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02-1124Council File # � a+ � ��y Green Sheet # O ��. Presented By Referred To RESOLUTION CITY OF SAINT PAUL, MINNESOTA � Committee: Date 2 WHEREAS, on September 30, 2002, the City of Saint Paul ( the "City") and the County 3 of Ramsey ( the "Count}�') entered into a I,ease Agreement with an Option to Purchase ( the 4 "Original Lease") certain property and improvements presenfly owned by the County and 5 commonly known as the Benz building for use by the City as a public safety building and related 6 puiposes; and 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 �� �g 29 30 31 32 33 34 35 36 37 38 39 WHEREAS, Article 3 of the Original Lease provided that the City would pay various costs including base rent on a monthly basis to the County in an amount sufficient to cover the County's costs associated with revenue bonds it would issue for the purpose of financing the repair, renovation and remodeling of the said premises for use by the City as a pubiic safety building; and WFIEREAS, Article 4of the Original L.ease provided that in calendar year 2003 the County will issue revenue bonds in an amount sufficient to yield Twelve Million Dollars ($12,000,000) to finance the repair, construction, renovation and other expenses of the City to furnish and equip the said premises for occupancy by the City as a public safety building; and WHEREAS, Articlel8 of the Original Lzase provided that the Ciry would pay to the County the sum of One Million, Five Hundred Thousand Doliars ($1,500,000.00) as Option Earnest Money to preserve the City's option to purchase the said premises from the County and that pursuant to Article 18 of the Original I.ease the City paid the said sum on or about September 30, 2002; and WHEREAS, as the financing details set forth in the Original L.ease progressed in connection with the requirements of the County's said Bond issuance, staff from the City and County recognized that it would be mutually desirable to amend the Original Lease in order to better reflect the City's obligations as the reai financial party in interest regazding paying the County for its costs associated with undertaking the repair, construction, renovation and rents necessary to operate the said building as a public safety building; and WHEREAS, such amendments to the Original lease as are attached hereto and are incorporated herein be reference in the attached Amended and Restated Lease Agreement (the "Amended L.ease") and include a prepaymendpurchase option in favor of the City, a semiannua] base rent payment schedule, an option to both the City and the County to refund the bonds upon approval of both parties, and an option to offset the base rent payments through earnings on the County's bond fund and debt service reserve fund; and o �.-��a� z 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 414 45 46 47 48 49 50 51 52 WI�REAS, City staff have recommended that the Amended Lease relaung to the Benz building by and between the County and the City be approved; and WHEREAS, City staff have further recommended that it is pmdent and desirable far the City, in connection with the terms and conditions set forth in the Amended Lease, to review and approve additional documents and conditions in connection with entering into the Amended Lease; and WHEREAS, these documents include a Continuing Disclosure Agreement which is issued in the ordinary course of business in connection with the issuance of revenue bonds and which is attached hereto and incorporated herein by reference; and WHEREAS, City staff have recommended that the Continuing Disclosure Agreement relating to the revenue bonds by and between the County and the City be approved; now THEREFORE, BE IT RESOLVED, the Council of the City of Saint Paul, upon the recommendation of staff, hereby approves the said Amended I.ease and the said Continuing Disclosure Agreement for the Benz Building in substantially the forms submitted, with such deletions, completions and changes therein as aze necessary and appropriate and approved by Bond Counsel, the City Attorney and City Staff; and BE IT FURTHER RESOLVED, that the Mayor, City Clerk and Director, Office of Financial Services, are hereby authorized and directed to execute the Amended Lease and the Continuing Disclosure Agreement and that the same are also authorized and directed to execute such other documents as are contemplated thereby or are necessary in connection therewith; and BE IT FURTHER RESOLVED, that the approval hereby given to the said documents includes approval of such additional details therein as may be necessary and appropriate, such modifications thereof, deletions therefrom and additions thereto prior to their execution as may be necessary and appropriate and approved by the City Attorney, Bond Counsel, City staff and the City officials authorized to execute them, and includes approval of such related instruments as may be required to be executed in connection with the various documents referred to above; and BE IT FURTHER RESOLVED, that City Attorney, Bond Counsel, City staff and City officials aze hereby authorized to approve any said changes and related instruments on behalf of the City upon deternunation by them that such changes and related instruments are consistent with this Resolution and are necessary or desirabie to effectuate the purposes hereof. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conciusive evidence of the approval of such documents in accordance with the terms hereof; and BE IT FURTHER RESOLVED, that the Council of the City of Saint Paul, in connection with the said approvals, states the following in connection with the County's issuance of the revenue bonds: 1. Funds: Arbitraee. Until expended on the Benz building, the proceeds of the Bonds shall be held in the custody of the Trustee pursuant to an Indenture. Payments on the Amended L.ease shall be made from annual appropriarions, and moneys to make such payment shall not be segregated in any special fund. No portion of those proceeds of the Bonds within the control of the City shall be used direcfly or indirectly to acquire higher yielding investments or to replace p �.-�\i�l 2 6. Countv's Official Statement. The County, in conjunction with its advisor Springsted 3 Incorporated and City staff, has prepared an Official Statement in connection with the offering of 4 the Bonds which makes disclosures about, among others, the City, Amended and Restated Lease 5 and Bonds. The City hereby approves the use of the Official Statement in connecrion with the 6 offering of the Bonds. 7 10 (remainder of this page left intentionally blank) 2 4 5 6 7 9 10 11 12 13 14 15 16 funds which were used directl or indirectl to ac uire hi her ieldin mvestments, exce t 1 b �� \ �� y Y Y 9 S Y g� P�) for a reasonable temporary period until such proceeds are needed for the purpose for which the Amended Lease is entered into, and (2) in addirion to the above in an amount not greater than $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in any City account which will be used to make payments on the Amended Lease in excess of amounts which under then-applicable federal azbitrage regulations may be invested without regazd as to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. In addition, those proceeds of the Bonds within the control of the City and moneys used to make payments on the Amended Lease shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instmmentality thereof if and to the extent that such investment would cause the Bonds or Amended Lease to be "federally guaranteed" within the meaning of Section 149(b) of the federal Intemal Revenue Code of 1986, as amended (the "Code"). 17 2. No General Obligation Pledge. The Amended Lease is not a general obligation of the 18 City but rather is payable from amounts to be annually appropriated, and the full faith, credit and 19 taYing powers of the City shall not be and are not pledged. Base rent override rental payments 20 and operating cost rent payments on the Amended I.ease aze due monthly, and base rent 21 payments are due semiannually five-sixths in arrears and one-sixth in advance, all over the 22 approximately 22-year term of the Amended Lease. 23 24 3. Records and Certificates. The officers of the City aze hereby authorized and directed to 25 prepare and furnish to the County, and to the attorneys approving the legality of the Bonds and 26 Amended Lease, certified copies of all proceedings and records of the City relating to the 27 Amended I.ease and to the financial condition and affairs of the City, and such other affidavits, 28 certificates and information as aze required to show the facts relating to the legality of the 29 Amended I.ease and the legality and mazketability of the Bonds as the same appear from the 30 books and records under their custody and control or as otherwise Irnown to them, and all such 31 certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed 32 representations of the City as to the facts recited therein. 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 4. Negative Covenants as to Use of Proceeds and Project. The City hereby covenants not to use the proceeds of the Bonds or Amended Lease or to use the Project, or to cause or permit them to be used, or to enter into any defened payment arrangements for the cost of the Project, in such a manner as to cause the Amended Lease or Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. The City reasonably expects that it will take no actions over the term of the Amended Lease that would cause the Amended I.ease or Bonds to be private activity bonds, and the average term of the Amended L.ease is not longer than reasonably necessary for the governmental purpose of the Amended L.ease. The City hereby covenants not to use those proceeds of the Amended Lease or Bonds which are within the control of the City in such a manner as to cause the Amended L,ease or Bonds to be "hedge bonds" within the meaning of Section 149(g) of the Code. 5. Ternunation of Amended Lzase. The Amended Lease provides the City with the option to terminate at the end of any fiscal year during its term. The City and City Council on the date this Kesolution is adopted intend and reasonably expect to appropriate and to pay the rent due pursuant to the Amended Lease for the entire term of the Amended L.ease. 1 o s.-�rsy 2 FINALLY RESOLVED, that the appropriate City officials are hereby authorized to 3 enter into and execute an Amended and Restated Lease Agreement and Continuing Disclosure 4 Agreement relative to the Benz Building. 5 6 7 8 9 10 11 �C e.S � O �.-��0.� of Financial Services DA7E INITNTED ,,,:5,oz GREEN SHEET mmzwate �2/24/�2 ASSIGN NUMBERFOR ROUTING ORDER TOTAL # OF SIGNATURE PAGES No 114022 u DEPARTMENT�IREG�OR L 41 CITTCAUNCIL I 'LS_e � CITYATfORNEY L�� ] CI1YG rcr ❑ FlNPNGIALSERVICES�IR FlNANCIpLSERVIACCTG I � MAYOR ❑ I 1_ (CLIP ALL LOCATIONS FOR SIGNATURE) ( ��attached resolution authorizes the proper City officials to execute an amended and restated lease agreemement for Benz public safety building. ir+i ivrv Hpprove �H� or rce�ect (i PLANNING COMMISSION GB COMMITTEE CIVIL SERVICE COMMISSfON (Who, Vvhat, Wnen, VYnere, Why) RSONAL SERVICE CONTRACTS MUSTANSWER THE FOLLOWING QUESTIONS: Has this person/firm everworked untler a conVact for Nis tlepartmenY? YES NO Has this person/firtn ever been a ary emPloyee? VES NO Does ihis person/firtn possess a skill not nortnally possessed by any cu�rent dry employee? VES NO Is this person/firm a targeted ventlof� YES NO p1310 dll VES 305We15 00 52p3fdt2 Sh2C� aptl 2�fdCh �O pR20 ShEE[ City, authorizetl by cvunal resofution 02-823, antl County have ffireatly enteretl irito a Lease �reemeM tlatetl as of September 30, 2002 �e Benz public safery bwltling, but as Ne financin9 has progressetl the Ciry stafi has found it benMdal to Ne Ciry to make cetlain fechnical changes to the lease itled in the amended antl restated lease IF APPROVED setfouM in ihe Amentletl Lease AgreemeN ace financially benefival to Ne LLie City. IF APPROVED APPROVED have ro proceetl with the transacM1On basetl on fhe Originai Lease. �OUNT OF TRANSACTION $ SOURCE INFORMATION (EXPLAIN) COST/REVENUE BUDGETEO (CIRCLE ONE) YES ACTNITY NUMBER NO O�.-11�4. CON'I'INLJING DISCLOSURE AGREEMENT This Continumg Disclosure Agreement (this "Disclosure Agreement") is by and between Ramsey County, Minnesota (the "Lssuer"), and the City of Saint Paul, Minnesota (the "City"), in connection with the issuance of the Issuer's $13,930,OQ0 PuUlic Facility Lease Revenue Sonds, Series 2�03A (City of Saint Paul, Minnesota, Lease Obligarion) (the "Bonds"). The Bonds are being issued pursuant to a Resolurion of the Issuer adopted December � 2002 (the "Resolution"), and a Mortgage and Trust Indenture dated as of January 1, 2003 (the "Indenture"), between the Issuer and as trustee (the "Tmstee"). The Issuer and City covenant and agree as follows: SECTION 1. Purpose of the Disclosure Aereement. This Disclosure Agreement is being executed and delivered by the Issuer and City for the benefit of the Owners of the Bonds and in order to assist the Participaring Underwriters in wmplying with SEC Rule 15c2-12(b)(5). The City is an obligated person with respect to the Bonds. SECTION 2. Definifions. In addirion to the definirions set forth in and pwsuant to the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any annual financial information provided by the City pursuant to, and as described in, Secfions 3 and 4 of this Disclosure Agreement. "Audited Financial Statements" shall mean the financial statements of the City audited annually by an independent certified public accounting firm or the State Auditor of the State, prepared pursuant to generally accepted accounting principles promulgated by the Financial Accounring Standards Boazd, modified by govemmental accounting standards promulgated by the Government Accounring Standards Board. "Dissemination Agent" shall mean such pariy from time to rime designated in writing by the Issuer or City to act as information dissemination agent and which has filed with the Issuer or City a written acceptance of such designation. "Fiscal Year" shall be the fiscal year of the City. "Governing Body" shall, with respect to the Bonds, have the meaning given that term in Minnesota Statutes, Section 475.51, Subdivision 9. "MSRB" shall mean the Municipal Securities Rulemaking Board. "National Repository° shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. Currently, the following are Narional Repositories: Bloomberg Municipal Repository 100 Business Park Drive Skillman NJ 08558 Phone: (609) 279-3225 Fax: (609)279-5962 E-Mail: munisna bloomber�.com 1467784v2 oa.-�� �`� FT Interactive Data Attn: NRMSIR 100 William Sh New York NY 10038 Phone: (212) 771-6999 Faac: (212) 771-7390 (Secondary Market Information) E-Mail: Nrmsir(a7ftid.com Standard & Poor's J. J. Kenny Repository 55 Water Street - 45`� Floor New York NY 10041 Athi: Repository Services Phone: (212) 438-4595 Fas: (212) 438-3975 E-Mail: nrmsir reoositorvCa�sandp.com DPC Data Inc. One Executive Drive Fort I,ee NJ 07024 Phone: (201) 346-0701 Fas: (201)947-0107 E-Mail: Nrmsir@dpcdata.com "Occurrence(s)" shall mean any of the events listed in Section S.A. of this Disclosure Agreement. "Official Statement" shall be the Preliminaiy Official Statement dated November _, 2002, prepared in connecfion with the Bonds, and an addendum thereto dated December � 2002. "Owners" shall mean the registered holders and, if not the same, the beneficial owners of any Bonds. "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connecfion with offering of the Bonds. "Repository" st�all mean each National Repository and each State Depository. "Resolurion" shall mean the resolufion adopted by the Governing Body of the Issuer providing for, and authorizing the issuance of, the Bonds pursuant to the Indenture. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securifies and Exchange Commission under the 5ecurities Exchange Act of 1934, as the same may be amended from rime to time or interpreted by the Securities and Exchange Commission. "State" shall mean the State of Minnesota. "State Depository" shall mean any public or private repository or entity designated by the State as a state depository for the purpose of the Rule. As of the date of this Disclosure Agreement, there is no State Depository in Minnesota. 1467784v2 oa.- I�a�1 SECTION 3. Provision of Annual Renorts. A. Beginning in connecrion with the Fiscal Yeaz ending on December 31, 2��2, the City shall, or stiall cause the Disseminarion Agent to, as soon as available but not later than December 31, 2003, and by December 31 of each year thereafter, provide to each Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. B. If the City is unable to provide to the Repositories an Annual Report by the date required in subsection A, the City shall send a notice of such delay and estimated date of delivery to each Repository or to the MSRB and to the State Depository, if any. SECTION 4. Content and Format of Annual Reoorts. The City's Annual Report shall contain or cross reference the financial informarion and operating data pertaining to the City listed below as of the end of the preceding Fiscal Year. The Annual Report may be submitted to each Repository as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Disclosure Agreement. The following type of fmancial information and operafing data shall be supplied: A. an update of the type of informafion contained in the Official Statement under the capfion CITY PROPERTY VALUES; B. an update of the type of information contained in the Official Statement under the captions GENERAI, OBLIGATION DEBT, REVENUE DEBT AND LEASE OBLIGATIONS, and REVENUE DEBT OBLIGATIONS; C. an update of the type of information contained in the Official Statement under the caption TAX RATES, LEVIES AND COLLECTIONS; D. an update of the type of informafion contained in the Official Statement under the caption CITI' FUNDS ON HAND; E. an update of the type of information contained in the Official Statement under the caprion CTTY INVESTMENTS; F. an update of the type of information contained in the Official Statement under the capfion and subheadings GENERAI, INFORMATION CONCERNING THE CITY —"Major Employers in Ramsey County", "Average Annual Labor Force Data" and "Annual Building Pernuts Issued by the City"; G. data extracted from preliminary, unaudited financial statements of the City and from past audited financial statements of the City in the form and of the type contained in Appendix IV of the Official Statement; and H. Audited Financial Statements of the City. The Audited Financial Statements of the City may be submitted to each Repository sepazately from the balance of the Annual Report. In the event Audited Financial Statements of the City aze not available on or before the date for filing the Annual Report with the appropriate Repositories as set forth in Section 3.A. above, unaudited financial statements shall be provided as part of the Annual Report. The accounting principles pursuant to which the financial statements will be prepared will be pursuant to generally accepted accounting principles promulgated by the Financial Accounfing Standards 1467784v2 ba--�I�ay Board, as such principles are modified by the governmental accounting standards promulgated by the Government Accounting Standards Board, as in effect from time to rime. If Audited Financial Statements aze not provided because they are not available on or before the date for filing the Annual Report, the CiTy shall promptly pmvide them to the Repositories when available. SECTION 5. Renorting of Si ificant Events. A. This Secrion 5 shall govern the giving of notices of the occurrence of any of the following events with respect to the Bonds, if material: (1) principal and interest payment delinquency; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulries; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substiturion of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tas-exempt status of the security; (7) modificarions to rights of security holders; (8) optional or unscheduled redempfion of any Bonds; (9) defeasances; (10) release, subsfitution or sale of property securing repayxnent of the Bonds; and (11) rating changes. B. Whenever an event listed in Section S.A. above has occurred, the City shall as soon as possible deternune if such event would constitute material information for Owners of Bonds. If laiowledge of the Occurrence would be material, the City shall promptly file a notice of such Occurrence with each National Repository or the MSRB and with the State Depository, if any. C. The City agrees to provide or cause to be provided, in a timely manner, to each National Repository ar the MSRB and to the State Depository, if any, notice of a failure by the CiTy to provide the Annual Reports described in Section 4. SECTION 6. Terminafion of Reportine Oblieafion. The City's obligations under this Disclosure Agreement sk�all terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. SECTION 7. Disseminafion AQent. The Issuer or City may, from rime to time, appoint or engage a Disseminarion Agent to assist the City in carrying out its obligations under this Disclosure Agreement, and may discharge any such Disseminafion Agent, with or without appointing a successor Disseminarion Agent. ff the Trustee, upon the request of the City as set forth in Secfion 11-1 of the Indenture, is the Disseminarion Agent, the Disseminarion Agent shall have only such dufies as are specifically set forth in this Disclosure Agreement and no implied duties or obligarions shall be read into 1467784v2 4 o�.-��a�l this Disclosure Agreement against the Dissemination Agent, and the Disseminarion Agent shall not be required to take any action to cause the City to comply with its obligations under this Disclos�se Agreement, and the Dissemination Agent has no power or authority to enforce the City's performance of its duries and obligafions under this Disclosure Ageement. SECTION 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Issuer and City may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, if (a) a change in law or change in the ordinary business or operarion of the City has occurred, (b) such amendment or waiver would not, in and of itself, cause the undertaldngs herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taldng into account any subsequent change in or official interpretarion of the Rule, and (c) such amendment or waiver is supported by an opinion of counsel expert in federal securities laws to the effect that such amendment or waiver would not materially impair the interests of Owners. SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer or City from disseminating any other information, using the means of disseminarion set forth in this Disclosure Agreement or any other means of communicarion, or including any other inforxnation in any Annual Report or notice of an Occurrence, in addition to that which is required by this Disclosure Agreement. If the Issuer or City chooses to include any infoxmation in any tlnnual Report or norice of an Occurrence in addition to that which is specifically required by this Disclosure Agreement, the Issuer or City shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of an Occurrence. SECTION 10. Default. In the event of a failure of the City to provide inforxnation required by this Disclosure Agreement, any Owner may take such actions as may be necessary and appropriate, including seeldng mandamus or specific performance by court order, to cause the City to comply with its obligarions to provide information under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Resolution or Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the City to comply with this Disclosure Agreement shall be an acfion to compel performance. SECTION 11. Beneficiaries. This Disclosure Ageement shall inure solely to the benefit of the Issuer, City, Participating Underwiiters and Owners from time to time of the Bonds, and shall create no rights in any other person or entity. SECTION 12. Reserved Riehts. The Issuer and City reserve the right to discontinue providing any information required under the Rule if a final detexxninarion should be made by a court of competent jurisdicrion that the Rule is invalid or otherwise unlawful or, subject to the provisions of Section 8 hereof, to modify the undertaking under this Disclosure Agreement if the Issuer or City determines that such modification is required by the Rule or by a court of competent jurisdiction. 1467784v2 oz. ��zy Date: 7anuary � 2003. RAMSEY COUN'i'Y. IvIINNESOTA By Its Chair of the County Boazd Approved as to Form: By Its County Manager Assistant County Attomey $13,930,000 Public Facility Lease Revenue Bonds, Series 2003A (Saint Paul — Benz Building Project) i4e��sa�z aa-1�ay Date: January _, 2003. CITY OF SAINT PAUL, MINNESOTA By Its Mayor Approved as to Form: By Its Duector, O�ce of Financial Services Assistant City Attomey $13,930,000 Public Facility Lease Revenue Bonds, Series 2003A (Saint Paul — Benz Building Project) 1467784v2 oz-����y AMENDED AND RESTATED LEASE AGREEMENT Tlus Axnended and Restated Lease, hereinafter, together with any supplements, amendments, or e�ibits, "the I,ease", is made and entered into as of this 16"' day of December, 2002, by and between the County of Ramsey, a political subdivision of the State of Mivnesota (the County), and the City of St. Paul, Minnesota, a home rule charter city and a municipal corparation under the laws of the State of Mimiesota (the City). RECTTALS WHEREAS, the County owns real property and improvements (the PROPERTY) more particularly described in Exhibit A which is attached hereto and incorporated herein; and WIIEREAS, the City desires to lease the Property from the County, and the County desires to lease the Property to the City, far the term and under the conditions stated herein; and WIIEREAS, the parties intend that the City use the property for Pubiic Safety offices and related purposes; and WHEREAS, the building which is on the Property is vacant and unready for office use; and WHEREAS, it is the desire of the parties that the County undertake to repair, renovate, and remodel the building for use as a Public Safety office facility by the City; and WHEREAS, the County is willing and able to repair, renovate, and remodel the building for the above purposes; and WHEREAS, the County is willing and able to finance the repair, renovarion and remodeling of the building through the use of the proceeds of the sale of Revenue Bonds (the Bonds) in the year 2003; and 54696 o �..1�zy WHEREAS, the City is willing and able to reimburse the County for the expense the County incurs for issuance and repayment of the Bonds through the rents it will pay to the County in this Lease of the Property; and WIIEREAS, to implement the foregoing plans the parties, on or about September 30, 2002 entered into a Lease Agreement (Original Lease); and WHEREAS, the parties have agreed to amend and restate the terms of the Original Lease to conform to the requirements of Bond documents, provide for different Base Rent Payment dates, provide for early retirement of the bonds and accelerated purchase of the Property, by the City, allocate interest earnings, and clarify the tas exempt nature of the Original Lease, NOW, THEREFORE, in consideration of the foregoing recitals, the other terms and conditions hereof, and for other good and valuable consideration, the receipt and sufficiency of which is hereby aclrnowledged by the parties, the Original Lease is amended and restated as follows: ARTICLE 1. PROPERTY In consideration of the Obligation of the City to pay Rent (as defined in Article 3) and in consideration of the other terms and provisions of this agreement, the County hereby leases to the City, and the City hereby takes from the County, the Property, together with all rights, privileges, easements, and appurtenances belonging to or pertaining to the Property. ARTICLE 2. TERM The Term of this lease shall commence on January 1, 2004 (Commencement Date) and terminate on December 31, 2023 (Termination Date) for a term of two hundred forty months (the Term). 54696 2, a �-��z-y Notwithstanding the foregoing, if the Property shall, on the scheduled Commencement Date of the Term, not be ready for occupancy by the City because construction has not yet been completed, or by reason of any Building operations, repair or remodeling to be done by the County, the County shall use good faith efforts to complete such conshuction, Building operations, repair or remodeling and to deliver possession of the Property to the City. The County, using such good faith efforts, shall not in any way be liable for failure to obtain possession of the Property for the City or to timely complete such construction, Building operations, repair or remodeling, but Addition Rent, as defined herein, payable by the City under this Lease shall abate until the date the County is able to tender possession of the Property to the City, which date shall be deemed the "Commencement Date;" and the Term shall be automarically extended so as to include the full number of months of the Term, except that if the Commencement Date is other than the first day of a calendar month, such Term shall also be extended for the remainder of the calendar month in which possession is tendered. The taking of possession by the City shall be deemed conclusively to establish that the Property has (a) been remodeled, renovated and repaired in accordance with the provisions of the Work Agreement which is attached hereto as Exhibit B and made in part hereof; and (b) are in good and satisfactory condition as of the date when possession was taken. Base Rent, as defined herein, shall not abate during any period of time the building is not ready far occupancy by the City because conshuction or remodeling has not been completed, and the City shall make the Base Rent payments on the dates and in the amounts specified in the Rent Schedule. 54696 oa.-��ay ARTICLE 3. RENT (a) Base Rent. Base rent shali be the sum of money sufficient to pay the annual debt service, including principal, interest, and any other chazges, of the Bonds or Reissue Bonds. The City shall pay Base Rent, without demand, deduction, or set off, for the entire Term, in the amount and at the tnne stated in the Rent Schedule, which is attached hereto and incorporated herein as Eachibit C. Base Rent shall be payable semi-annually, on June 1 and December 1, with the first payment due June 1, 2004, and the final payment due December 1, 2023. If at any time during the term of this Lease, the County, with the consent of the City, which consent shall not be unreasonably withheld, is able to and does redeem the Bonds and reissue bonds at a lower interest rate (the Reissue Bonds) the County shall recalculate the Base Rent to reflect the lower debt service. All provisions of this Lease which apply to the Bonds shall then apply to the Reissue Bonds. Provided, however, that the County shall not extend the redemption date for any such Reissue Bonds beyond the term hereof. (b) Base Rent Override. As Additional Rent, if the City elects to assume management of the Property as provided in Article 5 hereof, there shall be added to the Base Rent a Base Rent Override in the amount of two hundred thousand dollars ($200,000.00) per year, which Base Rent Override shall be paid in equal monthly installments of sixteen thousand six hundred sixty seven dollars ($16,667.00), commencing on the first day of the first month in which the City assumes management of the building. (c) Operating Costs• As Additional Rent, the City shall pay Operating Costs as defined herein. As used in this Lease, the term "Operating Costs" shall mean any and all expenses, costs and disbursements of any kind and nature whatsoever incurred by the County in connection with 54696 4 0�.-11ay the management, maintenance, operation and repair of the Property, which the County shall pay or become obligated to pay in respect of a calendaz year regazdless of when such Operating Costs were incurred. Operating Costs shall include, but not be limited to, the costs of maintenance, repairs, and repiacements to the Building, including, downspouts, gutters, painting sprinkler systems, roof and walls; property management fees, salaries, fringe benefits and related costs payable to employees of the County whose duties aze connected with the Property; insurance costs to the extent not separately paid for by the City pursuant to Article 10; all heating and air conditioning costs, electricity, sewer and water and other utility costs not separately metered to the City; landscape maintenance, trash and snow removal. Operating Costs shall not include the following: (i) costs of curing construction defects to the Building; (ii) depreciation; (iii) any cost or expenditure (ar portion thereo� for which the County is reimbursed, whether by insurance proceeds or otherwise; and (iv) any repairs or replacements to tenant improvements which are paid for from funds in the Capital Reserve for Replacements Fund established in Article 3(g). Notwithstanding anything contained herein to the contrary, any structural repairs or replacements to the Building, ar of any capital improvements made after the Commencement Date which are intended to reduce Operating Costs or of any capital improvements which are required under any governmental laws, regulations, or ordinances which were not applicable to the Property at the time it was constructed, including, without limitation, the Americans With Disabilities Act (ADA), shall be included in Operating Costs. Not later than May 31, 2004, and during May of each year ar as soon thereafter as is practicable, the County shall give the City written notice of its estimates of the amounts payable under Article 3(c) for the following calendar year. On or before the first day of January of said following calendar yeaz, and on or before the first day of each month thereafter, the City shall 54696 oa.-1��y pay to the County one twelfth (1/12) of such estimated amounts. If at any time during such calendar yeaz it appears to the County that the amounts payable under Article 3(c) will vary from its estimate by more than five percent (5%), the County may, by written notice to the City, revise its estimate for such year, and subsequent payments by the City for such year shall be based upon such revised estunate. Within ninety (90) days after the end of such full calendar year of the term or as soon thereafter as practicable, the County shall deliver to the City a summary of the total Operating Costs for the previous calendar yeaz. If such snmmary shows an amount due from the City that is less than the estimated payments previously paid by the City (the Excess Amount), the County shall credit the Excess Amount against Operating Costs next foliowing due hereunder until the Excess Amount is exhausted; provided, however, that if the suminary shows an Excess Amount for the year in which this Lease expires or is not appropriated or is cancelled pursuant to Article 19, the summary shall be accompanied by a refund of the Excess Amount to the City. If such summary shows an amount due from the City that is more than the estimated payments previously paid by the City, the City shall pay the deficiency to the County as Additional Rent within thirty (30) days after delivery of the summary. If the City non-appropriates or otherwise cancels this Lease pursuant to Article 20 hereof, the City shall also pay, within thirty (30) days of after it vacates the premises, any such obligation. (d) Estimated Onerating Costs. The parties agree that for the period commencing on the Commencement Date and ending December 31, 2004, Operating Costs are estimated to be eight hundred ninety thousand dollars ($890,000.00) (Base Year Operating Costs). On or before January 2, 2004, and on or before the first day of each month thereafter, the City shall pay to the County one twelfth (1/12) of the Base Year Operating Costs. If at any time during 2004 it 54696 6 c�.-��ay appeazs to the County that the amounts payable this Article 3(c) will vary from the parties estimate by more than five percent (5%), the County may, be written notice to the City, revise its estimate and subsequent payments by the City for 2004 shall be based upon such revised estimate. (e) Rip,ht to Audit. The City or its representatives shall have the right to examine the County's books and records of Operating Costs during normal business hours within twenty (20) days following the fiunishing of the suminary to the City. Unless the City takes written exception to any item within thirty (30) days following the fiunishing of the summary to the City (which item shall be paid in any event), such suminary shall be considered as final and accepted by the City. (� Preterm Reimbursement. As additional Rent, the City shall, on or before the date the first Rent payment is due, pay to the County a11 bond counsel, financial consultant, and related fees which the County incurs by reason of issuance of the Bonds and which are not capitalized in the Bonds. The County shail provide the City with a statement of such Preterm costs it incurred with thirty (30) days of issuance of the Bonds. In addition, if the County is required by law to maintain a debt service reserve surplus in order to avoid levying a tax of any kind, the City shall pay a Base Rent Reserve in the amount required by law each year. The Base Rent Reserve payment shall be due in full on the first day of January each calendar year during the term. Provided that, if the City pays the County in a timely manner all of the Rent payments required by this Lease, the County shall give a credit or return to the City a sum equal to the previous year's Base Rent Reserve on February 1 of each calendar year. 54696 oa�_��ay (g) Capital Reserve for Replacements. As Additional Rent, the City shall pay the sum of Four Thousand One Hundred Sixty-seven dollars ($4,167.00) per month for a Capital Reserve for Replacements (the Replacement Reserve). The County shall establish a separate account for the Replacement Reserve, which will be used solely for the repair or replacement of tenant improvements and will not be used for or applied to structural repairs, replacements, or improvements to the building. So long as the County is managing the property pursuant to Article 4, the parties shall jointly agree on expenditures from this account; provided that if an emergency arises which affects the structural integrity of the Building or otherwise requires immediate expenditure of funds, the County may, in its discretion, make such changes without consulting with the City. If the City elects to assume management of the Property as provided in Article 5, on the date it so assumes management the County will transfer to the City the balance of any funds remaining in Replacement Reserve Account, after all unpaid obligations haue been paid. During any period when the City manages the Property its obligation to pay the Capital Reserve for Replacements, as Additional Rent, shall be suspended. The County shall not be responsible for or become liable for paying for any portion of tenant improvement repairs or replacements except as provided in this Article 3(g). (h) Any interest earned on unexpended Bond proceeds shall be credited to the semi- annual Base Rent payment. Any unexpended debt service reserve funds shall be credited to Base Rent payments due in 2023, except as otherwise provided in the Bond or Reissue Bond documents. (i) If during any calendar yeaz during the Term any withdrawals are made from a debt service reserve fund required by the Bond or Reissue Bond documents to be maintained, or 54696 oa--���4 if such debt service reserve is devalued pursuant to the Bond or Reissue Bond documents, the City shall, on or before December 31 of such year, replenish such funds. ARTICLE 4. TAE COUNTY'S RESPONSIBILITIES (a) Propertv Mana eg ment• The County shall manage and operate the Properiy (Properry Management) as follows: Except for reasonable weaz and tear and any casualty against which the City was obligated to insure under this Lease, the County shall maintain all parts of the Building, making all necessary repairs and replacements, whether ordinary or extraordinary, structural or non-structural, including, but not limated to windows, glass and plate glass, doors, eniries, interior walls and finish work, floors and floor coverings, heating and air conditioning systems, pluxnbing works and fixtures, pest extermination, regular removai of trash and debris, and provide j anitorial and other maintenance/service program for servicing all hot water, heating and air conditioning systems and equipment servicing the premises. The County shall contract for all utilities, including heat, electricity and sewer and water, and excluding telephone/telecommunications. (b) Bond Issuance. In the calendar year 2003, the County will issue Revenue bonds in an amount sufficient to yield $12 million cash for the repair, conshuction and renovation of the building, and other expenses of the City to furnish and equip the building for its purposes and move its Public Safety functions into the building. ARTICLE 5. THE CITY'S RESPONSIBILITIES On or before March 31, 2003, the City may assume Properiy Management by notification to the County. After Mazch 31, 2003, the City may, at its option, assume Property Management, the City must give the County two (2) calendar year's notice of its intent to assume Property Management responsibility. Upon such assumption, the City's obligation to pay Operating Costs 54696 o a.-�1�.y as additional rent shall cease, and the City's Rent Obligation shall be Base Rent and Base Rent Override as defined in Article 3(a) and 3(b) hereof. Upon such assumption, the County's Responsibilities under Article 4(a) shall cease, and the County shall have no further obligation with respect to operarion, maintenance or repairs to the Property. ARTICLE 6. INSPECTION The County and the County's agents and representatives shall have the right to enter and inspect the Building at any reasonable time for the purpose of ascertaining the condirion of the Building or in order to make such repairs and perform such actions as may be required or permitted to be made by the County under the terms of this Lease. ARTICLE 7. ASSIGNMENT AND SUBLETTING The City may not assign, sublet or otherwise permit occupancy of the Building or any portion thereof by third parties without the County's prior written consent, which may be withheld in the discretion of the County, and such restriction shall be binding on any assignee or subtenant to which the County has consented. Notwithstanding any permitted assignment or subletting, the City shall at all times remain directly, primarily and fully responsible and liable far the payment of the Rent and for compliance with all of its other obligations under the terms of this Lease. Upon occurrence of an Event of Default, if the Building or any part thereof aze then assigned or subiet, the County, in addition to any other remedies herein provided or provided by law, may, at its option, collect directly from any assignee or sub-tenant all amounts due and becoming due to the City under such assigunent or lease and apply such amounts against any sums due to the Cowity from the City hereunder, and no such collection shall be construed to constitute a novation or release of the City from the further performance of its obligations hereunder. The County's acceptance of rent following any assignment or other 54696 1 � o�._�«y transfer prohibited by this Article shall not be deemed a consent by the County to such assignment or other transfer nor shall the same be deemed a waiver of any right or remedy of the County for breach of this Article. If the City assigns this Lease or sublets all or any portion of the Building without first obtaining the County's consent as required by this Article, said assignment or Lease shali be null and void and of no force or effect. The County's consent to an assignment, Sublease or other transfer of any interest of the City in this Lease or the building shall not be deemed to be a consent to any subsequent assignment, transfer, use or occupation. The City agrees to any assignment of all or part of this Lease by the County to a bond trustee as security for the Bonds ar Reissue Bonds. At the request of the County, the City shall pay Base Rent directly to a trustee for the Bonds or Reissue Bonds. ARTICLE 8. FIRE AND CASUALTY DAMAGE (a) Notice of Casualtv. If the Building should be damaged or destroyed by fire, tornado or other casuaity, the City shall give immediate oral and written notice thereof to the County. (b) Continuation of Lease. Notwithstanding the destruction of the Building by fire, flood, tornado, riot, civil disturbance, act of terrorism, or from any other cause, this Lease shall remain in fixll force and effect and the City's obligation to pay Base Rent shall continue for any remaining term of this Lease. (c) Repair of Property. If the Building should be destroyed or damaged by any cause, the City, at its option, may rebuild or repair the Building. Upon completion of such rebuilding or repair and reoccupation of the Building by the City, the County shall resume management of the Building and the City shall pay Rent, including Base Rent and Operating Costs, as determined on 54696 11 c �- ��a.y the date of re-occupancy. If the City has elected to manage the Building pursuant to Article 5, the County shall not be required to resume management of the Building. (d) Removal of Personal Propertv. In the event of any damage to the Building or the Property by any peril contemplated by this Article, the City shall, prompfly after the occurrence of such damage and at its sole cost and expense, remove from the Property any personal properiy on the Property belonging to any of the City, its agents, employees, contractors, licensees ar invitees. The City hereby indemnifies, holds harmless and agrees to defend the County from any loss, liability, damage, judgment, cost or expense, including attorneys' fees through all appellate levels arising out of any claim of damage or injury by any of the City, its agents, employees, contractors, licensees or invitees as to itself or themselves or their respective properties arising as a result of the removal or failure to remove such personal property. The County and the City agree that the County shail have no obligation to secure the Building or the Property in the event of a casualty and that the risk of loss, by destruction, the8 or otherwise, to the personal property of the City, its agents, employees, contractors, licensees or invitees shall be borne, as between the County and the City, entirely by the City. ARTICLE 9. LIABILITY, WAIVER AND RELEASE (a) No Liabilitv. The County shall not be liable for and the City will indemnify and hold the County hannless from any loss, liability, claims, suits, costs and expenses, including attorneys' fees, arising out of any claim of injury ar damage on or about the Property arising from any cause whatsoever other than the County's gross negligence or willful misconduct. The County shall not be liable to the City ar the City's agents, employees, contractors, licensees or invitees for any damage to persons or property arising from any cause whatsoever except the County's gross negligence or willfixl misconduct and the City assumes all risks of damage to sa696 12 o�- ��a� such persons or property. The County shall not be liable or responsible for any loss or damage to any property or person occasioned by theft, fire, force majeure, public enemy, injunction, riot, strike, insurrection, war, court order, requisition or order of govemmental body or authority, or other matter beyond control of the County, or for any injury or damage or inconvenience which may arise through repair or alteration of any part of the Building, or failure to make repairs, or from any cause whatsoever except the County's willful acts or gross negligence. Nothing in the foregoing provisions shall be construed as a waiver of the tort liability limits and defenses as set forth in Minn. Stat. Secrion 466.01 et. seq. The indemnification language in Article 9 shall apply if and when the City exercises its rights to assume management of the property pursuant to Article 5. (b) Waiver and Release. Except as provided below, each of the County and the City agrees to rely entirely upon its own property insurance with respect to any damage, loss or injury to its property. Each of the County and the City hereby releases the other and the other party's directors, officers, employees, agents and others acting on the other party's behalf (collectively, the `Yeleased parties") from all claims and all liability or responsibility to the releasing party and to any person claiming through or under the releasing party, by way of subrogation or otherwise, for any loss or damage to the releasing party's business or property caused by fire or other peril, even if such fire or other peril was caused in whole or in part by the negligence or other act or omission of one or more of the released parties. Notwithstanding the foregoing, the release from liability and waiver or subrogation provided for shall (i) only be effective to the extent that the loss or damage to the releasing party's business or property is actually covered by insurance; and (ii) not apply to the extent of any deductible (or deductibles) applying under such insurance. 54696 13 o�-��ay ARTICLE 10. INSURANCE T'he City, at its sole cost and expense, shall obtain and maintain in effect at all times a policy or policies of insurance as follows: (a) Insurance insuring the Building against loss or damage by fire, explosion, and other insurable hazards and contingencies for the full replacement value of the Building (the Property Policy). The Property Policy shall name the County as an insured and loss payee as its interests may appear. (b) The City shall be responsible for the payment of any deductibles and co-insurance penalties under the Property Policy or policies. (c) Insurance policies required by this Paragraph shall be in a form reasonably acceptable to the County, with an insurer or insurers having a Best rating of A-, X, or better and qualified to do business in Minnesota, and shall require at least thirty (30) days prior written notice to the County of termination, cancellation, non-renewal or material alteration. The liability insurance under Article 10(a) shall be primary with respect to the County and its agents and not participating with any other available insurance. (d) Prior to the Commencement Date, and on the anniversary of the Commencement Date and at such other time as the County may request, the City shall deliver to the County a Certificate evidencing such policies, or other evidence reasonably satisfactory to Landlord, confirming: (A) the terms of the Insurance; (B) that the premiums have been paid at least one (1) year in advance; and (C) that the policies are in full force and effect. If the City has a blanket insurance policy sa696 14 oa - ��ay providing coverage for several properties of the City, including the Property, the County will accept Certificates of such insurance, provided. (1) The certificate states the amounts of insurance and types of coverage; (2) The amounts and types of coverage are at least equal to the amounts and types that would be required by this Lease; and (3) The policies comply with the other requirements of this Lease. ARTICLE 11. CONDENINATION (a) Total Taking. If the whole or any substantial part of the Building is taken for any public or quasi-public use under governmental law, ordinance or regulation, or by right of eminent domain, or by private purchase in lieu thereof and the taking would prevent or materially interfere with the use of the Property or the Building for the purpose for which they are being used, this Lease shall terxninate and the Base Rent and Operating Costs shall be abated during the unexpired portion of this Lease effecrive when the physical taking of the Property shall occur. (b) Partial Taking. If part of the Property shali be taken for any public or quasi- public use under any governmental law, ordinance or regulation, or by right of eminent domain, or by private purchase in lieu thereof, and this Lease is not terminated as provided in the subparagraph above, this Lease shall not terminate but the Operating Costs payable hereunder during the unexpired portion of this Lease shall be reduced to such extent as may be fair and reasonabie under all of the circumstances. (c) Awards. In the event of any such tal�ng or private purchase in lieu thereof, the County and City shall each be entitled to receive and retain such separate awards and/or portion of lump sum awards as may be allocated to their respective interest in any condemnation 54696 15 ba -���.y proceedings, provided that the City shall not be entitled to receive any award for its loss of its leasehold interest, or other property which would have become the property of the County upon ternunation of this Lease; the right to such awazd being hereby assigned to the County. The City shall be entitled to any award it receives for relocation pursuant to Minnesota Statutes Section ll 7.50 and zelated Federal Statutes and Regulations. ARTICLE 12. QiJIET ENJOYMENT The County represents and warrants that it has or will acquire fuil right and authority to enter into this Lease and that the City, upon paying the Rent and performing its other covenants and agreements under this Lease, shall peaceably and quietly have, hold, and enjoy the Property, subject to the terms and provisions of this Lease. ARTICLE 13. EVENTS OF DEFAULT Each of the following events shall be deemed to be an Event of Default by the City under this Lease: (a) The City shall fail to pay any installment or other payment of Rent herein when due, and such failure shall continue for a period of five (5) days from the date such payment was due; (b) The City shall vacate or abandon all or a substantial portion of the Property; provided however, that such vacation or abandonment shall not constitute a default hereunder unless, in the County's reasonable estimation, the City has failed to comply with its obligation to maintain the Property as required under this Lease; (c) The City shall fail to insure and provide evidence of such insurance in accordance with Article 10; 54696 1C ba.. ��a�y (d) The City shall fail to comply with any term, provision or covenant of this Lease (other than the foregoing in this Article 13), and shall not cure such failure within twenty (20) days after written notice thereof from the County to the City. ARTICLE 14. Upon the occurrence of any such Events of Default as described in Article 13 hereof, the County shall, in addition to any and all remedies it may have at law or in equity, have the option to pursue any one or more of the following remedies without further notice or demand: (a) The County may, at its election, terminate this Lease ar terminate the City's right of possession only, without terminating the Lease; (b) Upon any terminarion of this Lease, whether by lapse of rime or otherwise, or upon any termination of the City's right to possession without terminarion of this Lease, the City shall surrender possession and vacate the Property immediately and deliver possession thereof to the County, and the City hereby grants to the County full and free license to enter into and upon the Property in such event with or without process of law and to repossess the County of the Property as of the County's former estate and to expel ar remove the City and any others who may be occupying or within the Froperty and to alter all locks and other security devices at the Property and to remove any and all property therefrom, without being deemed in any manner guilty of trespass, eviction or forcible enhy or detainer, and without incurring any liability for any damage resulting therefrom. The City hereby waives any right to claim damage far such re-entry and expulsion, and such entry and possession shall not terxninate this Lease or release the City, in whole or in part, from any obligation, including the City's obligation 54696 1'� o�-��ay to pay all Rent payable by the City hereunder, for the Term or any other right given to the County hereunder or by operation of law; (c) The County may, but need not, relet the Properry or any part thereof for such Rent and upon such terms as the County, in it sole discrerion, shall determine (including the right to relet the Property as part of the larger area and the right to change the character or the use made of the Property), and the County shall not be required to accept any tenant offered by the City or to observe any inshuctions given by the City about such reletting. In any such case, the County may make repairs, alterations and additions in ar to the Property, and redecorate the same to the extent the County deems necessary ar desirable, in it sole discretion. All Rent and other sums received by the County from any such reletting shall be applied as follows: first, to the payment of any indebtness other than Rent due hereunder from the City to the County; second, to the payment of any costs and expenses of such alterations and repairs; third, to the payment of the County's expenses of relet6ng, including, without limitation, broker's commissions, reasonable attorney fees and lease inducements, such as moving or leasehold improvement allowances; fourth, to the payment of Rent due and unpaid hereunder; and the residue, if any, shall be held by the County and applied in payment of future Rent as the same may be come due and payable hereunder. If such Rent and other sums received from such reletting during any month be less than the Rent to be paid during said month by the City hereunder, the City shall pay such deficiency to the County. Such deficieacy shall be calculated and paid monthly. 54696 18 o�-��ay Notwithstanding any such re-entry by the County, the County may at any time hereafter elect to terminate this Lease for such previous breach. (d) The City acknowledges that the damages the County would incur in terminating this Lease following a default by the City would be difficult to estimate or ascertain. Therefore, the City agrees that in the event the County elects to terniinate this Lease, the County may, in addition to other remedies available at law or in equity, declare all unpaid Rent payable under this Lease immediately due and payable, as liquidated damages, and not a penalty, and in addirion, recover from the City further liquidated damages, and not as a penalty, an amount equal to the sum of the following: (i) all unpaid Rent that is payable by the City hereunder and that accrues through the effective date of termination; (ii) all Base Rent for the term of the Lease accruing from the date of termination to expiration of the term of this Lease and which is necessary for the County to defease the Bonds, which the County will do at the earliest date possible under the terms of any Bond indenture. (e) Any and all property which may be removed from the Property by the County pursuant to the authority of the Lease or of law, to which the City is or may be entitied, may be handled, removed and stored, as the case may be, by ar at the direction of the County at the risk, cost and e7cpense of the City, and the County shall in no event be responsible for the value, preservation or safekeeping thereof. The City shall pay to the County, upon demand, any and all expenses incurred in such removal and all storage charges against such property so long as the same shall be in the County's possession or under the County's control. Any such 54696 19 oa.-���{ property of the City not retaken by the City from storage within thirry (30) days after removal from the Property shall, at the County's option, be deemed conveyed by the City to the County under this Lease as by a bill of sale without further payment or credit by the County to the City. (� Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies herein provided or any other remedies provided by law, nor shall pursuit of any remedy herein provided constitute a forfeiture or waiver of any Rent due to the County hereunder or of any damages accruing to the County by reason of the violation of any of the terms, provisions and covenants herein contained. No act or thing done by the County or its agents during the Term shall be deemed a terminarion of this Lease or an acceptance of the surrender of the Property, and no agreement to terminate this Lease or accept a surrender of said Property shall be valid unless in writing signed by the County. No waiver by the County of any violation or breach of any of the terms, provisions and covenants herein contained shall be deemed or construed to cons6tute a waiver of any other violation or breach of any of the terms, provisions and covenants herein contained. The County's acceptance of the payment of Rent or other payments hereunder after the occurrence of an Event of Default shall not be conshued as a waiver of such default, unless the County so notifies the City in writing. Forbearance by the County to enforce one or more of the remedies herein provided upon an Event of Default shall not be deemed or construed to constitute a waiver of such default ar of the County's right to enforce such remedies with respect to such default or any subsequent default. 54696 20 o�-���ay ARTICLE 15. PROPERTY TAX DIS'IRIBUTION OFFSET The County may, in its discretion, recover any sums due to it under the provisions of Article 14 hereof by withholding from any property taac distribution due from the County to the City under the provisions of Minnesota Statutes Chapter 276. ARTICLE 16. NOTICES Any notices or communications required or desired to be given hereunder shall be in writing and shall be deemed effective and received upon personal delivery or five (5) days after the deposit in the United States mail, certified, postage prepaid, return receipt required, to the County or the City at the following addresses: THE COUNTY Paul Kirkwold Ramsey County Manager 250 Courthouse St. Paul, MN 55102 THE CTI'Y Peter White Real Estate Division 140 City Hall St. Paul, MN 55102 ARTICLE 17. HAZARDOUS SUBSTANCES The City shall at all times comply with all applicable local, state and federal laws, ordinances and regulations relating to Hazardous Substances. "Hazardous Substances" means (1) any oil, petroleum product, flammable substances, explosives, radioactive materials, hazardous wastes or substances, toxic wastes or substances, infectious wastes or substances or any other wastes, materials or pollutants that (A) pose a hazazd to the Property or Building or to persons on or about the Property or Building or (B) cause the Property or Building to be in violation of any hazardous materials laws; (2) asbestos in any form, urea-formaldehyde foam insulation, transformers or other equipment that contains dielectric fluid containing polychlorinated biphenyl, or radon gas; (3) any chemical, materiais or substance defined as or included in the defuution of "hazazdous sabstances," "hazazdous wastes," "hazardous materials," sa69v 21 os ��ay "extremely hazazdous waste," "restricted hazardous waste," "infecfious waste," or "toxic substances," or words of similar import under any applicable local, state or federal law or under the regulations adopted or gublications promulgated pursuant thereto, including, but not limited to, the Comprehensive Environmentai Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601, et seq.; the Hazardous Materials Transportation Act, as amended, 42 U.S.C. §§6901, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. §§1251, et seq.; (4) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental authority or may or could pose a hazard to the health and safety of the occupants of the Building or Property or the owners and/or occupants of property adjacent to or surrounding the Property, or any other person or entity coming upon the Property or adjacent property; and (5) any other chemical, material or substance that may or could pose a hazard to the environment. The City shall not: (i) use the Building or Property for the storage of Hazardous Substances except for such acrivities that are part of the course of the City's ordinary business (the "Permitted Activities"); provided, such Permitted Acrivities are conducted in accordance with all applicable laws, orders, regularions and ordinances; (ii) use the Building ar Property as a landfill or dump; or (iii) install any underground tanks of any type at the Property. The City shall at its own expense maintain in effect any and all pernuts, licenses ar other governmental approvals, if any, required for the City's use of the Property and require the same of any subtenants. The City shall make and cause any subtenant to make all disclosures required of the City by any laws, and shall comply and cause any subtenant to comply with all orders concerning the City's use of the Property issued by any gove�ental authority hauing jurisdiction over the Property and take all action required by such governmental authoriries to bring the City's activities on the Property into compliance with all environmental and other laws, 54696 22 oZ-t��H rules, regulations and ordinances affecting the Property. If at any time the City shali become awaze, or have reasonable cause to believe, that any Hazardous Substance has been released or has otherwise come to be located on or beneath the property, the City shall gve written notice of that condition to the Counry immediately after the City becomes so aware. The City shall be responsible for, and shall indemnify, defend and hold the County harmless from and against, all environmental claims, demands, damages and liabiliries, including, without limitation, court costs and reasonable attorney fees, if any, arising out of, or in connecrion with, the generation, storage, disposal or other presence of any Hazazdous Substance in, on or about the Building or Property during the Terxn or that the City caused or pernutted. The indexnnification provided by this Articlel7 shall survive the termination of this Lease. ARTICLE 18. OPTION TO PURCHASE AT END OF TERM Provided that the City is not in default of any material terms, conditions, or covenants contained in this Lease at the time of the exercise of this option to purchase, at the end of the term hereof the City shall have the option to purchase the Property for the sum of one million five hundred thousand dollars ($1,500,000.00)(the Option Purchase Price). On or before September 30, 2002, the City shall pay to the County the sum of one miilion five hundred thousand dollars ($1,500,000.00) as Option Earnest Money. The Option Earnest Money shall be held by the County, without interest, as earnest money in connection with the City's option to purchase the Premises contemplated in this Article 18 or in Article 19, (and not as any payment of Rent or additional rent under the Lease), and the principal amount thereof shall be credited against the Option Purchase Price payable by the City on the Option Closing Date. sae9e 23 oa-1��`� The City shall exercise the option to purchase that is contemplated in this Article 18 or in Article 19 by delivering written notice to that effect to the County (the Exercise Norice). The Exercise Notice shall designate the date the City desires to close upon the purchase contemplated thereby (the Option Closing Date). The Opfion Closing Date shall not occur earlier than: (1) for the oprion provided by Article 18, the last day of the Term, or (2) for the opfion provided by Article 19, the last day of the third calendaz month after the date of the exercise notice, unless otherwise agreed by the parties. In the event of the timely delivery of the Exercise Notice by the City the parties shall proceed to a closing on the purchase and sale of the PROPERTY in accordance with the following terms: (a) The closing date (the "Date of Closing") shall be the Option Closing Date, or the succeeding business day if such day is not a business day; (b) The balance of the purchase price less the Option Earnest Money shall be payable in immediately available funds at closing; (c) The County shall convey title to the Subject Property by Quit Claim deed, subject to reservations, covenants, easements and restrictions of record without effective forfeiture provisions, Permitted Encuxnbrances, this Lease, the right of ail who claim through the City, alllevied and pend'mg special assessments, the right of any occupants, and building and zoning laws and other ordinances, but for the option provided by Article 19, the ritle transferred shall be in fee simple determinable, ritle to terminate and revert to the County if the Property ceases to be used by the City for public safety purposes prior to the end of the original Term of this Lease. (d) Except for any filing fees associated with the satisfaction of any mortgages or other liens created by the County, which shall be paid by the County, the City shall pay all fees and tases due in connection with the reco"rding of the deed and other conveyance doctunents; (e) The City shall be solely responsible for the payment of all costs incurred in providing a title insurance coxnxnihnent or other evidence of title for the Subject Property that the City desires to obtain, and the City shall be solely responsible for any closer's fee, title insurance premiums, survey, engineering, environmental and other due diligence costs; sa69e 24 o�--��iy ( fl The City shall have paid to the County all amounts due under the Lease through the Date of Closing; (g) Upon the occurrence of the Date of Closing, this Lease shall be ternunated and of no fm�ther force and effect. If the City elects to terminate this Lease by non-appropriation, pursuant to Article 20 hereof, or if the property is acquired by eminent domain pursuant to Article 11, this oprion and the option contemplated by Article 19 shall expire, lapse, and be of no further force. Upon such ternrination by non-appropriation, or acquisition under eminent domain, the County shall, within six months of the date this Lease terminates, refund to the City the Option Eamest Money, without interest. ARTICLE 19. OPTION TO PURCHASE DURING TERM During the term hereof, the City shall have the option to purchase the Property, and as an aspect thereof to prepay and terminate this Lease, for the sum of the following: (1) One million five hundred thousand dollars ($1,500,000) (which shall be satisfied by the County's retention of the Option Earnest Money described in Article 18); plus (2) The present value on the Date of Closing of the Base Rent Override due for the remainder of the original term of this Lease, using the yield on the Bonds (being the County's bonds for the Property issued in 2003, or any refunding issue thereo fl as the discount factor; plus (3) A sum sufficient, with investment earnings thereon, to redeem and prepay the principal of and interest on all the Bonds on a date certain for which notice of call can be given. In the event that the Bonds are not at the time prepayable, the amount paid pursuant to this clause sha11 be the amount which, invested so as not to cause the Bonds to be arbitrage bonds, is necessary to fund an escrow account in full that constitutes a defeasance of the Bonds. The County must have received the purchase price before giving notice of redemption of the Bonds. Additional provisions relating to the exercise of this option are set forth in Article 18. 54696 ZS o�- ���-y ARTICLE 20. ANNUAL APPROPRIATION LEASE The City's obligafions under this Lease are subject to an annual appropriafion by the City, and the City has the right to terminate this Lease by declining to appropriate funds for the Base Rent and any Addirional Rent, including operating costs. The City must notify the County not later than September 1 of its decision not to appropriate funds for its obligations under this agreement for the following yeaz. Such notification and non appropriation of funds by the City shall not be an event of default, as defined in Article 13, and this Lease shall terminate and be ofno further force and effect on December 31 of the year in which such notification and non appropriation is made, and the parties obligations hereunder shall terminate without penalty at 12:00 pm. on December 31 (The Termination Date). Prior to 12:00 pm. on the Ternunation Date, the City shall peaceably and quiefly leave, yield up and surrender the Property to the County in good repair and serviceable condition. For purposes hereof, and without limiting the generality of the foregoing, the Property shall be surrendered on such date in at least the following condition: (a) free from all liens and encumbrances; (b) in material compliance with all state and local building and fire codes applicable hereto; and (c) all licenses and permits of any governmental authority applicable to operation and use of the Property shall be transferred to the County to the extent transferable. The City shall leave the Property broom clean and free of occupants. The City shall remove from the Property on or before the Termination Date all personal property situated thereon which was not purchased with proceeds of the Bonds, pursuant to Article 4(b), and which is not otherwise owned by the County, or subject to the lien of any mortgage, and at its 54696 2( oa--�».y sole cost and expense shall, on or prior to such Termination Date, repair any damage caused by such removal. Property not so removed shall become the properiy of the County, which may thereafter cause such property to be removed from the Properiy and disposed of, but the cost of such removal and disposal as well as the cost of repairiug any damage caused by such removal sha11 be borne by the City. The provisions of this Article 20 are intended to and shall be interpreted to comply with the provisions of Minnesota Statutes Section 465.71 (2002). ARTICLE 21. ALTERATIONS; CONDITION OF PREMISES UPON EXPIRATION The City shall not make any alterations, additions or improvements to the Property (including but not limited to roof and wall penetrations) without the prior written consent of the County. The City may, without consent of the County, but at its own cost and expense and in a good worlrnianlike manner erect such shelves, bins, machinery and trade fixtures as it may deem advisable, without altering the basic character of the Building and without overloading or damaging such Building, and in each case complying with all applicable governmentallaws, ordinances, regulations and other requirements. Prior to commencing any such alterations, additions or improvements City shall provide such assurances to County, including, without limitation, waivers of lien, surety company performance and payment bonds and(or personal guaranties of persons of substances, as the County shall require to assure payment of the costs thereof and to protect the County against any loss from mechanics', laborers', materialmen's or other liens. All alterations, additions, installations, improvements and partitions erected by the City, including, without limitation, all telephone and data communications cabling ("Cabling"), shall be and remain the property of the County during the Term and the City shall, unless the County otherwise elects as provided below, remove all alterations, additions, installations, 54696 2 � oa.- ��ay improvements and partirions, including, without limitation, the Cabling, erected or installed by the City and restore the Property to its original condition by the earliest of (a) the Expiration Date, (b) the date of tennivation of this Lease prior to the Expiration Date or (c) the vacating of the Property without termination of this Lease (said eazliest date may be referred to as the "Restoration Date"); provided, however, that if the County so elects, in writing, prior to the Restoration Date, such alterations, additions, installations, unprovements, partitions and Cabling (other than trade fixtures and personal property of the City) shall become the property of the County as of the Restoration Date and shall be delivered to the County with the Property. All shelves, bins, machinery and trade fixtures installed by the City shall be removed by the City by the Restoration Date if required by the County, and upon any such removal the City shall restore the Property to its original condition. All such removals and restoration shall be accomplished in a good and workmanlike manner and shall not damage the primary shuctural qualities of the Building. ARTICLE 22. MISCELLANEOUS (a) Gender: etc. Words of any gender used in this Lease shall be held and construed to include any other gender, and word in the singular number shall be held to include the plural, unless the context otherwise required. (b) Binding Effect. The terms, provisions and covenants and conditions contained in this L,ease shall appiy to, inure to the benefit of, and be binding upon, the parties hereto and upon their respective legal representatives, successors and permitted assigns, except as otherwise herein expressly provided. The City agrees to funiish promptly upon demand, a corporate resolution, or other appropriate documentation evidencing the due authorization of the City to enter into this 54696 28 oa- �� a�y Lease. Nothing herein contained shall give any other tenant in the Building any enforceable rights either against the County or the City as a result of the covenants and obligations of either party stated herein. (d) Cantions. The captions inserted in this Lease are for convenience only and in no way define, limit or otherwise describe the scope or intent of this Lease, or any provision hereof, or in any way affect the interpretation of this Lease. (e) Amendment. This Lease may not be altered, changed or amended except by an instrument in wriring signed by both parties hereto. ( fl Survival of Oblieations. All obligations of the City hereunder not' fully performed as of the expiration or earlier termination of the Term shall survive the expiration or earlier termination of the Term, including without limitation, all payment obiigations with respect to Operating Costs and all obligations concerning the condition of the Property. Upon the expirarion or earlier termination of the Term, the City shali pay to the County the amount as esrimated by the County, necessary (i) to repair and restore the Property as provided herein; and (ii) to dischazge the City's obligation for Operating Costs or other amounts due the County. All such amounts shall be used and held by the County for payment of such obligations of the City, with the City being liable for any additional costs upon demand by the County, or with any excess to be returned to the City after all such obligations have been determined and satisfied. (g) Severabilitv. If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future laws effective during the Term, then and in that event, it is the intention of the parties hereto that the remainder of this Lease 54696 2C� aa.-�•�-y shall not be affected thereby, and it is aiso the intention of the parties to this Lease that in lieu of such clause or provision of this Lease that is illegal, invalid or unenforceable, there be added as a part of this Lease a clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and be legal, valid and enforceable. (h) Waiver of Jury Trial; Jurisdiction. Each of the County and the City hereby waives any right to a trial by jury in any action relating to this L,ease. This Lease shall be enforced in the District Court, Second Judicial District, State of Minnesota. (i) Complete Agreement. This Lease contains all of the agreements and understandings relating to the leasing of the Property and the obligations of the County and the City in connection with such leasing. The County has not made, and the City is not relying upon, any warranUes ar representations, promises or statements made by the County or any agent of the County, except as expressiy stated herein. This Lease supersedes any and all prior agreements and understandings between the County and the City and alone expresses the agreement of the parties. (j) Governine Law. This Lease, the rights of the parties hereunder and the interpretation hereof shall be governed by, and construed in accordance with, the internal laws of the State of Minnesota, without giving effect to conflict of laws principles thereof. (k) Construction. The parties agree that counsel for both parties have reviewed this Agreement. Accordingly, neither pariy shall deemed to have drafted this Agreement and it shall not be conshued against either party by virhxe of the drafting thereof in the event of a dispute. 54696 3 � o�.-���.� ARTICLE 23. EXHIBITS E�chibits A, B, and C attached hereto aze hereby incorporated by reference. ARTICLE 24. TAX EXEMPTION To this effect the City shall (1) file a form 8038-G with respect to this L,ease; (2) maintain a register of ownership of this Lease so that it is in registered form; (3) not use any porkion of the proceeds of this Lease directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (a) for a reasonable temporary period until such proceeds aze needed for the purpose for which this Lease is issued and (b) in addition to the above in an amount not greater then $100,000; (4) not invest any proceeds of this Lease or any sums from time to time held in any City account which will be used to pay principal or interest to become due on this Lease at a yield in excess of the applicable yield restrictions imposed under then-applicable federal azbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made auailable; (5) not invest any proceeds of this Lease or other relevant moneys in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such inveshnent would cause this Lease to be "federally guaranteed" within the meaning of Section 149(b) of the federal Internal Revenue Code of 1986, as amended (the "Code"); (6) not use the proceeds of this Lease or the facility, or cause or permit them to be used, or enter into any deferred payment arrangements for the cost of the facility, in such a manner as to cause this Lease to be a"private activity bond" within the meaning of Section 103 and 141 through 150 of the Code (for this purpose, the City reasonably expects that no action will be taken over the term of this Lease that would cause this Lease to be a private activity bond, and the auerage term of this Lease is not longer than reasonably 54696 31 o�.-����t necessary for the govemmental purposes of the issue); (7) not use the proceeds of this Lease in such a manner as to cause this Lease to be a"hedge bond" within the meaning of Section 149(g) of the Code; (8) comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of interest on this I,ease, including without lunitarion requirements relating to temporary periods for inveshnent, limitations on amounts invested at a yield greater than the yield on this Lease, and the rebate of excess inveshnents earnings to the United States (for this purpose, if any elections are available now or hereafter with respect to azbitrage or rebate matters relating to this Lease, the Mayor, Clerk, Treasurer and_Director, Office of Financial Services, or any of them , aze hereby authorized and directed to make such elections as they deem necessary, appropriate or desirable in connecrion with this Lease, and all such elections shall be, and shall be deemed and treated as, elections of the City). The City shall also be responsible for calculating and paying any azbitrage rebate with respect to the Bonds or any Reissue Bonds. The County will cooperate with the City in executing and submitting the Internal Revenue Service (1RS) form 8038-T (or other applicable forms) in connection therewith. The City does not reasonably expect to terminate this Lease pursuant to its right of non- appropriarion, but this representation shall in no way limit the City or estop it from exercising its right of non-appropriation. The interest the City pays on this Lease shall be specifically identified on a schedule to be attached hereto upon the County's issuance of its Bonds. 54696 32 oa.-��1y IN WITNESS WHEREOF, the parties hereto have executed this agreement. APPROVED AS TO FORM: Assistant County Attorney APPROVED AS TO FORM: Assistant City Attomey 54696 33 RAMSEY COUNTY � � Jim McDonough, Chair Board of Commissioners Bonnie Jackelen, Chief Clerk Board of Commissioners CTTY OF SAINT PAUL, MINNESOTA : Its Mayor and by: Its Director, Office of Financial Services and by: / Its City Clerk �