting of the ac.
quisition and renovation by Reprise Partners limited Part-
nership a Nauseate limited partnership of Park Acre
The Bonds will be limited obligations of the City,
npayable solely from revenues of the development specifi.
ly pledged to the payment of the Bonds and will not con.
stitute a debt of the City. No holder of the Bonds shall ever
have the right ta compel the exercise of the taxing power
of the City to pay the Bonds or the interest thereon, or to
enforce payment thereon against my property of the city..
The Program describes the need for the project and the
method offinancing proposed.- -
. Ampyofthe proposed Program is on fileand available
for inspection the office of the City Clark. All persons may
appear and be heard at the time and place set forth above'
or may file written comments with the City Clerk prior to
the data of the hearing at forth above.
Accommodations such as sign language interpreter or
large printed materials are available upon request at
least S working days in advance. please contact the
CitY Clerk to make arrangements (telephone 531.
5117, TDD number 5315109).
which is attached was cut from the columns of said newspaper, and was printed and published
once each week, for one successive weeks; it was first published
on Wednesday .the 23 day of October 19 9 6, and was thereafter
printed and published on every to and including
the _ day of , 19; and printed below is a copy of
the lower case alphabet from A to Z, both inclusive, which is hereby acknowledged as being the
size and kind of type used in the composition and publication
abrdefghijklmnopgrstuvwxyz
BY:
TITI P- Publisher
Acknowledged before me on this
23 dayof October ,19 96.
RATE INFORMATION
(1) Lowest classified rate paid by commercial users
for comparable space
(2) Maximum rate allowed by law for the above matter
P�Iplzlrmra t.
(3) Rate actually charged for the above matter $ 1.09 per line
Dated the 14th day of October, 1996.
tcity
inn
c;tr clerk
(Oct. 23, 1996) cty nh bonds
EXHIBIT E
Metropolitan Council Letter
D: WEW200M11CG.ISSUER_DOC E-1 CERTIFICATE OF ISSUER
Metropolitan Council
Working for the Region, Planning for the Future
October 28, 1996
Katherine Hadley, Commissioner
Minnesota Housing Finance Agency
400 Sibley Street, Suite 300
SL Paul, MN 55101
RE: Housing Bond Program/New Hope
Pa.k Ac y Aoartmens
Referral File No. 16419-1
Dear Ms. Hadley:
The Metropolitan Council has received the above-named program for review. The program proposes to
acquire and renovate Park Acre Apartments, a 41 -unit rental development located at 8007 Bass Lake
Road in New Hope. The project will be funded through the issuance of up to $2,200,000 in revenue
bonds.
The project consists of 16 one -bedroom apartments, 13 two-bedroom apartments and 6 three-bedroom
townhomes. The development is currently subject to a Section 8 contract, due to expire in January 1998.
However, the partnership intends to obtain tax credits, resulting in the maintenance of units subject to a
Section 8 subsidy in the city. ;
Council staff has reviewed the proposal and finds no apparent inconsistencies between the proposal and
policies of the Metropolitan Development Guide.
If you have any questions about this review, please call me at 2915380.
Sincerely,
Audrey ugharaer
Office of Local Assistance
cc: Jerome P. Gilligan, Dorsey & Whitney
230 Eaat Fifth Street St. Paul. Minnesota 55101-1634 (612)291-6359 Fax 291-6550 TDD/TTY 291-0904 Metro Info Line 229-3780
Ari Equal OPWrnmlly Employer
EXHIBIT F
Bond Resolution
Dr.NEW200\001\C01SSUER. DOC F-1 CERTIFICATE OF ISSUER
CERTIFICATE
CITY OF NEW HOPE
STATE OF MINNESOTA)
COUNTY OF HENNEPIN) ss
CITY OF NEW HOPE ►
I, the undersigned, being the duly qualified City Clerk of the City of New Hope,
Minnesota, hereby attest and certify that:
1. As such officer, I have the legal custody of the original record from
which the attached resolution was transcribed.
2. 1 have carefully compared the attached resolution with the original record
of the meeting at which the resolution was acted upon.
3. 1 find the attached resolution to be a true, correct and complete copy of
the original:
RESOLUTION NO. 97-27
RESOLUTION OF THE CITY OF NEW HOPE AUTHORIZING THE ISSUANCE OF ITS
MULTIFAMILY HOUSING REVENUE BONDS (PARK ACRES APARTMENTS
PROJECT), SERIES 1997 IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO
EXCEED $1,650,000, WHICH BONDS AND THE INTEREST AND PREMIUM
THEREON, IF ANY, SHALL BE PAYABLE SOLELY FROM THE REVENUES OF THE
PROJECT; PRESCRIBING THE FORM OF AND AUTHORIZING THE EXECUTION OF
AN INDENTURE OF TRUST, A LOAN AGREEMENT, REGULATORY AGREEMENT
AND CERTAIN RELATED DOCUMENTS; AUTHORIZING THE EXECUTION AND
SALE OF THE BONDS AND DIRECTING DELIVERY THEREOF; AUTHORIZING
ACCEPTANCE OF THE BOND PURCHASE AGREEMENT IN CONNECTION WITH
THE BONDS; AND PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES OF
THE HOLDERS OF SAID REVENUE BONDS
4. 1 further certify that the affirmative vote on said resolution was 4 ayes,
0 nayes, and 1 absent/abstention.
5. Said meeting was duly held, pursuant to call and notice thereof, as
required by law, and a quorum was present.
WITNESS my hand officially as such Clerk and the seal of said City, this 11th day of
February, 1997.
Valerie Leone, City Clerk
(Seal)
CITY OF NEW HOPE
RESOLUTION 97- 27
A RESOLUTION OF THE CITY OF NEW HOPE
AUTHORIZING THE ISSUANCE OF ITS MULTIFAMILY
HOUSING REVENUE BONDS (PARK ACRES
APARTMENTS PROJECT), SERIES 1997 IN THE
AGGREGATE PRINCIPAL AMOUNT OF NOT TO
EXCEED $1,650,000, WHICH BONDS AND THE INTEREST
AND PREMIUM THEREON, IF ANY, SHALL BE
PAYABLE SOLELY FROM THE REVENUES OF THE
PROJECT; PRESCRIBING THE FORM OF AND
AUTHORIZING THE EXECUTION OF AN INDENTURE
OF TRUST, A LOAN AGREEMENT, REGULATORY
AGREEMENT AND CERTAIN RELATED DOCUMENTS;
AUTHORIZING THE EXECUTION AND SALE OF THE
BONDS AND DIRECTING DELIVERY THEREOF;
AUTHORIZING ACCEPTANCE OF THE BOND
PURCHASE AGREEMENT IN CONNECTION WITH THE
BONDS; AND PROVIDING FOR THE SECURITY,
RIGHTS, AND REMEDIES OF THE HOLDERS OF SAID
REVENUE BONDS.
WHEREAS, the City of New Hope (the "Issuer") is a municipal corporation organized
and existing under the laws and the Constitution of the State of Minnesota; and
WHEREAS, pursuant to the Constitution and laws of the State of Minnesota, particularl}
Minnesota Statutes, Chapter 462C, as amended (the "Act"), the Issuer is authorized to carry out
the public purposes described therein and contemplated thereby in the financing of housing
within its boundaries, by issuing revenue bonds to defray, in whole or in part, the development
costs of a rental housing development, and by entering into any agreements made in connection
therewith and by pledging any such agreements as security for the payment of the principal of
and interest on any such revenue bonds; and
WHEREAS, on November 12, 1996, the Issuer held a public hearing regarding a Program
for Multifamily Housing Development (the "Program") pursuant to and in conformance with the
Act and Section 147(f) of the Internal Revenue Code of 1986, as amended, after publication of
notice of such hearing in a newspaper of general circulation in the City of New Hope at least 15
days before the hearing; and
WHEREAS, pursuant to the Act, the Issuer proposes to undertake the Program providing
for the acquisition and rehabilitation of an existing multifamily housing development located in the
City known as the Park Acres Apartments Project, a 41 -unit townhome and apartment housing
development for families located (the 'Project") by Reprise Associates Limited Partnership (the
"Company), as purchaser of the Project and, for the financing thereof, to authorize, issue and sell
its Multifamily Housing Revenue Bonds (Park Acres Apartments Project) Series 1997 in an
D `•NE W200'001RES'AUTHORIZDOC I AUTHORIZING RESOLLTION
aggregate principal amount not to exceed $1,650,000 (the "Bonds") payable solely from the
amounts pledged therefor under the Indenture of Trust, dated as of February I, 1997 (the
"Indenture") between the Issuer and a trustee to be appointed by the Company (the "Trustee");
and
WHEREAS, neither the Issuer nor the State of Minnesota nor any political subdivision
thereof (other than the Issuer and then only to the extent of the trust estate pledged in the
Indenture) shall be liable on the Bonds, and the Bonds shall not be a debt of the Issuer or the
State of Minnesota or any political subdivision thereof (other than the Issuer and then only to the
extent of the trust estate pledged in the Indenture), and in any event shall not give rise to a charge
against the credit or taxing power of the Issuer, Hennepin County (the "County"), the State of
Minnesota, or any political subdivision thereof;
NOW, THEREFORE, BE IT RESOLVED by the City of New Hope:
1. The Issuer acknowledges, finds, determines, and declares that the preservation of the
quality of life in the City of New Hope is dependent upon the maintenance, provision, and
preservation of an adequate housing stock, which is affordable to persons and families of
low or moderate income, that accomplishing this is a public purpose. The Issuer also
hereby finds, determines and declares that the Project has been designed to be affordable
by persons and families with adjusted gross incomes not in excess of 110 percent of the
median family income as most recently estimated by the United States Department of
Housing and'Urban Development for the Minneapolis/St. Paul Metropolitan Statistical
Area and that at least 40 percent of the dwelling units in the Project will be held for
occupancy by families and individuals with adjusted gross incomes not in excess of 60
percent of the median family income.
2. For the purpose of financing the Project there is hereby authorized the issuance of the
Bonds. The Bonds shall bear interest at such rates, shall be in such denomination, shall
be numbered, shall be dated, shall mature, shall be subject to redemption prior to
maturity, shall be in such form, and shall have such other details and provisions as are
prescribed by the Indenture hereinafter referred to.
3. The Bonds shall be special obligations of the Issuer payable solely from the revenues of
the Project, in the manner provided in the Indenture. The Bonds do not constitute an
indebtedness, liability, general or moral obligation (except to the extent of the trust estate
pledged under the Indenture) or a pledge of the faith and credit or any taxing power of the
Issuer, the County, the State of Minnesota, or any political subdivision thereof. The
Issuer hereby authorizes and directs the Mayor of the Issuer (the "Mayor") and the City
Manager of the Issuer (the "City Manager") to execute the Indenture, and to deliver to
said Trustee the Indenture, and hereby authorizes and directs the execution of the Bonds
in accordance with the Indenture, and hereby provides that the Indenture shall provide the
terms and conditions, covenants, rights, obligations, duties, and agreements of the
bondholders, the Issuer, and the Trustee as set forth therein. The Mayor is hereby
authorized to approve changes to the maturity schedules and mandatory sinking fund
payment schedules for the Bonds set forth in the Indenture and the Bond Purchase
Agreement, provided that the maturity date for any Bond shall not be later than the date
D'%NEW200M P:RESAUTHORIZ.DOC 2 AUTHORIZING RESOLUTION
set forth in the form of the Indenture. The Mayor is hereby authorized to approve the
final interest rate for the Bonds at an average annual rate not exceeding eight percent
(8.00%) per annum unless otherwise set forth in the Indenture and the Bond Purchase
Agreement. It
All of the provisions of the Indenture, when executed as authorized herein, shall be
deemed to be a part of this resolution as fully and to the same extent as if incorporated
verbatim herein and shall be in full force and effect from the date of execution and
delivery thereof. The Indenture shall be substantially in the form on file with the Issuer
on the date hereof, and is hereby approved, with such changes as shall be approved by the
Mayor pursuant to this section, and with such necessary and appropriate variations.
omissions, and insertions as are not materially inconsistent with such form and as the
Mayor, in her discretion, shall determine; provided that the execution thereof by the
Mayor shall be conclusive evidence of such determination.
4. The Mayor and the City Manager are hereby designated as the representatives of the
Issuer with respect to the issuance of the Bonds and the transactions related thereto and
are hereby authorized and directed to accept and execute the Bond Purchase Agreement
(the 'Bond Purchase Agreement") from Piper Jaffray Inc. (the "Underwriter"). All of the
provisions of the Bond Purchase Agreement, when executed and delivered as authorized
herein, shall be deemed to be a part of this resolution as fully and to the same extent as if
incorporated verbatim herein and shall be in full force and effect from the date of
execution and delivery thereof The Bond Purchase Agreement shall be substantially in
the form on file with the Issuer on the date hereof, and is hereby approved, with such
changes as shall be approved by the Mayor puisuant to Section 4 hereof, and with such
necessary and appropriate variations, omissions, and insertions as are not materially
inconsistent with such form as the Mayor, in his discretion, shall determine; provided that
the execution thereof by the Mayor shall be conclusive evidence of such determination.
5. The Mayor and the City Manager are hereby authorized and directed to execute the Loan
Agreement, dated as of February 1, 1997 (the "Loan Agreement") with Reprise
Associates Limited Partnership (the "Company"), and when executed and delivered as
authorized herein, the Loan Agreement shall be deemed to be a part of this resolution as
fully and to the same extent as if incorporated verbatim herein and shall be in full force
and effect from the date of execution and delivery thereof. The Loan Agreement shall be
substantially in the form on file with the Issuer on the date hereof, which are hereby
approved, with such necessary variations, omissions, and insertions as are not materially
inconsistent with such form and as the Mayor, in his discretion, shall determine; provided
that the execution thereof by the Mayor shall be conclusive evidence of such
determination.
6. The Mayor and the City Manager are hereby authorized and directed to accept and
execute the Regulatory Agreements, dated as of February 1, 1997 (collectively, the
"Regulatory Agreement") with the Company and the Trustee and, when executed and
delivered as authorized herein, the Regulatory Agreement shall be deemed to be a part of
this resolution as fully and to the same extent as if incorporated verbatim herein and shall
be in full force and effect from the date of execution and delivery thereof. The
D.\NEW200`001 :RES'AUTHORIZ.DOC 3 AUTHORIZING RESOLLTION
Regulatory Agreement shall be substantially in the form on file with the Issuer on the date
hereof, which is hereby approved, with such necessary variations, omissions, and
insertions as are not materially inconsistent with such form and as the Mayor, in his
discretion, shall determine; provided that the execution thereof by the Mayor shall be
conclusive evidence of such determination.
7. All covenants, stipulations, obligations, representations, and agreements of the Issuer
contained in this resolution or contained in the Indenture or other documents referred to
above shall be deemed to be the covenants, stipulations, obligations, representatives, and
agreements of the Issuer to the full extent authorized or permitted by law, and all such
covenants, stipulations, obligations, representations, and agreements shall be binding
upon the Issuer. Except as otherwise provided in this resolution, all rights, powers, and
privileges conferred, and duties and liabilities imposed, upon the Issuer by the provisions
of this resolution or of the Indenture or other documents referred to above shall be
exercised or performed by the Issuer, or by such officers, board, body, or agency as may
be required or authorized by law to exercise such powers and to perform such duties. No
covenant, stipulation, obligation, representation, or agreement herein contained or
contained in the Indenture or other documents referred to above shall be deemed to be a
covenant, stipulation, obligation, representation, or agreement of any officer, agent, or
employee of the Issuer in that person's individual capacity, and neither the City Council,
members of the Issuer nor any officer or employee executing the Bonds shall be liable
personally on the Bonds or be subject to any personal liability or accountability by reason
of the issuance thereof.
8. Except as herein otherwise expressly provided, nothing in this resolution or in the
Indenture, expressed or implied, is intended or shall be construed to confer upon any
person, firm, or corporation other than the Issuer, and the Trustee, as fiduciary for owners
of the Bonds, any right, remedy, or claim, legal or equitable, under and by reason of this
resolution or any provision hereof or of the Indenture or any provision thereof; this
resolution, the Indenture and all of their provisions being intended to be and being for the
sole and exclusive benefit of the Issuer and the Trustee as fiduciary for owners of the
Bonds issued under the provisions of this resolution and the Indenture, and the Company
to the extent expressly provided in the Indenture.
9. In case any one or more of the provisions of this resolution or of the Indenture or of the
Bonds issued hereunder shall for any reason be held to be illegal or invalid, such illegality
or invalidity shall not affect any other provision of this resolution or of the Indenture or of
the Bonds, but this resolution, the Indenture, and the Bonds shall be construed as if such
illegal or invalid provision had not been contained therein. The terms and conditions set
forth in the Indenture, the pledge of revenues derived from the Project referred to in the
Indenture, the pledge of collateral derived from the Project referred to in the Indenture,
the creation of the funds provided for in the Indenture, the provisions relating to the
application of the proceeds derived from the sale of the Bonds pursuant to and under the
Indenture, and the application of said revenues, collateral, and other monies are all
commitments, obligations, and agreements on the part of the Issuer contained in the
Indenture, and the invalidity of the Indenture shall not affect the commitments.
obligations, and agreements on the part of the Issuer to create such funds and to apply
Di\NEW200`.001',RESWUTHORIZ.DOC 4 AUTHORIZING RESOLUTION
said revenues, other monies, and proceeds of the Bonds for the purposes, in the manner.
and according to the terms and conditions fixed in the Indenture, it being the intention
hereof that such commitments on the part of the Issuer are as binding as if contained in
this resolution separate and apart from the Indenture.
10. All acts, conditions, and things required by the laws of the State of Minnesota, relating to
the adoption of this resolution, to the issuance of the Bonds, and to the execution of the
Indenture and the other documents referred to above to happen, exist, and be performed
precedent to and in the enactment of this resolution, and precedent to the issuance of the
Bonds, and precedent to the execution of the Indenture and the other documents referred
to above have happened, exist, and have been performed as so required by law.
11. The City Council, members of the Issuer, officers of the Issuer, and attorneys and other
agents or employees of the Issuer are hereby authorized to do all acts and things required
by them by or in connection with this resolution and the Indenture and the other
documents referred to above for the full, punctual, and complete performance of all the
terms, covenants, and agreements contained in the Bonds, the Indenture and the other
documents referred to above, and this resolution.
12. The Mayor and the City Manager are hereby designated and authorized to take such
administrative action as is permitted or required in connection with the issuance of the
Bonds by the Indenture, the Loan Agreement, the Regulatory Agreement and the Bond
Purchase Agreement.
13. The Mayor and the City Manager of the Issuer are authorized and directed to execute and
deliver any and all certificates, agreements or other documents which are required by the
Indenture, the Loan Agreement, the Bond Purchase Agreement, the Regulators
Agreement or any other agreements, certificates or documents which are deemed
necessary by bond counsel to evidence the validity or enforceability of the Bonds, the
Indenture or the other documents referred to in this Resolution, or to evidence compliance
with Section 142(d) of the Internal Revenue Code of 1986, as amended; and all such
agreements or representations when made shall be deemed to be agreements or
representations, as the case may be, of the Issuer.
14. If for any reason the Mayor of the Issuer is unable to execute and deliver those documents
referred to in this Resolution, any other member of the City Council of the Issuer may
execute and deliver such documents with the same force and effect as if such documents
were executed by the Mayor. If for any reason the City Manager of the Issuer is unable to
execute and deliver the documents referred to in this Resolution, such documents may be
executed and delivered by any member of the City Council or the Assistant City Manager
with the same force and effect as if such documents were executed and delivered by the
City Manager.
15. This resolution shall be in full force and effect from and after its passage.
D:`NEW200\001\RES`AUTHORIZ.DOC 5 AUTHORIZING RESOLUTION
Adopted this loth day of February, 1997.
z
Mayor
Attest:
1
City Clerk
D'.NEW2001001\RES\AUTHORIZ.DOC 6 AUTHORIZING RESOLUTION
EXHIBIT G
Specimen Bond
D:WEW200\001\CC\ISSUER.DOC G-1 CERTIFICATE OF ISSUER
THIS BOND IS REQUIRED TO BE TENDERED FOR PURCHASE ON A
MANDATORY TENDER DATE UPON TERMS AND CONDITIONS HEREIN DESCRIBED
AT A PRICE EQUAL TO 100% OF THE PRINCIPAL AMOUNT HEREOF PLUS ACCRUED
INTEREST HEREON. FROM AND AFTER A MANDATORY TENDER DATE INTEREST
SHALL CEASE TO ACCRUE ON THIS BOND, THIS BOND SHALL NO LONGER BE
DEEMED OUTSTANDING, AND THE HOLDER OF THIS BOND SHALL THEREAFTER
LOOK ONLY TO FUNDS HELD IN THE BOND PURCHASE FUND (WHICH IS NOT PART
OF THE TRUST ESTATE) FOR PAYMENT OF THE PURCHASE PRICE OF THIS BOND.
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF NEW HOPE, MINNESOTA
No. R -1� $1,650,000
MULTIFAMILY HOUSING RE EDS
(PARK ACRES APARTME ' RW)
SERIES44
k997;�
Interest Maturity pat of CUSIP
Rate Date Qri 'nal Issue
Variable March 1, 203 March 27, 1997 645464 EN4
REGISTERED HOLDER: Cede
PRINCIPAL AMOUNT: One Million Hundred Fifty Thousand Dollars
KNOW ALL$SONS'BY THESE PRESENTS that the City of New Hope, in the
County of Hennepin end Sfaie'of Minnesota (the "Issuer"), for value received, promises to pay to
the registered holder named -above, or registered assigns, but only from the Bond Fund (as
defined in the Indenture described below), and upon presentation and surrender hereof at the
principal corporate trust office of the Trustee named below, the principal sum specified above, on
the maturity date specified above, or, if this Bond is prepayable as stated below, or a prior date on
which it shall have been duly called for redemption, and to pay interest on said principal sum to
the Record Date Holder hereof as defined below, solely from the Bond Fund, until the principal
sum is paid or discharged, at the rates and on the dates provided herein, on the basis of a
365/366 -day year and charged for the actual number of days elapsed.
This Bond shall bear interest from the date of original issue set forth above, or in the case
of transfer or exchange, from the most recent Interest Payment Date (hereinafter defined) to
which interest has been paid or provided for. The "Record Date Holder" is the person in whose
name this Bond is registered in the Bond Register maintained by the Trustee named below or its
successor in trust (the 'Registered Holder" or "Holder" hereof) on the fifteenth day of the
calendar month next preceding an Interest Payment Date, whether or not such day is a Business
Day. Interest shall be payable by check or draft mailed to the Registered Holder at his or her
address as it appears on the Bond Register on the Record Date, except as otherwise provided in
the Indenture.
The principal of and interest and premium, if any, on this Bond are payable in lawful
money of the United States of America. Upon notice to the Trustee accompanied by proper wire
instructions, any Holder of Bonds in an aggregate principal amount equal to or greater than
$1,000,000 may elect to be paid the interest on such Bonds payable on any Interest Payment Date
by Federal Reserve wire transfer in immediately available funds to any bank in the United States
specified by such Holder.
Interest not timely paid or duly provided for will be paid by check mailed to the person in
whose name this Bond is registered on the Bond Register at the close of business on a date (the
"Special Record Date") fixed by the Trustee, notice of which is to be mailed to all Bondholders.
This Bond is one of an issue in the aggregate principal'of $1,650,000 (the
"Bonds"), all of like nominal date of original issue and tenorit ept as to number and amount,
issued in accordance with an Indenture of Trust, dated as "6f March 1';:1997 (the "Indenture"),
duly executed and delivered by the issuer to Norwest Bank Minnesota, National Association in
Minneapolis, Minnesota (the "Trustee"), setting forth the term's upat `which the Bonds are issued.
The Bonds are equally and ratably secured and gitled to th protection of the Indenture. The
Bonds are issued for the purpose of financingrentalpr ) ect within the meaning of Minnesota
Statutes, Chapter 462C (the "Project' o Reprise' Associates Limited Partnership, a
Minnesota limited partnership (the "Coaitpany").n'Jhe Company has agreed under a Loan
Agreement dated as of March 1, 199TH betwe Issuer and the Company (the "Loan
Agreement") to repay all amountsessay ore ' y the Bonds, together with interest thereon, in
amounts and at times sufficient_V pa�>the` prmcipal of, premium, if any, and interest on the
Bonds as the same shall become Wand Oyable (the "Basic Payments"). The Company, the
Issuer and the Trustee have entered" ' a Regulatory Agreement dated March 1, 1997 with
respect to the Project (the "Regulatory Agreement") requiring compliance with certain
requirements of fedep'lµaitd state, law relating to the construction and operation of the Project as a
residential rental housing .prbjcct ' Pursuant to the Indenture, the Issuer has assigned and pledged
to the Trustee, for the"equal and ratable benefit of the Holders of the Bonds, the Basic Payments
due under the Loan Agreement.
Reference is hereby made to the Loan Agreement, Regulatory Agreement, and Indenture,
including all indentures supplemental thereto, for a description of the property encumbered and
assigned, the provisions, among others, with respect to the nature and extent of the security, the
rights of the Issuer, and the rights, duties and obligations of the Company, the Trustee and the
Holders of the Bonds and the terms upon which the Bonds are issued and secured.
The term "Business Day" shall mean any day on which the Trustee, the Investment
Agreement Provider or the Federal Reserve Bank of New York are not authorized by law to
close. If the date for making any payment or the last date for performance of any act or the
exercising of any right, as provided in this Bond, is not a Business Day, such payment may be
made or act performed or right exercised on the next succeeding Business Day.
2
Prior to the Conversion Date, interest on the Bonds shall be payable on the first Business
Day of May 1997, and on the first Business Day of each month thereafter (each a "Variable Rate
Interest Payment Date"). Interest on the Bonds shall be payable on the Conversion Date. After
the Conversion Date, interest on the Bonds shall be payable on the first day of each March and
September following the Conversion Date, until payment in full of this Bond and on the date of
payment in full of this Bond (each a "Fixed Rate Interest Payment Date").
Prior to the Conversion Date, this Bond shall bear interest at the Variable Rate as defined
in the Indenture (the "Variable Rate"). On and after the Conversion Date, this Bond shall bear
interest at the Fixed Rate, as defined in the Indenture. The interest rate on this Bond shall be
converted from the Variable Rate to the Fixed Rate, on a one-time basis at the option of the
Company upon the conditions set forth in the Indenture. In such case, the Fixed Rate shall be the
interest rate computed in accordance with the Indenture and annoukd by the Remarketing
Agent, effective on and after the Conversion Date.
Subject to the provisions of (b) and (c) below, the Molder hereof shall be required to
tender this Bond to the Trustee on or before 12:00 noon, Minneapolis time on the Business Day
prior to the Mandatory Tender Date, for purchase on the M, 'datory Tender Date at a purchase
price equal to the principal amount hereof plus accrued intere$t thereon, all as more fully
provided herein and in the Indenture.
(a) Notice of a Mandator}ent Date (a "Mandatory Tender Notice") shall
be given by the Trustee, by certifies mail, retum receipt requested, to the Holder of this
Bond at its address appearing on the registration books for the Bonds maintained by the
Trustee, not less than fifteen daysto 'e Mandatory Tender Date. Such Mandatory
t
Tender Notice shall specify,ihe lyiandatory Tender Date and state (i) that all Bonds shall
be purchased on the Mandatbtj Terydbr Date at a purchase price equal to the principal
amount thereof plus aircrued iriterp5t thereon, and (ii) that all Bonds must be tendered for
purchase at or before 12U0 noon, Minneapolis time on the Business Day prior to the
Mandatory Tender,Date; together with an appropriate instrument of huAsfer executed in
blank and any' such Bond which is not tendered but for which there has been irrevocably
deposited in the Bond Purchase Fund (as such term is defined in the Indenture) with the
Trustee an amountsufficient to pay the purchase price thereof (an "Untendered Bond")
shall not be entitled to receive interest on such Bond on and after the Mandatory Tender
Date.
(b) This Bond shall be tendered to the Trustee for purchase at or before 12:00
noon, Minneapolis time on the Business Day prior to the Mandatory Tender Date, by
delivering this Bond to the Trustee together with an appropriate instrument of transfer
duly executed in blank, and on the Mandatory Tender Date, the Trustee shall purchase
this Bond or cause this Bond to be purchased at a purchase price equal to the principal
amount hereof.
(c) If this Bond is not tendered on or before the Mandatory Tender Date, then
the Holder hereof shall not be entitled to receive interest on this Bond for any period
beginning on or after the Mandatory Tender Date, and upon surrender of this Bond to the
Trustee, the Holder of this Bond shall be paid only an amount equal to the purchase price
3
of this Bond due on the Mandatory Tender Date and interest through the Mandatory
Tender Date.
The Bonds are subject to redemption prior to maturity as provided in the Indenture as
follows:
(a) Optional Redemption On or Prior to the Conversion Date. Prior to the
Conversion Date, the Bonds are subject to redemption in whole on any date on or after
September 1, 1997 at the option of the Company, at a redemption price equal to the
principal amount of the Bonds to be redeemed plus accrued interest thereon.
(b) Mandatory Sinking Fund Redemption Prior to Conversion Date. The
Bonds maturing on March 1, 2032 (the "Term Bonds")acg subject to mandaton
redemption by random selection in the principal increments of $5;:@0x0, at par and accrued
interest without premium, on March I of the years and in "11 amounts set forth
below (unless and to the extent a credit against any such'amoun is applied as provided in
tae Indenture): ,
Year
Amount v>
2002
$ 15,000
2003
15,000
2004
15,000"'
2005
15,000
2006
20,000
2007
20,000"'
2008
': 20,000
2009
20tj300
2010
25,000
2011
- 25,000
2012
- 30,000
2013
30,000
2014
30,000
2015
35,000
2016
35,000
2017
40,000
(c) Optional and Mandatory Redemption From and After Conversion Date.
From and after the Conversion Date, the Bonds shall be subject to optional and
mandatory sinking fund redemptions on the dates and at the prices determined by the
Remarketing Agent as provided in the Indenture.
(d) Calamity Redemption. After the Conversion Date, in the event of (i)
damage to or destruction of the Project or any part thereof or Condemnation of the Project
or any part thereof to the extent provided in Section 8.04 of the Agreement, or in the
event of any changes in the Constitution or laws of the United States of America or the
State of Minnesota as provided in Section 8.04 of the Loan Agreement and (ii)
4
:Yeah,
: = Amount
1018
$ 45,000
1019
45,000
2020
50,000
2021
55,000
2022
55,000
2023
60,000
2024
65,000
2025
70,000
2026
75,000
2027
85,000
2028
90,000
2029
95,000
2030
100,000
2031
110,000
2032
260,000
(c) Optional and Mandatory Redemption From and After Conversion Date.
From and after the Conversion Date, the Bonds shall be subject to optional and
mandatory sinking fund redemptions on the dates and at the prices determined by the
Remarketing Agent as provided in the Indenture.
(d) Calamity Redemption. After the Conversion Date, in the event of (i)
damage to or destruction of the Project or any part thereof or Condemnation of the Project
or any part thereof to the extent provided in Section 8.04 of the Agreement, or in the
event of any changes in the Constitution or laws of the United States of America or the
State of Minnesota as provided in Section 8.04 of the Loan Agreement and (ii)
4
termination of the Loan Agreement upon the occurrence of one of those events, all Bonds
shall be redeemed by the Issuer on the earliest date for which timely notice of call can be
given, at a redemption price equal to the principal amount to be redeemed, without any
premium, plus accrued interest to the redemption date.
(e) Tax Redemption. This Bond is subject to mandatory redemption in whole
on the first day of the first calendar month for which notice of redemption can properly be
given as provided herein upon the occurrence of a Determination of Taxability (as such
term is defined in the Indenture) at a redemption price equal to one hundred percent
(100%) of the principal amount of this Bond plus accrued interest thereon to the
redemption date.
(f) Special Ma
Upon Failure to Remarket.
(i) The Bonds shall be subject
March 1, 1998, if the Company has fa
Remarketing Agent on or before February
that the interest rate on the Bonds be con
Fixed Rate, accompanied by other items req
or (B) an opinion of Bond Co4lnsel,Y6-
Conversion Date will not adv_etsely afect`tl
the written consent of all Bgridholders tb,the
the event the Conversion Pate is extended,
mandatory redemptiopr 'on dtexterIed Co.
than March 1, 2000, -if thc-)Cinpany fails to
days prior to the-extertd'ed C;pnversion Dat
rate on the Bbnds~ be-coeverted from th
to f&pecialiandafory redemption on
1� to deliV to the Trustee and
3;'IM, e*th` er (A) a written request
iWetf;om the Variable Rate to the
dr6d,by Section 2.13 of the Indenture,
Ae effect that an extension of the
tax exempt status of the Bonds; and
extension of the Conversion Date. In
the Bonds shall be subject to special
version Date, which will be no later
ieliver to the Trustee on or before 20
the written request that the interest
Variable Rate to the Fixed Rate
accompanied'by, the other items required by Section 2.13 of the Indenture. If the
Company` nils to deliver a Credit Facility (as defined in the LoSn.Agreement) to
the Trustee am,,or'prior to the Conversion Date, the Bonds shall be subject to
special rnandato'y redemption on the Conversion Date.
. r
(ii) The Bonds shall be subject to mandatory redemption on the
Mandatory Tender Date if the Resale Proceeds and other funds provided by the
Company are insufficient to purchase any Bonds properly tendered on the
Mandatory Tender Date.
In the case of any partial redemption of the Bonds of the same maturity, the particular
Bonds to be redeemed shall be selected by the Trustee in such manner as the Trustee shall deem
fair and equitable and the Bonds shall be redeemed in the principal amounts specified in the
Indenture. Any Bond which is to be redeemed only in part shall be surrendered to the Trustee (i)
for payment of the Redemption Price (including accrued interest thereon to the Redemption
Date) of the portion thereof called for redemption and (ii) for exchange for Bonds in any
authorized denomination or denominations in aggregate principal amount equal to the
unredeemed portion of such Bond.
5
Notice of redemption shall be mailed at least fifteen (15) days but not more than forty
(40) days prior to the date fixed for redemption to each Registered Holder of a Bond to be
redeemed. All Bonds so called for redemption, provided funds for their redemption have been
duly deposited, will cease to bear interest on the specified redemption date and (except for the
purpose of payment) shall no longer be protected by the Indenture and shall not be deemed
Outstanding under the Indenture, and shall thereafter be payable solely from the funds provided
for payment.
In addition to the foregoing, if under certain circumstances an Event of Default, as
defined in the Indenture, shall occur, the principal of all the Bonds and all interest accrued
thereon may, without prior notice to the Bondholders, be declared due and payable in the manner
and with the effect provided in the Loan Agreement and Indenture.
This Bond and the series of which it forms a part are issue suant to and in full
compliance with the Constitution and laws of the State of Miicularly Minnesota
Statutes. Chapter 462C, and pursuant to a resolution adopted and app tved by the Issuer, which
resolution authorized the financing of the Project and the execution'and delivery of the Indenture.
and the issuance of the Bonds as special, limited obi gadon's payable solely from revenues
derived from the Loan Agreement except that under clan circumstances the Bonds may be
payable from Bond proceeds. The loan repayments under,Yhe';<,oan Agreement are scheduled to
be sufficient to pay the principal of, premium,' if any,`aird interest on the Bonds as the same
become due and payable and are to be paid to the '.Trustee for the account of the Issuer and
credited to the Bond Fund as a special trust fund account created by the Issuer and have been and
are hereby pledged for that purpose.
The Bonds, including principal,_.prein Uu and any other payments however designated,
and the interest due thereon do not And shall -never constitute a general indebtedness of the Issuer
within the meaning of anythsfate 0orisiitutional or statutory provision and do not and shall not
constitute or give rise to S"pecuniary liability or moral obligation of the Issuer, the State of
Minnesota or any of its political subdivisions, or a charge against its general gedit or taxing
powers, or to the extent permitted by law, any pecuniary liability of any officer, employee or
agent of the Issuer. "The provisions of this paragraph are controlling notwithstanding anything
herein to the contrary.
The Registered Holder of this Bond shall have no right to enforce the provisions of the
Indenture or to institute action to enforce the covenants therein, or to take any action with respect
to any Event of Default under the Indenture, or to institute, appear in or defend any suit or other
proceedings with respect thereto, except as provided in the Indenture. Modifications or
alterations of the Indenture, or of any indenture supplemental thereto, may be made only to the
extent and in the circumstances permitted by the Indenture.
With the consent of the Issuer, the Company and the Trustee, as appropriate, and to the
extent permitted by and as provided in the Indenture, the terms and provisions of the Indenture,
the Loan Agreement and the Letter of Credit, or of any instrument supplemental thereto, may be
modified or altered by the consent of the Registered Holders of at least 51% in aggregate
principal amount of the Bonds then Outstanding thereunder.
6
The Indenture also contains provisions permitting Holders of a majority in aggregate
principal amount of the Bonds at the time Outstanding, on behalf of all the Holders of all the
Bonds, to waive compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or waiver by the
Registered Holder of this Bond shall be conclusive and binding upon such Registered Holder and
on an future Registered Holders of this Bond and of any Bond issued in lieu hereof whether or
not notation of such consent or waiver is made upon this Bond.
The Bonds are issued as fully registered Bonds without coupons in the Authorized
Denomination. The Bonds are interchangeable for one or more Bonds in Authorized
Denominations and of the same series, aggregate principal amount, interest rate and maturity
date, upon surrender thereof by the Holder at the principal office of the Trustee, in the manner
and subject to the limitations provided in the Indenture. The Iss the Trustee and any
additional paying agents may deem and treat the Registered HoldVnereoas the absolute owner
hereof (whether or not this Bond shall be overdue) for the putp '' payment of oron
account )f principal hereof and interest (except as otherwise eprovided with respect
to the Record Date) due hereon and for all other purpose's, andie Issuer, the Trustee and any
additional paying agents shall not be affected by any notice to t"&' cowry.
Subject to the limitations provided in the lnaenture;1this,Bond is only transferable by the
Registered Holder hereof upon surrender of this Bon& for tt4nsfer at the principal corporate trust
office of the Trustee, duly endorsed or accotnpank4 by;n written instrument or instruments of
transfer in the form printed on this Bon�i� or inanother form satisfactory to the Trustee and
executed and with guaranty of signature."by the gtstered Holder hereof or his attorney duly
authorized in writing, containing wtlten instructio s as to the details of the transfer of the Bond.
Thereupon the Issuer shall executi.(ifpecessary) and the Trustee shall authenticate and deliver,
in exchange for this Bond, otle`,or more new Bonds in the name of the transferee (but not
registered in blank or to "bearer"aor a.similar designation), of an authorized denomination, in
aggregate principal amount equal to the principal amount of this Bond, and the same maturity,
and bearing interest aTie same kte. '
No service charge shall be made to the Registered Holder for any registration, transfer or
exchange hereinbefore referred to, but the Trustee may require payment of a sum sufficient to
cover any tax, fee or other governmental charge that may be imposed in connection with any
transfer or exchange of Bonds, other than exchanges expressly provided in the Indenture to be
made without charge to Bondholders.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and
things required to exist, to happen and to be performed precedent to and in the execution and
delivery of the Indenture and the issuance of this Bond to exist, have happened and have been
performed in due time, form and manner, as required by law, and that the issuance of this Bond
and the series of which it forms a part, together with all other obligations of the Issuer, does not
exceed or violate any constitutional or statutory limitation.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Indenture unless the Certificate of Authentication hereon shall have
been executed by the Trustee.
IN WITNESS WHEREOF, the City of New Hope, Minnesota, by its governing body, has
caused this Bond to be executed in its name by the facsimile signatures of its Mayor and its Ciry
Manager and by the manual signature of a Responsible Agent of the Trustee acting as
authenticating agent.
CITY OF NEW HOPE, MINNESOTA
By
Its Mayor
2-9
TRUSTEE'S CERTIFICATE OF Ai7TiIENL'ICATION
This Bond is one of the Bonds described in the within mentioned Indenture.
Date of Registration: '-NOkWEST BANK MINNESOTA,
t NATIONAL ASSOCIATION, Trustee
;a
By
Responsible Agent
s
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and does hereby irrevocably
constitute and appoint attorney to transfer the Bond on the books kept for
the registration thereof, with Full power of substitution in the premises.
Dated:
Notice: The assignor's signature to this assignment must correspond with the name as it
appears upon the face of the within Bond in every particular, without alteration or
any change whatever.
Signature Guaranteed:
Signature(s) must be guaranteed by a member of a
The Trustee will not effect transfer of this Bond`.Iuiless'i,Ite information concerning the
transferee requested below is provided. }�
Name and Address:
,.a
(Include infordtjo for all joint owners if the Bond
is held by joint account)
Insert social security or othcildenGfying ii'[imber of Transferee
N
ARBITRAGE CERTIFICATE
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
I. General.
A. The undersigned is an authorized representative of the City of New Hope,
Minnesota (the "Issuer") and certifies the statements in this arbitrage certificate (the "Arbitrage
Certificate").
B. This Arbitrage Certificate has been prepared and is being executed and delivered
pursuant to Section 1.148-0 through 1.148-11 of the Income Tax Regulations (the "Regulations")
and Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), in order to set
forth the facts, estimates, and expectations of the Issuer on the date hereof as to future events
regarding the amount and use of the proceeds of the Issuer's $1,650,000 Multifamily Housing
Revenue Bonds (Park Acres Apartments Project), Series 1997 (the "Bonds").
C. The undersigned is an officer of the Issuer to whom has been delegated, along
with others, the responsibility of issuing the Bonds.
D. The facts, estimates, and expectations of the Issuer expressed in this Arbitrage
Certificate are based solely on representations made by Reprise Associates Limited Partnership
(the "Company"). The Issuer is not aware of any facts or circumstances that would cause it to
question the accuracy of the representations made by Company.
E. The Issuer has not been notified of any listing or proposed listing of the Issuer in
the Internal Revenue Bulletin by the Commissioner of the Internal Revenue Service of the
Department of the Treasury of the government of the United States of America as an issuer that
may not certify as to its reasonable expectations on the date of issue of its bonds as to future
events.
F. To the best of the undersigned's knowledge, information, and belief, the
expectations contained in this Arbitrage Certificate are reasonable.
G. Capitalized terms not defined herein have the meanings set forth in the Indenture.
II. Pu ose.
A. The Bonds are issued pursuant to an Indenture of Trust dated as of March 1, 1997
(the "Indenture") from the Issuer to Norwest Bank Minnesota, National Association, as trustee
(the "Trustee").
D:\NEW200\001',CC%ARBITRAG.DOC 1 ARBITRAGE CERTIFICATE
B. Pursuant to the terms of the Indenture and a Loan Agreement dated as of March 1,
1997 between the Issuer and the Company (the "Loan Agreement"), the proceeds of the Bonds
shall be loaned to the Company and shall be used, together with other funds provided by the
Company, to provide for the acquisition and rehabilitation of an existing multifamily housing
development located in the City of New Hope, Minnesota, known as the Park Acres Apartments
Project, a 41 -unit townhome and apartment housing development for families (the "Project').
C. Payments of principal, premium and interest with respect to the Bonds will be
made solely from moneys derived from the Loan Agreement (other than to the extent payable
from proceeds of the Bonds or temporary investments).
D. The source and application of funds available to accomplish the purposes for
which Bonds are issued are summarized in the Tax Certificate of the Company, prepared and
executed by the Company. The Tax Certificate is incorporated herein as if fully set forth herein.
E. On the date hereof the Issuer will deposit with the Trustee an amount equal to the
purchase price of the Bonds, $1,650,000 (representing the principal face amount of the Bonds).
On the date hereof such moneys will be deposited in the Project Fund.
F. All costs of financing the Project are to be paid from amounts on deposit in the
Project Fund. The Company is authorized to direct the Trustee, by certificate of the Company
submitted in accordance with the terms and conditions of the Indenture, to pay, or to reimburse
the Company for its payment of such costs from the Project Fund. If the amounts in the Project
Fund are not sufficient to pay all costs incurred in financing the Project, the Company is still
obligated to complete such financing of the Project and- to pay all costs incurred without further
reimbursement.
G. Amounts sufficient to pay the principal and interest on the Bonds when due will
be deposited when received in the Bond Fund. Moneys in the Bond Fund will be used for
payment when due of the principal of and interest on the Bonds.
III. Temnorary Periods.
A. Acquisition and rehabilitation of the Project is expected to continue without
interruption until the completion on or before the date specified in the Tax Certificate of the
Company but, in any event, no later than January 31, 2000. At least eighty-five percent (85%) of
the proceeds of the Bonds are expected to be expended before such date. The proceeds of the
Bonds deposited in the Project Fund will be invested without regard to rate of investment return
in accordance with the temporary period allowed for the investment of such proceeds by Section
1.148(e)(2)(i) of the Regulations.
B. The Bond Fund is a bona fide debt service fund with respect to any money
deposited therein since any such moneys so deposited will be expended within one year or less
from the date of deposit to pay debt service on the Bonds. Therefore, any moneys deposited in
the Bond Fund will be invested without regard to rate of investment return in accordance with the
temporary period allowed for the investment of such moneys by Section 1.148-2(e)(5)(ii) of the
Treasury Regulations. To the extent that amounts in the Bond Fund which will not be expended
within one year of the date of deposit for the payment of the Bonds, except for a reasonable
D:\NEW200\001\CC\ARBITRAGDOC 2 ARBITRAGE CERTIFICATE
carryover not to exceed the greater of earnings on the Fund for the immediately preceding Bond
Year or one -twelfth of annual debt service for the immediately preceding Bond Year (which
amounts constitute a bona fide debt service fund which may be invested without regard to rate of
investment return exceeds $100,000), such excess amounts must be reinvested at a yield not
exceeding the yield on the Bonds.
C. The Underwriter has represented that the funding of the Debt Service Reserve
Fund in the amount set forth in the Indenture is required to market the Bonds to the public. The
Debt Service Reserve Fund deposit does not exceed the least of (i) ten percent of the original
principal amount of the Bonds or (ii) 125% of average annual debt service on the Bonds or (iii)
maximum annual debt service on the Bonds. The Debt Service Reserve Fund represents a
reasonably required reserve fund and amounts therein will be invested without regard to rate of
investment return.
IV. Yield.
A. As used in this Arbitrage Certificate, the term "yield" refers to that yield which,
when used in computing the present value of all payments of principal and interest to be paid on
an obligation, produces an amount equal to the "purchase price" as described below.
B. The Indenture provides that the Bonds will be dated as of Closing Date, and will
bear interest payable monthly on each Interest Payment Date commencing May 1, 1997, during
the Variable Rate Period, and payable semiannually on each Interest Payment Date during the
Fixed Rate Period.
C. Under the Loan Agreement the Company is required to make basic payments on
the loan to the Issuer in an amount equal to the principal and interest due on the Bonds, and such
interest rate is subject to adjustment on the Conversion Date.
D. Pursuant to the Indenture, the Bonds will initially bear interest at the rate of 59%
of the Prime Rate per annum from the date of issuance thereof until Conversion Date. From and
after the Conversion Date the interest rate on the Bonds will be adjusted in accordance with the
provisions of Section 2.13 of the Indenture. Therefore, the interest rate on the Bonds is variable.
For purposes of this Certificate, yield will be calculated from time to time in the manner provided
by Section 1.148-4(b) of the Treasury Regulations, using the issue price as the purchase price.
Thus, generally, yield means the rate which, when used in computing the present value of all
payments of principal of and interest on an obligation, produces an amount equal to the purchase
price. For purposes of determining the yield on the Bonds, the present worth of all payments of
the principal of (including mandatory sinking fund redemption) and interest on the Bonds will be
computed by a method which is consistent with the principals of the actuarial method of
computing yield.
E. No transfer, waiver, modification or similar transaction with respect to any right
that is part of the terms of a Bond or is otherwise associated with a Bond is expected to occur in a
transaction that is separate and apart from the original sale of the Bonds. No qualified hedge is
expected with respect to the Bonds.
D �NEW200.00 D,CCWRBITRAG.DOC 3 ARBITRAGE CERTIFICATE
V. Other Matters
A. In the Indenture, the Issuer and the Trustee have agreed, and in the Loan
Agreement, the Company has agreed, that they will not make any use of the proceeds of the
Bonds that, if such action were reasonably expected on the date of issuance of the Bonds, would
have caused the Bonds to become "arbitrage bonds."
B. In addition to the moneys received from the sale of the Bonds, the Issuer has
certain other moneys that are invested in various funds, other than those created by the Indenture,
that are pledged for various municipal purposes. These other funds are not available to
accomplish the purposes described in Section II.
C. There are no funds or accounts in existence or that will be established in addition
to the Bond Fund and the accounts thereunder, that the Issuer reasonably expects will be
available to pay the principal of or interest on the Bonds.
D. The Issuer does not intend, nor does the Indenture permit, the issuance of
additional obligations secured by the revenues or interests pledged by the Indenture.
E. In connection with the issuance of the Bonds, the Issuer has not engaged and will
not engage in any transaction or series of transactions which attempts to circumvent the
provisions of Section 148 of the Code, or Sections 1.148-0 through 1.148-11 of the Regulations,
and which enables the Issuer to exploit the difference between tax-exempt and taxable interest
rates to gain a material financial advantage, and increases the burden on the market for
tax-exempt obligations in any manner including, without limitation, by selling Bonds that would
not otherwise be sold or selling more Bonds, or issuing Them sooner, or allowing them to remain
outstanding longer, than would otherwise be necessary.
VI. Miscellaneous.
A. No sinking fund (other than the Bond Fund) has been established with respect to
the Bonds. No securities or obligations other than those expressly referred to in this Arbitrage
Certificate have been pledged to the payment of the principal of, premium, if any, and interest on
the Bonds. No funds or accounts in existence or that will be established (other than those
expressly referred to in this Arbitrage Certificate) will be available to pay debt service on the
Bonds.
B. Neither the Project nor the Loan are expected to be sold or otherwise disposed of
during the term of the Bonds unless the Bonds are retired concurrently with such sale or
disposition. No such sale or disposition is presently expected.
C. As required by the Indenture, the Issuer will comply with the requirements of
Section 148(f) of the Code and the applicable Regulations to the extent applicable.
WNEW200\001\CC\ARBITRAG. DOC 4 ARBITRAGE CERTIFICATE
l
IN WITNESS WHEREOF, I have executed this Arbitrage Certificate on March,
WITH
D: \NEW 200\001 \CC W RB ITRAG. DOC
CITY OF NEW HOPE, MINNESOTA
SWIM
/ I��.
MINIM A 'A
ARBITRAGE CERTIFICATE
The undersigned, on behalf of the Company, hereby certifies that the facts and estimates
contained in this Certificate have been provided to the Issuer by the Company and that to the best
of the undersigned's knowledge, information and belief, the expectations contained in this
Certificate are reasonable.
REPRISE ASSOCIATES LIMITED
PARTNERSHIP
By Reprise, Inc.
Its General Partner
By
s Presi�3g t
D:\KEW200\001\CC\ARBITRAG.DOC O ARBITRAGE URTIFICATE
ORDER TO TRUSTEE
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
Norwest Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Ladies and Gentlemen:
Pursuant to Section 2.06 of the Indenture of Trust dated as of March 1, 1997 (the
"Indenture") between the City of New Hope, Minnesota (the "Issuer") and Norwest Bank
Minnesota, National Association, there are delivered to you herewith, duly executed on behalf of
the Issuer, the Issuer's Multifamily Housing Revenue Bonds (Park Acres Apartments Project),
Series 1997 in the aggregate principal amount of $1,650,000 (the "Bonds"). Capitalized terms
not defined herein have the meanings given them in the Indenture.
You are hereby requested and authorized to authenticate and deliver all Bonds to the
order of Piper Jaffray Inc. upon payment to you for the account of the Issuer of the purchase price
of $1,650,000.
Upon receipt of the foregoing total amount, you are hereby authorized and directed to
deposit all amounts received in the Project Fund, pursuant to Section 6.02 of the Indenture.
Dated: March �, 1997
CITY OF NEW HOPE, MINNESOTA
By
Its Mayor Q
By / ` AIII d1
Its City Manager
D:\NEW200\001\CC\ORDER.DOC ORDER TO TRUSTEE
STATE OF MINNESOTA Form L
MINNESOTA DEPARTMENT OF FINANCE Notice of Issue
CASH AND DEBT MANAGEMENT DIVISION Revised October 1995
Page 1 of 2
PROJECT CLOSING INFORMATION
AND NOTICE OF ISSUE
Pursuant to Minnesota Statutes Chapter 474A
Due within 5 days after issuance (each series if issued in series)
(Notices for manufacturing projects also due prior to the last Monday in December)
Issuer: City of New Hope Minnesota
Allocation under which issued: Entitlement
X Pool
Not subject to annual volume cap
Title of Issue: Multifamily Housing Revenue Bonds (Park Acres Apartments Project) Series 1997
Type of Qualified Bonds under Federal Tax Law:
Small Issue Bonds X Residential Rental Project Bonds Redevelopment Bonds
Public Facilities Bonds Mortgage Bonds Student Loan Bonds
Governmental Bonds Enterprise Zone Facility Bonds 501 (c) (3)
Certificate of Allocation number: 729
Name of enterprise: Reprise Associates Limited Partnership
Nature of enterprise: residential rental housing
Location of enterprise: 8700 Bass Lake Road
Date of issuance
March 27. 1997
Principal amount of this issue: $
Additional series to be issued: $
Dollar amount of bonds issued subject to the annual volume cap: $ 1,650,000
Term: March 1, 2032
Equity contributed to project: $
Interest Rate: initial - 59% of prime; subject to conversion
to fixed rate
Other sources of financing (please specify): $ 321,700 (existing Project reserves); $54,500 (taxable debt)
Amount previously issued for this project: $
Total cost of project: $ 2,026,200
Original purchaser(s) of bond issue: Piper Jaffray Inc
Approximate number of new jobs: N.A.
Submitted by: Holmes & Galey, Ltd.
Signature: 1714� T Ln " ~
D:\NEW200\ 1\C0NO ICE.DOC
Tide: Bond Counsel
Date:/ �'/ 9 7
PROJECT CLOSING INFORMATION
AND NOTICE OF ISSUE
Form L
Notice of Issue
Revised October 1995
Page 2 of 2
NOTICE OF ISSUE
Each issuer that issues bonds with an allocation received under M.S. Chapter 474A shall provide a "Notice
of Issue Form L" to the Department of Finance stating:
(1) the date of issuance of the bonds;
(2) the title of the issue;
(3) the principal amount of the bonds;
(4) the type of qualified bonds under federal tax law; and
(5) the dollar amount of the bonds issued that were subject to the annual volume cap.
For obligations that are issued as a part of a series of obligations a notice must be provided for each series.
Any issue of obligations for which a notice of issue is not provided to the Department of Finance within
five days after issuance is deemed not to have received an allocation under M.S. Chapter 474A or
under federal tax law, the allocation will be cancelled and reallocated, and the related deposit lost to
the issuer. Notices for small issue projects are due prior to the last Monday in December.
Within 30 days after receipt of a notice of issue the Department of Finance will refund appropriate
application deposits. Penalties apply for return of allocations and issuance of bonds at amounts less than the
certification amount. No refunds are available for allocations returned on or after the last Monday in
November. Application fees for projects of entitlement issuers must be submitted to the department of
finance with the notice of issuance of bonds, notice of use of mortgage credit certificates, and notice of carry
forward.
Please forward ALL notice of issue(s) to:
Minnesota Department of Finance
Cash and Debt Management Division
400 Centennial Office Building
658 Cedar Street
St. Paul, MN 55155
Atm: Mr. Lee Mehrkens
(612)296-1700
In addition, for revenue bonds that fall under the provisions of M.S. Chapter 469.152 - 469.169 please
forward a COPY of the notice of issue(s) to:
Minnesota Department of Trade & Economic Development
500 Metro Square Building
121 7th Place East
St. Paul, MN 55101
Atm: Mr. Paul Moe
(612)297-1391
D:\NEW200\001\CC\NOTICE.DOC PROJECT CLOSING INFORMATION
AND NOTICE OF ISSUE
CERTIFICATE
TO
PROJECT CLOSING INFORMATION AND NOTICE OF ISSUE
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
I, the undersigned, DO HEREBY CERTIFY that on the r day of April, 1997, there
was filed in the Office of the Department of Finance of the State of Minnesota, a Project Closing
Information and Notice of Issue dated the 3rd day of April, 1997, relating to the above -referenced
bonds.
Signature
Typed or Printed Name
Title
DAFER I00\001\CC\CERNTCIS. DOC Certificate to Project Closing Information
and Notice of Issue
Form8038
(Rev. March 1995)
Depanment or the Treasury
ntemal Revenue Serva:e
rP art I
Reporting Authority
�/�4sP k��uR,� STPD
Information Return for Tax -Exempt e6p,G
Private Activity Bond Issues OMB No 1545-0720
(Under Internal Revenue Code section 149(e))
► See separate instructions.
If Amended Return, check here 110-
i
1 Issuer's name '
City of New Hope, Minnesota
Number and street (or P.O. box if mail is not tleliveretl to street address)
Room
4401 Xylon Avenue North
5 City. town. or post office, state. and ZIP code
New Hope, Minnesota 55428-4898
7 Nameofissue Multifamily Housing Revenue Bonds (Park Acres
Part II
t Issuer's employer identification number
4 Report number
PA19 97 — 1
8 Date of issue
March 27, 1997
8 CUSIP number
645464 EN4
Type of Issue (check applicable box(es) and enter the issue price for each)
Issue Price
9
Exempt facility bond:
9a
a
❑
Airport (sections 142(a)(1) and 142(c)) . . . . . . . . . . . . . . • ' • '
9b
b
❑Docks
and wharves (sections 142(a)(2) and 142(c)).
9C
c
❑
D.".ass commuting facilities (sections 142(1)(3) and 142(c)Vr- . . ' ' ' .
9d
d
[:]Water
furnishing facilities (sections 142(a)(4) and .1 AMC u
9e
e
❑
Sewage facilities (section 142(a)(5)) . . . . . . . • . . f
142(a)(6)).
9f
f
❑
Solid waste disposal facilities (section
g
®
Qualified residential rental projects (sections 142(a)(7)I42(d)), as follows:. . . . . .
142(d)(1)(A)) . . . ❑
7RAR
Meeting 20-50 test (section . . . . 7-1 PA
na Y
Meeting 40-60 test (section 142(d)(1)(B)) . . . .MR
9 P P ULA '❑
142(d)(6)) S
x
Meeting 25-60 test (NYC only) (section dip_
❑Yes ❑ No
Has an election been made for deep rent skewing (section 142(d)(4)(B))?
9h
h
❑
Facilities for the local furnishing of electric energy or gas (sections 142(a)(8) and 142(f))
9i
i
❑
Local district heating or cooling facilities (sections 142(a)(9) and 142(g)) . . . . . . . .
9
❑
Qualified hazardous waste facilities (sections 142(a)(10) and 142(h)) . . . • ' • ' ' .
9k
j
It
❑
High-speed intercity rail facilities (sections 142(a)(11), 142(c), and 142(i)) . . . .
❑
Check box if the owner elected not to claim depreciation or any tax credit (see instructions) ►
I
❑
Environmental enhancements of hydroelectric generating facilities (sections 142(a)(12) and
91
m
❑
1420)) . . . . . . . . . . . . . . . . . . . . . . . .
Facilities allowed under a transitional rule of the Tax Reform Act of 1986 (see instrucionjsl!k .\
9m
Facilitytype --------------------------------------------------- ----• rP
�.
❑
1986 Act section ---•--. .... _-_------- ----•----•------ ------------- v
Qualified enterprise zone facility bonds (section 1394). :•- • ' _ ,, _.
9n
n
10
❑
,
Qualified mortgage bond (section 143(a)) . . . . . . . . .
10
11
❑
Qualified veterans' mortgage bond (section 143(b)). . . . . . . • . .
❑
If you elect to rebate arbitrage profits to the United States, check bux . . . . . .
12
12
❑
Qualified small issue bond (section 144(a)) (see instructions). . . . . . . . . . ❑
_
_177 s`7
For $10 million small issue exemption, check box . . . . . . . . . . . .
13
13
❑
Qualified student loan bond (section 144(b)) . . . . . . . . . . . . . . . .
14
14
❑
Qualified redevelopment bond (section 144(c)) . . . . . . . . . . . . . . .
15
15
❑
Qualified hospital bond (section 145(c)) (attach schedule -see instructions) . . . . . .
16
16
❑
Qualified 501(c)(3) bond other than a qualified hospital bond (attach schedule -see instructions)
17
17
❑
Nongovernmental output property bond (treated as private activity bond) (section 141(d)).
19
❑
Other. Describe (see instructions) ►
19
(= Description of Bonds
(a)I (b) I (C)
Maturity date Interest rate Issue price
19 Final maturity. ./ LU3G v x �o •r
Lou
20 Entire issue" $ 1,650,(
For Paperwork Reduction Act Notice, see page 1 of the Instructions.
(a) (e)I M (9)
Stated redemption Weighted average Yield Net
price at maturity maturity interest cost
550 000 26.104 ears , u o/ -IV -R. %
Cat. No. 49973K Form 8058 (Rev. 3-95)
Form 80380
21
22
23
24
25
26
27
28
3-95)
Uses of Proceeds of Issue (including underwriters' discount)
Proceeds used for accrued interest . • • • • . .
Issue price of entire issue (enter amount from line 20, column (c)) . . .
Proceeds used for bond issuance casts (including underwriters' discount)
Proceeds used for credit enhancement . . . . . . . . . . . .
Proceeds allocated to reasonably required reserve or replacement fund .
Proceeds used to refund prior issues (complete Part VI) . . . . . .
Total (add lines 23 through 26) . . . . . . . . . . . . . . .
nl„r,rafrmriinn nrnr-eeds of the issue (subtract line 27 from line 22 and en
Description of Property Financed by Noi
(Do not complete for qualified student loan bonds,
23 33,000
24
25 140,000
26
bonds, or qualified veterans'
29 Type of Property Financed by Nonrefunding Proceeds:
a Land . . . . . . . . . . . . . . .
b Buildings and structures . . . . . . . . . . . . . . . . . . . . . .
e Equipment with recovery period of more than 5 years . . . . . . . . . . . .
d Equipment with recovery period of 5 years or less . . . . . . . . . . . .
the
of
slc
of
Amount
bonds.)
P
Description of Refunded Bonds (Complete this part only for refunding bonds.)
► years
31 Enter the remaining weighted average maturity of the bonds to be refunded . . . . . . . ►
32 Enter the last date on which the refunded bonds will be called . . . . . . . . . . .
33 Enter the date(s) the refunded bonds were issued ►
Miscellaneous
approving issue (see instructions)►. City. -Council- of --the- City -of-,14QtJ-Hopa---
34 Name of governmental unit(s) app g
public he---- November 12, 1996
35 Enter the amount of the bonds designated by the issuer under section 265(b)(3)(B)(i)(Ill) . . . . ► ❑
36 Check box if you have elected to pay a penalty in lieu of rebate . . . . . . . . . . ► ❑
37 Check box if you have identified a hedge (see instructions) .
Amount
Volume Cap
1 '650000
38
39
40
a
b
c
41
a
b
c
42a
b
Amount of volume cap allocated to the issuer. Attach copy of state certification
38
39
>
1,650,000
Amount of issue subject to the unified state volume cap . . . . . . . . . . . . .
Amount of issue not subject to the unified state volume cap or other volume limitations:
Of bonds for governmentally owned solid waste facilities, airports, docks, wharves, environmental
40a
enhancements of hydroelectric generating facilities, or high-speed intercity rail facilities. . . '
40b
Under a carryforward election. Attach a copy of Form 8328 to this return . . • . . ' . .
40c
Under transitional rules of the Tax Reform Act of 1986 . . . . . . . . . . . . . . .
Enter the Act section of the applicable transitional rule. . ►-------------- -----
Under the exception for current refunding (section 146(1) and section 1313(a) of the Tax Reform
. .
40d
Act of 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount of issue of qualified 501(c)(3) bonds:
41a
Qualified hospital bonds . . . . . . . . . . . . . . . . . . . • . ' ' . .
41b
Qualified nonhospital bonds . . . . . . . . . . . . . . . . . . • • ' . . .
41c
Outstanding tax-exempt nonhospital bonds . . . . . . . . . . . • • • ' ' . .
42a
Amount of issue of qualified veterans' mortgage bonds . . . . . . . . • ' ' .
42b
Enter
the state limit on qualified veterans' mortgage bonds . . . . . . . . . . . ,
this return, and accompanying schedules and statements. and to the best of my knowledge
Under penalties of perjury, I declare that I have examined
and belief, they are true, corr5ft, aLdyOmplet A
Please'
A
Sign Signature of officer
Here W. Peter Enck
Name of above officer (type or print)
9 Printed on recrded paper
3/27/97
' Date
Title of officer (type or
STATE OF MINNESOTA
DEPARTMENT OF FINANCE
CASH AND DEBT MANAGEMENT DIVISION
C'FRTMC'ATF OF A11,0CATiC►N
Pursuant to Minnesota Statutes Chapter 474A as amended
NAME OF ► of New Hope
TITLE OF PROPOSED ISSUE: Park Acres Apartments
Form C
Certificate
.u• hY • • Y•► •�- a m,� ��r.� �\ Y�� i� 1111 •• _\:7.`I
This Certificate of Allocation is not transferable.
This Certificate of Allocation shall expire and be deemed not to have been issued if the department has
not received a NOTICE OF ISSUE within five days of issuance of the obligations. A notice of issue is
required for each series of obligations if issued in series. Notice of Issue forms are available from the
department upon request. Unless otherwise specified, obligations must be issued within 120 days of the
allocation date (date of certificate). Penalties also apply for unused partial allocations. See Minnesota
Statutes Chapter 474A for complete instructions regarding applicable rules and procedures.
January 6, 1997
Date of Certificate
For further information, please contact:
Minnesota Department of Finance
400 Centennial Building
658 Cedar Street
St. Paul, Minnesota 55155
(612) 296-5900
Wayne Sim peau, Commissioner
Department of Finance
STATE OF MINNESOTA
UCC -1 FINANCING STATEMENT
For
Filing
Officer fI' (1 e)
This statement is presented for filing pursuant to Minnesota Uniform Commercial Code Minnesota
Statutes Chapter 336.9-402 (Type in Black Ink)
1. Individual Debtor -
Social Security #
City
2. Individual Debtor -
Social Security #
Mailing Address
First Name
State
State
3. Business Debtor - Name
City of New Hope, Minnesota
Fed. ID # Mailing Address
41-6008870 1 4401 XvIon Avenue North
Zip Code
Middle I.
Zip Code
City
State
Zip Code
New Hope
MN
55428-4898
4. Secured Party Name
5. Assignee of Secured Patty
Norwest Bank Minnesota, National Association
Mailing Address: Attn: Corporate Trust Department
Mailing Address
Sixth Street and Marquette Avenue
City
State
Zip Code
City State
Zip Code
Minneapolis
ivu�
55479-0069
6. This financing statement covers the following types or items of property. (It crops are covered aescnoe me teat estate ana ust me time in rcwru owner.)
All rights, title, interest and privileges of the City of New Hope, Minnesota (the "Issuer") in, to and under a Loan
Agreement dated as of March 1, 1997 between the Issuer and Reprise Associates Limited Partnerhip (the "Loan
Agreement"), except for the rights of the Issuer to indemnification and certain direct payments to be made to it pursuant
to Sections 4.04, 7.04 and 9.05 of the Loan Agreement.
RETURN ACKNOWLEDGMENT COPY TO: (name and address)
Holmes & Galey, Ltd.
One Financial Plaza, Suite 1200
120 South Sixth Street
Minneapolis, MN 55402
Please do not tune outside the bracketed area
Debtor is a transmitting utility
as defined by Minnesota Statutes Chapter 336.9-105
CITY OF NEW MINNE TA
!�% X,
Mayo Debtor's Signature
�/
City Manager Debtor's signature
Secured Party's Signature
D:WEW200\00hCC\UCCI DOC STANDARD FORM APPROVED BY SECRETARY OF STATE
UCC -1
GENERAL CERTIFICATE OF COMPANY
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
This certificate (the "Certificate") has been prepared and executed in conjunction with the
issuance by the City of New Hope, Minnesota (the 'Issuer"), of its Multifamily Housing Revenue Bonds
(Park Acres Apartments Project), Series 1997 (the 'Bonds") in the aggregate principal amount of
$1,650,000. The proceeds from the sale of the Bonds are being loaned to Reprise Associates Limited
Partnership (the "Company"), a Minnesota limited partnership, pursuant to the terms of the Loan
Agreement dated as of March 1, 1997 and executed by the Issuer and the Company (the "Loan
Agreement"), to be used to finance the acquisition and rehabilitation of an existing multifamily housing
development located in the City of New Hope, Minnesota, known as the Park Acres Apartments Project, a
41 -unit townhome and apartment housing development for families (the "Project"). Capitalized terms used
herein shall have the meanings set forth in the Loan Agreement.
The undersigned officer of the Company does hereby certify on behalf of the Company as
follows:
1. Reprise, Inc. (the "General Partner") is the General Partner of the Company. Robert J.
Boisclair is the President of the General Partner and has been properly authorized and directed by proper
action of the Board of Directors of the General Partner and the Limited Partnership Agreement of the
Company to execute this Certificate, and any other certificates to be executed and delivered by the
Company in connection with the issuance and sale of the Bonds, and the Loan Agreement, the
Regulatory Agreement, the Bond Purchase Agreement, the Remarketing Agreement, the Limited
Offering Memorandum and the Investment Agreement (collectively referred to hereinafter as the
"Company Documents"), and has executed and delivered the Company Documents and this Certificate on
behalf of the Company, by subscribing his manual signature thereon.
2. The Company is a limited partnership duly organized and validly existing under the laws
of the State of Minnesota, with full power and authority to own its properties and conduct its business.
Exhibit A attached hereto is a copy of the Limited Partnership Agreement of the Company, together with
the Certificate of Limited Partnership filed with the Secretary of State of Minnesota (the "Limited
Partnership Documents"). Such Limited Partnership Documents have not been amended, nor has any
action been taken by the officers of the Company or otherwise for the purpose of effecting any further
amendment or modification thereof.
3. The General Partner of the Company is a corporation duly organized and existing under
the laws of the State of Minnesota. A complete copy of the Articles of Incorporation and the Bylaws of
the General Partner are attached to this Certificate as Exhibit B (the "General Partner Documents").
Such General Partner Documents have not been amended, nor has any action been taken by the General
Partner or otherwise for the purpose of effecting any further amendment or modification thereof.
4. By resolution of the General Partner, attached as Exhibit C hereto, the General Partner
has reviewed and has by proper action authorized and directed the execution and delivery of the
Company Documents substantially in the forms executed and delivered on the date hereof. By the
Limited Partnership Agreement of the Company, the Company has reviewed and has by proper action
approved the execution and delivery of the Company Documents substantially in the forms executed and
D:\NEW200\00I\CC\COMPANY.DOC 1 CERTIFICATE OF COMPANY
delivered on the date hereof. Such actions are in full force and effect and have not been altered,
amended, changed, repealed or revoked, nor have any conditions been placed on its effectiveness, as of
the date hereof.
5. To the best knowledge of the undersigned, the information set forth in the Limited
Offering Memorandum (except for the sections captioned "THE ISSUER," "THE INVESTMENT
AGREEMENT AND INVESTMENT AGREEMENT PROVIDER," and "UNDERWRITING"), is true,
accurate and complete in all material respects, and, as of the date of the Limited Offering Memorandum,
no material adverse change has occurred in the financial position or affairs or results of operation of the
Company.
6. To the best knowledge of the undersigned, the Company has not, since the date of the
Limited Offering Memorandum, incurred any material liabilities other than in the ordinary course of
business or as set forth in or contemplated by the Limited Offering Memorandum.
7. There are no proceedings, pending or to the best knowledge of the undersigned,
threatened, contemplating the liquidation or dissolution of the General Partner or the Company or
threatening their existence, or seeking to retrain or enjoin the transactions contemplate by the Company
Documents, or questioning the validity thereof.
8. The Company is not presently in violation of any material provision of, or in default
under, any of its obligations under the Company Documents, and each of the representations and
warranties of the Company under the Company Documents are true, complete, and correct as of the date
hereof.
9. All agreements to be complied with and obligations to be performed by the Company on
or prior to the date hereof under the Company Documents have been complied with and performed on or
prior to the date hereof.
10. Consummation of the transactions contemplated by the Company Documents, and
compliance by the Company with the provisions thereof, will not result in any breach of any of the terms,
conditions, or provisions of, or constitute a default under, any indenture, lease, loan agreement, or other
agreement to which the Company is a party or by which the Company may be bound, or result in any
violation of any provisions of law.
IL No further approval, consent, or withholding of objection on the part of any
administrative or regulatory body, federal, state or local, is required in connection with the issuance and
sale of the Bonds, or the execution and delivery, or acceptance of, the Company Documents.
12. No proceeding or litigation is pending or threatened, seeking to restrain or enjoin the
issuance, sale or delivery of the Bonds, or the payment, collection, or application of the proceeds thereof,
or other moneys and securities pledged or to be pledged under the Indenture, Loan Agreement or
Investment Agreement, or in any way contesting or affecting any authority for or the validity of the
Bonds, the Indenture and the Company Documents, or the existence or powers of the Company or the
right of the Company to finance the Project by or before any federal, state, or local governmental or
administrative authority, agency, or court.
13. To the best knowledge of the undersigned, no event affecting the Company has occurred
since the date of the Limited Offering Memorandum for the purpose for which it is to be used or which
should be disclosed therein in order to make the statements and information therein not misleading in any
material respect.
D:\NEW200\001\CC\COMPANY.DOC 2 CERTIFICATE OF COMPANY
Dated: March �, 1997.
REPRISE ASSOCIATES LIMITED
PARTNERSHIP
By Reprise, Inc.
Its General Partner
By
s resid t
D:\NEW200\001\CC\C0MPANY.D0C 3 CERTIFICATE OF COMPANY
EXHIBIT A
Limited Partnership Agreement and
Certificate of Limited Partnership
D:\NEW200\001\CC\COMPANY DOC A-] CERTIFICATE OF COMPANY
�� 7�od
x_,236
REPRISE ASSOCIATES LIMITED PARTNERSHIP
CERTIFICATE AND AGREEMENT
OF LIMITED PARTNERSHIP
The undersigned general and initial limited partner in order to form a limited partnership
under Minnesota Statutes Section 322A hereby agree as follows:
The name of the limited partnership shall be "Reprise Associates Limited Partnership" W
(hereinafter the "Partnership").
II.
BUSINESS
The general character of the business of the Partnership shall be to acquire, rehabilitate,
own, lease, and manage a low and moderate -income housing developments, and all activities
related or incident thereto.
III.
OFFICE: AGENT /
1. The principal offices of the Partnership are located at 3005 Ottawa Avenue, St. Louis ✓
Park, Minnesota 55416. The agent for service of process shall be Reprise, Inc.
IV.
PARTNERS
1. The name and business address of the general partner (hereinafter the "General Partner")
of the Partnership is as follows:
Reprise, Inc.
3005 Ottawa Avenue
St. Louis Park, Minnesota 55416
2. The name and business address of the initial limited partner (hereinafter the "Initial
Limited Partner") is:
Robert J. Boisclair
3005 Ottawa Avenue
St. Louis Park, Minnesota 55416
3. This Certificate of Limited Partnership shall be amended if and when additional persons
become general partners in the Partnership or at such other times as determined by the parties
hereto.
030791
1 J'v3
I. The General Partner shall contribute One Hundred and 00/100 Dollars ($100.00) in cash
for its interest as the General Partner in the Partnership.
2• The Initial Limited Partner shall contribute One Hundred and 00/100 Dollars ($100.00)
in cash for his interest as the Initial Limited Partner in the Partnership. Upon admission of any
additional limited partners to the Partnership, the Initial Limited Partner's interest in the
Partnership may, at the sole discretion of the General Partner, be liquidated, and, in such event,
the Partnership shall return to the Initial Limited Partner his $100.00 initial capital contribution
made pursuant hereto.
VI.
ASSIGNMENT OR SUBST=ION
1. The Initial Limited Partner shall have no right to sell, encumber, assign or otherwise
transfer his interest as an Initial Limited Partner in the Partnership or to substitute any other
person or entity as Initial Limited Partner without the consent of the General Partner.
2. If a General Partner withdraws from the Partnership, such withdrawing General Partner
must transfer his or its interest in the Partnership to a successor General Partner pursuant to
terms agreed upon by the withdrawing General Partner and the successor General Partner.
1. A General Partner may terminate its membership in and withdraw from the Partnership
if it (i) first provides sixty (60) days written notice to all Limited Partners of the intent to so
withdraw; and (ii) provides a successor General Partner to the Partnership, but only if necessary
to maintain the existence of the Partnership or the tax classification of the Partnership under the
Internal Revenue Code. If a General Partner does withdraw from the Partnership and it is
necessary to admit a substitute General Partner, the withdrawing General Partner must transfer
its interest in the Partnership to the substitute General Partner under the terms agreed upon by
the withdrawing General Partner and the substitute General Partner.
2. The Initial Limited Partner shall terminate his membership in and withdraw from the
Partnership under the terms and conditions set forth in Section V.2 of this Certificate and
Agreement of Limited Partnership.
Distributions of cash, property or other assets of the Partnership shall be made by and
at the sole discretion of the General Partner from time to time. Income, gain, loss, credit and
all other tax attributes of the Partnership shall be allocated among the General Partner and the
Initial Limited Partner as determined by the General Partner in its sole discretion.
0
1--)1;438
Ix.
TERMINATION AND DISSOLUTION
1. The Partnership shall terminate upon the earlier of: /
a. The expiration of the term of the Partnership on December 31, 2045; or
b. The dissolution of the Partnership.
2. The Partnership shall be dissolved upon the bankruptcy, death, legal incapacity,
dissolution, retirement, removal, withdrawal of, or assignment for the benefit of creditors by the
General Partner unless all of the then remaining limited partners and any other general partners
elect in writing to continue the Partnership's business and appoint a new General Partner.
• R.
CONTINUATION OF BUSINESS
The business of the Partnership may be carried on by the remaining General Partner(s)
upon the happening of an event of withdrawal of a general partner, as defined in Minnesota
Statutes, Section 322A.32.
IN WITNESS WIIEREOF, the undersigned have hereunto set their hand this 20th day of
December 1996.
�DEPARTj 04T' OF STATEA
FILED
,F,s:105503-1 JAN 2 9 1937
jkwv
8wewyofsaw
-3-
GENERAL PARTNER:
Reprise, Inc.
By: A� -
R96ert . Boisclair
Its: Chief Executive Officer
INITIAL
PARTNER:
, individually
Office of the Secretary of State
State of Minnesota
180 State Office Bldg., 100 Constitution Ave.
a St Paul, MN 55155-1299
Election fJivisian: (612)296.2805
Joan Anderson Growe ®usmass Serace lniomlawn: (612)296-2603
Secnl
General Inlonnatim: (612)296-3266
s0cmeary of state EWne Voss Brass Service Far: (612)215-0663
Dip" Ssen�ry of Stab E7ecRrAn Qrhsron Fac (67296-9073
Dear New Business Registrant:
Congratulations on starting a new business and registering with the Office of the Secretary of State. I hope
that your business prospers! The following is information to help you keep your registration current.
1. If you have registered a corporation, you are required to file an annual registration once each calendar
year beginning in the first year following incorporation If your business u a for-profit corporation, the
annual registration form will be located in the state corporate tax packagge. If your business is a nonprofit
corporation the annual registration form will be mailed directly to you. No fee is required to file the annual
registration if it is filed each year. Failure to file the annual registration will result in the corporation losing
its good standing to transact business with the Office of the Secretary of State. Yf the annual registration is
not filed for three consecutive years, the corporation will be dissolved by the Office of the Secretary of
State. You may also request an annual registration form by calling the Public Information Phone Lines, at
(612)296-2803.
2. If you area non -Minnesota corporation, you must have an agent at an address in Minnesota. You must
also file an annual registration and pay a fee between January 15 and May 15 each year beginning in the
first year after you file. The annual registration form is marled to the registered agent in January. If you
do not keep accurate agent information on file or file the annual registration, your ability to do business in
Minnesota will be revoked. Finally, to change the corporation's name, merge it with another corporation
or dissolve it, an original certificate from the state of incorporation showing the change must be filed and
a $50 fee paid.
3. A new or amended assumed name filing must be published. The publication must appear in two
consecutive issues in a newspaper authorized to publish legal notices in order to be valid. Contact the
newspa rs in the county where you have your business to determine if they can make this publication for
you. If you do not publish, you may have to pay a $250 penalty. The newspaper will return an affidavit
of publication to you. It is not necessary to send this affidavit to this office.
4. Remember, the registration of your business name with this office does not authorize you to use that
name in violation of another persons rights. Prior right to a name may have been acquired under the Federal
Trademark Act, 15 United States Code Section 10 1, or other common law rights. For more information
about your right to use a name, please consult your attorney.
Also, registration of a business as an assumed name does not prevent another party from registering an
identical assumed name with this office. In fact, the law requires that we accept all identical or similar
assumed names and notify the existing registrants of the new filing. To get additional protection for your
assumed name you may want to consider filing a name reservation or a trademark. To determine what is
best for your business, please consult with your attorney.
It is necessary, for the information filed in our oiirce to be current. If your business name, address, or
other information changes, you must file an amendment to your original business papers with this office.
You ma obtain the amendment form and fee information by calling the Public Information Phone Lines
at (612)296-2803.
There is additional information on the reverse side of this letter which may be helpful to you. Once again,
congratulations on starting your business!
Sin rely, Q
Jo �� n Growe
S�retary of State
'AA Equal opportunity Employer Rev. 11/96
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EXHIBIT B
Articles of Incorporation and Bylaws
D:\NEW200\001\CC\COMPANY.DOC B-1 CERTIFICATE OF COMPANY
ARTICLES OF INCORPORATION
OF
REPRISE, INC.
THE UNDERSIGNED, for purposes of forming a corporation under Chapter 302A of the Laws --�
of the State of Minnesota, as amended, does hereby sign and acknowledge these Articles of
Incorporation.
ARTICLE 1.
The name of the Corporation is Reprise, Inc.
ARTICLE II.
The purpose of this Corporation is general business purposes.
ARTICLE III.
Al
This Corporation shall possess all powers necessary to conduct any business in which it is
authorized to engage, including but not limited to all those powers expressly conferred upon
business corporations by Minnesota Statutes, together with those powers necessarily implied
therefrom.
ARTICLE IV.
This Corporation shall have perpetual duration.
030'794
ARTICLE V.
The location and post office address of the registered office of this Corporation in Minnesota is /
3005 Ottawa Avenue, St. Louis Park, Minnesota 55416.
ARTICLE VI.
The total authorized capital of this Corporation is 100,000 shares of common stock, $.01 par
value. There shall be no cumulative voting by the shareholders of the Corporation. The
shareholders of this Corporation shall not have preemptive rights to subscribe for or acquire
securities or rights to purchase securities of any kind, class or series of the Corporation.
ARTICLE VII.
The name and post office address of the incorporator of this Corporation is:
Beth G. Timm
Winthrop & Weinstine, P.A.
3000 Dain Bosworth Plaza
60 South Sixth Street
Minneapolis, Minnesota 55402-4430
ARTICLE VIII.
The names and addresses of the first directors, who shall serve as the directors until the first
annual meeting of shareholders or until their successors are elected and qualified, are as follows:
Robert J. Boisclair
3005 Ottawa Avenue
St. Louis, Park, MN 55416
-2-
ARTICLE IX.
An action required or permitted to be taken at a meeting of the Board of Directors of this
Corporation may be taken by a written action signed, or counterparts of a written action signed
in the aggregate, by all of the directors unless the action need not be approved by the
shareholders of this Corporation, in which case the action may be taken by a written action
signed, or counterparts of a written action signed in the aggregate, by the number of directors
that would be required to take the same action at a meeting of the Board of Directors of this
Corporation at which all of the directors were present.
ARTICLE X.
The personal liability of the directors of this Corporation is hereby eliminated to the fullest
extent permitted by Minnesota Statutes, Section 302A.251, as the same may be amended and
supplemented.
IN WITNESS WHEREOF, the undersigned does hereunto set her hand this 28th day of January,
1997.
Beth G. Timm, Inco or
STATE OF MINt*SOtA
DEPARTMENT OF STATE
FILED
JAN 2 9 199'
/J(A�'y��
M:105700-1 / AW40
'O"w of &* r'�
-3-
BYLAWS
OF
REPRISE, INC.
ARTICLE I.
Offices
Section 1. Registered Office. The registered office of Reprise, Inc., a Minnesota
corporation (the "Corporation") is as provided and designated in the Articles of Incorporation.
The Board of Directors of the Corporation may, from time to time, change the location of the
registered office. On or before the day that such change is to become effective, a certificate of
such change and of the location and post office address of the new registered office shall be filed
with the Secretary of State of the State of Minnesota.
Section 2. Other Offices. The Corporation may establish and maintain such other
offices, within or without the State of Minnesota, as are from time to time authorized by the
Board of Directors.
ARTICLE II.
Meetings of Shareholders
Section 1. Place of Meeting. All meetings of the shareholders of the Corporation shall
be held at the registered office of the Corporation in the State of Minnesota or at such place
within or without the state as may be fixed from time to time by the Board of Directors or by
written consent of all the shareholders entitled to vote thereat.
Section 2. Regular Meetings. The regular meeting of the shareholders shall be held on
such date as the Board of Directors shall by resolution establish. At the regular meeting, the
shareholders shall designate the number of directors to constitute the Board of Directors (subject
to the authority of the Board of Directors thereafter to increase or decrease the number of
directors as permitted by law), shall elect qualified successors for directors who serve for an
indefinite term or whose terms have expired or are due to expire within six months after the date
of the meeting, and shall transact such other business as may properly come before them.
Section 3. Special Meetings. Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, may be
called by the President, Treasurer, any two or more directors, or by a shareholder or
shareholders holding ten percent (10%) or -more of the voting power of all shares entitled to
vote.
Section 4. Notice of Meetings. There shall be mailed to each shareholder, shown by
the books of the Corporation to be a holder of record of voting shares, at his/her address as
shown by the books of the Corporation, a notice setting out the date, time and place of each
regular meeting and each special meeting, except where the meeting is an adjourned meeting and
the date, time and place of the meeting were announced at the time of adjournment, or except
as otherwise permitted by statute. This notice shall be mailed at least five (5) days prior thereto
and no earlier than sixty (60) days prior thereto. However, notice of a meeting at which a plan
or agreement of merger or exchange is to be considered shall be mailed to all shareholders of
record, whether or not entitled to vote at the meeting, not less than fourteen (14) days nor more
than sixty (60) days prior thereto. Every notice of any special meeting called pursuant to this
Section shall state the purpose or purposes for which the meeting has been called, and the
business transacted at all special meetings shall be confined to the purpose stated in the notice.
In addition, the notice of a meeting at which a plan or agreement of merger or exchange is to
be voted upon shall state that a purpose of the meeting is to consider the proposed plan or
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agreement of merger or exchange and a copy or a short description of the plan or agreement of
merger or exchange shall be included in or enclosed with the notice.
Section 5. Waiver of Notice. A shareholder may waive notice of a meeting of
shareholders. A waiver of notice by a shareholder entitled to notice is effective whether given
before, at, or after the meeting, and whether given in writing, orally, or by attendance.
Attendance by a shareholder at a meeting is a waiver of notice of that meeting, except where
the shareholder objects at the beginning of the meeting to the transaction of business because the
meeting is not lawfully called or convened, or objects before a vote on an item of business
because the item may not lawfully be considered at that meeting and does not participate in the
consideration of the item at that meeting.
Section 6. Quorum. Adjourned Meetings. The holders of a majority of the voting power
of the shares entitled to vote shall constitute a quorum for the transaction of business at any
regular or special meeting. In case a quorum shall not be present at a meeting, those present
may adjourn to such day as they shall, by majority vote, agree upon, and a notice of such
adjournment shall be mailed to each shareholder entitled to vote at least five (5) days before such
adjourned meeting. If a quorum is present, a meeting may be adjourned from time to time
without notice other than announcement at the meeting. At adjourned meetings at which a
quorum is present, any business may be transacted which might have been transacted at the
meeting as originally noticed. If a quorum is present when a duly called or held meeting is
convened, the shareholders present may continue to transact business until adjournment, even
though the withdrawal of a number of shareholders originally present leaves less than a quorum.
Section 7. Voting. At each meeting of the shareholders, every shareholder having the
right to vote shall be entitled to vote either in person or by proxy, but no proxy shall be valid
after eleven (11) months unless a longer period is expressly provided for in the appointment.
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Each shareholder, unless the Articles of Incorporation or statute provide otherwise, shall have
one vote for each share having voting power registered in such shareholder's name on the books
of the Corporation. Jointly owned shares may be voted by any joint owner unless the
Corporation receives written notice from any one of them denying the authority of that person
to vote those shares. Upon the demand of any shareholder, the vote upon any question before
the meeting shall be by ballot. All questions shall be decided by a majority vote of the voting
power of the shares present and entitled to vote and represented at the meeting at the time of the
vote except if otherwise required by statute; the Articles of Incorporation, or these Bylaws.
Section 8. Record Date. The Board of Directors may fix a date, not exceeding sixty
(60) days preceding the date of any meeting of shareholders, as a record date for the
determination of the shareholders entitled to notice of, and to vote at, such meeting,
notwithstanding any transfer of shares on the books of the Corporation after any record date so
fixed. If the Board of Directors fails to fix a record date for determination of the shareholders
entitled to notice of, and to vote at, any meeting of shareholders, the record date shall be the
twentieth (20th) day preceding the date of such meeting.
Section 9. Ori-anization of Meetings. Unless a Chairman of the Board has been elected.
at all meetings of the shareholders the President shall act as Chairman, and in his/her absence
any person appointed by the President shall act as Chairman, and the Secretary, or in his/her
absence any person appointed by the Chairman, shall act as Secretary.
Section 10. Action Without a Meeting. Any action which may lawfully be taken at a
shareholders' meeting may be taken without a meeting if authorized by a writing or writings
signed by all of the holders of shares who would be entitled to a notice of a meeting for such
purpose. Such action shall be effective on the date on which the last signature is placed on such
writing or writings, or such earlier effective date as is set forth therein. If any action so taken
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requires a certificate to be filed in the office of the Secretary of State, the officer signing the
same shall state therein that the action was effected in the manner aforesaid.
Section 11. Conference Communications. Any or all shareholders may participate in
and be present at any meeting of the shareholders by any means of communication through
which the shareholders may simultaneously hear each other during such meeting. For the
purposes of establishing a quorum and taking any action at the meeting, such shareholders
participating pursuant to this Section 11 shall be deemed present in person at the meeting, and
the place of the meeting shall be the place of origination of the conference communication.
ARTICLE III.
Board of Directors
Section 1. General Powers. The business and affairs of the Corporation shall be
managed by or under its Board of Directors, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute or by the Articles of
Incorporation or by these Bylaws required to be exercised or done by the shareholders.
Section 2. Number. Oualification and Term of Office. Until the first meeting of
shareholders, the number of directors shall be the number named in the Articles of Incorporation
or, if no such number is named therein, the number elected by the incorporator. Thereafter, the
number of directors shall be established by resolution of the shareholders (subject to the
authority of the Board of Directors to increase or decrease the number of directors as permitted
by law). In the absence of such shareholder resolution, the number of directors shall be the
number last fixed by the shareholders, the Board of Directors, the incorporator or the Articles
of Incorporation. Directors need not be shareholders. Each of the directors shall hold office
until the regular meeting of shareholders next held after such director's election or appointment
and until such director's successor shall have been elected and shall qualify, or until the earlier
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death, resignation, removal, or disqualification of such director; provided, however, that no
director shall be elected to a term in excess of five years.
Section 3. Board Meetings. Meetings of the Board of Directors may be held from time
to time at such time and place within or without the State of Minnesota as may be designated
in the notice of such meeting.
Section 4 CallingMeetinLs: Notice. Meetings of the Board of Directors may be called
by the President by giving at least forty-eight (48) hours' notice, or by any director by giving
at least five (5) days' notice, of the date, time and place thereof to each director by mail,
telephone, telegram or in person.
Section 5. Waiver of Notice. Notice of any meeting of the Board of Directors may be
waived by any director either before, at, or after such meeting orally, in a writing signed by
such director, or by attendance at the meeting. A director, by his/her attendance at any meeting
of the Board of Directors, shall be deemed to have waived notice of such meeting, except where
the director objects at the beginning of the meeting to the transaction of business because the
meeting is not lawfully called or convened and does not participate thereafter in the meeting.
Section 6. Ouorum. A majority of the directors holding office immediately prior to a
meeting of the Board of Directors shall constitute a quorum for the transaction of business at
such meeting. In the absence of a quorum, the majority of the directors present adjourn a
meeting from time to time until a quorum is present. If a quorum is present when a duly called
or held meeting is convened, the directors present may continue to transact business until
adjournment, even though the withdrawal of a number of directors originally present leaves less
than a proportion or number otherwise required for a quorum.
Section 7. Absent Directors. A director may give advance written consent or opposition
to a proposal to be acted on at a meeting of the Board of Directors. If such director is not
0
present at the meeting, consent or opposition to a proposal does not constitute presence for
purposes of determining the existence of a quorum, but consent or opposition shall be counted
as a vote in favor of or against the proposal and shall be entered in the minutes or other record
of action at the meeting, if the proposal acted on at the meeting is substantially the same or has
substantially the same effect as the proposal to which the director has consented or objected.
Section 8. Conference Communications. Any or all directors may participate in and be
present at any meeting of the Board of Directors, or of any duly constituted committee thereof,
by any means of communication through which the directors may simultaneously hear each other
during such meeting. For the purposes of establishing a quorum and taking any action at the
meeting, such directors participating pursuant to this Section S shall be deemed present in person
at the meeting, and the place of the meeting shall be the place of origination of the conference
communication.
Section 9. Vacancies: Newly Created Directorships. Vacancies in the Board of
Directors of this Corporation resulting from the death, resignation, removal or disqualification
of a director may be filled for the unexpired term by the affirmative vote of a majority of the
remaining directors of the Board, although less than a quorum; newly created directorships
resulting from an increase in the authorized number of directors by action of the shareholders
or by action of the Board of Directors as permitted by Section 2 may be filled by a majority of
the directors serving at the time of such increase; and each director elected or appointed pursuant
to this Section 9 shall be a director until such director's successor is elected by the shareholders
at their next regular or special meeting.
Section 10. Removal. Any or all of the directors may be removed from office at any
time, with or without cause, by the affirmative vote of the shareholders holding a majority of
the shares entitled to vote at an election of directors except, as otherwise provided by Minnesota
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Statutes Section 302A.223, as amended, when the shareholders have the right to cumulate their
votes. A director named by the Board of Directors to fill a vacancy may be removed from
office at any time, with or without cause, by the affirmative vote of a majority of the remaining
directors if the director was named by the Board to fill the vacancy and the shareholders have
not elected directors in the interim between the time of the appointment to fill such vacancy and
the time of the removal. In the event that the entire Board or any one or more directors be so
removed, new directors shall be elected at the same meeting.
Section 11. Committees. A resolution approved by the affirmative vote of a majority
of the Board of Directors may establish committees having the authority of the Board in the
management of the business of the Corporation to the extent provided in the resolution. A
committee shall consist of one or more persons, who need not be directors, appointed by
affirmative vote of a majority of the directors present. Committees may include a special
litigation committee consisting of one or more independent directors or other independent
persons to consider legal rights or remedies of the Corporation and whether those rights and
remedies should be pursued. Committees other than special litigation committees and
committees formed pursuant to Section 302A.673, Subdivision 1(d), are subject to the direction
and control of, and vacancies in the membership thereof shall be filled by, the Board of
Directors.
A majority of the members of the committee present at a meeting is a quorum for the
transaction of business, unless a larger or smaller proportion or number is provided in a
resolution approved by the affirmative vote of a majority of the directors present.
Section 12. Written Action. An action required or permitted to be taken at a meeting
of the Board of Directors may be taken by written action signed by all of the directors unless
the action need not be approved by the shareholders and the Articles of Incorporation so provide,
H
in which case the action may be taken by written action signed by the number of directors that
would be required to take the same action at a meeting of the Board of Directors at which all
directors were present. The written action is effective when signed by the required number of
directors, unless a different effective time is provided in the written action. When written action
is permitted to be taken by less than all directors, all directors shall be notified immediately of
its text and effective date. Failure to provide the notice does not invalidate the written action.
A director who does not sign or consent to the written action has no liability for the action or
actions taken thereby.
Section 13. Resignations. Any director of the Corporation may resign at any time by
giving written notice to the Secretary of the Corporation. Such resignation shall take effect at
the date of the receipt of such notice, or at any later time specified therein, and, unless otherwise
specified therein, the acceptance of suchIresignation shall not be necessary to make it effective.
Section 14. Compensation of Directors. By resolution of the Board of Directors, each
director may be paid his/her expenses, if any, of attendance at each meeting of the Board of
Directors, and may be paid a stated amount as director or a fixed sum for attendance at each
meeting of the Board of Directors, or both. No such payment shall preclude a director from
serving the Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed, pursuant to resolution by the Board of
Directors, like compensation for attending committee meetings.
ARTICLE IV.
Officers
Section 1. Number. The officers of the Corporation shall be chosen by the Board of
Directors and shall include a President and a Treasurer. The Board of Directors may also
choose a Secretary, one or more Vice Presidents, and one or more Assistant Secretaries and
0
Assistant Treasurers. Any number of offices may be held by the same person. If a document
must be signed by persons holding different offices or functions and a person holds or exercises
more than one of these offices or functions, that person may sign the document in more than one
capacity, but only if the document indicates each capacity in which the person signs.
Section 2. Election Term of Office and Oualifications. The Board of Directors shall
elect or appoint, by resolution approved by the affirmative vote of a majority of the directors
present, from within or without their number, the President, Secretary and Treasurer and such
other officers as may be deemed advisable, each of whom shall have the powers, rights, duties,
responsibilities, and terms in office provided for in these Bylaws or a resolution of the Board
of Directors not inconsistent therewith. The President and all other officers who may be
directors shall continue to hold office until the election and qualification of their successors,
notwithstanding an earlier termination of their directorship.
Section 3. Removal and Vacancies. Any officer may be removed from his/her office
by the Board of Directors at any time, with or without cause. Such removal, however, shall be
without prejudice to the contract rights of the person so removed. If there be a vacancy among
the officers of the Corporation by reason of death, resignation, removal, disqualification, or
otherwise, such vacancy shall be filled for the unexpired term by the Board of Directors.
Section 4. Chairman of the Board. The Chairman of the Board, if one is elected, shall
preside at all meetings of the shareholders and directors and shall have such other duties as may
be prescribed, from time to time, by the Board of Directors,
Section 5. President. The President or Chief Executive Officer, as the case may be,
(hereafter the "President") shall be the chief executive officer of the Corporation and shall have
general active management of the business of the Corporation. In the absence of the Chairman
of the Board, or if no Chairman of the Board is elected, the President shall preside at all
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meetings of the shareholders and directors. He/She shall see that all orders and resolutions of
the Board of Directors are carried into effect. He/She shall execute and deliver, in the name
of the Corporation, any deeds, mortgages, bonds, contracts or other instruments pertaining to
the business of the Corporation unless the authority to execute and deliver is required by law to
be exercised by another person or is expressly delegated by the Articles or Bylaws or by the
Board of Directors to some other officer or agent of the Corporation. He/She shall maintain
records of and, whenever necessary, certify all proceedings of the Board of Directors and the
shareholders, and shall perform all duties usually incident to the office of the President. He/She
shall have such other duties as may, from time to time, be prescribed by the Board of Directors.
Section 6. Vice President. Each Vice President, if one or more are elected, shall have
such powers and shall perform such duties as may be specified in the Bylaws or prescribed by
the Board of Directors or by the President. In the event of the absence or disability of the
President, Vice Presidents shall succeed to his/her power and duties in the order designated by
the Board of Directors.
Section 7. Secre . The Secretary, if one is elected, shall be secretary of and shall
attend all meetings of the shareholders and Board of Directors and shall record all proceedings
of such meetings in the minute book of the Corporation. He/She shall give proper notice of
meetings of shareholders and directors. He/She shall perform such other duties as may be
prescribed from time to time by the Board of Directors or by the President.
Section 8. Assistant Secretary. The Assistant Secretary, if any, or if there be more than
one (1), the Assistant Secretaries in the order determined by the Board of Directors, shall, in
the absence or disability of the Secretary, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
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Section 9. Treasurer. The Treasurer or Chief Financial Officer, as the case may be,
(hereafter the "Treasurer") shall be the chief financial officer of the Corporation and shall keep
accurate financial records for the Corporation. He/She shall deposit all moneys, drafts and
checks in the name of, and to the credit of, the Corporation in such banks and depositaries as
the Board of Directors shall designate from time to time. He/She shall have power to endorse
for deposit all notes, checks and drafts received by the Corporation and make proper vouchers
therefor. He/She shall disburse the funds of the Corporation, as ordered by the Board of
Directors, making proper vouchers therefor. He/She shall render to the President and the
directors, whenever requested, an account of all his/her transactions as Treasurer and of the
financial condition of the Corporation, and shall perform such other duties as may be prescribed
from time to time by the Board of Directors or by the President.
Section 10. Assistant Treasurer. The Assistant Treasurer, or if there shall be more than
one (1), the Assistant Treasurers in the order determined by the Board of Directors, shall, in the
absence or disability of the Treasurer, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such powers as the Board of Directors
may from time to time prescribe.
Section 11. Compensation. The officers of the Corporation shall receive such
compensation for their services as may be determined, from time to time, by resolution of the
Board of Directors.
ARTICLE V.
Certificates of Stock
Section 1. Certificates of Stock. All shares of the Corporation shall be certificated
shares. Every holder of stock in the Corporation shall be entitled to have a certificate signed
by or in the name of the Corporation by the President or a Vice President, and the Secretary or
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an Assistant Secretary, of the Corporation, certifying the number of shares owned by him/her
in the Corporation. The certificates of stock shall be numbered in the order of their issue.
Section 2. Issuance of Shares. The Board of Directors is authorized to cause to be
issued shares of the Corporation up to the full amount authorized by the Articles of
Incorporation in such amounts as may be determined by the Board of Directors and as may be
permitted by law. No shares shall be issued except in consideration of cash or other property,
tangible or intangible, received or to be received by the Corporation under a written agreement,
or services rendered or to be rendered to the Corporation under a written agreement, as
authorized by resolution(s) approved by the affirmative vote of a majority of the directors
present, or approved by the affirmative vote of the holders of a majority of the voting power of
the shares present, valuing all non -monetary consideration and establishing a price in money or
other consideration, or a minimum price, or a general formula or method by which the price will
be determined.
Section 3. Facsimile Si nag tures. Where a certificate is signed (1) by a transfer agent
or an assistant transfer agent, or (2) by a transfer clerk acting on behalf of the Corporation and
a registrar, the signature of any such President, Vice President, Secretary or Assistant Secretary
may be facsimile. In case any officer or officers who have signed, or whose facsimile signature
or signatures have been used on any such certificate or certificates, shall cease to be such officer
or officers of the Corporation before such certificate or certificates have been delivered by the
Corporation, such certificate or certificates may nevertheless be used by the Corporation and be
issued and delivered as though the person or persons who signed such certificate or certificates
or whose facsimile signature or signatures have been used thereon had not ceased to be such
officer or officers of the Corporation.
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Section 4. Lost or DestroXeed Certificates. Except as otherwise provided by Minnesota
Statutes, Section 302A.419, any shareholder claiming a certificate for shares to be lost, stolen
or destroyed shall make an affidavit of that fact in such form as the Board of Directors shall
require and shall, if the Board of Directors so requires, give the Corporation a bond of
indemnity in form, in an amount, and with one or more sureties satisfactory to the Board of
Directors, to indemnify the Corporation against any claim which may be made against it on
account of the reissue of such certificate, whereupon a new certificate may be issued in the same
tenor and for the same number of shares as the one alleged to have been lost, stolen or
destroyed.
Section 5. Transfers of Stock. Upon surrender to the Corporation or the transfer agent
of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence
of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue
a new certificate to the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 6. Registered Shareholders. The Corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to receive dividends,
and to vote as such owner, and to hold liable for calls and assessments a person registered on
its books as the owner of shares, and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise provided by the laws of
Minnesota.
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ARTICLE VI.
Indemnification of Certain Persons
Section 1. The Corporation shall indemnify such persons, for such expenses and
liabilities, in such manner, under such circumstances, and to such extent as permitted by
Minnesota Statutes Section 302A.521, as now enacted or hereafter amended, or any successor
or supplementary law or statute.
ARTICLE VII.
Books and Records
Section 1. Share Re i@ ster. The Board of Directors of the Corporation shall cause to be
kept at its principal executive office, or at another place or places within the United States
determined by the Board:
(1) a share register not more than one year old, containing the names and addresses
of the shareholders and the number and classes of shares held by each shareholder; and
(2) a record of the dates on which certificates or transaction statements representing
shares were issued.
Section 2. Other Books and Records. The Board of Directors shall cause to be kept at
its principal executive office, or, if its principal executive office is not in Minnesota, shall make
available at its registered office within ten days after receipt by an officer of the Corporation of
a written demand for them made by a shareholder or other person authorized by Minnesota
Statutes Section 302A.461, originals or copies of:
15-
(1) records of all proceedings of shareholders for the last three years;
(2) records of all proceedings of the Board for the last three years;
(3) its Articles and all amendments currently in effect;
(4) its Bylaws and all amendments currently in effect;
(5) financial statements required by Minnesota Statutes, Section 302A.463, and the
financial statement for the most recent interim period prepared in the course of the
operation of the Corporation for distribution to the shareholders or to a governmental
agency as a matter of public record;
(6) reports made to shareholders generally within the last three years;
(7) a statement of the names and usual business addresses of its directors and
principal officers; and
(8) any shareholder voting trust or control agreements of which the Corporation is
aware.
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ARTICLE VIII.
Loans, Guarantees, Suretyship
Section 1. The Corporation may lend money to, guarantee an obligation of, become a
surety for, or otherwise financially assist a person if the transaction, or a class of transactions
to which the transaction belongs, is approved by the affirmative vote of a majority of the
directors present and:
(1) is in the usual and regular course of business of the Corporation;
(2) is with, or for the benefit of, a related corporation, an organization in which the
Corporation has a financial interest, an organization with which the Corporation has a
business relationship, or an organization to which the Corporation has the power to make
donations;
(3) is with, or for the benefit of, an officer or other employee of the Corporation or
a subsidiary, including an officer or employee who is a director of the Corporation or
a subsidiary, and may reasonably be expected, in the judgment of the Board, to benefit
the Corporation; or
(4) has been approved by either (a) the affirmative vote of the holders of two-thirds
voting power of the shares entitled to vote which are owned by persons other than the
interested person or persons, or (b) the unanimous affirmative vote of the holders of all
outstanding shares; whether or not entitled to vote.
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The loan, guarantee, surety contract or other financial assistance may be with or without
interest, and may be unsecured or may be secured in any manner, including, without limitation,
a pledge of or other security interest in shares of the Corporation. Nothing in this Section shall
be deemed to deny, limit, or restrict the powers of guaranty or warranty of the Corporation at
common law or under a statute of the State of Minnesota.
ARTICLE IX.
General Provisions
Section 1. Dividends. Subject to provisions of applicable law and the Articles of
Incorporation, dividends upon the capital stock of the Corporation may be declared by the Board
of Directors at any regular or special meeting, and may be paid in cash, in property, or in shares
of the capital stock.
Section 2. Record Date. Subject to any provisions of the Articles of Incorporation, the
Board of Directors may fix a date not exceeding one hundred twenty (120) days preceding the
date fixed for the payment of any dividend as the record date for the determination of the
shareholders entitled to receive payment of the dividend and, in such case, only shareholders of
record on the date so fixed shall be entitled to receive payment of such dividend notwithstanding
any transfer of shares on the books of the Corporation after the record date.
Section 3. Annual Statement. The Board of Directors shall present at any regular or
special meeting of the shareholders when called for by vote of the shareholders, a full and clear
statement of the business and condition of the Corporation.
Section 4 Checks. All checks or demands for money and notes of the Corporation shall
be signed by such officer or officers or such other person or persons as the Board of Directors
may from time to time designate.
9"
Section 5. Fiscal Year. The fiscal year of the Corporation shall be fixed or changed by
resolution of the Board of Directors.
Section 6. Seal. The Corporation shall have no corporate seal.
ARTICLE X.
Amendments
Section 1. Subject to the right of the shareholders of the Corporation to adopt or amend
these Bylaws as provided by Minnesota Statutes, Section 302A.181, these Bylaws may be
amended or altered by a vote of the majority of the whole Board of Directors at any meeting
provided that notice of such proposed amendment shall have been given in the notice given to
the directors of such meeting. However, the Board of Directors shall not make or alter any
Bylaws fixing a quorum for meetings of shareholders, prescribing procedures for removing
directors or filling vacancies in the Board of Directors, or fixing the number of directors or their
classifications, qualifications, or terms of office, except that the Board of Directors may adopt
or amend any Bylaw to increase their number.
ARTICLE XI.
Securities of Other Corporations
Section 1. Voting Securities Held by the Corporation. Unless otherwise ordered by the
Board of Directors, the President shall have full power and authority on behalf of the
Corporation to purchase, sell, transfer or encumber any and all securities of any other
corporation owned by the Corporation, and may execute and deliver such documents as may be
necessary to effectuate such purchase, sale, transfer or encumbrance. The Board of Directors
may, from time to time, confer like powers upon any other person or persons.
M: 105699-1
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EXHIBIT C
Resolution of General Partner
D:WEW200\001\CC\COMPANY.DOC C -I CERTIFICATE OF COMPANY
CONSENT RESOLUTIONS OF THE GENERAL PARTNER
OF
REPRISE ASSOCIATES LIMITED PARTNERSHIP
The undersigned, Reprise, Inc., a Minnesota corporation, the general partner (the "General
Partner") of Reprise Associates Limited Partnership, a Minnesota limited partnership (the
"Partnership"), effective as of the 1st day of March, 1997, hereby adopts the resolutions set
forth below:
WHEREAS, the Partnership has an opportunity to enter into a transaction involving the issuance
and sale of $1,650,000 of Multifamily Housing Revenue Bonds for the Park Acres Apartments
Project (the "Project") in New Hope, Minnesota (the "Bond Transaction"); and
WHEREAS, the General Partner agrees that it is in the best business and pecuniary interests
of the Partnership to enter into the Bond Transaction;
WHEREAS, in connection with the Bond Transaction, the Partnership must enter into the
following agreements, as well as an Exchange Agreement with BNR Partners, dated as of March
27, 1997, with respect to obtaining the Project:
(i) The Loan Agreement between the City of New Hope and the Partnership, dated
as of March 1, 1997 (the "Loan Agreement');
s
(ii) The Bond Exchange Agreement by and among the Partnership, the City of New
Hope, and Piper Jaffray Inc., dated as of March 20, 1997 (the "Bond Exchange
Agreement");
(iii) The Remarketing Agreement by and among the Partnership, Norwest Bank
Minnesota, National Association, and Piper Jaffray Inc., dated as of March 1,
1997 (the "Remarketing Agreement")
(iv) The Regulatory Agreement among the City of New Hope, Norwest Bank
Minnesota, National Association, and the Partnership, dated as of March 1, 1997
(the "Regulatory Agreement"); and
(v) Any and all other documents, agreements and certificates required to enable the
Bond Transaction to occur.
The above listed documents are collectively referred to hereinafter as the 'Bond Transaction
Documents".
NOW, THEREFORE, BE IT RESOLVED, that the Partnership is hereby authorized to enter
into the Bond Transaction.
FURTHER RESOLVED, that Robert Boisclair, the President of Reprise, Inc., acting as agent
of the Partnership and as the President of the general partner of the Partnership, alone be and
hereby is authorized and directed to approve, execute, deliver and perform the following
instruments and agreements:
1. The Loan Agreement;
2. The Bond Purchase Agreement;
3. The Remarketing Agreement;
4. The Regulatory Agreement;
5. The Limited Offering Memorandum describing the terms of the bonds;
6. The Investment Agreement with the Investment Agreement Provider;
7. Any and all other documents, agreements and certificates required to enable the
Bond Transaction to occur; and
8. The Exchange Agreement.
FURTHER RESOLVED, that the foregoing resolutions are in addition to, and do not limit and
shall not be limited by, any resolutions heretofore or hereafter adopted by the Partnership for
the conduct of the business necessary to enable the Bond Transaction to occur; and the foregoing
resolutions shall continue in force until express written notice of their prospective rescission or
modification, as to future transactions not been undertaken or committed for, has been received.
FURTHER RESOLVED, that any and all transactions by or on behalf of the Partnership prior
to the adoption of these resolutions be and the same hereby are in all respects ratified, approved
and confirmed.
IN WITNESS WHEREOF, the undersigned has signed these Consent Resolutions of the
General Partner as of the date and year first above written, which shall be the effective date
hereof.
REPRISE, INC.
General Partner of Reprise Associates Limited Partnership
LIM
heLS: 1145221
Its:
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TAX CERTIFICATE OF COMPANY
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
Reprise Associates Limited Partnership, a Minnesota limited partnership (the
"Company"), DOES HEREBY CERTIFY TO the City of New Hope, Minnesota (the "Issuer") as
follows:
1. The Issuer is issuing its Multifamily Housing Revenue Bonds (Park Acres
Apartments Project), Series 1997 (the 'Bonds") in the aggregate principal amount of $1,650,000
in order (i) to finance the acquisition and rehabilitation the Company of an existing multifamily
housing development located in the City of New Hope, Minnesota, known as the Park Acres
Apartments Project, a 41 -unit townhome and apartment housing development for families (the
'Project"), and (ii) to pay certain expenses incurred in connection with the issuance of the Bonds.
2. Robert J. Boisclair, the President of Reprise, Inc. (the "General Partner") which is
the General Partner of the Company is authorized to execute and deliver this Tax Certificate on
behalf of the Company.
3. The General Partner has supervision aad control of the financial affairs of the
Company and the undersigned is familiar with the books and records of the Company and
maintains them under its supervision and control.
4. The Company has duly authorized the execution, delivery, and due performance
of the following documents: the Loan Agreement dated March 1, 1997 (the "Loan Agreement"),
executed by the Issuer and the Company; the Regulatory Agreement dated March 1, 1997 (the
"Regulatory Agreement"), executed by the Issuer, the Company and Norwest Bank Minnesota,
National Association (the "Trustee"); the Investment Agreement dated March 27, 1997 (the
"Investment Agreement'), executed by the Trustee, Bayerische Landesbank Girozentrale and the
Company; the Remarketing Agreement dated as of March 1, 1997 (the "Remarketing
Agreement'), executed by the Company, the Trustee and Piper Jaffray Inc. as the remarketing
agent; and the Bond Purchase Agreement dated March 1, 1997, executed by the Issuer, Piper
Jaffray Inc. (the "Underwriter") and the Company (collectively, the "Company Documents"), and
any and all other documents and certificates as may be required to be executed and delivered by
the Company in order to carry out the transactions contemplated thereby. Each of said
documents has been duly signed, acknowledged, and delivered on behalf of the Company by one
or more of its officers.
5. To the best knowledge of the Company, no default or Event of Default under the
Company Documents has occurred which is continuing and no event has occurred which with the
giving of notice or the passage of time would constitute a default under the Company
Documents.
D:\NEW200\00VCC\TAX.DOC I TAX CERTIFICATE OF COMPANY
6. The Company is duly authorized to operate the Project under the laws, rulings,
regulations, and ordinances of the State of Minnesota and the departments, agencies, and political
subdivisions thereof; the Company has obtained or will obtain in a timely manner all requisite
approvals of the State of Minnesota and other federal, state, regional, and local governmental
bodies for the operation of the Project; and the Project is and will be in compliance with
applicable federal, state, and local zoning, subdivision, environmental, pollution control, and
building laws, regulations, codes, and ordinances (other than immaterial non-compliance which
will not impair the operation of the Project).
7. The Project has been designed for rental primarily to low and moderate income
persons and families, and will be operated by the Company in accordance with each of the terms
and conditions of the Regulatory Agreement. All representations of the Company made in the
Loan Agreement and the Regulatory Agreement are reaffirmed as of the date hereof as if fully set
forth herein.
8. This Tax Certificate is made to induce the sale and delivery of the Bonds, the
statements herein are deemed representations of the Company as to the facts recited therein.
9. The Bonds are issued pursuant to Section 142(d) of the Internal Revenue Code of
1986, as amended (the "Code"). Substantially all (at least 95%) of the net proceeds of the Bonds
will be used to provide a qualified rental project, as defined in Section 142(d)(1) of the Code.
Less than 25 percent of the net proceeds of the Bonds will be used for the acquisition of land.
10. The total estimated costs of financing the Project are as shown on Exhibit A
hereto, which estimates are reasonable on the date hereof and will be reasonable upon issuance of
the Bonds by the Issuer. Within 2 years following the date of acquisition of the Project, the
Company will cause to be made "rehabilitation expenditures", as defined in Section 147(d) of the
Code with respect to the Project in an amount equal to not less than 15 percent of the portion of
the cost of acquiring the building or buildings which constitute the Project, financed with net
proceeds of the Bonds. The rehabilitation expenditures will not be less than $160,000.
11. The standard industrial classification applicable to the costs of the Project is 6513.
12. No more than two percent (2%) of the sale proceeds of the Bonds will be used to
pay costs of issuing the Bonds.
13. No portion of the proceeds of the Bonds are to be used for any use prohibited by
Section 147(e) of the Code, including any airplane, skybox or other private luxury box, health
club facility, facility primarily used for gambling or a store the principal business of which is the
sale of alcoholic beverages for consumption off premises. The Company does not expect to sell
or otherwise dispose of the Project during the term of the Bonds.
14. The average reasonably expected economic life of the Project, and all components
thereof, which is being financed with the proceeds of the Bonds, is more than 30 years. The
average maturity of the Bonds, which is 26.104 years, does not exceed by more than 120 percent
the average reasonably expected economic life of the Project.
D:,NEW2W001'C0TAX. DOC 2 TAX CERTIFICATE OF COMPANY
15. No person who was a "substantial user" (as defined in Section 147(a) of the Code)
of the Project at any time during the five (5) year period preceding the date hereof, and who will
be a substantial user of the Project at any time during the five (5) year period following the date
thereof, will receive, directly or indirectly, proceeds of the Bonds in an amount equal to five
percent (5%) or more of the fact amount of the Bonds (in payment for his interest in the Project
or otherwise).
16. The Company will not acquire any portion of the Project from anyone who will be
a principal user of the Project or from any "related person" as (defined in Section 147(a) of the
Code) to any such principal users.
17. No portion of the Project is located outside of the geographical boundaries of the
Issuer.
18. The Company will cause the rebate required to be paid in connection with the
Bonds to be computed and shall cause rebate to be paid to the United States of America as
required in the Loan Agreement.
19. To the best of knowledge, information and belief of the undersigned, there are no
other facts, estimates or circumstances that would materially change any of the foregoing
certifications. The representations contained in this Certificate are made for the benefit of the
Issuer, the Trustee, the purchasers of the Bonds, Bond Counsel, and others, and may be relied
upon by the Issuer, the Trustee, and purchaser of any Bond, Bond Counsel and others in
determining whether or not the bonds constitute "arbitrage bonds" within the meaning of Section
148 of the Code and whether or not the interest on the Bonds is subject to income taxation by the
United States or the State of Minnesota under existing statutes, regulations and decisions.
20. The information on the "Information Return for Private Activity Bond Issues"
(Form 8038) prepared for the Bonds is true and correct in all respects.
21. The facts, estimates and expectations contained in the Arbitrage Certificate have
been provided to the Issuer by the Company and to the best of the undersigned's knowledge,
information and belief, the facts contained in the Arbitrage Certificate are true and correct and
the estimates and expectations contained in the Arbitrage Certificate are reasonable.
D.\NE W 200001,CCITAXDOC 3 TAX CERTIFICATE OF COMPANY
IN WITNESS WHEREOF, the undersigned have executed this Tax Certificate on
March J-17-1 1997.
REPRISE ASSOCIATES LIMITED
PARTNERSHIP
By Reprise, Inc.
Its General Partner
By,
is Presi
D: WEW200\001\CC\TAX.DOC 4 TAX CERTIFICATE OF COMPANY
EXHIBIT A
Estimated Sources and Uses of Funds
Sources
Bond Proceeds
$1,650,000
MHFA Reserves
321,700
Taxable Debt
54,500
TOTAL
$2,026,200
Uses
Acquisition
$1,540,200
Rehabilitation'
160,000
Costs of Issuance
120,000
Reserves
132,000
Real Estate Related Costs
74,000
TOTAL
$2,026,200
'Required rehabilitation expenditures, which may be advanced in part by the seller of the
Project and repaid as additional acquisition price.
D:WEW200\001\CC\TAX.DOC A -i TAX CERTIFICATE OF COMPANY
M: 1135791 EXCHANGE AGREEMENT
THIS AGREEMENT is made as of March 27, 1997, by and between BNR Partners, a
Minnesota limited partnership ("Seller"), and Reprise Associates Limited Partnership, a
Minnesota limited partnership ("Buyer").
RECITALS
A. Seller is the owner of a certain tract or parcel of land and all improvements, including
without limitation the 41 -unit rental housing development situated thereon, commonly known as
"Park Acres Apartments" located in the City of New Hope, County of Hennepin, State of
Minnesota, and legally described on Exhibit A attached hereto and made a part hereof, together
with all right, title and interest appurtenant thereto (the "Real Property"), all of the personal
property owned by Seller and located in or about the Real Property, including without limitation,
the personal property described on Exhibit C attached hereto and made a part hereof (the
"Personal Property"), the reserve account(s) relating to the Real Property and held by the
Minnesota Housing Finance Agency (the "MHFA") for residual receipts, development costs,
replacement costs, and painting and decorating, with balances estimated to total $321,700 (the
"Accounts"), and the lessor's interest in all of the leases described on the rent roll attached
hereto as Exhibit D ("Leases"). The Real Property, the Personal Property, the Accounts and
the Leases are hereinafter collectively referred to as the "Property".
B. Seller desires to transfer the Property to Buyer in a transaction qualifying as an exchange
of like -kind property for non -recognition of gain under Section 1031 of the Internal Revenue
Code of 1986, as amended (the "Code").
C. Buyer desires to acquire the Property from Seller and agrees to cooperate with Seller in
the identification, transfer and exchange to Seller of property which qualifies as an exchange of
like -kind property within the meaning of Section 1031 of the Internal Revenue Code of 1986,
as amended.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Definitions.
1.1 Exchange Properties means the like -kind properties to be transferred to
Seller in exchange for the Property being transferred by Seller to Buyer in a transaction
qualifying for non -recognition of gain under Section 1031 of the Code.
1.2 Identification Period means the period beginning on the Date of Closing
and ending 45 days thereafter.
1.3 Exchange Period is defined as the period beginning on the Date of Closing
and ending on the earlier of 180 days thereafter or on the due date (including extensions) for
Seller's income tax return for the taxable year in which the Date of Closing occurs.
1.4 Oualified Escrow Account means an escrow account established at or
before the Date of Closing with an escrow holder or escrow agent who is not Seller or a related
party, and which shall be established in such a manner as to permit Seller to qualify for a
deferred exchange of Exchange Property.
2. Purchase Price and Manner of Payment. The total purchase price ("Purchase Price") to
be paid for the Property shall be One Million Five Hundred Forty Thousand Two
Hundred and 00/100 Dollars ($1,540,200.00) and shall be payable on the Date of Closing
as follows:
2.1 Approximately $54,500.00 in the form of a promissory note amortized over 15
years, bearing interest at the rate of not less than 7% per annum and otherwise
containing such terms and conditions as are mutually acceptable to Buyer and
Seller (the "Note").
2.2 Approximately $1,485,700.00 by cash, wire transfer or other immediately
available funds, which funds shall be paid directly to the Qualified Escrow
Account on the Date of Closing.
3. Identification of Exchange Properties.
3.1 Identification. The initial Exchange Property is identified on Exhibit B attached
hereto and made a part hereof. On or before the expiration of the Identification
Period, Seller shall identify to Buyer the additional Exchange Properties in
writing or writings executed by Seller and delivered to Buyer for acceptance by
Buyer prior to for acceptance by Buyer prior to expiration of the Identification
Period.
3.2 Application of Funds in Qualified Escrow Account. In the event that Seller has
identified an Exchange Property, Buyer shall proceed to purchase the Exchange
Property in accordance with the terms and conditions of a purchase agreement
between Buyer and the owner of the Exchange Property. Funds held in the
Qualified Escrow Account shall be disbursed to pay for the Exchange Properties
from time to time in respect of each of the Exchange Properties so purchased.
In the event the funds held in the Qualified Escrow Account are insufficient to
complete the purchase of all of the Exchange Properties, Seller shall pay the
difference in cash or otherwise. In the event the funds held in the Qualified
Escrow Account exceed the aggregate purchase price of the Exchange Properties,
the balance of funds held in the Qualified Escrow Account shall be delivered to
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Seller promptly following the date the last Exchange Property is purchased by
Buyer.
3.3 Obligations of Buye . Buyer agrees to take any action deemed by Seller to be
necessary or advisable in connection with the like -kind exchanges contemplated
by this Exchange Agreement, provided that Buyer shall not be required to expend
any amount in excess of the amounts specified in this Exchange Agreement.
Buyer (or third party sellers as set forth in Section 3.4 hereof) shall transfer each
Exchange Property purchased pursuant to this Exchange Agreement to Seller
either by quit claim deed or by assigning to Seller all of the Buyer's interests in
the binding purchase agreements for the Exchange Properties, which agreements
shall by their terms be assignable.
3.4 Transfer of Exchange Properties. To effectuate the transfer of the Exchange
Properties from an independent third party owner to Seller, Buyer is authorized
to direct such third party seller to deed the Exchange Properties directly to Seller
without the joinder of Buyer, provided that such direction shall not prevent the
rendering of the opinion acceptable to Seller as required by Section 5 hereof, in
which event Buyer shall first acquire the Exchange Properties and thereafter deed
the Exchange Properties to Seller.
4. Failure to Identify Exchange Properties or to Complete Exchanges. In the event Seller
does not identify Exchange Properties within the Identification Period or Buyer does not
complete the purchase of the Exchange Properties within the Exchange Period, all funds held
in the Qualified Escrow Account (including interest and less expenses) shall be disbursed to
Seller in payment of the balance of the Purchase Price.
5. Conditions to Seller's Performance. This Exchange Agreement and Seller's obligations
hereunder shall be conditioned, for the sole benefit of Seller, upon the following:
5.1 Buyer's Performance. Buyer shall have performed all of its covenants, duties
and obligations under this Exchange Agreement.
5.2 Opinion of Seller's Tax Counsel. Seller shall have received a favorable opinion
of its tax counsel regarding the tax consequences to Seller as a result of the sale
of the Property including, without limitation, confirmation that Seller's partners
shall be entitled to the benefit of a like -kind exchange as provided by Section
1031 of the Code.
6. Conditions to Buyer's Performance. This Exchange Agreement and Buyer's obligations
hereunder shall be conditioned, for the sole benefit of Buyer, upon the following:
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6.1 Representations and Warranties. The representations and warranties of Seller
contained in this Agreement must be true now and on the Date of Closing as if
made on the Date of Closing.
6.2 Title. Title shall have been found acceptable, or been made acceptable, in
accordance with the requirements and terms of Section 10 below.
6.3 Access and Inspection. Seller shall have allowed Buyer, and Buyer's agents,
access to the Real Property without charge and at all reasonable times for the
purpose of Buyer's investigation and testing the same. Seller shall make available
to Buyer and Buyer's agents without charge all plans and specifications, records,
inventories, permits and correspondence in Seller's possession relating to
Hazardous Substances affecting the Property; and the right to interview employees
of Seller who may have knowledge of such matters. Buyer shall have been
satisfied with the results of all tests and investigations performed by it.
6.4 Document Review. Buyer shall have determined, on or before the Contingency
Date, that it is satisfied with its review and analysis of the Leases, a current rent
roll and list of security deposits, listing names of all tenants, commencement and
termination dates of the Leases and monthly rental amounts certified by Seller to
Buyer to be true and accurate in all respects as well as all maintenance, service,
management or utility contracts relating to the operation of the Property (the
"Property Agreements") and all plans, building permits and certificated of
occupancy with respect to the Property or any part thereof (the "Plans, Licenses
and Permits"). Seller shall deliver to Buyer copies of all such documents for
review on or before December 31, 1997.
6.5 Government Approvals. Buyer shall have obtained at its sole cost and expense,
on or before the Date of Closing, all final governmental approvals necessary in
Buyer's judgment in order to make the use of the Property which Buyer intends,
including but not limited to the MHFA and the Department of Housing and Urban
Development ("HUD"). Seller shall cooperate in all reasonable respects with
Buyer in obtaining such approvals, and shall execute such applications, permits
and other documents as may be reasonably required in connection therewith.
6.6 Financine. Buyer shall have received, on or before the Date of Closing, the
proceeds of financing necessary and sufficient, in Buyer's opinion, to implement
Buyer's plans for and complete the purchase of the Property.
6.7 Environmental Assessment. At Buyer's sole cost and expense, Buyer shall have
obtained and be satisfied with, in Buyer's sole discretion, a Phase I
Environmental Site Assessment of the Property in accordance with the Minnesota
Pollution Control Agency Voluntary Investigation and Cleanup Guidance
Document X18.
0
6.8 Refinancing: Approvals. Buyer shall have refinanced the project by payoff of the
existing MHFA mortgage through the issuance of Minnesota tax exempt revenue
bond financing. Buyer shall have received all necessary approvals from the City
of New Hope and the State of Minnesota regarding necessary bond allocations
and the MHFA and all state and federal offices of HUD must have approved all
aspects of the sale, including the Assignment of any Housing Assistance Payment
Contract ("HAP Contract(s)").
6.9 Rehabilitation. The Seller shall have caused the rehabilitation work listed on
Exhibit E ("Rehabilitation") to occur on or before the Date of Closing. .Buyer
agrees to reimburse Seller at Closing for all costs incurred in connection with
such Rehabilitation, which the parties reasonably estimate will total $160,000.
Buyer shall have had the right to enter upon the Property at all reasonable times
to inspect and/or direct the rehabilitation and its progress. All change orders
shall have been delivered to Buyer for its written approval prior to
implementation.
6.10 Credit Enhancement. The Buyer shall have obtained a federal or state guarantee
of the Buyer's financial obligations with respect to the bond financing.
6.11 Notification of Limited Partners. The general partner of the Seller shall have
notified the limited partners of the Seller of the general partner's intention to
execute this Agreement at least 15 days prior to the Seller's execution of this
Agreement.
The "Contingency Date" shall be December 31, 1997. If any contingency has not been
satisfied on or before the Contingency Date or Date of Closing, as the case may be, then
this Agreement may be terminated by notice from Buyer to Seller. Upon termination,
neither party will have any further rights or obligations regarding this Agreement or the
Property. All the contingencies are specifically for the benefit of the Buyer, and the
Buyer shall have the right to waive any contingency by written notice to Seller.
7. Closing. The closing of the purchase and sale contemplated by this Agreement (the
"Closing") shall occur on January 31, 1998 (the "Date of Closing") or such other date
as Buyer and Seller may agree upon. The Closing shall take place at the office of
Winthrop & Weinstine, P.A. in Minneapolis, Minnesota, or such other place as Buyer
may elect. Seller agrees to deliver possession of the Property to Buyer on the Date of
Closing.
7.1 Seller's ClosingDocuments. On the Date of Closing, Seller shall execute and
deliver to Buyer the following (collectively, "Seller's Closing Documents"), all
in form and content reasonably satisfactory to Buyer:
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7.1.1 Deed. A Warranty Deed conveying the Real Property to Buyer, free
and clear of all encumbrances, except the Permitted Encumbrances
hereafter defined.
7.1.2 Seller's Affidavit. A standard form Seller's Affidavit, duly executed
by Seller in form and substance satisfactory to the title insurance
company.
7.1.3 Bill of Sale. A Warranty Bill of Sale conveying the Personal Property
to Buyer, free and clear of all encumbrances.
7.1.4 Assignment of Leases. An Assignment of Leases conveying with
warranties the Leases and any security deposits, prepaid rents or
collections and guarantees regarding the Leases to Buyer, free and
clear of all encumbrances.
7.1.5 Assignment of Property Agreements. Plans, Licenses and Permits. An
Assignment of Property Agreements, Plans, Licenses and Permits, and
miscellaneous documents conveying Seller's interest to Buyer together
with the consent of all parties having a right to consent to such
Assignment.
7.1.6 Trade Name. To the extent they are assignable, all right, title and
interest of Seller in and to the trade name "Park Acres Apartments"
and any telephone numbers assigned to the trade name.
7.1.7 Security Deposits and Prepaid Rents. All security deposits and prepaid
rents under the Leases together with notices to tenants and third parties
of such transfers.
7.1.8 Letters to Tenants. Letters to all tenants indicating that ownership of
the Property has been transferred to Buyer, and providing an address
at which future installments and any delinquent installments of rent
should be paid.
7.1.9 Original Documents. Original copies of the Leases, Property
Agreements, Plans, Licenses and Permits for the Property in Seller's
possession.
7.1.10 FIRPTA Affidavit. A non -foreign affidavit, properly executed,
containing such information as is required by Section 1445(b)(2) of the
Code and its regulations.
0
7.1.11 Owner's Duplicate Certificates of Title. If the Real Property is
Torrents, the owner's duplicate certificates of title regarding the Real
Property.
7.1.12 IRS Forms. A Designation Agreement designating the "reporting
person" for purposes of completing Internal Revenue Form 1099 and,
if applicable, Internal Revenue Form 8594.
7.1.13 Well Certificate. A Certificate signed by Seller warranting that there
are no "Wells" on the Property within the meaning of Minn. Stat.
§ 103I or, if there are "Wells", a Well Certificate in the form required
by law.
7.1.14 Storage Tanks. If the Property contains or contained a storage tank,
an affidavit with respect thereto, as required by Minn. Stat. § 116.48.
7.1.15 Individual Sewage Treatment Systems. If the Property contains an
individual sewage treatment system, a disclosure statement as required
by Minn. Stat. § 115.55.
7.1.16 Other Documents. All other documents reasonably determined by
Buyer or Title to be necessary to transfer the Property to Buyer free
and clear of all encumbrances.
7.1.17 HAP Contracts. An Assignment of the HAP Contracts, with all
necessary consents to such Assignment.
7.2 Buyer's Closing Documents. On the Date of Closing, Buyer will execute and
deliver the following (collectively, 'Buyer's Closing Documents"):
7.2.1 Note. The Note required by Section 2.1 hereof shall be delivered to
the Seller;
7.2.2 Cash. The Cash required by Section 2.2 hereof shall be delivered to
the Qualified Escrow Account by wire transfer and execution or
delivery of any required Seller's financing documents.
7.2.3 IRS Form. A Designation Agreement designating the "reporting
person" for purposes of completing Internal Revenue Form 1099 and,
if applicable, Internal Revenue Form 8594 shall be executed and
delivered to Seller.
8. Prorations. Seller and Buyer agree to the following pro -rations and allocation of costs
regarding this Agreement:
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8.1 Title Insurance and Closing Fee. Buyer will pay all costs of the Title Evidence,
the Title Policy, and the fees charged by Title for any escrow required regarding
Buyer's Objections. Buyer will pay all additional premiums required for the
issuance of any mortgagee's Title Policy. Buyer will pay any closing fee or
charge imposed by any closing agent or by the title company.
8.2 Deed Tax. Buyer shall pay all State Deed Tax payable in connection with this
transaction. Buyer shall pay all Mortgage Registry Tax payable in connection
with Buyer's financing.
8.3 Real Estate Taxes and Soecial Assessments. Real Estate Taxes payable in the
year in which Closing occurs, and installments of Special Assessments payable
therewith, shall be pro -rated based upon a calendar year based upon the Date of
Closing, except that if Buyer's lender shall require Special Assessments to be
prepaid, Seller shall prepay the same on the Date of Closing.
8.4 Rents. All rents and other charges under the Leases will be pro -rated as of the
Date of Closing.
8.5 Other Operating Costs. All other operating costs of the Property shall be
allocated between Seller and Buyer as of the Date of Closing, so that Seller pays
that part of operating costs payable before the Date of Closing, and Buyer pays
that part of operating costs payable from and after the Date of Closing.
8.6 Attorney's Fees. Each of the parties will pay its own attorney's fees, except that
a party defaulting under this Agreement or any Closing Document will pay the
reasonable attorneys' fees and court costs incurred by the nondefaulting party to
enforce its rights hereunder.
8.7 Other Closing Costs. Except as otherwise specifically set forth herein, Buyer
shall be obligated to pay any and all closing costs related to the transaction
contemplated hereby.
9. Deposits and Reserve Funds. All tenant security deposits shall be transferred to the
Buyer at Closing. All other checking or savings account balances or other funds connected with
the project including, but not limited to, escrow funds and reserve or maintenance funds
maintained by the Seller or required to be maintained by any State or Federal agency shall be
retained by Seller except that Seller shall transfer to Buyer at Closing the Accounts.
10. Title Examination. Title Examination will be conducted as follows:
10.1 Seller's Title Evidence. Seller shall, within 60 days prior to the Date of Closing,
furnish the following (collectively, "Title Evidence") to Buyer: (a) a commitment
("Title Commitment") for an ALTA Form B 1992 Owner's Policy of Title
Insurance insuring title to the Real Property, deleting standard exceptions and
including endorsements as may be identified by Buyer, in the amount of the
Purchase Price, issued by a title insurance company acceptable to Buyer ("Title");
(b) if the Property is abstract property, Seller shall also deliver to Title or Buyer
an Abstract of Title to the Real Property certified to a current date to include all
appropriate judgment and bankruptcy searches; (c) a survey prepared by a
registered land surveyor and certified to Buyer and Buyer's lender, if any, within
30 days from the date hereof showing the Real Property and location of all
buildings and easements thereon and such other information and containing such
matters as Buyer or Buyer's lender shall reasonably request; and (d) UCC
searches against Seller by name and the Property.
10.2 per's Objections. Within twenty (20) days after receiving the last of the Title
Evidence, Buyer will make written objections ("Objections") to the form and/or
contents of the Title Evidence. Buyer's failure to make Objections within such
time period will constitute waiver of Objections. Any matter shown on such Title
Evidence and not objected to by Buyer shall be a "Permitted Encumbrance"
hereunder. Seller will have thirty (30) days after receipt of the Objections to cure
the Objections, during which period the Closing will be postponed, if necessary.
Seller shall use its best efforts to correct any Objections. To the extent an
Objection can be satisfied by the payment of money, Buyer shall have the right
to apply a portion of the cash payable to Seller at the Closing to satisfaction of
such Objection, and the amount so applied shall reduce the amount of cash
payable to Seller at the Closing. If the Objections are not cured within such 30 -
day period, Buyer will have the option to do any of the following:
10.2.1 Terminate this Agreement.
10.2.2 Withhold from the Purchase Price an amount which, in the reasonable
judgment of Title, is sufficient to assure cure of the Objections. Any
amount so withheld will be placed in escrow with Title, pending such
cure. If Seller does not cure such Objections within sixty (60) days
after such escrow is established, Buyer may then cure such Objections
and charge the costs against the escrowed amount. The parties agree
to execute and deliver such documents as may be reasonably required
by Title, and Seller agrees to pay the charges of Title to create and
administer the escrow.
10.2.3 Waive the objections and proceed to close.
11. Oferation Prior to Closing. During the period from the date of Seller's acceptance of this
Agreement to the Date of Closing (the "Executory Period"), Seller shall operate and
maintain the Property in the ordinary course of business in accordance with prudent,
reasonable business standards, including the maintenance of adequate liability insurance
6E
and insurance against loss by fire, windstorm and other hazards, casualties and
contingencies, including vandalism and malicious mischief. Seller shall execute no
contracts, or other agreements regarding the Property during the Executory Period except
in the ordinary course of Seller's business and which are terminable on or before the
Date of Closing, without the prior written consent of Buyer, which consent may be
withheld by Buyer at its sole discretion.
12. Representations and Warranties bySeller. Seller represents and warrants to Buyer as
follows:
12.1 Existence: Authority. Seller is duly organized, qualified and in good standing,
and has the requisite power and authority to enter into and perform this
Agreement and Seller's Closing Documents; such documents have been duly
authorized by all necessary action; such documents are valid and binding
obligations of Seller, and are enforceable in accordance with their terms.
12.2 Leases. Seller has made available to Buyer a correct and complete copy of each
Lease and all its amendments. The information regarding the Leases contained
in the attached Rent Roll is correct and complete as of the date of this
Agreement. The Leases are in full force and neither Seller, nor any tenant, is in
default under the Leases. There are no other leases or possessory rights of others
regarding the Real Property. No tenant has prepaid rent for more than the
current month, has received or is entitled to a rent concession, allowance or
rebate in connection with its tenancy, or is entitled to any work (not yet
performed) or consideration (not yet given) in connection with his or her tenancy,
except as stated in the rent roll.
12.3 Contracts. Seller has made available to Buyer a correct and complete copy of
each Contract and its amendments which will survive a Closing hereunder.
12.4 Operations. Seller has received no notice of actual or threatened cancellation or
suspension of any utility services or certificate of occupancy for any portion of
the Real Property. Seller has received no notice of actual or threatened special
assessments or reassessments of the Real Property. The Property is, and to
Seller's best knowledge has been, used in compliance with all governmental
permits. All necessary permits have been obtained and are in full force and effect
and no default exists thereunder.
12.5 Environmental Laws. No toxic or hazardous substances or wastes, pollutants or
contaminants (including, without limitation, asbestos, urea formaldehyde, the
group of organic compounds known as polychlorinated biphenyls, petroleum
products including gasoline, fuel oil, crude oil and various constituents of such
products, and any hazardous substance as defined in any state, local or federal
law, regulation, rule, policy or order relating to the protection of the
-10-
environment) (collectively, "Hazardous Substance") have been generated, treated,
stored, transferred from, released or disposed of, or otherwise placed, deposited
in or located on the Property, nor has any activity been undertaken on the
Property that would cause or contribute to the Property becoming a treatment,
storage or disposal facility within the meaning of, or otherwise bring the Property
within the ambit of, any state, local or federal law, regulation, rule, policy or
order relating to the protection of the environment. There has been no discharge,
release or threatened release of Hazardous Substances from the Property. There
are no and there has not been Hazardous Substances or conditions in or on the
Property that would support a claim or cause of action under any state, local or
federal law, regulation, rule, policy or order relating to the protection of the
environment. The Property is not now, and to the best knowledge of Seller never
has been, listed on any list of sites contaminated with Hazardous Substances, nor
used as landfill, dump, disposal or storage site for Hazardous Substances.
12.6 Seller's Defaults. Seller is not in default concerning any of its obligations or
liabilities regarding the Property.
12.7 Operating Statements. The operating statements for the Property for the period
from 1992 to 1996, inclusive, that have been supplied by Seller to Buyer are
correct and complete and have been prepared in accordance with generally
accepted accounting standards.
12.8 FIRPTA. Seller is not a "foreign person", "foreign partnership", "foreign trust"
or "foreign estate", as those terms are defined in Section 1445 of the Internal
Revenue Code.
12.9 Proceedings. There is no action, litigation, investigation, condemnation or
proceeding of any kind pending or threatened against Seller or any portion of the
Property.
12.10 Condition. The buildings, structures and improvements included within the
Property are structurally sound and in good repair and in first-class condition, and
all mechanical, electrical, heating, air conditioning, drainage, sewer, water and
plumbing systems are in proper working order.
12.11 Wells and Individual Sewage Treatment Systems. The Seller certifies and
warrants that the Seller does not know of any "Wells" on the described Property
within the meaning of Minn. Stat. § 103I or "Individual Sewage Treatment
Systems" on the described Property within the meaning of Minn. Stat. § 115.55.
This representation is intended to satisfy the requirements of those statutes.
12.12 Storage Tanks. No above ground or underground tanks are located in or about the
Property, or have been located under, in or about the Property and have
-11-
subsequently been removed or filled. To the extent storage tanks exist on or
under the Real Property, such storage tanks have been duly registered with all
appropriate regulatory and governmental bodies, and otherwise are in compliance
with applicable federal, state and local statutes, regulations, ordinances and other
regulatory requirements.
12.13 RepQrts. Seller has delivered to Buyer copies of all environmental reports and
studies relating to the Property which are in the possession of Seller.
12.14 Litigation. There is no action, proceeding, claim or investigation, pending or,
to the best knowledge of Seller, threatened, against Seller or the Property which
might create or result in a lien on the Property or any part thereof or interest
therein.
Seller will indemnify Buyer, its successors and assigns, against, and will hold Buyer, its
successors and assigns, harmless from, any expenses or damages, including reasonable
attorneys' fees, that Buyer incurs because of the breach of any of the above
representations and warranties, whether such breach is discovered before or after
Closing. Consummation of this Agreement by Buyer with knowledge of any such breach
by Seller will not constitute a waiver or release by Buyer of any claims due to such
breach.
13. Casualty: Condemnation. If all or any part of the Property is substantially damaged by
fire, casualty, the elements or any other cause, Seller shall immediately give notice to
Buyer, and Buyer shall have the right to terminate this Agreement by giving notice
within thirty (30) days after Seller's notice. If Buyer shall fail to give the notice, then
the parties shall proceed to Closing, and Seller shall assign to Buyer all rights to
insurance proceeds resulting from such event. If eminent domain proceedings are
threatened or commenced against all or any part of the Property, Seller shall immediately
give notice to Buyer, and Buyer shall have the right to terminate this Agreement by
giving notice within thirty (30) days after Seller's notice. If Buyer shall fail to give the
notice, then the parties shall proceed to Closing, and Seller shall assign to Buyer all
rights to appear in and receive any award from such proceedings.
14. Broker's Commission. Seller and Buyer represent to each other that they have dealt with
no brokers, finders or the like in connection with this transaction, and agree to indemnify
and hold each other harmless from all claims, damages, costs or expenses of or for any
such fees or commissions resulting from their actions or agreements regarding the
execution or performance of this Agreement, and will pay all costs of defending any
action or lawsuit brought to recover any such fees or commissions incurred by the other
party, including reasonable attorneys' fees.
-12-
15. Assi ng ment. Either party may assign its rights under this Agreement before or after the
Closing. Any such assignment will not relieve such assigning party of its obligations
under this Agreement.
16. Survival. All of the terms of this Agreement and warranties and representations herein
contained shall survive and be enforceable after the Closing.
17. Notices. Any notice required or permitted hereunder shall be given by personal delivery
upon an authorized representative of a party hereto; or if mailed in a sealed wrapper by
United States registered or certified mail, return receipt requested, postage prepaid; or
if transmitted by facsimile copy followed by mailed notice; or if deposited cost paid with
a nationally recognized, reputable overnight courier, properly addressed as follows:
If to Buyer: Reprise Associates Limited Partnership
Reprise, Inc.
3005 Ottawa Avenue
St. Louis Park, MN 55416
Attn: Mr. Robert Boisclair
Fax:# (612) 922-3071
With Copy to: Winthrop & Weinstine, P.A.
3000 Dain Bosworth Plaza
60 South Sixth Street
Minneapolis, Minnesota 55402
Attu. Todd B. Urness, Esq.
Fax: (612) 347-0600
If to Seller: BNR Partners
c/o Boisclair Corporation
3005 Ottawa Avenue
St. Louis Park, MN 55416
Attn: Mr. Robert Boisclair
Fax #: (612) 922-3071
Notices shall be deemed effective on the earlier of the date of receipt or the date of
deposit, as aforesaid; provided, however, that if notice is given by deposit, the time for
response to any notice by the other party shall commence to run one business day after
any such deposit. Any party may change its address for the service of notice by giving
notice of such change ten (10) days prior to the effective date of such change.
-13-
18. Miscellaneous. The paragraph headings or captions appearing in this Agreement are for
convenience only, are not a part of this Agreement, and are not to be considered in
interpreting this Agreement. This written Agreement constitutes the complete agreement
between the parties and supersedes any prior oral or written agreements between the
parties regarding the Property. There are no verbal agreements that change this
Agreement, and no waiver of any of its terms will be effective unless in a writing
executed by the parties. This Agreement binds and benefits the parties and their
successors and assigns. This Agreement has been made under the laws of the State of
Minnesota and such laws will control its interpretation.
19. Remedies. If Buyer or Seller cancels this Exchange Agreement by reason of non -
satisfaction of one or more conditions to Closing, neither party shall thereafter have any
further liability, right or obligation hereunder. If this Exchange Agreement is not
cancelled by either party in accordance with the terms and conditions thereof, in the
event of a default by a party (the "Defaulting Party"), the other party (the "Non -
defaulting Party") shall have any and all rights and remedies available at law or in equity
to the Non -defaulting Party, including, without limitation, money damages or the right
to apply for and receive from any court of competent jurisdiction, equitable relief by way
of specific performance to enforce performance of the terms of this Exchange
Agreement, plus reimbursement of costs, including reasonable attorneys' fees, incurred
in securing such relief, provided that any action to enforce such specific performance
shall be commenced within six (6) months after such right of action shall arise and shall
be in lieu of any claim for damages. Notwithstanding anything contained herein to the
contrary, if for any reason the transaction contemplated hereby is not closed on or before
the Date of Closing specified in Section 7 hereof, either party may terminate this
Agreement upon ten (10) days written notice to the other; provided, however, if such
failure to close results from the default of either Buyer or Seller, such termination shall
not relieve the Defaulting Party from liability for damages hereunder.
20. Withdrawal of Offer. This Agreement shall be deemed to be withdrawn, unless accepted
by Seller, and a fully executed counterpart of this Agreement returned to Buyer on or
before March 27, 1997.
-14-
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the date first
written above.
SELLER BNR PARTNERS,
A MINNESOTA LIMITED PARTNERSHIP
Date of Signature By: Boisclair Corporation
1997
Its: General Partner
� �
By: -�
Bob 'sclair
Y
Its: President
BUYER REPRISE ASSOCIATES LIMITED PARTNERSHIP
Date of Signature By: Reprise Inc.
1997
Its: General Partner
By:
Bob Boi lair
Its: President
[Signature Page to Exchange Agreement for Park Acres Apartments, New Hope, Minnesota]
-15-
EXHIBIT A
Legal Description
(The following Parcel is identified as New Hope
and is located at Wisconsin Avenue and Bass Lake
County, New Hope, Minnesota, and is legally
follows):
Family Housing,
Road, Hennepin
described as
PARCEL C
Par 1; That paof the South 292.5 feet of the Nest 1/2
rt of the Northeast
Quarter of the Southeast Quarter lyino.East of the Hest 210 feet
thereof, Section 6, Township 118, Range 21, west of the Fifth Prin-
cipal rieridian. '
Subject to the rights of the public over the West 30 feet of the
above land as shown in deeds Document Nos. 455014, 455015, 455016 and
455013 as modified by the order of Court Document No. 1034962.
Subject to minerals and mineral rights reserved by the State of Kinne-
sota as to above land except that part of the North 37.5 feet lying
East -of the West 210 -feet thereof. Also
Par 2: All that part of the following described property=
That part of the East 1/2 of the Northeast Quarter of the Southeast
Quarter of Section 6. Township 118, Range 21, Hest of the Fifth Prin-
cipal Meridian, described as follows, to -wit; Commencing at the SoutT.
west corner of the East 1/2 of the Northeast Quarter of the southeast
Quarter of said Section 6; thence North along the west line thereof a
,distance of 475 feet, more or less, *to the Southerly 'lire of Public
highway; thence Southeasterly along Southerly line of said highway a
distance of 406 feet; thence South a distance of 247.6 feet more
,or less, to a point on the South line. of the East 1/2 of the North-
east Quarter of the Southeast Quarter -of said Section 6, 341 feet East
from point of beginning, thence west 341 feet to beginning, which lies
westerly and'Northwesterly of the following described line.-begirtc 5
at a point an the youth line of the East 1/2 of the Northeast Qu
of the Southeast Quarter of said Section 6 distant 30 feet east of the
Southwest corner thereof; thence North parallel with the west line of
the East 1/2 of the Northeast Quarter of the Southeast Quarter of said
Section 6 a distance of 379.91 feet; thence deflectIn g Northeasterly
33 degrees 04 minutes (measured from North to East) to the Southerly
line of said public highway and there terminating.
EXHIBIT B
(Legal Description of the Exchange Property)
EXHIBIT C
(Personal Property)
To be provided.
EXHIBIT D
(Leases)
Exhibit E
NEW HOPE
Rehabilitation Work
Breakdown
March 19, 1997
Park Acres
HAVC Mechanical
50,000
Elevator Repair
45,000
Structural Repair
30,000
Appliances
35,000
TOTAL
$160,000
CERTIFICATE OF
CI• rFNi.,Is P.1 Ant
We, the undersigned officers of Bayerische Landesbank Girozentrale (the 'Provider*) HEREBY
CERTIFY in connection with the Investment Agreement between Norwest Bank Minnesota, National
Association and the Provider dated as of March 27, 1997 (the 'Investment Agreement') that the yield on
the Investment Agreement is at least equal to the yield offered by the Provider on the date the Provider
offered to enter into the investment Agreement on reasonably comparable investment contract offered
to other persons, if any, funded from a source of funds other than gross proceeds of an issue of
tax-exempt bonds and that the amount of administrative costs that are reasonably expected to be paid by
the Provider to third parties in connection with the Investment Agreement is S 2. 133.33 plus the
normal and customary fees of counsel to the Provider. For purposes of this certification, administrative
costs include all brokerage or selling commissions paid by the Provider to third parties in connection with
the Investment Agreement, legal or accounting fees, investment advisory fees, recordkeeping,
safekeeping, custody and other similar costs or expenses.
Dated this 27th day of March, 1997.
By I -
Bert von Stuelpnagel
Executive Vice President
and ger
By
::L
Ronald Bertolini
First Vice President
and Treasury Manager
Wn247.1N.. K� WUUZ au • "7
CERTIFICATE OF TRUSTEE
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
The undersigned, Assistant Vice President of Norwest Bank Minnesota, National
Association, as trustee (the "Trustee"), under an Indenture of Trust dated as of March 1, 1997
(the "Indenture") between the City of New Hope, Minnesota (the "Issuer") and the Trustee,
authorizing the issuance of the Issuer's $1,650,000 Multifamily Housing Revenue Bonds (Park
Acres Apartments Project), Series 1997 (the "Bonds"), does hereby certify as follows:
1. Power and Authority of Trustee. The Trustee is a banking association duly
organized and existing and authorized to accept and execute trusts of the character herein set out
under the laws of the United States of America and has full power and authority to execute and
deliver (i) the Indenture, (ii) the Investment Agreement effective as of March 27, 1997, by and
between the Trustee and Bayerische Landesbank Girozentrale (the "Investment Agreement"), (iii)
the Regulatory Agreement, dated as of March 1, 1997 (the "Regulatory Agreement"), by and
among the Issuer, the Trustee and Reprise Associates Limited Partnership (the "Company"), and
(iv) the Remarketing Agreement dated as of March 1, 1997, by and among the Trustee, the
Company and the Issuer (the "Remarketing Agreement"), and to act as Trustee, Bond Registrar
and Paying Agent as provided in the Indenture. (The Indenture, Investment Agreement, the
Regulatory Agreement and the Remarketing Agreement shall be referred to hereinafter as the
"Trustee Documents").
2. Execution of Documents. The Trustee Documents have been duly executed on
behalf of the Trustee by one of the persons listed on Exhibit A to the Trustee's Certificate of
Receipt, Deposit of Funds and Authentication and Delivery of Bonds, and each said person was
at the time of the execution of the Trustee Documents, and now is the duly elected or appointed,
qualified and acting incumbent of such person's respective office.
The execution and delivery by the Trustee of the Trustee Documents and the performance
by the Trustee of its duties under the Trustee Documents have been duly authorized by all
necessary corporate action on the part of the Trustee and the execution and delivery of the
Trustee Documents does not contravene the Articles of Association or Bylaws of the Trustee or
conflict with or constitute a breach of or default under any law, administrative regulation, consent
decree or any agreement or instrument applicable to the Trustee.
3. Authentication of Bonds. Pursuant to and in accordance with the provisions of
Section 2.04 of the Indenture, at the written request and authorization of the Issuer and prior to
the delivery of the Bonds, the Certificate of Authentication on the Bonds so delivered was signed
on behalf of the Trustee, as Bond Registrar, by a duly authorized signatory.
D:WEW200\00BCC\TRUSTEE.DOC I CERTIFICATE OF TRUSTEE
4. Delivery of the Bonds. The Trustee on this date, at the written request and
authorization of the Issuer dated the date hereof, pursuant to Section 2.05 of the Indenture,
delivered $1,650,000 aggregate principal amount of the Bonds to or at the order of Piper Jaffray
Inc., as the underwriter for of the Bonds (the "Underwriter").
5. Receipt of Purchase Price of the Bonds. The Trustee on this date received, on
behalf of the Issuer from the Underwriter, the full purchase price of the Bonds in the amount of
$1,650,000 and has applied and deposited such amounts as set forth in the Indenture.
6. Authorization of Officer. The officers of the Trustee referred to in paragraph 2
above were at the time of the acts above-mentioned, and are at the date hereof, duly elected or
appointed, qualified and acting officers of the Trustee and duly authorized to perform the acts
referred to in such paragraph.
D:\NEW200\001\CC\TRUSTEE.DOC 2 CERTIFICATE OF TRUSTEE
IN WITNESS WHEREOF, the Trustee has caused this certificate to be executed by its
duly authorized officer on March 2, 1997.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By � ..eta)
Its Assistant Vice President
D:WEW200\001\CC\TRUSTEE.DOC 3 CERTIFICATE OF TRUSTEE
TRUSTEE'S CERTIFICATE OF RECEIPT AND
DEPOSIT OF FUNDS AND AUTHENTICATION AND
DELIVERY OF BONDS
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
The undersigned, on behalf of Norwest Bank Minnesota, National Association, in
Minneapolis, Minnesota, a national banking association duly organized and existing under and by
virtue of the laws of the United States of America (the "Trustee"), under that certain Trust
Indenture (the "Indenture") between the City of New Hope, Minnesota (the "Issuer") and the
Trustee, dated as of March 1, 1997, relating to the issuance of $1,650,000 aggregate principal
amount of Multifamily Housing Revenue Bonds (Park Acres Apartments Project), Series 1997
(hereinafter the "Bonds") does hereby certify as follows:
1. The Bonds have been presented to the Trustee for authentication as fully
registered typewritten bonds, in integral multiples of $100,000, or any multiple of $5,000 in
excess of $100,000.
2. As of the 27th day of March, 1997, one or more of the persons listed in Exhibit A
attached hereto signed the Trustee's Certificate of Authentication appearing on said Bonds, said
Bonds maturing on the dates specified in the Indenture in the aggregate principal amount of
$1,650,000.
3. Pursuant to the Indenture and express authorization and direction from the Issuer,
the Trustee has delivered the Bonds to Piper Jaffray Inc. On the date hereof the Trustee received
from Piper Jaffray Inc., the purchase price of said Bonds in federal funds, said purchase price
being $1,650,000, and the Trustee did thereupon deliver said Bonds, after authentication by the
Trustee, to or at the direction of said purchaser.
4. As authorized in the Order to Trustee, $0 from the proceeds of the Bonds shall be
deposited in the Bond Fund and $1,650,000 shall be deposited into the Project Fund.
D:\NEW200\001\CC\RECEIPT.DOC 1 TRUSTEE'S CERTIFICATE OF RECEIPT
AND AUTHENTICATION
IN WITNESS WHEREOF, I have exec��ed this Certificate in the name of Norwest Bank
//4�/}�}
Minnesota, National Association, on March Mme, 1997.
D:\NE W200\00 ] \CCRECEIPT.DOC
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /1 ti ZLQ
Its Assistant Vice President
TRUSTEE'S CERTIFICATE OF RECEIPT
AND AUTHENTICATION
EXHIBIT A
Authorized Signers
D:\NEW200\001\CC\RECEIPT.DOC A -I TRUSTEE'S CERTIFICATE OF RECEIPT
AND AUTHENTICATION
��:�� Norwest Bank Minnesota, N.A. Certified Copy of By -Law 7.2 and
NORWEST BANKS Corporate Trust Services General Signature Resolution Relating to
///N/ Execution of Written Instruments
7I SII
BY-LAW NO. 7.2 NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
All instruments, documents, or agreements relating to or affecting the property or business and affairs of this Association when acting in any
representative or fiduciary capacity, shall be executed, acknowledged, verified, delivered or accepted in behalf of this Association by the chief executive
officer, the President or any Vice President, or by such other officer, officers, employees, or designated signers, as the Board may from time to time direct.
I, Patricia A. Fisher, an Assistant Secretary of Norwest Bank Minnesota, National Association, a national banking association
organized under the laws of the United States of America (the "Bank"), hereby certify that:
The following resolution was duly adopted by the Board of Directors of the Bank at a meeting thereof held on July 22, 1996, and that
said resolution has not been amended or revoked and remains in full force and effect on the date hereof:
GENERAL SIGNATURE RESOLUTION
RESOLVED that instruments, documents, or agreements relating to or affecting the property or business and affairs of this Bank,
or of this Bank when acting in any representative or fiduciary capacity, may be executed in As name, with or without its corporate
seal, by the persons hereinafter designated.
For the purposes of this resolution, "Executive Officer" shall mean any person specifically designated as an Executive Officer of
this Bank by resolution of the Board of Directors, and "Signing Officer" shall mean the Chairman of the Board, the President, any Vice
President (including any Executive Vice President or any Senior Vice President), the Cashier, the Controller, any Office President,
any Managing Officer, any Assistant Vice President, Assistant Cashier, any functional We which includes the word "Officer" (e.g.,
Corporate Trust Officer, Trust Officer), or any other functional title hereinafter designated by the Board of Directors as an officer of
the Bank.
The Chairman, the President, and any Vice President, acting alone, may execute:
b. Bonds of indemnity and powers of attorney.
3. Any Signing Officer, acting alone, may execute:
a. Assignments of mortgages, releases or satisfactions of mortgages, certificates of redemption, assignments of sheriffs
certificates, trust deeds, and declarations of trust.
b. Transfers and assignments of stocks, bonds or other securities.
c. Loan agreements, letters of credit advised without confirmation, participation agreements and certificates of participation.
d. Security agreements, financing statements, termination statements, continuation statements and statements of assignment
with respect to which the Bank is a secured party, releases of security interests in and liens upon personal property.
e. Receipts for any money or property paid or delivered to this Bank.
f. Demands, notices of acceleration, or extensions of the time for payment of any note or other obligation held by this Bank.
g. Notices of default and of election to sell or cause to be sold the property described in any mortgage or deed of trust held by
this Bank, notices to the trustee named in any such deed of trust , and do any other act or sign any other document provided
for by law, or which may be necessary, expedient or proper in order to protect or enforce the rights of this Bank under any
such mortgage or deed of trust.
j. Tax returns and related instruments.
n. Pleadings, petitions, accounts, and other documents to be filed in any court or other proceeding involving this Bank,
including verifications thereof.
p. Deeds, leases, assignments and conveyances of any real or personal property held by the Bank in any representative or
fiduciary capacity, or any interest therein.
q. Trust indentures, declarations of trust and trust and agency agreements, acceptances thereof and consents thereto, and any
similar documents however denominated; petitions for the appointment or the confirmation of appointment of this Bank in
any representative or fiduciary capacity; certificates of assets held in any account of this Bank, certificates of authentication
with respect to bonds, notes, debentures, and other obligations issued under corporate mortgages, trust agreements and
other indentures; certificates for securities deposited, interim certificates and other certificates for and on behalf of this Bank
as depository or agent; countersignatures of bonds, notes, certificates of stock, voting trust certificates or participation
certificates on behalf of this Bank as transfer agent or registrar, certificates of cancellation and cremation of stocks, bonds or
other securities, certificates of incumbency of trustee; and resignations of this Bank in any representative or fiduciary
capacity.
r. Certifications of records, confirmations, and affidavits.
Any Executive Officer or any Vice President, acting alone, by filing a written authorization with the Secretary of the Bank, may
designate other persons as agents ("Designated Signers") to execute any of the instruments, documents, or agreements listed in the
preceding paragraphs of this resolution, but only to the extent said Executive Officer or Vice President has that authority as described
in this resolution. Designated signers will maintain this status until written revocation of such designation has been filed with the
Secretary of the Bank or until termination of employment with the Bank or any of its affiliates.
I further certify that on the 27th day of March, 1997, the following named person is a duly appointed, qualified and acting officer of
Norwest Bank Minnesota N.A., that their correct title and genuine signature appears beside their name, and that on said date they
were duly authorized to act on behalf of the Bank as set forth in the foregoing resolution:
Name
Title
Signat re
Steve Gubrud
Assistant Vice President
Tim Matyi
Assistant Vice President
C
Paula Marty
Designated Signer
I further certify that on the 27th day of March, 1997, the following named persons were duly appointed, qualified and acting
designated signers of Norwest Bank Minnesota N.A., that their correct titles and genuine signatures appear beside their
names, and that on said date they were duly authorized to act on behalf of the Bank as set forth in the foregoing resolution
section 3. b.:
Name
Title
Signature
Pam Hamack
Designated Signer
AVIS Helm
Designated Signer
Paula Marty
Designated Signer
Kurt Etherton
Designated Signer
Karen Soete
Designated Signer
Mark McGraw
Designated Signer
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the Bank this 27th day of March, 1997.
Assistant Secretary
(Bank Seal)
* * * Redacted [indicates portions of the General Signature Resolution have intentionally been omitted because the sections are
not relevant to the transaction for which this certification has been requested.]
CERTIFICATE OF UNDERWRITER
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
This Certificate has been prepared and executed in conjunction with the issuance by the
City of New Hope, Minnesota (the "Issuer") of its Multifamily Housing Revenue Bonds (Park
Acres Apartments Project), Series 1997 (the 'Bonds"), in the aggregate principal amount of
$1,650,000. The undersigned, authorized representative of Piper Jaffray Inc. (the "Underwriter"),
does hereby certify as follows, on behalf of the Underwriter:
1. The Underwriter is purchasing the Bonds from the Issuer pursuant to the terms of
a Bond Purchase Agreement (the 'Bond Purchase Agreement") dated March 20, 1997 between
the Underwriter, the Issuer and Reprise Associates Limited Partnership (the "Company").
2. The Underwriter hereby determines that all conditions precedent to the
performance of the obligation of the Underwriter under the Bond Purchase Agreement have been
met, or if not met, the Underwriter hereby waives compliance with such conditions.
3. On the date hereof, the Underwriter delivered to Norwest Bank Minnesota,
National Association (the "Trustee") by wire transfer of immediately available funds for the
account of the Issuer the sum of $1,650,000, and hereby acknowledges delivery by the Trustee to
the Owners thereof of fully registered Bonds in aggregate principal amount of $1,650,000.
4. For purposes of completing Internal Revenue Service Form 8038, the Underwriter
has computed the weighted average maturity of the Bonds to be 26.104 years.
5. The Bonds are a variable yield issue and, thus, the yield on the Bonds has not been
calculated. The initial offering price of the Bonds to the public (excluding bond houses and
brokers) at which price all of the Bonds were sold is $1,650,000.
All terms not defined herein shall have the same meanings specified or incorporated by
reference in the Loan Agreement and Indenture relating to the above -referenced Bonds.
D:\NEW200\001\CC\UNDERWRI.DOC 1 CERTIFICATE OF UNDERWRITER
Dated: March 9 q , 1997.
PIP
Un
CERTIFICATE OF UNDERWRITER
CERTIFICATE RE: INVESTMENT AGREEMENT BIDS
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
The undersigned Jim Towne of Piper Jaffray Inc. hereby certifies as follows in connection
with the City of New Hope, Minnesota Multifamily Housing Revenue Bonds (Park Acres
Apartments Project), Series 1997.
We have solicited and received bids from not less than three investment agreement
providers. The following bids are computed on a 365 -day year basis. Bidders bid an interest
rate as a percentage of the Prime Rate:
Provider
*Bayerische Landesbank Girozentralc
Republic National Bank
Canadian Imperial Bank of Commerce
National Westminster Bank
West Deutsch Landesbank
Bank of America
' Successful Provider
% of Prime Rate
61.0%
58.0
66.5 (non -conforming as to
non-waivable condition)
Pass
Pass
Pass
These bids were solicited on a competitive basis and represent current market rates.
PIPER JAFFRAY INC.
By4,,.
cc President
it
D.'MynOOl0OA=1I1)11LN.000 CRIIFICOM OF BIDDER
1109 INVI';$YMBNr AGRLLMENT
WINTHROP & WEINSTINE
A PROFESSIONAL ASSOCIATION
SHERMANWRITHROP
ION J. HOGANSON
ROBERT R. wR HSTINE
SANDRA 1. MARTIN
'HARD A. HOEL
GARY W SCHOKMILLHR
iGER D. GORDON
TODD B. URNESS
STEVEN C. TOUREK
nMOTHY M. BARNETT
STEPRENJ. SNYDER
SCOTTJ.DONGOSKE
MARVIN C. DJGBER
PETER J. GLEEKEL
HART KULLER
EDWARD J. DRENTTEL
DAM P. PEARSON
JEFFREY R. ANSEL
THOMASM.HARTW
LAURMA.KNOME
DARRON C. KNUTSON
LLOYD GROOMS
JOHN A. KNAPP
MARK T.JOHNSON
ERIC 0. MADSON
BROOKS F POLEY
K. CRAIG WILDFANG
THOMAS H. BOYD
MICHELE D. VAILLANCOURT
DANIEL C. BECK
DAVID E. MORAN, JR.
ERIC J. "MOM
DONALD J. BROWN
JOANNE L. MATZEN
Direct Dial
347-0700
Piper Jaffray Inc.
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, MN 55402
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428-4898
Holmes & Galey, Ltd.
One Financial Plaza, Suite 1200
120 South Sixth Street
Minneapolis, MN 55402
Attorneys and Counselors at Law
3200 Minnesota World Trade Center
30 East Seventh Street
Saint Paul, Minnesota 55101
Telephone (612) 290-8400
Fax(612)292-9347
3000 Dain Bosworth Plaza
60 South Sixth Street
Minneapolis. Minnesota 55402
Telephone (612) 347-0700
Fax(612)347-0600
March 27. 1997
PAUL W. MARKWARDT
JULIE WIDLEY SCHNELL
KRISTIN PETERSON LeBRE
PATRICK W. WEBER
CRAIG A. BRANOT
JAMES W DIERKING
THERESE M. MARSO
MELISSA A. ARNDT
SUZANNE M. SPELLACY
CHRISTOPHER W MADEL
TREVOR V. GUNDERSON
BLAIR A. ROSENTHAL
JEFFREY L. LECLERC
JOHN C. HOLM
MATTHEW T. BOOS
TDTANY A. BLORELD
ANDREA I. HAGEMAN
Reply to
Minneapolis
Best & Flanagan
601 Second Avenue South
Suite 4000
120 South Sixth Street
Minneapolis, MN 55402-4331
Norwest Bank Minnesota,
National Association
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479-0069
ANDREW D. MGH
NANCY L MOERSCH
BETH GERSTEIN TIMM
AUDREY L. SANI5LO
BENJAMIN R. MULCAHY
SEAN P. KEARNEY
JULIE A. SILVERMAN
LAURA A. PFEIFFER
CRAIG S. KRUMMEN
CELESTE J. TAYLOR
JOHN B. VAN & NORTH In
DAVID M. HOPPER
RICHARD W. BLACK
KERI L. BARNET
JOSEPH i FRIEDBERG
DANIEL W HARDY
IfG,.md
Re: $1,650,000 City of New Hope, Multifamily Housing Revenue Bonds, Series 1997
(Park Acres Apartments Project)
Ladies and Gentlemen:
We have served as counsel to Reprise Associates Limited Partnership, a Minnesota limited
partnership (the "Partnership"), and Reprise, Inc., a Minnesota corporation, the general partner
of the Partnership (the "General Partner"), in connection with the issuance and sale of the above -
referenced Bonds (the 'Bonds"). In our capacity as counsel to the Partnership and the General
Partner, we are familiar with their organizational documents and we have examined:
Piper Jaffray Inc.
( Best & Flanagan
City of New Hope
Norwest Bank Minnesota, National Association
Holmes & Galey, Ltd.
March 27, 1997
Page 2
(i) the Loan Agreement, dated as of March 1, 1997 (hereinafter the "Loan
Agreement"), between the City of New Hope (the "Issuer") and the Partnership;
(ii) the Indenture of Trust dated as of March 1, 1997 (the "Indenture") between the
Issuer and Norwest Bank Minnesota, National Association, as trustee (the
"Trustee");
(iii) the Bond Purchase Agreement, dated as of March 20, 1997 (the 'Bond Purchase
Agreement") by and among the Partnership, the Issuer and Piper Jaffray Inc.;
(iv) the Remarketing Agreement, dated as of March 1, 1997 (the 'Remarketing
Agreement") by and among the Partnership, the Trustee and Piper Jaffray Inc.;
(v) the Limited Offering Memorandum, dated March 20, 1997 (the "Limited Offering
Memorandum") describing the terms of the Bonds;
(vi) the Regulatory Agreement, dated as of March 1, 1997 (the 'Regulatory
Agreement") among the Issuer, the Partnership, and the Trustee; and
(vii) the Exchange Agreement, dated as of March 27, 1997 (the 'Exchange
Agreement") between BNR Partners, as seller, and the Partnership, as buyers.
(The Loan Agreement, the Indenture, the Bond Purchase Agreement, the Regulatory Agreement,
and the Remarketing Agreement are sometimes herein collectively referred to as the 'Bond
Documents").
We have examined the original or photostatic or certified copies of such records of the
Partnership and the General Partner, the certificates of the Partnership and the General Partner
and of public officials and such other documents as we have deemed relevant and necessary to
render this opinion. In this examination, we have assumed the authenticity of all documents
submitted to us as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies and the authenticity of the originals of such certified or
photostatic copies and the accuracy of the statements contained in the certificates of the
Partnership or public officials.
In rendering this opinion we have made no independent factual investigations or inquires; and
we have performed no service in any filing or recording offices in the State of Minnesota or
Piper Jaffray Inc.
r Best & Flanagan
City of New Hope
Norwest Bank Minnesota, National Association
Holmes & Galey, Ltd.
March 27, 1997
Page 3
elsewhere. In rendering this opinion, we have assumed (i) the due authorization, execution and
delivery of the Bond Documents and the Exchange Agreement by all parties thereto other than
the Partnership and (ii) the validly, binding effect and enforceability under applicable law of the
Bond Documents and Exchange Agreement against the parties thereto other than the Partnership.
Based on such examination, and subject to the assumptions, qualifications and limitations set
forth herein, it is our opinion that, as of the date hereof:
1. The Partnership is a limited partnership duly organized, validly existing, and
(based solely on the Certificate of Good Standing issued by the Minnesota Secretary of State on
March 20, 1997) in good standing under the laws of the State of Minnesota.
2. The General Partner is a corporation duly organized, validly existing, and (based
solely on the Certificate of Good Standing issued by the Minnesota Secretary of State dated
March 20, 1997) in good standing under the laws of the State of Minnesota.
3. The Partnership has full power and authority to execute and deliver the Bond
Documents to which it is a party and to carry out the terms thereof.
4. The execution, delivery and performance of the Bond Documents to which the
Partnership is a party, have been duly and validly authorized by all necessary action, will not
result in violation of any material provision of, or in a default under, the certificate of limited
partnership or the partnership agreement of the Partnership, or, to our actual knowledge, under
any indenture, mortgage, deed of trust, indebtedness, agreement, judgment, decree, order,
statute, rule or regulation to which the Partnership is a party or by which it or its properties are
bound.
5. Each of the Bond Documents to which the Partnership is a party constitutes the
legal, valid and binding obligation of the Partnership enforceable against the Partnership in
accordance with its respective terms.
REPRESENTATIONS AS TO ACTUAL KNOWLEDGE
We hereby represent to you that we do not have any actual knowledge that any of the following
statements is not true or correct in any material respect:
Piper Jaffray Inc.
Best & Flanagan
City of New Hope
Norwest Bank Minnesota, National Association
Holmes & Galey, Ltd.
March 27, 1997
Page 4
A. Neither the execution and delivery of the Bond Documents to which the
Partnership is a parry nor the performance of the provisions of the agreements
therein contained on the part of the Partnership or the General Partner will
contravene, violate or cause a default under any law, nor any agreement,
mortgage, indenture, lease or any license, permit, judgment, decree, order,
statute, ordinance, rule or governmental regulation to which the Partnership or
the General Partner is subject or a party or by which it or any of the
Partnership's or the General Partner's properties are bound.
B. There are no actions, suits, or proceedings pending or, to the knowledge of the
Partnership or the General Partner, threatened against the Partnership or the
General Partner or any property of the Partnership or the General Partner in any
court or before any federal, state, municipal or other governmental agency, which
if decided adversely to the Partnership or the General Partner, would have a
material adverse effect upon the Partnership or the General Partner or upon the
business or properties of the Partnership or the General Partner or upon the
validity or enforceability of the Bond Documents, or the ability of the Partnership
or the General Partner to perform its obligations thereunder; and neither the
Partnership nor the General Partner is in default with respect to any order of any
court or governmental agency.
C. No consent, approval, order, or authorization of, or designation, registration,
declaration, qualification, or filing with any regulatory authority on the part of
the Partnership or the General Partner, not already obtained, other than action in
connection with any state or federal securities laws, is necessary or required by
law as a prerequisite to the execution and delivery of the Bond Documents to
which the Partnership is a party and the carrying out of the transactions
contemplated by or the enforcement of the remedies provided in the Bond
Documents.
D. The Partnership and the General Partner are in compliance in all material respects
with all laws, regulations, ordinances, and orders of public authorities applicable
to them.
We hereby advise you that we have not made any independent investigation or inquiry with
respect to the matters stated and described in paragraphs A through D above, other than
obtaining the certificate of the limited partnership and the General Partner attached hereto as
Piper Jaffray Inc.
Best & Flanagan
City of New Hope
Norwest Bank Minnesota, National Association
Holmes & Galey, Ltd.
March 27, 1997
Page 5
Exhibits A and B and any documents attached thereto as exhibits. The use of the phrase "actual
knowledge" to qualify matters expressed herein with respect to the existence or absence of facts
means the conscious awareness of facts or other information by Todd B. Urness, Joanne L.
Matzen, Jeffrey L. Leclerc, Keri L. Barney, Beth G. Timm or any other attorney at the law firm
of Winthrop & Weinstine working on the project file. Except to the extent expressly set forth
herein, we have not undertaken any independent investigation to determine the existence or
absence of such facts.
SCOPE OF OPINION
The foregoing opinion is subject to the qualification that we express no opinion with respect to:
1. The right, title or interest of the Partnership (other than the rights of the
Partnership under the Exchange Agreement) in or to any property of the
Partnership; or
2. Whether any third party consents or approvals are or will be necessary to be
obtained in order for you to sell, transfer, assign, liquidate, or otherwise dispose
of any collateral or retain any collateral in satisfaction of the debt or otherwise
exercise your rights and remedies with respect to any collateral; or
3. What action you may take or fail to take after the date hereof that may constitute
"lender liability," as that term is commonly used in the industry, and thereby
affect or impair (a) the validity or enforceability of the Bond Documents, or
(b) the validity or perfected status of the security interests or mortgage liens
granted thereby, or (c) the rights and remedies of the parties thereunder; or
4. The validity or enforceability of any indemnification provision contained in any
of the Bond Documents to the extent such provisions are determined to be against
public policy; or
5. Any tax effect or tax implication of the transactions contemplated by the Bond
Documents or any documents related thereto; or
6. The validity or enforceability of any of the provisions of the Bond Documents
that purport to give you any right to possess or use any collateral or any right to
Piper Jaffray Inc.
Best & Flanagan
City of New Hope
Norwest Bank Minnesota, National Association
Holmes & Galey, Ltd.
March 27, 1997
Page 6
enter any properties of the Partnership, all of which may be subject to and limited
by applicable law; or
7. The enforceability of any of the Bond Documents or other documents referred to
herein to the extent the enforceability thereof depends upon the validity and
enforceability of the Bonds or assumes compliance with the provisions of Sections
103, 142(d) or 148 of the Internal Revenue Code of 1986, as amended, or
Minnesota Statutes, Chapters 462A and 462C; or
8. The exemption of interest on the Bonds from any state or federal income taxation,
the validity or enforceability of the Bonds, or compliance with Section 103 of the
Internal Revenue Code of 1986, as amended, or Minnesota Statutes, Chapters
462A and 462C; or
9. The truth, accuracy, or completeness of any of the representations, warranties,
or other statements of the Partnership or, any of its directors, officers, partners
or employees contained in any of the Bond Documents or any exhibit or schedule
attached thereto or any related documents or certificates, in each case except for
those matters as to which an opinion is expressly rendered herein; or
10. The validity or enforceability of (a) any power of attorney granted in any of the
Bond Documents, or (b) any document or instrument deemed executed or
delivered by the Partnership pursuant to such power of attorney; or
11. The validity or enforceability of provisions of the Bond Documents to the extent
they contain:
a. choice of law provisions, including, without limitation, any provisions
indicating that a state's law other than Minnesota law applies to the Bond
Documents and the transactions contemplated thereby;
any cumulative remedy provision; or
C. waivers by the Partnership of any constitutional rights or remedies; or
12. The applicability of or compliance with federal securities laws or any state Blue
Sky laws, or with respect to the availability of or compliance with any applicable
Piper Jaffray Inc.
Best & Flanagan
City of New Hope
Norwest Bank Minnesota, National Association
Holmes & Galey, Ltd.
March 27, 1997
Page 7
exemptions from the registration or filing requirements of the federal securities
laws or state Blue Sky laws, which may apply in connection with the transactions
contemplated by the Bond Documents; or
13. What actions you are required to or may take or fail to take which, if taken or
not taken, would affect or impair the enforceability of the documents referred to
herein or your rights or remedies thereunder.
The opinions expressed herein are also subject to the following matters (in addition to the
qualifications, exceptions, limitations, and assumptions specified above):
1. We have assumed that you will enforce your remedies in accordance with
applicable state law and under such circumstances and in a manner in which it is
commercially reasonable to do so.
2. Notwithstanding certain language contaiad in the Bond Documents, the recovery
of attorneys' fees and expenses may be limited to the recovery of only reasonable
expenses or attorneys' fees and legal expenses.
3. We have assumed that the execution, delivery and performance of the Indenture
have been duly authorized by all necessary action as required by applicable law
and that the Bonds and the Indenture have been duly executed and delivered by
the Issuer and the Trustee.
4. Our opinions as they relate to the validity and enforceability of the Bond
Documents and the validity and enforceability of the assignments and interests
granted pursuant to the Bond Documents, are subject to (a) the limitations that
might result from the Uniform Fraudulent Transfer Act, the Uniform Fraudulent
Conveyance Act, bankruptcy, insolvency, reorganization, moratorium, and similar
laws relating to or affecting the rights or remedies of creditors generally, now or
hereafter in effect, (b) principles or equity, and (c) the qualification that the
availability of the remedies of specific performance or injunctive relief, or any
other equitable remedy, is subject to the discretion of the court before which a
proceeding therefor may be brought and the application of general principles of
equity.
Piper Jaffray Inc.
/ Best & Flanagan
City of New Hope
Norwest Bank Minnesota, National Association
Holmes & Galey, Ltd.
March 27, 1997
Page 8
5. The validity and enforceability of each of the Bond Documents is subject to the
applicable statutes of limitations.
6. The provisions of the Bond Documents specifying that the documents may only
be amended or waived in writing may not be enforceable to the extent that an oral
agreement or implied agreement by trade practice or course of conduct has been
created modifying any provision of the Bond Documents.
7. Our opinions contained herein are limited exclusively to the laws of the State of
Minnesota and the United States of America.
This opinion speaks only as of the date hereof and, notwithstanding anything to the contrary
contained herein, we render no opinion as to what other facts or circumstances might
subsequently arise or what other actions or omissions might hereafter be taken by you, the
Partnership, or any third parry that, if so arising or so taken, would affect any of the opinions
rendered hereby. We undertake no duty or obligation to advise you as to the occurrence of any
such facts or circumstances or to otherwise update or reaffirm this opinion. This opinion is
based on existing facts, statutes, rules and regulations, and judicial rulings and is subject to
changes thereto. We do not, however, undertake to advise you with respect to such future
changes that affect this opinion.
During our representation of the Company, nothing has come to our attention that would lead
us to believe that the statements and information contained in the Limited Offering Memorandum
(other than the information contained under the captions "THE ISSUER", "THE INVESTMENT
AGREEMENT AND INVESTMENT AGREEMENT PROVIDER", "TAX MATTERS",
"LITIGATION", and "UNDERWRITING") are not true, accurate, and correct, or contain any
untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they are
made, not misleading. We specifically express no view as to the accuracy or completeness as
to any information relating to the Investment Agreement, the Investment Agreement Provider,
or any financial or statistical information contained or referred to in the Limited Offering
Memorandum.
We are qualified to practice law in the State of Minnesota and we do not purport to express any
opinion herein concerning any law other than the State of Minnesota or the United States of
America.
Piper Jaffray Inc.
( Best & Flanagan
City of New Hope
Norwest Bank Minnesota, National Association
Holmes & Galey, Ltd.
March 27, 1997
Page 9
This opinion is being rendered solely to you. You, your successors by merger, and any
subsequent holder of the Bond Documents or the Bonds are the only parties entitled to rely on
the opinions expressed herein in connection with the financing of the Partnership. This opinion
may not be used or relied upon by any other persons or entities or for any other purpose without
our expressed written permission.
Very truly yours,
WINTHROP & WEINSTINE, P.A.
By -
Todd B. Urness
MPLS:115461 1
CERTIFICATE OF REPRISE ASSOCIATES LEMTED PARTNERSHIP
The undersigned hereby certifies to Winthrop & Weinstine, P.A., knowing that Winthrop &
Weinstine, P.A. is relying hereon in issuing its opinion of counsel attached, the following:
Neither the execution and delivery of the Bond Documents, the Investment
Agreement, or the Exchange Agreement nor the performance of the provisions
of the agreements therein contained on the part of the Partnership will contravene,
violate or cause a default under any law, nor any agreement, mortgage, indenture,
lease or any license, permit, judgment, decree, order, statute, ordinance, rule or
governmental regulation to which the Partnership is subject or a parry or by
which it or any of the Partnership's properties are bound.
2. There are no actions, suits, or proceedings pending or, to the knowledge of the
Partnership, threatened against the Partnership or any property of the Partnership
in any court or before any federal, state, municipal or other governmental agency,
which if decided adversely to the Partnership, would have a material adverse
effect upon the Partnership or upon the business or properties of the Partnership
or upon the validity or enforceability of the instruments referred to herein as the
Bond Documents, or the ability of the Partnership to perform its obligations
thereunder; and the Partnership is not in default with respect to any order or any
court or governmental agency.
3. To the best of its knowledge, the Partnership is in compliance in all material
respects with all laws, regulations, ordinances, and orders of public authorities
applicable to it.
• 1 1 1 _ ._� Y►1_ : 011'
By: Reprise, Inc.
Its: General Pare,
By:
obert BoiAair
Its: President
CERTIFICATE OF REPRISE, INC.
The undersigned hereby certifies to Winthrop & Weinstine, P.A., ]mowing that Winthrop &
Weinstine, P.A. is relying hereon in issuing its opinion of counsel attached, the following:
1. Neither the execution and delivery of the Bond Documents, the Investment
Agreement, or the Exchange Agreement nor the performance of the provisions
of the agreements therein contained on the part of the Corporation will
contravene, violate or cause a default under any law, nor any agreement,
mortgage, indenture, lease or any license, permit, judgment, decree, order,
statute, ordinance, rule or governmental regulation to which the Corporation is
subject or a party or by which it or any of the Corporation's properties are
bound.
2. There are no actions, suits, or proceedings pending or, to the knowledge of the
Corporation, threatened against the Corporation or any property of the
Corporation in any court or before any federal, state, municipal or other
governmental agency, which if decided adversely to the Corporation, would have
a material adverse effect upon the Corporation or upon the business or properties
of the Corporation or upon the validity or enforceability of the instruments
referred to herein as the Bond Documents, or the ability of the Corporation to
perform its obligations thereunder; and the Corporation is not in default with
respect to any order or any court or governmental agency.
3. To the best of its knowledge, the Corporation is in compliance in all material
respects with all laws, regulations, ordinances, and orders of public authorities
applicable to it.
REPRISE, INC.
By:'�
'Robert B sclair
Its: President
AV 5:114669 1
KUTAK ROCK
A PARTNERSHIP
INCLUOING PROFESSIONAL CORPORATIONS
SUITE 2100
225 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30303 1731
404-222-4600
FACSIMILE 404-222-4654
http://www. kutakrock.cor
March 27, 1997
Norwest Bank Minnesota, National
Association, as Trustee
Minneapolis, MN
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
Ladies and Gentlemen:
DENVER
KANSAS CITY
LITTLE ROCK
NEW YORK
OKLAHOMA CITY
OMAHA
PHOENIX
PITTSBURGH
WASHINGTON
We have served as counsel to Bayerische Landesbank Girozentrale, acting through its New York
Branch (the "Bank"), for purposes of reviewing the Investment Agreement dated as of March 27, 1997
(the "Agreement") between Norwest Bank Minnesota, National Association, as trustee, and the Bank
respecting the investment of certain proceeds of the above -captioned bonds.
In connection with the rendering of this opinion, we have examined the Agreement and such other
documents, records and instruments as we have deemed necessary in connection with the rendering of
this opinion. In such examination we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals and the conformity with originals of all documents submitted
to us as copies.
Based upon the foregoing, we are of the following opinions:
1. The Bank is qualified to do business and is in good standing under the laws of
the United States of America and the State of New York.
2. The Agreement has been duly authorized by all necessary corporate action on the
part of the Bank and is an obligation which the Bank is permitted to undertake under the laws of
the United States of America and the laws of the State of New York.
3. The Agreement has been duly executed and delivered by the Bank and, assuming
due authorization, execution and delivery by the other parties thereto, constitutes the legal, valid
and binding obligation of the Bank, enforceable against the Bank in accordance with its terms,
04171=t
KUTAK ROCK
Norwest Bank Minnesota, National
Association, as Trustee
March 27, 1997
Page 2
except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
liquidation, moratorium or other similar laws affecting the enforcement of creditors' rights in
general and (b) general principles of equity, including, but not limited to, the availability of
certain equitable remedies.
We express no opinion with respect to the effect of laws, other than the laws and regulations of
the State of New York and the federal law of the United States of America in full force and effect on the
date hereof, upon the validity and binding effect of the Agreement or upon any other matter set forth in
this opinion. In addition, we have assumed that the Agreement constitutes a valid and binding obligation
of Bayerische Landesbank Girozentrale under the laws of Germany. We express no opinion as to the
availability of equitable remedies to persons seeking to enforce the obligations of the Bank under the
Agreement.
This opinion may be relied upon by Moody's Investors Service or Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc., to the extent either assigns investment ratings
to the Bonds, as if this opinion were addressed to them.
This opinion is limited to the matters expressly set forth above, and no opinion is implied or may
be inferred beyond the matters expressly so stated. This opinion is delivered to you, and any rating
agency referenced in the preceding paragraph, in connection with the above -referenced transaction and
may not be utilized or quoted by you, or such rating agency, for any other purpose whatsoever or
delivered to any other person without our prior written consent.
V ry truly yours,
KU AK RGCK
W71IC t
Bayerische
Landeshank
Norwest Bank Minnesota,
National Association
Minneapolis, MN
Munich, March 27, 1997
Ladies and Gentlemen,
I am legal counsel to Bayerische Landesbank Girozentrale (the 'Bank") acting
through its New York Branch (the 'Branch") in connection with the execution and
delivery of the Investment Agreement dated as of March 27, 1997 (the
"Agreement") between the Bank and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee") for the City of New Hope, Minnesota (the
"Issuer").
I have made factual investigations in respect of the Bank as I have deemed
necessary for the purpose of giving this opinion. I have assumed for the purpose of
my opinion hereinafter expressed that the Agreement will constitute the legal, valid
and binding obligation of the Bank under the law of the State of New York and
United States Federal law, enforceable against the Bank in accordance with the law
of the State of New York and United States Federal law. No opinion is expressed
herein as to any matters governed by any laws other than the laws of the Federal
Republic of Germany and the Free State of Bavaria.
Based on the foregoing, I am of the opinion that:
1. The Bank is a bank duly organized and existing under the laws of the
Federal Republic of Germany and the Free State of Bavaria.
2. The Bank has the corporate power and authority to execute, deliver and
perform its obligations under the Agreement.
3. No authorizations, approvals or consents from any governmental authorities
in the Federal Republic of Germany or the Free State of Bavaria are required
in connection with the execution, delivery and performance by the Bank of
the Agreement which have not been obtained.
Baverische Landesban'r
Girozentrale
80,77 Munchen
(= Bnefadressel
Brienner 5tra8e 20
80333 Munchen
(=Pak O.dlr sse)
Telefon:
Zentraie
(089)21710'
Telefax:
Zencra
108912`. 7 t-38?9
Bayerische
Landesbank
4. A final and conclusive judgment in any Federal court of the United States
and any court of the State of New York in respect of any suit, action or
proceeding, arising out of or relating to the Agreement, wherein process has
been effectively served on the Branch, would be given conclusive effect by
the appropriate courts of the Federal Republic of Germany or the Free State
of Bavaria without reexamination of the substantive matters thereby
adjudicated; provided, however, that the requirements of Article 328 of the
German Code of Civil Procedure are met, in particular that recognition of
the judgment is not contrary to the public policy of the Federal Republic of
Germany or the Free State of Bavaria, as applicable, and is not
unconscionable, and reciprocity exists between the relevant jurisdiction and
the Federal Republic of Germany or the Free State of Bavaria, as applicable,
with respect to the recognition of the final judgments of the courts of the
Federal Republic of Germany or the Free State of Bavaria, as applicable. I
know of no reason why recognition of such judgments would be deemed or
held to be either contrary to the public policy of the Federal Republic of
Germany, or the Free State of Bavaria or unconscionable. Further, it is my
understanding that reciprocity for the recognition of judgments currently
exists between the Federal Republic of Germany, the Free State of Bavaria
and the State of New York, but I must point out that such reciprocity might
cease to exist at any time.
5. The execution, delivery and performance of the Agreement has been duly
authorized by all necessary action on the part of the Bank and, upon
execution thereof by two officers of the Branch and upon due execution and
delivery by the other parties thereto, will constitute the legally valid and
binding obligation of the Bank enforceable against the Bank in accordance
with its terms, except (i) as limited by bankruptcy, insolvency,
reorganization, moratorium and other laws relating to, or affecting generally,
the enforcement of creditors' rights or a moratorium applicable to the Bank,
and (ii) that no opinion is expressed as to the availability of equitable
remedies to any person seeking to enforce the Agreement. The obligation of
the Bank to make payments under the Agreement ranks pari passu with the
obligations of the Bank to its other depositors and its other unsecured and
unsubordinated creditors.
6. Under the laws of the Federal Republic. of Germany and the Free State of
Bavaria, the Trustee has the right to commence a direct action against the
Bank in any court in Germany having jurisdiction over the Bank based on
nonpayment by the Branch of amounts due under the Agreement.
Bleph
zum Schmiben vom.
27.03.97
1 Bayerische Landesbank
7. The choice by the parties to the Agreement of the law of the State of New
York, United States of America, as governing law is legal, valid and binding
under the laws of the Federal Republic of Germany and the Free State of
Bavaria, except that the authorization of the Agreement by the Bank may be
governed by the laws of the Federal Republic of Germany and the Free State
of Bavaria.
8. Under the laws of the Federal Republic of Germany and the Free State of
Bavaria, the Bank has the power to submit, and the Branch (on behalf of the
Bank) has validly and irrevocably submitted, to the jurisdiction of the State
of New York, and the United States Federal Courts in the State of New
York, with respect to any action arising out of or based on the Agreement or
any judgment properly entered by any court in respect thereof.
9. German courts, if requested, may express a judgment in United States
Dollars in respect of any action in connection with a debt in United States
Dollars under the Agreement. However, if a judgment awarded by a
German court were to be expressed in German Marks, it would normally be
expressed by reference to the exchange value of the relevant amount of
United States Dollars at the rate of exchange prevailing on the effective date
of payment.
Kutak Rock, special legal counsel to the New York Branch of the Bank, and
Moody's Investor Services or Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., to the extent that either assigns investment ratings to
the Bonds referenced in the Agreement, may rely upon this opinion as if it were
addressed to them.
This opinion is limited to the matters expressly set forth above and no opinion is
implied or may be infetzed beyond the matters expressly so stated. This opinion is
delivered to you and your counsel in connection with the above -referenced
transaction and may not be utilized or quoted by you for any other purpose
whatsoever or delivered to any other person without my prior written consent.
This opinion is rendered to you and may not, without any written consent, be used
or relied upon by you in any other capacity or by any other person, except as
provided above, for any purpose whatsoever.
Very truly yours,
Ulrike Seuffert
Legal Advisor
Blatt
zum Sdrteiben Yom
27.03.97
:Hr L.CRosBY
L. NAHD M. ADDINGTON
ROBERT R. BARTH
N. WALTER GRA"
ALLEN A BARNARD
RICHARD A. PETERSON
ROBERT J. CHRISTIANSON, JR.
FRANK J. WALZ
FRANK VOGL
MARINES W. VAN PUTTER, JH.
DAVID B. MoasE
JoxN A. BunTox, JR.
JAMES C. DIRACLES
ROBERT L.MEISER,JR.
JUDITH A. ROCOSHESHE
SCOTT D. ELLER
CHARLES C. BEROUIST
BEST & FEANAGAN
Professional Limited Liability Partnership
E. JOSEPH LAFAVE
GREGonY D. SOULE
CATHY E. GoHLIN
PATRICK B. HENNESSY
TIMOTHY A. SULLIVAN
BRIAN F. RICE
.DANIEL R.W. NELSON
TRACY J. VAN STEENHURGH
DAVID J. ZUBHE
STEVEN R. HRUOER
JAMES P. MICHELS
PAUL E. RAMINSKI
JOHN P. BOYLE
Ross C. FERRELL
CARYN S. GLOVER
MARY E. SHEAREN
BARBARA M. Ross
Piper Jaffray Inc.
222 South Ninth Street
16th Floor
Minneapolis, Minnesota 55402
4000 FIRST BANE PLACE
601 SECOND AVENUE SOUTH
MINNEAPOLIS, MINNESOTA
55402-4331
HTTP: / / WW W. BE S TLAW. COM
(612) 339-7121
FAX (612) 339-5897
March 27, 1997
MORRIS E. KNOPF
CATHERINE J. COURTNEY
JILL B. LAORR
TRACY F. KOCHENDORFER
JEANNxcE M. REmxc
SABAH CHIPPER MADISON
ROBERT D. MAHER
DAVID H. JOHNSON
WILLIAM J. MORRIS
MICHAEL H. PINK
OF COUNSEL
WAND B. LEWIs
ARCHIBALD SPENCER
ROBERT M. SHARE
JOHN R. CARROLL
JAMES D. GLSON
JAMES I. BEST
1902-1988
ROBERT J. FLAMAGAN
1898-19aa
Re: $1,650,000 City of New Hope, Minnesota Multifamily Housing Revenue Bonds,
Series 1997 (Park Acres Apartments Project)
Ladies and Gentlemen:
We have acted as counsel to you as the underwriter (the "Underwriter") in connection
with that certain Bond Purchase Agreement dated March 20, 1997 (the 'Bond Purchase
Agreement") and the sale by you of the $1,650,000 City of New Hope, Minnesota Multifamily
Housing Revenue Bonds, Series 1997 (Park Acres Apartments Project) (the 'Bonds"), issued as
of the date hereof by the City of New Hope, Minnesota (the "Issuer"). Terms defined in the
Bond Purchase Agreement, and not otherwise defined herein, are used in this opinion with the
meanings assigned to them in the Bond Purchase Agreement.
We have examined the Investment Agreement (the "Investment Agreement"), dated
March 27, 1997 between Norwest Bank Minnesota, National Association as trustee (the
"Trustee") and Bayerische Landesbank Girozentrale, acting through its New York branch (the
"Investment Agreement Provider"), securing the payment of the principal of and interest on the
Bonds prior to the conversion Date, and executed counterparts of the Bond Purchase Agreement,
the Indenture, the Loan Agreement, the Remarketing Agreement and the Regulatory Agreement.
We have also examined the originals, or copies, certified or otherwise identified to our
satisfaction, of such other documents, certificates of public officials and instruments as we have
deemed necessary or advisable for purposes of this opinion, including documents relating to the
authorization, execution and delivery of the Bond Purchase Agreement and the above-mentioned
documents. As to various matters of fact material to such opinion, we have, when such facts
were not independently established, relied to the extent we deem such reliance proper on
certificates of the Issuer, Reprise Associates Limited Partnership (the "Company") and public
officials. We have assumed that all signatures on executed documents are genuine, that all
Piper Jaffray Inc.
March 27, 1997
Page 2
certified copies conform to the originals, and that all certificates containing relevant facts are
correct.
We have participated in conferences at which the Limited Offering Memorandum was
discussed. We have generally reviewed and discussed with the Underwriter, Bond Counsel, and
the officers of the Issuer and the Company (or their respective counsel) the information and
statements contained in the Limited Offering Memorandum, but we have not independently
investigated or verified the accuracy or completeness of the statements and information contained
in the Limited Offering Memorandum. As to the matters discussed in the Limited Offering
Memorandum under the captions "THE BONDS, " and "TAX MATTERS, " other than under the
subheading "Other Federal Tax Consideration," we have relied on opinions of Holmes & Galey,
Ltd., Minneapolis, Minnesota, Bond Counsel, and the certificates referred to above, dated the
date hereof, as to the accuracy of the statements contained therein. As to matters discussed in
the Limited Offering Memorandum under the captions "ESTIMATED SOURCES AND USES
OF FUNDS," "THE COMPANY," and "THE PROJECT," we have relied on the opinions of
Winthrop & Weinstine, P.A., Saint Paul and Minneapolis, Minnesota, counsel to the Company,
and the certificates referred to above, dated the date hereof, as to the accuracy of the statements
contained therein.
Based on the foregoing, nothing has come to our attention which would lead us to believe
that the Limited Offering Memorandum (except with respect to any financial or statistical data
contained in or omitted from the Limited Offering Memorandum, on which we express no
opinion) contains any untrue statement of material fact or omits to state any material fact
necessary to make the statements therein, in light of the circumstances under which they are
made, not misleading.
This opinion is furnished solely for the benefit of the Underwriter. It is not to be used,
circulated, quoted or otherwise referred to for any other purpose.
Very truly yours,
BEST & FLANAGAN
Professional Limited Liability Partnership
cjc\10570\9611MUnder riwM71723.OPN
HOLMES & GALEY, LTD.
ONE FINANCIAL PLAZA, SUITE 1200, 120 SOUTH SIXTH STREET, MINNEAPOLIS, MINNESOTA 55402
TELEPHONE: (612) 288-9300 ♦ FACSIMILE: (612) 288-9400
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
We have acted as Bond Counsel in connection with the issuance and sale by the City of New
Hope, Minnesota (the "Issuer"), a municipal corporation, of its $1,650,000 aggregate principal
amount of Multifamily Housing Revenue Bonds (Park Acres Apartments Project), Series 1997 (the
'Bonds").
The Bonds are subject to mandatory and optional redemption by the Issuer and mandatory
tender by the owners thereof prior to maturity at the times, in the manner, and upon the terms
provided in the Bonds and in the hereinafter -described Indenture. The Bonds are not general
obligations of the Issuer and do not constitute a charge against the general credit or assets of the
Issuer.
In connection with the issuance of the Bonds, we have examined a certified copy of a
resolution adopted by the City Council of the Issuer in connection with the issuance by the Issuer of
the Bonds pursuant to and under the provisions of Minnesota Statutes, Chapter 462C, as amended
(the "Act'), an executed counterpart of the Indenture of Trust (the "Indenture") dated as of March 1,
1997, among the Issuer and Norwest Bank Minnesota, National Association, Minneapolis,
Minnesota, as trustee thereunder (the "Trustee"), an executed counterpart of the Loan Agreement
(the "Loan Agreement') dated as of March 1, 1997, between the Issuer and Reprise Associates
Limited Partnership, a Minnesota limited partnership (the "Company"), an executed counterpart of
the Regulatory Agreement dated as of March 1, 1997, between the Issuer, the Trustee and the
Company (the "Regulatory Agreement'), a form of the Bond, and such other documents as we
deemed relevant and necessary in rendering this opinion.
Based on such examination, and assuming the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to us as certified or
photostatic copies and authenticity of originals of such latter documents and the accuracy of the
statements contained in certificates fumished to us by the Company and officials of the Issuer, and
based upon federal and State of Minnesota laws, regulations, rulings and decisions in effect on the
date hereof, we are of the opinion that:
I. The Issuer is a municipal corporation under the laws of the State of Minnesota.
Pursuant to the Act, the Issuer is authorized to issue the Bonds and to use the proceeds thereof for the
purpose of financing the acquisition and rehabilitation by the Company of certain facilities
constituting the Project (as that term is defined in the Indenture) to be owned by the Company, and to
assign and pledge to the Trustee the amounts payable by the Company and other income and
revenues pledged to the Trustee under the Indenture, from which amounts the Bonds are payable.
March 27, 1997
Page 2
2. The Bonds have been validly authorized, executed, and issued in accordance with the
laws of the State of Minnesota now in force and represent valid and binding limited obligations of
the Issuer. The principal of, premium, if any, and interest on the Bonds shall be payable solely from,
and secured by, an assignment and pledge by the Issuer to the Trustee of the amounts to be received
by the Issuer pursuant to the Loan Agreement (other than certain indemnification rights and certain
fees and expenses of the Issuer) and other income and revenues pledged pursuant to the Indenture.
3. The Indenture has been duly authorized, executed, and delivered by the Issuer and,
assuming due authorization, execution, and delivery by the Trustee, represents the valid and binding
agreement of the Issuer and the Trustee enforceable in accordance with its terms.
4. The Loan Agreement and the Regulatory Agreement have been duly authorized,
executed and delivered by the Issuer and, assuming due authorization, execution and delivery by the
other parties thereto, represent the valid and binding agreements of the Issuer enforceable in
accordance with their terms.
5. Based on certain representations of the Company as to the application of the proceeds
of the Bonds and as to the use of the rental housing facilities financed with the proceeds of the
Bonds, Section 142(d) of the Internal Revenue Code of 1986, as amended (the "Code") and
regulations applicable thereto, under existing laws, regulations, rulings and decisions as of the date
of issuance, (i) interest on the Bonds is not includable in gross income for purposes of federal
income taxation and is not includable in taxable net income of individuals, estates or trusts for
purposes of State of Minnesota income taxation; (ii) interest on the Bonds is subject to the State of
Minnesota franchise tax measured by net income and imposed upon corporations and financial
institutions; and (iii) interest on the Bonds is a specific item of tax preference for purposes of
determining the federal alternative minimum tax applicable to all taxpayers and the Minnesota
alternative minimum tax applicable to individuals, estates and trusts.
The Internal Revenue Code of 1986, as amended (the "Code"), establishes certain
requirements (the "Federal Tax Requirements") that must be met subsequent to the issuance of the
Bonds in order that, for federal income tax purposes, interest on the Bonds not be included in gross
income of the owners thereof. Noncompliance with the Federal Tax Requirements may cause
interest on the Bonds to become subject to federal and Minnesota income taxation retroactive to the
date of issue, irrespective of the date on which such noncompliance occurs or is ascertained. The
Indenture, the Loan Agreement and the Regulatory Agreement contain provisions which, if complied
with, will satisfy the Federal Tax Requirements. In expressing the opinion in paragraph 5 above, we
have assumed compliance by the Issuer and the Company with the provisions of the Indenture, the
Loan Agreement and the Regulatory Agreement.
6. No opinion is expressed herein regarding any other consequences of ownership of the
Bonds.
The obligations of the parties, and the enforceability thereof, with respect to the documents
described above are subject, in part, to the provisions of the bankruptcy laws of the United States of
America and to other applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or affecting creditors' rights, now or hereafter in effect. Certain of the obligations, and the
D: WEW200\001\OPN\BOND DOC
l
March 27, 1997
Page 3
enforcement thereof, contained in the Indenture, the Loan Agreement and the Regulatory Agreement
are also subject to general equity principles which may limit the specific enforcement of certain
remedies, but which do not affect the validity of such documents.
Dated this 27th day of March, 1997.
D: W E W 200\00I \OPMBOND. DOC
(
HOLMES & GALEYf LTD.
ONE FINANCIAL PLAZA, SUITE 1200, 120 SOUTH SIXTH STREET, MINNEAPOLIS, MINNESOTA 55402
TELEPHONE: (612) 288-9300 ♦ FACSIMILE: (612) 288-9400
March 27, 1997
Piper Jaffray Inc.
222 South Ninth Street
Minneapolis, Minnesota 55402
$1,650,000
City of New Hope, Minnesota
Multifamily Housing Revenue Bonds
(Park Acres Apartments Project)
Series 1997
Ladies and Gentlemen:
We have acted as bond counsel in connection with the captioned Multifamily Housing
Revenue Bonds (Park Acres Apartments Project), Series 1997 (the 'Bonds") issued by the City of
New Hope, Minnesota (the "Issuer"). Reference is made to our opinion as Bond Counsel, of even
date herewith, with respect to validity of the Bonds. In addition to the documents referred to in that
opinion, we have examined the Limited Offering Memorandum dated March 20, 1997 (the "Offering
Memorandum") relating to the issuance of the Bonds. It is our opinion, as of the date hereof, that:
1. The Bonds and underlying securities constitute "municipal securities" under the
Securities Exchange Act of 1934, as amended, and exempted securities within the meaning of
Section 3(a)(2) of the Securities Act of 1933, as amended, and the Trust Indenture Act of 1939, as
amended. The Indenture of Trust dated as of March 1, 1997, relating to the Bonds is not required to
be qualified under the Trust Indenture Act of 1939, as amended.
2. The statements contained in the Offering Memorandum on the cover and under the
captions "The Bonds" (except under the caption 'Book Entry System" thereunder) and "Tax
Matters," insofar as such statements contained under such captions purport to summarize certain
provisions of the Bonds and our principal bond counsel opinion referred to above, present a fair and
accurate summary of such matters.
We hereby consent to the use of our name and reference to our approving legal opinion of
even date herewith with respect to the Bonds in the Offering Memorandum. You are authorized to
rely on our principal bond counsel opinion of even date herewith as if addressed to you.
D:\NEW 200\001 \OPN\SUPP. DOC