05-331Council File # ��� ��
Resolution #
Green Sheet # 3026061
OF
Presented By
Referred To
PAUL, MINNESOTA
Committee: Date
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RESOLUTTON APPROVING DISTRICT HEATIlVG
SUBORDINATION AGREEMENT AND
CONSENTING TO ADDITIONAL BONDS
A. The City of Saint Paul, was awarded an Urban Development Action Crrant (No. B-81-AA-0028, the
"UDAG") for the purposes of the district heating system (the "System") owned and operated by District Heating
Development Company, d/b/a District Energy St. Paul, Ina (the "Company"); and
B. In connecrion with the development of the System, the City made a loan to the Company from the
proceeds of the UDAG pursuant to a City Loan Agreement dated as of December 1, 1982 as amended by an
Amendment to City Loan Agreement dated December 1, 1985 (collectively, the "City Loan AgreemenY'), and
the Ciry Loan Agreement also provided for loans to the Company by the Ciry of Communiry Development Block
Grant and tax increment funds, all of which loans, and the obligafions of the Company under the City Loan
Agreement, are secured by a City Mortgage, Fixture Financing Statement and Security Agreement dated as of
December 1,1982 and amended by an Amendment to City Mortgage, Fixture Financing Statement and Security
Agreement dated December 1, 1985 (collectively, the "City Mortgage"); and
C. The Housing and Redevelopment Authority of the City of 5aint Paul, Minnesota (the "IIIZA") has
previously issued and has outstanding its $30,500,000 Variable Rate Demand Purchase Dishict Heating Revenue
Bonds, 1982 Series A, dated December 22, 1982 (the "1982 Bonds"), its $2,700,000 Variable Rate District
Heating Revenue Bonds,1997 Series C, dated July 1,1997 (the "1997 Bonds"), and its $7,000,000 Variable Rate
District Heating Revenue Bonds,1999 Series D and E dated as of October 1,1999 (the "1999 Bonds") and has
loaned the proceeds thereof to the Company for the purpose of fmancing the System; and
D. The Port Authority of the City of Saint Paul (the "Port Authority") has, pursuant to a Joint Powers
Agreement with the I �RA dated as of April l, 2003 (the "Joint Powers Agreement"), previously issued and has
outstanding its $4,000,000 Variable Rate Distdct Heating Revenue Bonds, 2003 Series F and $750,000 Variable
Rate District Heating T�able Revenue Bonds, 2003 Series G both dated as of April 23, 2003 and its $2,250,000
Variable Rate District Heating Revenue Bonds, 2003 Series H dated as of May 14, 2003 (the "2003 Bonds") and
has loaned the proceeds thereof to the Company for the purpose of financing the System; and
2584370
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2 E. The Company has proposed that the Port Authority issue its Variable Itate District Heating Revenue
3 Bonds, 2005, Series I and J(the "2005 Bonds"), to provide funds to fu�uice improvements to the System; and
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5 F. The 2005 Bonds are to be issued by the Port Authority piusuant to the Joint Powers Agreement and on
6 apazity with the 1982 Bonds, the 1997 Bonds and the 1999 Bonds previously issued by the HRA and outstanding
7 under an Amended and Restated Indenture of Trust dated as of July 1,1997 as amended (the "Master Indenture'�
8 between the HRA and First Trust National Association (now lrnown as U.S. Bank National Association) (the
9 "Trustee") and the 2003 Bonds previously issued by the Port Authority under a Second Supplemental Indenture
10 of Trust dated as of April 1, 2003 (the "Second Supplementai Indenture") between the Port Authority and the
11 Trustee; and
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G. The Company has secured its obligafion to repay the loans of the proceeds of the 1982,1997, 1999, and
2003 Bonds, by granting a first lien leasehold mortgage and security interest in certain real property and assets
of the Company (collectively the "Mortgaged Properiy") to the Trustee and executing and delivering a Mortgage,
Fixture Financing Statement and Security Agreement dated as of December 1,1982 and subsequent amendments
thereto executed in connec6on with the issuance of each series of Bonds (collectively the `Bond Mortgage"); and
H. In connection with the issuance ofother series ofrevenue bonds pursuant to the Master Indenture, the City
has previously authorized and executed certain subordination agreements pursuant to which the City has
subordinated the liens and security interests granted in the City Mortgage to the rights of the Trustee under the
Bond Mortgage; and
I. The loan to be made by the Port Authority from the proceeds of the 2005 Bonds will require
subordinaYion of the City's security interest in the Mortgaged Properly to the interests of the Trustee for the
District Heating Revenue Bonds (including the 2005 Bonds) and the interest ofthe bank which issues the letter(s)
of credit securing the bonds, which subordination will be evidenced by a Subordination Agreement to be dated
as of April l, 2005 (the "Subordination Agreement"); and
J. It is necessary and desirable for the City to recognize that the subordinarion provided by the subordination
agreements applies to the Bonds issued by the Port Authority, as well as any other bonds issued pursuant to the
Master Indenture, whether by the Port Authority or the HRA, and there has been submitted to this City Council
the Subordination Agreement, in the form attached hereto as Eachibit A, to accomplish this result; and
K. Minnesota Statutes, Chapter 469.084(11), provides that any issue ofrevenue bonds authorized by the Port
Authority shall be issued only with the consent of the City Council of the City of Saint Paul, by resolution adopted
in accordance with law; and
L. To meet the requirements of state law, the Port Authority has requested that the City Council give its
requisite approval to the issuance ofthe proposed 2005 Bonds by the Port Authority, subject to final approval of
the details of said 2005 Bonds by the Port Authority; and
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2 M. A public hearing on the project to be financed with the proceeds of the 2005 Bonds was held by the Port
3 Authority after notice was published, and materials made available for public inspecfion at the offices of the Port
4 Authority, as required by Section 147(fl of the Intemal Revenue Code of 1986, as amended (the "Code"), at
5 which public heazuig all those appeatiug who so desired to speak were heazd.
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NOW TT�REFORE, BE TT RESOLVED by the City Council ofthe City of Saint Paul, il�liimesota, as follows:
City Subordination Agreement
l. The City hereby finds that the subordinafion effected by the Subardination Agreement is effective to
subordinate the liens and security interests of the City under the City Mortgage to the liens and security interests
securing all bonds issued under the Master Indenture, whether such bonds are issued by the Port Authority or the
HRA, including specifically the 2005 Bonds.
2. The form of the Subordinarion Agreement is hereby approved. The Subordination Agreement is hereby
authorized and d'uected to be executed by the appropriate officers of the City, subj ect to approval of the form
thereof by the City Attomey.
21 3. The form of the Subordinarion Agreement approved hereby is authorized to be executed with such
22 variations, modificafions, additions or deletions as may be necessary and approved by the City Attorney. Any
23 such changes sha11 be deemed to have been agreed to by virtue of execurion of the documents.
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25 Consent to Issuance of 2005 Bonds
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27 4. Tn accardance with the requirements of Minnesota Statutes 469.084(11) and Section 147( fl of the Code,
28 the City Council hereby approves the issuance ofthe aforesaid 2005 Bonds by the Port Authority for the purposes
29 described in the Port Authority resolution adopted April 19, 2005, the exact details of which, including but not
30 limited to, provisions relating to maturities, interest rates, discount, redemption, and the issuance of additional
31 bonds are to be determined by the Port Authozity, and the City Council hereby authorizes the issuance of any
32 addifional bonds (including refunding bonds) by the Port Authority found by the Port Authority to be necessary
33 for can•ying out the purposes for which the aforedescribed 2005 Bonds are issued.
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Plannina & Economic DeveloAment
BY: c�� �y2%i�'�// '�
�
by City Attorney ��l
�... _ _
�, _ � . _
� Green Sheet Green Sheet Green Sheet Green Sheet Green 3heet �eeen Sheet .�
� �'. .., ., .,�., � ,:_. .
� �� � DepartrnenUoffice/council: Datelnitiated: �./.J���•
� PE - p�anni�gBcEconomicDevelopment „�.PR-05 . Green Sheet NO: 3026061
Confiact Person Ph e.
� " " David Gontarek�j"� K � � �-�-
,. s-ss�a /
�
�, Must Be on Council Agenda by (Date):`
� _�i��
Total # of Signature
A�
Number
For
Routing
O�der
0
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(Clip Ali Locafions for Signature)
la oin & E no i Devel
lanoin EconomicDevelu� DeoartmentDirector �/
inancisi Services O �ce inan isl ervi '~
i Attoroe __��
a or' Offic or/ASSistant ��
ouncil Cti Council
� � Ci lerk
Resolurion approving Port Authority to issue bonds for District Energy and Subordination Agreement to subordinate liens and
security interests of the City Under the „
Ciry Mortgage
�dations: Approve (A) or R
Planning Commiseion
CIB Committee
Civil Service Commission
Personal Service
1. Has this person/firm ever worked under a contrect for this tlepartment?
Yes No
2. Has this personffirm ever been a city employee?
Yes No .
3. Does this person/firm possess a skill not normally possessed by any
current city employee?
Yes No
Explain all yes awswers on separate sheet and attach to green sheet
Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why):
�'� .
District Energy requests to sell $7,000,000 in conduiYrevenue bonds for the expansion of their services to Saint Paul
AdvantapesffApproved:
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The Bonds aze issued and District Energy expands their system to new customers.
DisadvanWnes If Approved:
Disadvantages If Not Approved:
The heating system is not expanded
(�Yi
�RY..:.= �3��
Q� � � 2009
,� ._.
ToWI Amount of
Transac6on: �000000 Cost/Revenue B�dgeteu:
Fundinq souree: Conduit Revenue Bonds ActivitV Number:
Financial Information:
(Explain) .
y��
SUBORDINATION AGREEMENT
among
CITX OF SAINT PAUL, MINNESOTA,
DISTRICT HEATING DEVELOPMENT COMPANY, d/b/a
DISTRICT ENERGY ST. PAUL, INC.,
U.S. BANK NATIONAL ASSOCIATION,
as Trustee,
. �
DEXIA CREDIT LOCAL
(New York Branch)
Dated as of April l, 2005
p5-33\
This instrument drafted by: LEONARA, STREET AND DEINARD (RH)
Professional Association
380 St. Peter Street, Suite 500
St. Paul, Minnesota 55102
2583418
Subordination Ageement
05-331
SUBORDINATION AGREEMENT
THIS SU AGREEMENT is made and entered into as of the lst day of
April, 2005 by and among
i) the Ciry of Saint Paul, Mimiesota, a home rule charter city and municipal
corporation organized under the laws of the State of Minnesota (the "City"),
ii) District Heating Development Company, Inc. d/b/a District Energy St. Paul, Inc, a
Minnesota nonprofit corporation ("Company"), and
iii) U.S. Bank National Association, a national banking association ("U.S. Bank"), as
Trustee for the Housing and Redevelopment Authority of the City of Saint Paul,
Minnesota, $30 Variable Rate Demand Purchase District Heating Revenue
Bonds, 1982 Series A(the "Series A Bonds"), $2,700,000 Variable Rate Demand
Purchase District Heating Revenue Refunding Bonds, 1997 Series C(the "Series C
Bonds"), the $3,500,000 Variable Rate Demand Purchase District Heating Revenue
Bonds, 1999 Series D(the "Series D Bonds"), the $3,500,000 Variable Rate
Bemand Purchase District Heating Revenue Bonds, 1999 Series E(the "Series E
Bonds"), the $4,000,000 Variable Rate Demand Purchase District Heafing Revenue
Bonds, 2003-2 Series F(the "Series F Bonds"), the $750,000 Variable Rate Demand
Purchase District Heating Revenue Bonds, 2003-3 Series G(the "5eries G Bonds")
and the $2,250,000 Variable Rate Demand Purchase District Heating Revenue
Bonds, 2003-4 Series H(the "Series H Bonds"), the $4,500,000 Variable Rate
District Heating Revenue Bonds, 2005-4 Series I(the "Series I Bonds"j and the
$2,500,000 Variable Rate District Heating Revenue Bonds, 2005-5 Series J(the
"Series 7 Sonds"), the Series I Bonds and the Series J Bonds to be issued on or after
the date of the execution hereof; and
(iv) Dexia Credit Loca1 (New Yark Branch) (previously lmown as Credit Local de
France (the `Bank"), as the Bank with respect to the Series A Bonds, the Series C
Bonds, the Series D Bonds, the Series E Bonds, the Series F Bonds, the Series G
Bonds, the Series H Bonds, the Sexies I Bonds and the Series J Bonds (collectively,
the `Bonds") and as a co-mortgagee with the Trustee under the Mortgage (as defined
herein) as amended in connection with the Series I Bonds and the Series J Bonds.
WITNESSETH:
WIIEREAS, the Company, U.S. Bank and The First National Bank of Saint Paul (the
"Original Bank"; the U.S. Bank and the Original Bank being hereinafter joinfly referred to as the
"Original Mortgagee") have entered into tiat certain Mortgage, Fixture Financing Statement and
Security Agreement dated as of December 1, 1982 (the "Mortgage'� which was filed and recorded
in Minnesota on the 20�' (abstract) and 20�' (tonens) day of December, 1982 at 430 o'ciock p.m.
as Document No. 2164536 (abstract) and 730850 (tonens); as amended by that certain First
Amendment to Mortgage, Fixture Financing Statement and Security Agreement dated as of
2583418
Subordu�apon Agreemrnt
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December 1, 1985 (the "First AmendmenY') which was filed and recorded in the Office of the
County Recorder in and far Rarnsey County, Minnesota on the 8�' day of January, 1986 at 1:47
dclock pm. as Document No. 2296824 (abstract) and 793908 (tonens); as fiuther amended by that
certain Second Amendment to Mortgage, Fixture Financing Statement and Security Aa eement
dated as of September 1, 1990 (the "Second Amendment") by and between the Company, the U.S:
Bank and The Swnitomo Bank Limited (Chicago Branch) ("Sumitomo''), which was filed and
recorded in the Office of the County Recorder in and for Ramsey County, Minnesota on the 25
day of September, 1990 at 3:51 dclock p.m. as Document No. 2564397 (abstract} and 932515
(torrens); as fiuther amended by that certain Third Amendment to Mortgage, Fixture Financing
Statement and Security Agreement dated as of July 1, 1997 (the "T'hird Amendment") by and
between the Company, U.S. Bank and the Bank, which was filed and recorded in the Office of
County Recorder for Ramsey County, Minnesota on the 23` day of July, 1997 as Document No.
3003909 (abstract) and on August 5, 1997 as Aocument I3o. 1160528 (tonens); as further amended
by that certain Fourth Amendment to Mortgage, Fixture Financing Statement and Security
Agreement dated as of September 1, 1999 (the "Fourth AmendmenP') by and between the
Company, U.S. Bank and the Bank which was filed and recorded in the O�ce of County Recorder
for Ramsey County, Minnesota on the 8`�' day of October, 1999 as Document No. 3276556
(abstract) and on October 19, 1999 as Document No. 1578662 (torrens); and as further amended by
that certain Fifth Amendment to Mortgage, Fixture Financing Statement and Security Agreement
dated as of April 1, 2003 (the "Fifth AmendmenY') by and between the Company, U.S. Bank and
the Bank which was filed and recarded in the Office of County Recorder for Ramsey County,
Minnesota on the 12th day of May, 2003 as Document No. 3620641 (abstract) and on May 12, 2003
as Document No. 1750392 (torrens); granting a lien to U.S. Bank and the Bank as co-mortgagees on
the real property described on Schedule I annexed hereto and made a part hereof; and
WHEREAS, coincident with the execution and recording of the Mortgage, the Housing and
Redevelopment Authority of the Ciry of Saint Paul, Minnesota (the "HRA") issued and delivered its
Series A Bonds and loaned the proceeds thereof (the "Loan") to the Company pursuant to a Loan
Agreement, dated as of December 1, 1982 (the "Loan AgreemenY'); and
WHEREAS, coincident with the execution and recording of the First Amendment, the HRA
issued its District Heating Revenue Bonds, 1985 Series B in the aggregate principal amount of
$14,000,000 (the "Series B Bonds") pursuant to a First Supplemental Indenture of Trust dated as of
December 1, 1985 (the "First Supplemental Indenture"), and has loaned the proceeds thexeof (the
"Series B Loan") to the Company pursuant to a"First Supplemental Loan AgreemenY' dated as of
December 1, 1985 (the "First Supplemental L,oan Agreement"); and
WHEREAS, the Original Bank issued its urevocable Letter of Credit No. 17082 (the
"Original Series A Letter of CrediY') to secure the Series A Bonds; and
WHEREAS, coincident with the execution and recording of the Second Amendment,
Sumitomo issued its Irrevocable Transferable Letter of Credit, I3o. BICGO-500339, in the amount
of U.S. $31,552,671.17 (the "Stunitomo I.etter of CrediY') in substitution for the Original Series A
Letter of Credit, pursuant to the terms of that certain Letter of Credit Agreement dated as of
September 1, 1990 by and between the Company and Sumitomo; and
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Subordu�ation AgreemenC
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WHEREAS, the Original Bank transferred and assigned all of its right, title and interest in
the Mortgage and the First Amendment to Sumitomo, pursuant to that certain Assisnment dated as
of September 1, 1990 (the `�Sumitomo Assignment"}, which Sumitomo Assignment was filed for
record in the office of the County Recorder in the County of Ramsey and Sate of Minnesota on the
25�' day of September, 1990 as Document No. 2564396; and
WHEREAS, coincident with the execution and recording of the Third Amendment, the
Bank issued its Irrevocable Direct-Pay Letter of Credit No. 970735, in the amount of $28,897,535
in substatution for the Sumitomo Letter of Credit; and
WHEREAS, Sumitomo transferred and assigned all of its right, tide and interest in the
Mortgage, the First Amendment and the Second Amendment to the Bank, pursuant to that certain
Assignment dated July 1, 1997 (the "AssignmenY'), which Ass b�nment was filed for record in the
office of the County Recorder in the County of Ramsey and State of Minnesota on the 23` day of
July, 1997 as Document No. 3003908, and on August 5, 1999 as Document No. 1160527 (torrens);
and
WIIEREAS, coincident with the execution and recording o£ the Third Amendment, the
IIRA issued the Series C Bonds pursuant to a Fourth Supplemental Indenture of Trust dated as of
July 1, 1997 (the "Fourth Supplemental Indentuse"), and has loaned the proceeds thereof (the
"Series C Loan") to the Company pursuant to a"Third Supplemental Loan AgreemenP' dated as of
Ju1y l, 1997 (the "Third Supplemental Loan Agreement"); and
WHEREAS, subsequent to the issuance of the Series C Bonds, and in connection with a
replacement of the letter of credit securing the outstanding Dish Heating Revenue Bonds, the
FIRA and the Trustee entexed into an Amended and Restated Indenhzre dated as of July 1, 1997, and
the HRA and the Company entered into an Amended and Restated Loan Agreement dated as of July
1, 1997; and
WHEREAS, the Bank issued its irrevocable Letter of Credit No. 970736 (the "Series C
Letter of CrediY') dated July 22, 1997 in the amount of $2,755,036; and
WfIEREAS, coincident with the execution and recording of the Fourth Amendment, the
HRA issued its Series D Bonds and Series E Bonds pursuant to a First Supplemental Tndenture of
Trust dated as of October l, 1999 (the "1999 Supplemental Indenture") and has loaned the proceeds
thereof (the "Series D Loan and Series E Loan") to the Company pursuant to a First Supplemental
Loan Agreement dated as of October 1, 1999 (the "1999 Supplemental Loan AgreemenY'); and
WFIEREAS, coincident with the execution and recording of the Fifth Amendment, the Port
Authority of the City of Saint Paul (the "Port Authority") issued its $4,000,000 Variable Rate
Demand Purchase District Heating Revenue Bonds, 2003-2 Series F(the "Series F Bonds"), the
$750,000 Taxable Variable Rate Demand Purchase District Heating Revenue Bonds, 2003-3 Series
G(the "Series G Bonds") and the $2,250,000 Variable Rate Demand Purchase District Heating
Revenue Bonds, 2003-4 Series H(the "Series H Bonds") pursuant to a Second Supplemental
Indenture by and between the Port Authority and tT.S. Bank dated as of April 1, 2003 (the "2003 .
Suppiemental Indenture"); and the Port Authority agreed to loan the proceeds of the Series F Bonds,
2583418 3
' Subordivatlon Agreement
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the Series G Bonds and the Series H Bonds (the "2003 Loan") to the Company pursuant to a Second
Supplemental Loan Agreement dated as of April l, 2003 (the "2003 Supplementat Loan
AgreemenY'); and
WT�REAS, the Bank issued its direct pay irrevocable transferable letter of credit no.
DCL0304li0 (fhe "Series F Letter of Credit") to secure the Series F Bonds, its direct pay
urevocable transferable letter of credit no. DCL0304131 (the "Series G Letter of CrediY'); and its
d'uect pay irrevocable transferable letter of credit no. DCL0304132 (the "Series H Letter of
CrediY'); and
WHEREAS, simultaneously with the execution and delivery of the Series A Bonds, the City
made a loan in the amount of $9,800,000 to the Company (the "City Loan"), pursuant to a City
Loan Agreement dated December l, 1982, as amended (the "City Loan AgreemenY') between the
City and the Company; and
WHEREAS, the Company secured its obligation to repay the City Loan by granting a
mortgage lien and security interests in the Mortgaged Property and other district heating system
equipment, by executing and delivering a Mortgage, Fixture Financing Statement and Security
Agreement dated as of December 1, 1982 bettiveen the Company, as mortgagor and debtor, and the
City, as mortgagee and recorded in the Office of the County Recorder in and for Ramsey County,
Minnesota on the 21st day of December, 1982 as Document No. 2164537; as amended as of
December 1, 1985 in connection with the issuance of the Series B Bonds, which amendment was
recorded in the OfFice of the County Recarder an and for Ramsey County, Minnesota on the 8th day
of January, 1986 as Document No. 2296843 and as further amended as of September 25, 1990 by a
subordination letter in connecrion with the issuance of the Sumitomo Letter of Credit, which
subordination letter was recorded in the Office of the County Recorder in and for Ramsey County,
Minnesota on the 25th day of September, 1990 as Document No. 2564398 (the "City Mortgage");
and
WHEREAS, the lien and encumbrance of the City Mortgage is subordinated to the lien and
encumbrance of the Original Mortgage, as amended by the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment and the Fifth Amendment (defined
below) (the "Bond Mortgage"), but only to the extent of the principal amount, and interest thereon,
represented by the Series A Bonds, the Series C Bonds, the Series D Bonds and the Series E Bonds,
and the consent of the Ciry is required as a condition to the issuance of Additional Bonds under the
Indenture; and
WHEREAS, the Company has now requested, and the Port Authority has agreed, that the
Port Authority should issue its $4,500,000 Variable Rate District Heating Revenue Bonds, 2005-4
Series I(the "Series I Bonds") and its $2,500,000 Variable Rate District Heating Revenue Bonds,
2005-5 Series J(the "Series J Bonds") pursuant to a Third Supplemental Indenture by and between
the Port Authority and U.S. Bank dated as of April 1, 2005 (the "2005 SupplementaI Indenture");
and the Port Authority has agreed to loan the proceeds of the Series I Bonds and the Series J Bonds
(the "2005 Loan") to the Company pursuant to a Third Supplemental Loan Agreement dated as of
April 1, 2005 (the "2005 Supplemental Loan AgreemenY') far the purpose of funding the expansion
of the district energy system; and
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Subordivatlon Ageement
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WFiEREAS, the Bank has agreed to issue its direct pay irrevocable transferable letter of
credit no. DCL0503160 (the "Series I Letter of Credit") to secure the Series I Bonds and its duect
pay irrevocable transferable letter of credit no. DCL0503161 (the "Series J Letter of CrediY' and
together with the Series I Letter of Credit, the "Letter of CrediP') to secure the Series I Bonds and
the Series J Bonds; and the Company and the Bank have entered into a Letter of Credit
Reunbursement A�eement dated as of April l, 200� (the "Reunbursement AgreemenY') to provide
for the reunbursement by the Company to the Bank for any amounts drawn under the Letter of
Credit; and
WHEREAS, the obligation of the Company to repay the 2005 Loan and all amounts due
under the Reimbursement Agreement will be secured by the Bond Mortgage, through the execution
of a Sixth Amendment to Mortgage, Fixture Financing Statement and Security Agreement dated as
of April 1, 2005 (the "Sixth AmendmenP') between the Company, as mortgagee and debtor, U.S.
Bank (as Trustee) and the Bank, as co-mortgagees and co-secured parties; which amendment shall
increase the aggregate principal indebtedness secured by the Bond Mortgage by $7,000,000; and
WHEREAS, the Company has requested the City to subordinate its lien and encumbrance
under the City Mortgage to the lien and encmnbrance of the Bond Mortgage as amended by the
Sixth Amendment.
NOW THEREFORE, in consideration of these presents and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this
Subordination Agreement agree as follows:
(1) Subardination and Consent. Subject to the provisions Qf Section (2), the City
Mortgage and all liens, rights, titles, and interests created in favor of the City thereunder or any
subsequent holder of the debt secured thereby, are hereby made subordinate, junior and inferior in
all respects to the security interests in the Mortgaged Properry (as defined in the Original Mortgage)
created by the Bond Mortgage, as amended by the Sixth Amendment. The City hexeby consents to
the making of the 2005 Loan and the increase in the amount of indebtedness secured by the Bond
Mortgage as amended by the Sixth Amendment.
(2) Term of A�reement. This Agreement shall be a continuing agreement, and it shall
remain in full force and effect with respect to the parties until such time as the loans of the proceeds
of the Series A Bonds, the Series C Bonds, the Series D Bonds, the Series E Bonds, the Series F
Bonds, the Series G Bonds, the Series H Bonds, the Series I Bonds, the Series J Bonds and the City
Loan are repaid in full and all amounts due and owing to the Bank under the Reimbursement
Agreement are paid in full.
(3) Representations and Warranfies. The City represents and warrants to U.S. Bank, as
Trustee for the Series A Bonds, the Series C Bonds, the Series D Bonds, the Series E Bonds, the
Series F Bonds, the Series G Bonds, the Series H Bonds, the Series I Bonds and the Series J Bonds
and to the Bank, that it is the sole holder and owner of the securiry interest and mortgage
subordinated by this Agreement and the sole holder of the debt instrument secured by the City
Mortgage, and that it has not transferred such security interest and mortgage, or the inshvuient
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Subordmat�on Ageemmt
CS�
evidencing the debt secured by the City Mortgage, without such assignment or iransfer being made
expressly subject to the terms of this A�eement. Each pariy warrants to the other parties to this
Agreement that they have full right, power and authority to enter into this Agreement, and that this
A�eement has been duly authorized, executed and delivered, and that this Ageement is valid,
binding and enforceable in accordance with its terms upon each of the parties to this Agreement,
except only as such enforceability may be limited by banln moratorium, reorganization or
other laws, or principles of equity affecting creditor's rights.
(4) Notice. The parties to this Agreement agree to give each other at least ten days
written notice prior to irutiating foreclosure upon any of the Mortgaged Property, provided,
however, that the failure to give such notice shall in no way adversely affect the enforceability of
this Agreement or the subordination of the Ciry Mortgage. All notices required to be given under
this Agreement shall be deemed given upon the deposit of written notice in the United States mail,
certified mail, return receipt requested and postage prepaid, addressed to the party to whom notice is
being given at the address set forth for the receipt of notice in this Agreement, or at such other
address as the pariy to whom notice is being given has norified the other parties as to where such
party wishes to receive notices pursuant to this Agreement.
To U.S. Bank: U.S. Bank National Association
U.S. Bank Trust Center
60 Livingston Avenue, Third Floor
St. Paul, Minnesota 55107
Attn: Corporate Trust Department
To the City: City of Saint Pau1
15 West Kellogg Boulevard
St. Paul, Minnesota 55102
Attn: Director, Office of Financial Services
To the
Port Authority: Port Authority of the City of Saint Paui
345 St. Peter Street
1900 Landmark Towers
Saint Paul, MN 55102
Attn: President
To the Company: District Energy St. Paul, Inc.
Hans O. Nyman Energy Center
76 West Kellogg Boulevard
St. Paul, Minnesota 55102-1611
Attn: President
To the Bank: De�a Credit Locat (New York Branch)
445 Pazk Avenue
New York, New York 10022
Attn: First Vice President and Manager, Public Finance
2583418 6
Subordination Agreement
�'33�
(�) Successors and Assiens. Choice of Law Entire A�eement TYus Agreement shall
be bindin� upon and inure to the benefit of the parties to this Agreement and their respective heirs,
legal representatives, successors and assigns. This Agxeement shall be govemed by the laws of the
State of. Minnesota, and the parties tQ this agreement consent to the exclusive jurisdicrion of the
courts of the State of Minnesota and the United States District Court for the District of Minnesota.
This Agreement constitutes the entire agreement between the parties.
(6) Counterparts. This Agreement may be simultaneously executed in a number of
identical counterparts, each of which shall be deemed an original for all purposes and all of which
consritute, collectively, one and the same agreement; but in making proof of this agreement, it shall
not be necessary to produce or account for more than one such counterpart.
zsssais 7
Subordinatiou Ageement
05
IN WIINESS WI�EREOF, the parties to this A�eement have hereby caused this
Subordination Agreement to be executed and delivered as of the date and year first written:
CITY OF SAIIVT PAUL, MINNESOTA
(SEAL):
Approved as to form:
Assistant City Attorney
STATE OF MINNESOTA
COUNTY OF RAMSEY
)
) ss.
)
By
Its Mayor
By
Its Director, Office of Financial Services
By
Its City Clerk
The foregoing instrument was acknowledged before me this day of April, 2005 by
, the Mayar of the City of Saint Paul, Minnesota, on behalf of said public body.
I�3otary Public
(SEAL)
zsssais S-1
Subordination Agreemrnt
Ch-331
STATE OF MIIVNESOTA
COLNTY OF RANISEY
)
) ss.
)
The foregoing inshument was acknowledged before me this day of April, 2005 by
Matthew Smith, ihe Director, Office of Financial Services, of the City of Saint Paul, �nnesota, on
behalf of said public body.
Notary Public
(SEAL)
STATE OF M iNNESOTA
COUNTY OF RAMSEY
)
) ss.
)
The foregoing instntment was acknowledged before me this day of April, 2005 by
Donald Luna, the City Clerk of the City of Saint Paul, Minnesota, on behalf of said public body.
Notary Public
(SEAL)
2583418 S._2
$ubOCdinaaotlP.a e¢]Lenl
�"�3�
STATE OF MINNESOTA )
) ss.
COUNTX OF RAMSEY )
U.S. BANK NATIONAL ASSOCIATION
By_
zts
The foregoing instrument was acknowledged before me this day of April, 2005 by
,�e of U.S. Bank National Association a nationai bankiug
association.
Notary Public
(SEAL)
>
2i83418
S-3
Subordinatlon Ageement
(,�j
STATE OF NINNESOTA )
) ss.
COUNTY OF RAMSEY )
DISTRICT HEATI��G DEV"ELOPMENT
COMPANY, d/b/a DISTRICT ENERGY
ST. PAtiL, INC.
By
Its President
The foregoing insh was acknowledged before me this _ day of April, 2005 by
Anders Rydaker, the President of District Heating Development Company, a Minnesota nonprofit
corporation organized under the laws of the State of Minnesota.
Notary Public
(SEAL)
2583418
S-4
Subordmation Agreeme�t
pS-33\
STATE OF NEW YORK )
) ss.
COUNTY OF )
DEXIA CREDIT LOCAL, acting through its
New York Branch
By
James I�3. Beck, Vice President
The foregoing instrument was acknowledged befoxe me this day of April, 200� by
James N. Beck, the Vice President of the New York Branch of Dexia Credit Local, a banking
institution organized under the laws of the Republic of France.
Notary Public
(SEAI.)
2583418
S-5
Subordination .4geemmt
�'3
SCHEDLTLE I
LEGAL DESCRIPTION
Lots 1, 2, 3, 4, and the Easterly 2� feet of Lot 5, Block 21, Rice and Irvine's
Addition to St. Paul.
2583418
1-1
Subordination Agreement