97-1245Council File # q�� �'� y S
Green Sheet # �o U ��
RESOLUTION
SAINT PAUL, MINNESOTA
P�esented By
Referred Ta
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ACCEPTING PROPOSAL ON
$16,500,000 LINE OF CREDIT
FOR WATER UTILITY
WAEREAS, the Director, Office of Financial Services,
has presented a proposal for a$16,500,000 revolving line of
credit (the "Line of Credit") from First Bank National
Association (the "Bank°) to the City of Saint Paul, Minnesota
(the '�City"), as a way to temporarily finance improvements to the
City's Water Utility; and
the Line of Credit shall be incorporated in a Taxable Water
Revenue Revolving Note of 1997 (the "Note"); and
WHEREAS, the terms of the Line of Credit are set forth
in a Credit Agreement (the ��Credit Agreement") to be executed by
the Bank and City, and the obligation to repay amounts drawn on
WHEREAS, there are currently outstanding bonds of the
City payable from Net Revenues of the City's Water Utility,
specifically the City's (a) $11,175,000 Water Revenue Bonds,
Series 1993E (the "1993 Bonds"), issued pursuant to a resolution
adopted by this Council on June 15, 1993, of which $7,790,000
remain outstanding, and (b) $7,000,000 Water Revenue Refunding
Bonds, Series 1997C (the "1997 Bonds"), issued pursuant to a
resolution adopted by this Council on June 11, 1997, of which
$7,000,000 remain outstanding; and
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WHEREAS, the proceeds of the Line of Credit will
finance on a tempozary basis various improvements (the "Project")
to the City's municipal water utility (the "Water Utility"j,
which has since its acquisition in 1885 been under the
jurisdiction of the Board of Water Commissioners (the "BOard");
and
WHEREAS, the Project is best financed long term by a
loan from the Minnesota Public Facilities Authority, but loans
are not yet available under the new water loan program, and other
financing is necessary before contracts for the construction of
the Project may be entered into; and
WHEREAS, the Line of Credit is a form of temporary
financing authorized by Minnesota Statutes, Section 475.61,
Subdivisions 5 and 6; and .
WHEREAS, the Board and this Council deem it necessary
and expedient to undertake the Line of Credit and issue the Note;
and
WHEREAS, the parity tests of the resolutions
authorizing the 1993 Bonds and 1997 Bonds are not met with
respect to the City's repayment obligation should amounts be
drawn upon the Line of Credit, and it is necessary and desirable
to provide for payments of amounts drawn on the Line of Credit
and Note, and interest thereon, as a temporar�r obligation
subordinaCe to the 1993 Bonds and 1997 Bonds; and
WAEREAS, pursuant to Minnesota Statutes, Section
475.60, Subdivision 2(9?, public sale requirements do noC apply
to the Line of Credit and Note, because the City has retained an
independent financial advisor and this Council has determined to
enter into the Line of Credit and issue the Note by private
negotiation; and
WHEREAS, Rule 15c2-12 of the Securities and Sxchange
Commission, which prohibits '�participating underwriters" from
purchasing or selling bonds unless the City undertakes to provide
certain continuing disclosure with respect to the bonds, does not
apply to the Line of Credit and Note due to the denomination
thereof:
NOW, TAERSFORE, BE IT RESOL,VED by the Council o£ the
City of Saint Paul, Minnesota, as follows:
1. Acceptance of Proposal. The proposal of First
Bank National Association to enter into the Line of Credit with
the City for a$76,500,000 revolving loan, evidenced by the Note,
in accordance with the Credit Agreement, is hereby accepted.
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Payment for the Note shall be advanced in installments as draws
are made on the Line of Credit, all as provided in the Credit
Agreement.
2. Title; Amount: Oriainal Issue Date; Maturity. The
City's indebtedness under the I,ine of Credit shall be
inCOrporated in a Note titled "Ta�cable Water Revenue Revolving
Note of 1997" (the "Note"). The Note shall be in the principal
amount of $16,500,000, or so much thereof as shall be advanced
pursuant Co the Credit Agreement. The Note sha11 be issued
forthwith, shall be dated with its date of issuance, and shall be
issued as a fully registered note. The Note shall mature 364
days after its issuance.
3. Purpose. The Line of Credit shall provide funds
to temporarily finance the Proj.ect, being improvements to the
Water Utility (the "Improvements"). The total cost of the
Project, which sha11 include all costs enumerated in Minnesota
Statutes, Section 475.65, is estimated to be at least equal to
the amount of the Line of Credit and Note.
4. Interest. Amounts advanced under the Line of
Credit on the Note shall bear interest payable as provided in the
Credit Agreement, calculated on the basis of actual days elapsed
and a 360-day year, at the applicable variable rate per annum set
forth in the Credit Agreement. Interest on the Note shall be
paid on each Interest Payment Date by check or draft mailed to
the person in whose name the Note is registered (the "Holder") on
the registration books of the City.
5. Redemption and Prepavment. The Note shall be
subject to redempeion and prepayment at the option of the City or
mandatorily as provided in the Credit Agreement.
6. Registration of Note. At the time of issuance and
delivery of the Note, the Treasurer of the City shall register
the Note in the name of the payee in a note register which she
and her suecessors in office sha11 maintain for the purpose of
registering the ownership of the I3ote. The 13ote shall be
prepared for execution with an appropriate text and spaces for
notation of registration. The force and effect of such regis-
tration shall be as stated in the form of Note hereinafter set
forth. Payment of principal installments and interest, whether
upon redemption or otherwise, made with respect to the Note, may
be made to the registered holder thereof or to his, her or its
1ega1 representative, without presentation or surrender of the
Note.
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1 7.
2 Certificate of
3 the following
Farm of Note. The Note, together with the
Registration thereon, shall be in substantially
form:
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iJI3ITED STATES OF AMERICA
STATE OF MINNESOTA
RAMSEY COUNTY
CITY OF SAINT PAUL
R-1
Maximum
$16,500,Od0
TAXABLE WATER REVEPIIJE REVOLVING NOTE OF 1997
MATURITY
DATE
DATE OF
ORIGINAL IS�UE
October , 1998
October _, 1997
REGISTERED OWNER: FIRST BANK NATIONAL ASSOCIATION
MAXIMUM PRINCIPAL AMOUNT: SIXTEEN MILLION FIVE HUNDRED TAOUSAND
DOLLARS
KNOW ALL PER50NS BY THESE PRESENTS that Che City of
Saint Paul, Ramsey County, Minnesota (the "Issuer" or "City"),
certifies that it is indebted and for value received gromises to
pay to the registered owner specified above, or registered
assigns, solely from the sources and in the manner hereinafter
set forth, the principal amount specified above, or so much
thereof as shall be advanced, on the maturity date specified
above, unless called for earlier redemption, and to pay interest
on so much of the principal amount as may be advanced from time
to time as provided in the Credit Agreement (as defined below)
and remains unpaid, on the last day of each month (each, an
"Interest Payment Date"), commencing November 30, 1997, at the
variable rate per annum specified in the Credit Agreement
(calculated an the basis of actual days elapsed and a 360-day
year) until the principal sum is paid or has been provided £ar.
The principal of this Note is payable at maturity upon
presentation and surrender hereof at the principal office of the
Treasurer of the City of Saint Pau1, in Saint Pau1, Minnesota
(the "NOte Registrar"), acting as paying agent or any successor
paying agent duly appointed by the Issuer. Interest on this Note
will be paid on each interest Payment Date by check or draft
mailed to the person in whose name this Note is registered (the
��Holder" or "Noteholder") on the registration books of the Issuer
maintained by the Alote Registrar. The principal of and premium,
if any, and interest on this Note are payable in lawful money of
the iTnitetl States of AmeriCa.
Principal and Interest Payments. Interest shall accrue
only on the aggregate amount of this Note which has been advanced
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under the Credit Agreement dated as of October , 1997, by and
between the City and First Bank National Association tthe "Credit
Agreement°). Principal and interest paid other than at maturity
of this Note are payable without presentation or surrender of
this Note.
Date of Payment Not Business Day. If the date for
payment of the principal of, or interest on, this Note shall be a
Saturday, Sunday, legal holiday or a day on which banking
institutions in the City of Minneapolis, Minnesota, are
authorized by law or executive order to close, then the date for
such payment shall be the next succeeding day which is not a
Saturday, Sunday, legal holiday or a day on which such banking
institutions are authorized to close, and payment on such date
sha11 have the same force and effect as if made on the nominal
date of payment. .
Redemption. This Note is subject to redemption and
prepayment at the option of the Issuer or mandatorily as provided
in the Credit Agreement.
Issuance: Puroose; Special Obligation. This Note has
been issued pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota and the Charter
of the Issuer, and pursuant to a resolution adopted by the City
Council of the Issuer on October , 1997 (the "Resolution"), for
the purpose of providing moneys to temporarily finance various
improvements to the Issuer's Water Utility. This Note is payable
out of the 1997 Note Debt Service Account of the Board of Water
Commissioners Water Utility Enterprise Fund, to which fund there
have been pledged on a subordinate basis Net Revenues of the
Water Utility and into which fund there are to be paid proceeds
of the definitive revenue bonds which the Issuer is required by
law to issue at or prior to the maturity of this Note for the
purpose of refunding the same if the Net Revenues theretofore
received or collected are not sufficient for the full payment
thereof. This Note and the interest hereon are payable solely
and exclusively £rom the Net Revenues of the Water Utility of the
Issuer pledged to the payment thereof, and do not constitute a
debt of the Issuer or of the Saint Paul Board of Water
Commissioners within the meaning of any constitutional, Charter
or statutory limitation of indebtedness. `Phis I3ote is issued as
a subordinate lien upon the Net Revenues of the Water Utility of
the Issuer.
Registration; Transfer. This Note shall be registered
in the name of the payee on the books of the City by presenting
this Note for registration to the City's Treasurer, who will
endorse his or her name and note the date of registration
opgosite the name of the payee in the certificate of registration
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attached hereto. Thereafter this Note may be transferred to a
bona fide purchaser only by delivery with an assignment duly
executed by the registered owner or his, her or its legal
representative, and the City may treat the registered owner as
the person exclusively entitled to exercise all the rights and
powers of an owner until this Note is presented with such
assignment for registration of transfer, accompanied by assurance
of the nature provided by law that the assignment is genuine and
effective, and until such transfer is registered on said books
and noted hereon by the City�s Treasurer.
Fees upon Transfer or Loss. The Note Registrar may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer or
exchange of this Note and any 1ega1 or unusual costs regarding
transfers and lost instruments.
Credit Aareement. The terms and conditions of the
Credit Agreement are incorporated herein by reference and made a
part hereof. The Credit Agreement may be attached to this Note,
and shall be attached to this Note if the holder of this Note is
any person other than First Bank National Association.
Taxable Interest: Not Oualified Tax-Exempt Obliaation.
The City intends that none of the interest on this Note wi11 be
excluded from gross income for United States income tax purposes
or from both gross income and taxable net income for State of
Minnesota income tax purposes. This Note, as a taxable
obligation, is not eligible to be designated by the Issuer as a
"qualified tax-exempt obligation" for purposes of Section
265(b)(3) of the federal Internal Revenue Code of 1986, as
amended.
IT IS HEREBY CERTIFIED AND RECITED that a11 acts,
conditions and things required by the Constitution and laws of
the State of Minnesota and the Charter of the Issuer to be done,
to happen and to be per£ormed, precedent to and in the issuance
of this Note, have been done, have happened and have been
performed, in regular and due form, time and manner as required
by law; that this Note, together with all other debts of the
Issuer outstanding on the date of original issue hereof, being
the date of its actual issuance and delivery to the original
purchaser, does not exceed any constitutional or statutory or
Charter limitation of indebtedness; and that the Issuer will
establish rates and charges for the water service furnished by
its Water TJtility sufficient in amount, with all other sources,
to promptly meet the principal and interest requirements of this
issue_
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IN WITNESS WHEREOF, the City of Saint Paul, Ramsey
County, Minnesota, by its City Council has caused this Note to be
sealed with its official seal and to be executed on its behalf by
the signature of its N3ayor, attested by the signature of its
Clerk, and countersigned by the signature of its Director, Office
of Einancial Services.
(SEAL)
365438.1
CITY OF SAINT PAUL,
RAMSEY COUN'PY, MINNE50TA
Mayor
Attest:
City Clerk
Countersigned:
X X X
Director, Office of Financial
Services
F7
a�-jay..s
CEI2TIFICATE OF REGISTRATION
The transfer of ownership of the principal amount of
the attached Note may be made only by the registered owner or
his, her or its legal representative last noted below.
DATE OF SIGNATURE OF
REGISTRATION REGISTERED OWNER CITY TRSASURER
First Bank
National Association
Marquette Avenue Office
90 South Sixth Street
October , 1997 Minneapolis MN 55402 X X X
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8. Execution. The Note shall be executed on behalf
of the City by the signatures of its Mayor, Clerk and Director,
Office of Financial Services, each with the effect noted on the
form of the Note, and be sealed with the seal of the City. In
the event of disability or resignation or other absence of any
such officer, the Note may be signed by the manual or facsimile
signature of that officer who may act on behalf of such absent or
disabled officer. In case any such officer whose signature or
facsimile of whose signature shall appear on the Note shall cease
to be such officer before the delivery of the Note, such
signature or facsimile shall nevertheless be valid and sufficient
for a11 purposes, the same as if he or she had remained in office
until delivery.
9. Deliverv; Application of Proceeds. The Note when
so prepared and executed shall•be delivered by the Director,
Office of Financial Services, to the Bank, and the Bank shall not
be obliged to see to the proper application thereof.
10. Fund and Accounts. For the convenience and proper
administration of the proceeds from the sale of the Note and for
the payment of principal of and interest on the Note and fees
with respect to the I3ote, the Board of Water Commissioners Water
Utility Enterprise Fund (the "Water [Ttility E'und", heretofore in
resolutions relating to the 1993 Bonds and 1997 Sonds also
referred to as the "Water Utility Fund") hereCofore created shall
continue in force and effect as a separate fund of the City and
of the Soard until a11 of the Note, and interest thereon and fees
with respect thereto, are fully paid and retired. In the Water
Utility Fund there is hereby created a 1997 Note Account and a
1997 Note Debt Service Account and in addition there are, and
there shall continue to be, the following accounts:
(a) A"1997 Note Account", to which shall be credited
all proceeds of the Note drawn on the Line of Credit. It is
recognized that amounts may be drawn on the Line of Credit
in reimbursement for costs expended on the Project, and that
accordingly the moneys need not in such circumstance be
placed in the 1997 Note Account but may be applied directly
to the reimbursement. The 1997 Note Account shall be used
to pay costs of the Project, including all costs enumerated
in Minnesota Statutes, Section 475.65. The moneys in the
1997 Note Account shall be used solely for the purposes
herein set forth and for no other purpose, except that any
surplus in the 1997 Note Account shall be deposited in the
1997 Note Debt Service Account.
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(b) An "Operation and Maintenance Account", into which
shall be paid all gross revenues and earnings derived from
the operation of the Water Utility system including any
assessments which may from time to time be levied with
respect to the Water Utility. From this account there shall
be paid all, but only, current expenses oP said system.
Current expenses shall include the reasonable and necessary
costs of administering, operating, maintaining and insuring
the system, salaries, wages, costs of materials and
supplies, costs of water production and distribution,
necessary legal, engineering and auditing services, and all
other items which, by sound accounting practices, constitute
normal, reasonable and current costs of operation and
maintenance, but excluding any allowance for depreciation,
extraordinary repairs and payments into the Revenue Bond
Debt Service Account, 1997 Note Debt Service Account and
Reserve Account. There shall at all times be maintained in
said account a reserve in an amount sufficient to cover the
operation and maintenance costs of the Water Utility system
for the ensuing fifteen (15} day period; neither said
reserve nor any annual addition thereto shall constitute
��Net Revenues'� as defined below_ The balance from time to
time remaining in the Operation and Maintenance Account,
including interest or other earnings received from the
investment of any moneys in the Water Utility Fund, after
paying or providing for the foregoing items, sha11
constitute, and are referred to in this resolution as, "Net
Revenues". Payments of fees Co trustees for bonds, to
providers of liquidity facilities or credit enhancement
facilities for bonds and remarketing agents for bonds are
also current expenses.
(C) A"Revenue Bond Debt Service Account", into which
there shall be credited and to which there is hereby
irrevocably pledged from the Net Revenues of the operation
of the Water LStility system monthly, a sum equal to at least
1/12 of the total principal and interest on the 1993 Bonds
and 1997 Bonds and any other bonds issued on a parity
therewith during the ensuing twelve (12) months; provided,
however, that no further payments need be made to said
account when the moneys held therein are sufficient for the
payment of all principal and interest due on said bonds on
and prior to the next maturity date. No money shall be paid
out of said account except to pay principal, premium, iP
any, and interest on the 1993 Bonds and 1997 Bonds and any
other bonds which are issued on a parity with the 1993 Bonds
and 1997 Sonds.
(d) A"Reserve Account", which was heretofore creaCed,
and is hereby continued, to be used only when and if moneys
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in the Revenue Bond Debt Service Account or other moneys
available therefor are insufficient to pay principal,
premium, if any, and interest on the bonds payable from the
Revenue Bond Debt Service Account; provided, however, that
the moneys in the Reserve Account may be used to prepay said
bonds, when such prepayment wi11 retire a11 of the bonds
then outstanding. Amounts already in the Resezve Account
pursuant to the resolutions authorizing the issuance of the
1993 Bonds and 1997 Bonds shall be maintained therein to the
extent necessary to equal the amount required to be
maintained in the Reserve Account as set forth below, being
initially amounts required for the 1993 Bonds and 1997
Bonds. Whenever the moneys in the Reserve Account exceed
the amount required to he maintained in the Reserve Account
as set forth below, such excess may be transferred to the
Revenue Bond Debt Service_ACCOUnt; and whenever the moneys
in the Reserve Account shall be less than said amount, the
Reserve Account shall be restored ta said amount from the
next available Net Revenues. The amount required to be
maintained in the Reserve Account shall be an amount equal
to the lesser of: (1) ten percent (10%) of the original
principal amount of the 1993 Bonds and 1997 Bonds and otYter
bonds payable from the Revenue Bond Debt Service Account
issued after the 1993 Bonds on a parity of lien therewith,
or (2) the maximum principal and interest due in any year on
the bonds payable from the Revenue Sond Debt Service
Account; and whenever the moneys in the Reserve Account
exceed such amount required to be maintained therein, such
excess may be transferred to the Revenue Bond Debt Service
Account. When only bonds issued after the 1994 Bonds are
outstanding, the "maximum principal and interest due in any
year" on variable rate bonds shall be calculated at such
time (for any variable rate bonds issued prior to such time)
or in connection with their issuance (for variable rate
bonds issued after such time) assuming the variable rate
bonds bear fixed interest for the remainder of their terms
or for their terms, as appropriate, at the rates prevailing
at such time (for any variable rate bonds issued prior to
such time) or at the time of their issuance (for variable
rate bonds issued after such time) for utility revenue bonds
of comparable quality, maturity and taxable or tax-exempt
status, provided that other or different assumptions may be
used if necessary to obtain an investment grade credit
rating for the variable rate bonds or to maintain the credit
rating(s) then in effect for the bonds then outstanding.
(e) A"1997 Note Debt Service Account", into which
shall be paid (1) monthly from Net Revenues amounts
necessary to make the payments authorized in this
subparagraph and (2) the proceeds of the long term bonds or
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additional temporary bonds issued to refund the Note in an
amount sufficient, together with any other moneys in the
account, to pay the principal of, and interest on, the Note.
From the account shall be paid (1) the Commitment Fees (as
defined in the Credit Agreement) of O.OSa per annum on the
average daily unused Commitment Amount (as defined in the
Credit Agreement), payable in arrears on the last day of
each month and on the Maturity Date (as defined in the
Credit AgreemenC), t2) on the last day of each month,
interest on the Note, and (3) upon a prepayment or on the
Maturity Date, the principal of the Note.
(f) Net Revenues in excess of those required for the
foregoing purposes may be used for any proper purpose.
(g) The money in the Water Utility Fund sha11 be
allotted and paid to the various accounts herein estal�lished
in the order in which said accounts are lisCed on a
cumulative basis, and if in any month the money in said
accounts is insufficient to place the required amount in any
accounts, the deficiency shall be made up in the following
month or months after payment into all other accounts having
a prior claim on said Net Revenues have been made in full.
(h) A11 mone}� held in the Revenue Bond Debt Service
Account and the Reserve Account created by this resolution
shall be kept separate and apart from all other municipal
funds and accounts.
(i) Notwithstanding anything to the contrary herein,
moneys in the Water Utility Fund and any account thereof may
be used to pay any rebate of excess arbitrage earnings on
gross proceeds of the 1993 Bonds, 1994 Bonds and 1997 Bonds
to be paid to the United States in order to maintain the
exclusion from gross income under Section 103 of the Code
(as hereinafter defined) of the intere5t on the 1993 Bonds,
1994 Bonds and 1997 Bonds.
(j) Accounts created for bonds, notes or obligations
with a lien on Net Revenues subordinate to the lien of the
1997 Bonds shall be maintained and operated as required b}�
the resolutions authorizing the same.
11. Pledae of Proceeds of Lpna Term Bonds. To provide
moneys for the prompt and full payment of principal of, and
interest on, the Note, the City sha11 issue and se11 a long term
bond or bonds or additional temporary obligations at or prior to
the maturity date of the Note, as required by Minnesota Statutes,
Section 475.61, Subdivisions 5 and 6. It is hereby found,
determined and declared that a11 conditions precedent to the
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offering of definitive obligations of the City to refund the Note
to the necessary within the meaning of Minnesota Statutes,
Section 475.61, Subdivisions 5 and 6, have been met and exist.
12_ Note Subordinate; Prioritv. The pledge of Net
Revenues to the payments of amounts due on the Line of Credit and
Note is hereby made e�cpressly junior to, and subordinate to, the
pledge of Net Revenues to the payment of the 1993 Bonds, 1997
Bonds and any obligations issued on a parity of lien with the
1993 Bonds and 1997 Bonds. The 1993 Bonds and 1997 Bonds shall
be a first charge and lien upon the Net Revenues of the Water
t3tility.
No part of such NeC Revenues sha11 be pledged to the
payment of any general obligation bonds issued by the City while
any 1993 Bonds or 1997 Bonds or bonds issued on a parity
therewith remain outstanding and undischarged, unless the pledge
of Net Revenues to such general obligation bonds is expressly
made a second and subsequent lien and the City and Board covenant
to make the rates and chazges of the Water i3tility sufficient to
timely pay such general obligation bonds.
Until the Note is paid in full, no additional revenue
obligations payable from the Revenue Bond Debt Service Account or
1997 Note Debt Service Account shall be hereafter issued unless
(1) the same are expressly made a lien upon the I3et Revenues of
the Water Utility which is junior to, and subsequent to, the lien
of the Note or (2) the Bank or other Holder of the Note consents
to a higher priority of the lien for such revenue obligations.
13. Insufficient Amounts In the event that the
moneys in the 1997 Note Debt Service Account shall be
insufficient at any particular time to pay the amounts due on the
LVote, said moneys shall first be applied to the payment of the
accrued interest on the Note, and any balance shall be applied in
payment of the principal of the Note, provided further that if it
shall ever be determined by a court of competent jurisdiction
while any of the Note remains outstanding that the sums available
and to become available for the payment of the principal thereof
and interest thereon are insufficient whether or not then due,
then the moneys in the 1997 Note Debt Service Account shall be
applied in payment of all principal then outstanding whether or
not then due and the interest accrued thereon to Che date of
payment.
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other Holder
and with the
as follows:
CovenanCS. For the protection of the Bank or
of the Note, the City herein covenants and agrees to
Bank or other Holder of the Note from time to time
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(a) It wi11 at all times through its Board adequately
maintain a:.d efficiently operate the Water Utility as a City
utility. It will from time to time make all needful and
proper repairs, replacements, additions and betterments to
the equipment and facilities o£ said Water Utility so that
they may at all times be operated properly and
advantageously, and whenever any equipment of said system
shall have been worn out, destroyed or otherwise become
insufficient for proper use, it shall be promptly replaced
or repaired so that the value and efficiency of the
facilities shall be at all times fully maintained and its
revenues unencumbered by reason thereof.
(b) The rates for all water service and the charges
for all water supplied by the Water Utility Co the City and
its residents and to all other consumers shall be reasonable
and just, taking into account the cost and value of the
Water Utility, the cost of maintaining and operating the
Water Utility and the proper and necessary allowances for
depreciation, the amounts required for the payment of
principal and interest on the bonds and Note payable from
the Net Revenues of the Water Utility, and all other sums
customarily paid from the revenues of the Water Utility.
(c) It will as required by Section 10.11.2 of the City
Charter (and it will continue to do so whether or not
required by said Charter) establish, maintain and collect
such charges and rates as will produce revenues sufficient
to pay the reasonable cost of operation, repair and
maintenance of the Water Utility and to pay the interest on
and principal of the 1993 Bonds, 1997 Bonds and all bonds on
a parity of lien with the 1993 Bonds and 1997 Bonds and of
the Note, as and when they become due, as we11 as to provide
sufficient money to make the required appropriations to the
various funds and accounts established herein. The City
will review the schedule of rates and charges for the Water
Utility at least annually when the Board budget is reviewed.
(d) It will not sell, lease, mortgage, or in any manner
dispose of the Water Utility or any part thereof (including
any and all extensions and additions that may be made
thereto) until all revenue bonds or obligations payable from
the Net Revenues of the'Water Utility or any part thereof
have been paid in full; provided, however, that the City may
sell the Water Utility or any part thereof if simultaneously
with or prior to said sale all of the outstanding bonds are
discharged in accordance with the resolutians authorizing
the issuance of the 1993 Bonds and 1997 Bonds. This
covenant shall not be construed to prevent the sale by the
City at fair market value of real estate, equipment or other
365438.1 15
q�-1�ys
non-revenue-producing properties which in the judgment of
the City have become unnecessary, uneconomical or
inexpedient to use in connection with the Water Utility
provided that suitable facil.ities are obtained in place
thereof and provided further that nothing herein is intended
to prevent the City or Board from terminating or otherwise
preventing the termination of contracts for the furnishing
of water.
(e) It shall cause to be kept proper books, records and
accounts adapted to the Water Utility separate fram other
accounts to be audited at the end of each fiscal year. A
copy of said audit shall be furnished, withaut cost, to the
Bank or other Holder of the Nate. If the City fails to
provide such audit within a reasonable time after the end of
said fiscal year, the Bank or other Holder of the Note may
cause such audit to be made at the expense of the City. The
expense of preparing such audit shall be paid as current
operating expenses of the Water Utility. The Bank or other
Holder of the Note, or their duly appointed representatives,
from time to time shall have the right, at all reasonable
times, to inspect the Water Utility system anfl to inspect
and copy the books, records, accounts and data relating
thereto. The City agrees to furnish copies of such audiC,
without cost, to the Bank or other Holder of the Note at
their request within a reasonable time after the end of each
fiscal year.
(f1 It wi11 EaiChfully and punctually perEoxm a11
duties with reference to the Wate� Utility required by the
City Charter, the Constitution and laws of the State of
Minnesota and this resolution.
ig) It will grant no franchise to any competing
utility.
15. Amendments. No change, amendment, modification or
alteration sha11 be made in the covenants made with the Bank or
other Holder of the Note without the consent of the Bank or other
Holder of the Note, except for changes, amendments, modifications
and alterations (a) made to cure any ambiguity or formal defect
or omission, or (b) which would not materially prejudice the Bank
or other Holder of the Note.
16. Fiscal Year As used in this resolution the words
"fiscal year" shall mean the twelve (12) month period beginning
on January 1 of each year and ending on December 31 of the same
year. Should it be deemed advisable at some later date to change
the fiscal yearly basis, the same may be done by proper actions
365438.1 1 6
q�-1ay5
to that effect, which change shall not constitute an amendment or
modification of this resolution.
17. xppropriation. The City hereby appropriates, from
Net Revenues, sums sufficient to pay the facility fee required by
Section 3.1 of the Credit Agreement and the costs and expenses
required by Section 8.2 of the Credit Agreement.
18. Records and Certifieates. The officers of the
City are hereby authorized and directed to prepare and furnish to
the Bank, and to the attorneys approving the legality of the
issuance of the Note, certified copies of all proceedings and
records of the City relating to the Note and to the financial
condition and affairs of the City, and such othe� affidavits,
certificates and information as are required to show the facts
relating to the legality and marketability of the Note as the
same appear from the books and records under their custody and
control or as otherwise known to them, and a11 such certified
copies, certificates and affidavits, including any heretofore
furnished, shall be deemed representatians of the City as to the
facts recited therein.
19. Interest Taxable: No Designation of Oualified
Tax-Exempt Obligation. The City intends that none of the
interest on the Note will be excluded from gross income for
I3nited States income tax purposes or from both gross income and
taxable net income for State of Minnesota income tax purposes.
The Note, as a taxable obligation, is not eligible to be
qualified as a"qualified tax-exempt obligation" within the
meaning of Section 265(b)(3) of the federal Internal Revenue Code
of 1986, as amended.
20. Credit Agreement. The Mayor, C1erk, and DireCtor,
Office of Financial Services, are authorized and directed to
execute and deliver the Credit Agreement in substantially the
form submitted to this Council, with such changes, modifications,
additions and deletions as shall be necessary and appropriate and
approved by bond counsel. Execution by such officers of the
Credit Agreement shall be conclusive evidence as to the necessity
and propriety of changes and their approval by bond counsel. The
Credit Agreement may be attached to the Note, and shall be
attached to the Note if the Holder of the Note is any person
other than the Bank.
21. Covenant with Bank or Other Holder. Each and all
of the terms and provisions of this resolution shall be and
constitute a covenant on the part of the City to and with the
Bank or other Holder from time to time of the Note.
365438.1 17
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1
2
3
4
5
6
7
S
9
10
11
i2
13
14
15
16
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22. Supplemental Resolution. Prior resolutions of the
City governing the Water Utility Fund are hereby supplemented to
the extent necessary to give effect to the provisions of
paragraph 10 of this resolution.
23. Negotiated Sale. The City has retained Springsted
Incorporated as an independent financial advisor, and this
Council has heretofore determined, and does hereby determine, to
enter into the Line of Credit and to sell the Note by private
negotiation to the Bank, all as provided by Minnesota Statutes,
Section 475.60, Subdivision 2(9).
24. Severabilitv. If any section, paragraph or
provision of this resolution shall be held to be invalid or
unenforceable for any reason, the invalidity or unenforceability
of such section, paragraph or provision shall not affect any of
the remaining provisions of this resolution.
365438.7
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1 25 . Fieadinas . Fieadings in thi
2 included for convenience of reference onl
3 hereof, and shall not limit or define the
4 provision hereof.
s resolution are
y and are not a part
meaning of any
4dopted by Council: Date � i�- � ���q �
ldoption Cert'rfied by Council Secretary
; �..�,� a _ �„P�i
pproved by May • � ° � a �' � g ?"
�: l ,� ��,�.
Requested by Department of:
v
Iri- �z�
Office of Financial Services
By:
Form Approved by City Attomey
Bv . `� .� ° � -�-� -
ro- �- ��
Ap roved a or f r ubmi ion o Council
By: -�� 1 ��lit--r"
19
a�-�a�l.s
Office of Financial Services
Martha Rantorowicz
10/O1j97
TOTAL # OF SIGNATURE PAGES
GREEN SHEET
o��n,�,r owECra�
No
1 -'�• 1 _
Q�.,� 1-J_ � �«�
❑�.,�.�. ❑..�s
p�.�,�,��„��z p
(CUP ALl LOCATIONS FOR SIGNATURE)
60926
This resolution accepts the proposal frota First Bank National Association to enter into a
of credit with the City for a$16,500,000 revolving loan.
PLANNING COMMISSION
CIB CObIbiRTEE
CIVIL SERVICE COMMISSION
Hss this pe�sor�rm erer wnA�etl under a contract fwtlNS deparlmenYT
YES NO
Nas this P���� evM been a cilY emPbYeeT
YES NO
Ocea ihic Pe�Mrm W�e%s a sldU r�M mmw1�Y7�%ed bY a�Y Gnre�t ctt'! emPbYee4
YES NO
isll�ispe(eonlfimiatargetedvenda? .
YES NO
The Water Utility is in need of a way to temporarily finance improvements to the Utility
it awaits long term financing from the MinnesoCa Public Facilities Authority.
The Water Utility can enter into e, c�n.struction contract for its improve now.
[9��3t: ' ���Z.��z4e+e° t P '�' '�ui.
Ov f 2 5���
�ISADVANTAGESIFAPPROVED
NONE �„._ .�,R_ .,_..�.��.•`
Improvements would have to be delayed until the State financing is available.
�.,,
707ALAMOUN7OFTRANSACTIONf__
FUNDING SOURCE
,
CO37/REVENUE BUDfiETED (CIRGLE ON�
ACTM7Y NUMBER
YES NO
'uLwcw. MFOahuNiwN (IXF' W M
9 � - iaYs
Draft 9 30 97
CREDTT AGREEMENT
THIS CREDTT AGIZEEMENT, dated as of October _,1997, is by and
befween 'TI-3E CITY OF SAINT PAiTL, MINNESOTA, a municipality organized
under the laws of the State of Minnesota (the "Borrower"), and FI12ST BANK
NATIONAL ASSOCIATION, a national banking association (the "Lender").
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Defined Terms. As used in this Agreement the following
terms shall have the following respective meanings
"Advance": Any portion of the outstanding Revolving Loan by the
Lender which is subject to an available inEerest rate option. An Advance may be a
Eurodoilar Rate Advance, or, with respect to any period when the Eurodoliar Rate is
unavailable, a Reference Rate Advance.
"Ad�usted Eurodollar Rate": With respect to each Eurodollar Rate
Advance, the rate (rounded upward, if necessary, to the next one hundredth of one
percent) deterxnined by dividing the Eurodollar Rate by 1.00 minus the Eurodollar `
Reserve Percentage.
"A�plicable Margin°: With respect to:
(a) Eurodoliar Rate Advances -- 0.4$%.
(b) Reference Rate Advances -- minus 2.0°l0.
"Board": The Board of Governors of the Federal Reserve System or
any successor thereto.
"Business Da�': Any day (other than a Saturday, Sunday or legal
holiday in the State of Minnesota) on which national banks are permitted to be open
for business in Minneapolis, Minnesota.
"Closing Date": The date of this Agreement.
"Commitment": The obligation of the Lender to make Advances to
the Borrower in an aggregate principal amount outstanding at any time not to
exceed the Commitment Amount upon the terms and subject to the conditions and
limitations of this Agreement.
97 - /d ys
"Commitment Amount": $16,500,000, or such lesser amount to which
the Commitment Amount is reduced pursuant to Section 2.6.
°Commitment Fees°: As defined in Section 29.
"T?efault": Any evenE which, with the giving of notice (whether such
notice is required under Section 7.1, or under some other provision of this
Agreement, or otherwise) or lapse of time, or both, would constitute an Event of
Default.
°Eurodollar Business Da�": A Business Day which is also a day for
trading by and beEween banks in United States dollar deposits in the interbank
Eurodollar market and a day on which banks are open for business in New York
City.
"Eurodollar Rate': With respect to each Eurodollar Rate Advance, the
average offered rate for one month deposits in United States dollars (rounded
upward, if necessary, to the nearest 1/16 of 1%) for delivery of such deposits on each
Eurodollar Business Day, or if any day is not a Eurodollar Business Day, on the first
preceding Eurodollar Business Day which rate appears on fhe Reuters Screen LIBO
page as of 11:00 a.m., London time (or such other time as of which such rate appears}
on each Burodollar Business Day, or the rate for such deposits determined by the
Lender at such time based on such other published service of general application as
shall be selected by the Lender for such purpose; provided, that in lieu of
determining the rate in the foregoing manner, if not so determinable on such date,
at the option of the Lender, the Lender may determine the rate based on rates at
which one xnonth United States dollar deposits are offered to the Lender in the
interbank Eurodollar market at such time for delivery in Immediately Available
Funds on each Eurodollar Business Day in an amount approximately equal to the
Advance by the Lender (rounded upward, if necessary, to the nearest 1(16 of 1%).
"Reuters Screen LIBO page" means the display designated as page "LISO" on the
Reuters Monitor Money Rate Screen (or such other page as may replace the LIBO
page on such service for the purpose of displaying London interbank offered rates of
major banks for United States dollar deposits). For purposes of determining any
interest rate hereunder or under any other Loan Document which is based on the
Eurodollar Rate, such interest rate shall change as and when the Eurodollar Rate
shall change.
"Eurodollar Rate Advance°: An Advance with respect to which the
interest rate is determined by reference to the Adjusted Eurodoliar Rate.
"Eurodollar Reserve Percentage": As of any day, that percentage
(expressed as a decimal} which is in effect on such day, as prescribed by the Board for
determining the maximum xeserve requirement (including any basic, supplemental
or emergency reserves) for a member bank of the Federal Reserve System, with
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deposits comparable in amount to those held by the Lender, in respect of
"Eurocurrency Liabilities" as such term is defined in Regulation D of the Board. The
rate of interest applicable to any outstanding Eurodollar Rate Advances shall be
adjusted automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default": Any event described in Secfion 7.1.
"GAAP": Generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Pubiic Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements bp such other
entity as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of any date of determination.
"Loan Documents": This Agreement and the Note.
"Lien": With respecf to any Person, any security interest, mortgage,
pledge, 1ien, charge, encumbrance, title retention agreement or analogous
instrument or device (including the interest of each lessor under any capitalized
lease), in, of or on any assets or properties of such Person, now owned or hereafter
acquixed, whefher arising by agreement or operation of law.
"Maturitv Date": October � 1998.
"Note": As de£ined in Section 2.3.
"Person": Any natural person, corporation, partnership, limited
partnership, joint venture, firm, association, trust, unincorporated organization,
government or governmentai agency ox political subdivision or any other entity,
whether acting in an individual, fiduciary or other capacity.
"Reference Rate°: The rate of interest from time to time publicly
announced by the Lender as its "reference rate." 'I'he Lender may lend to its
custorners at rates that are at, above or below the Reference Rate. For purposes of
determining any interest raee hereunder or under any other Loan Document which
is based on the Reference Rate, such interest shall change as and when the Reference
Rate shall change.
"Reference Rate Advances": An Advance with respecE to which the
interest rate is determined by reference to the Reference Rate.
"Re�ulatory Change": Any change after the date of this Agreement in
federal, state or foreign laws or regulations or the adoption or making after such
daEe of any interpretations, directives or requests applying to a class of banks
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9 7 - /.Z �1S
including the Lender under any federal, state or foreign laws or regulations
(whether or not having the force of law) by any court or govemmental or monetary
authorify charged with the 9nterpretation or administration thereof.
"Revolving Loan°: As defined in Section 2.1.
"Ufilit�': 'The Borrower's municipal water utility under the
jurisdiciion of the Borrower's Board of Water Commissioners.
Section 1.2 Accounting Terms and Calculations. Except as may be
expressly provided to the contrary herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP.
Section 1.3 Other Definitional Terms.Terms of Construction. The
words "hereof", "herein" and "hereunder" and words of similar import when used
in fihis Agreement shall refer to this Agreement as a whole, and not to any
particular provision of this Agreement. References to Sections, E�ibits, Schedules
and the like references are to Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise expressly provided. The words "include", "includes°
and "including" shall be deemed to be followed by the phrase "without limitation".
Unless the context in which used herein otherwise clearly requires, "or" has the
inclusive meaning represented by the phrase "and/or°. All incorporations by
reference of covenants, terms, definitions or other provisions from other
agreements are incorporated into this Agreement as if such provisions were fully set
forth herein, and include all necessary definitions and related provisions from such
other agreements. All covenants, terms, definitions and other provisions from
other agreements incorporated into this Agreement by reference shall survive any
termination of such other agreements until the obligations of the Borrower under
this Agreement and the Note are irrevocably paid in full and the Commitment is
terminated.
ARTICLE II
TERMS OF LENDING
Section 2.1 The Revolving Commitment. On the terms and subject to
the conditions hereof, the Lender agrees to make loans (collectively, the "Revolving
Loan') to the Borrower on a revolving basis at any time and from time to time from
the Closing Date to the Maturity Date, during which period the Borrower may
borrow, repay and reborrow in accordance with the provisions hereof, provided that
the unpaid principal amount of the outstanding Revolving Loan shall not at any
time, in the aggregate, exceed the Commitment Amount. Advances shall be
obtained and maintained, but subject to the limitations hereof, as Eurodollar Rate
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Advances at all times the Eurodollar Rate is available as an interest rate option, and
as Reference Rate Advances at all other times.
Section 2.2 Procedure for Advances. Any request by the Borrower for a
Advance shall be in writing, or by telephone and must be given so as to be received
by the Lender not later Ehan 12:00 Noon (Minneapolis time) on the date of the
requested Advance. Each request for an Advance shall specify (i) the date of the
Advance, and (ii) the amount of the Advance to be made on such date which shall
be in a minimum amount of $100,060 or, if more, an integral muitiple thereof. Each
request for an Advance shall be irrevocable and shall be deemed a representation by
the Borrower that on the requested Advance date and after giving effect to such
Advance the applicable conditions specified in Ariicle III have been and will
continue be satisfied. Unless the Lender determines that any applicable condition
specified in Article III has not been satisfied, the Lender will make available to the
Borrower at the Lender's principal office in Minneapolis, 1Vlinnesota in immediately
available funds not later than 1:00 p.m. {Minneapolis time) on the requested
Advance date the amount of the requested Advance.
Section 2.3 The Note. The Advances shall be evidenced by a single
promissory note of the Borrower (the "Note"), substantially in the form of Exhibit A
hereto, in the amount of the Commitment Amount originally in effect. The Lender
shall enter in its ledgers and records the amount of each Advance made and the
payments made thereon, and the Lender is authorized by the Borrower to enter on a
schedule attached fo the Note a record of such Advances and payments.
Section 2.4 Interest Rates and Interest Pa�ments. Interest shall accrue
and be payable on the Advances as follows:
(a) Each Eurodollar Rate Advance shall bear interest on the unpaid
principal amount thereof at a varying rate per annum equal to the sum of (i)
the Adjusted Eurodollar Rate, plus (ii) the Applicable Margin.
(b) Each Reference Rate Advance shall bear interest on the unpaid
principai amount thereof at a varying rate per annum equal to Ehe sum of (i)
the Reference Rate, plus (ii) the Applicable Margin, provided that no portion
of the Revolving Loan shall bear interest at fhe Reference Rate plus the
Applicabie Margin uniess the Eurodollar Rate is not available as an interest
rate option.
(c) Interest shall be payable (i) with respect to each Advance on the last
day of each month; (ii) with respecE to a11 Advances, upon any permitted
prepayment (on the amount prepaid); and (iii) with respect to all Advances,
on the MaturiEy Date.
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Section 2.5 Re�a�ment and Pre�a�nent. Principal of the Note shall be
payable in full on the Maturity Date.
Section 2.6 O�tional Reduction of Commitment AmounE ar
Termination of Commitment. The Borrower may, at any time, upon not less than 5
Business Days prior written noEice to the Lender, reduce the Commitment AmounE,
with any such reduction in a minimum amount of $100,000, or, if more, in an
integral multiple of $100,000; provided, however the Borrower may not at any time
reduce the Commihnent Amount below the then unpaid principal balance of the
Note. The Borrower may, at any time, upon not less than 5 Business Days prior
written notice to the Lender, terminate the Commitment in its entirety. Upon
EerminaEion of the Commitment pursuant to this Section, the Borrower shall pay to
the Lender all unpaid obligations of the Borrower to the Lender hereunder.
Section 2.7 Commitment Fee. The Borrower shall pap to the Lender
fees {the "Commitment Fees") in an amount determined by applying a rate of 0.05%
per annum to the average daily unused Commitment Amount for the period from
the date of this Agreement to the Maturity Date. Such Commitment Fees are
payable in arrears monEhly on the last day of each month and on the Maturity Date.
Section 2.& Com,�utation. Commitment Fees and interest on the Note
shall be computed on the basis of actual days elapsed and a year of 360 days.
Section 2.9 Use of Proceeds. The proceeds of the Advances shaii be
used for capital improvements to the Utility, in a manner not in conflict with any of
the Borrower's covenants in this Agreement.
Section 2.10 �atiita 1 Ade_c�uac�. In the event that any Regulatory
Change reduces or shali have the effect of reducing the rate of return on the
Lender's capital or the capital of its parent corporation (by an amount the Lender
deems material} as a consequence of fhe Commitment and/or the Advances to a
level below that which the Lender or its parent corporation could have achieved but
for such Regulatory Change (taking into account the Lender's policies and the
policies of its parent corporation with respect to capital adequacy), then the Borrower
shall, within five days after written notice and demand from the Lender, pay to the
Lender additional amounts sufficient to compensate the Lender or its parent
corporation for such reduction. Any determination by the Lender under this
Section and any certificate as to the amount of such reduction given to the Borrower
by the Lender shall be final, conclusive and binding for all purposes, absent error.
Section 2.11 Interesf Rate Not Ascertainable, Etc. If, on or prior to the
date for determining the Adjusted Eurodollar Rate in respect of any Advance or
Eurodoilar Rate Advance, the Lender determines (which determination shali be
conclusive and binding, absent error) that:
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(a) deposits in dollars (in the applicable amount) are not being made
available to the Lender in the relevant markeE, or
(b) the Adjusted Eurodollar Rate will not adequately and fairly reflect
the cost to the Lender of funding or maintaining Eurodollar IZate Advances,
the Lender shall forthwith give notice to the Borrower of such determination,
whereupon the obiigation of the Lender to make or continue any Advance as a
Eurodollar Rate Advance shall be suspended until the Lender notifies the Borrower
that the circumstances giving rise to such suspension no longer exist. Whi�e any
such suspension continues, all further Advances by the Lender shall be made as
Reference Rate Advances.
Section 2.12 Increased Cost. If any Regulatory Change:
(a) shall subject the Lender to any fax, duty or other charge wifh respect
to its Eurodollar Rate Advances the Note or its obligation to make Eurodollar
Rate Advances or shall change the basis of taxation of payment to the Lender
of the principal of or interest on Eurodollar Rate Advances or any other
amounts due under this Agreement in respect of Eurodollar Rate Advances
or its obligaEion to make Eurodollar Rate Advances (excepE for changes in the
rate of tax on fihe overall net income of the Lender imposed by the
jurisdiction in which the Lender s principal office is located); or
(b) shall impose, modify or deem applicable any reserve, special
deposit, capital requirement or similar requirement (including, without
limitation, any such requirement imposed by the Board, but excluding with
respect to any Eurodoilar Rate Advance any such requirement to the extent
included in calculating the applicable Adjusted Eurodollar Rate) against assets
of, deposits with or for the account of, or credit extended by, the Lender, the
interbank Eurodollar market, or the certificate of deposit market, or shall
impose, modify or deem applicable any other condition affecting its
Eurodollar Rate Advances, the Note or its obligation to make Eurodollar Rate
Advances and ehe result of any of the foregoing is to increase the cost to the
Lender of making or maintaining any Eurodollar Rate Advance, or to reduce
the amount of any sum received or receivable by the Lender under this
Agreement or under the Note,
then, within 30 days after demand by the Lender, the Borrower shall pay to the
Lender such additional amount or amounts as will compensate the Lender for such
increased cost or reduction. The Lender will promptly notify the Borrower of any
event of which it has knowledge, occurring after the date hereof, which will entitle
the Lender to compensation pursuant to this Section. A certificate of the Lender
ciaiming compensation under this Section, setting forth the additional amount or
amounts to be paid to it hereunder and stating in reasonable detail the basis for the
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charge and the method of computation, shall be conclusive in the absence of error.
In determining such amount, the Lender may use any reasonable averaging and
atEribution methods. Failure on the part of the Lender to demand compensation for
any increased costs or reduction in amounts received or receivable with respect to
any Eurodollar Rate Advance at any time shall not constitute a waiver of the
Lender's rights to demand compensation for any increased costs or reducfion in
amounts received or receivable at any other fime.
Section 2.13 Ille ali . If any Regulatory Change shall make iE
unlawful or impossible for the Lender to make, maintain or fund any Eurodollar
Rate Advance, the Lender shall notify the Borrower, whereupon the obligation of
the Lender to make or continue any Advance as a Eurodollar Rate Advance shall be
suspended until the Lender notifies the Borrower that the circumstances giving rise
to such suspension no longer exist. If the Lender determines that it may not
lawfully continue to maintain any Eurodoilar Rate Advance, all of the affected
Advances shall be automatically converted to Reference Ra�e Advances as of the
date of the Lender's notice, and upon such conversion the Borrower shall
indemnify the Lender.
Section 2.14 Discretion of Lender as to Manner of Fundine. The
Lender shall be entitled to fund and maintain its funding of Eurodollar Rate
Advances in any manner it may elect, it being understood, however, that tor the
purposes of this Agreement all determinations hereunder (but excluding
determinations that the Lender may elect to make from the Reuters screen) shall be
made as if the Lender had actually tunded and maintained each Eurodollar Rate
Advance.
:
9 � - �ays
ARTICLE III
CONDTTIONS PRECEDENT
Section 3.1 Conditions of Initial Advance. The obligafion of Ehe
Lender to make the initial Advance hereunder shall be subject to the prior or
simultaneous fulfillment of each of the following conditions:
3.1(a) Documents. The Lender shall have received
the following:
(i) This Agreement and the Note executed by a duly auYhorized
officer (or officers) of the Borrower and dated the Closing Date.
(ii) A certificate of the Clerk of the Borrower dated as of the
Closing Date and certifying as to the following:
(A) A true and accurate copy of the municipai resolutions of
the Borrower authorizing the execution, delivery and
performance of the Loan Documents, and other
agreements, instrument and documents contemplated
hereby and thereby;
(B) The incumbency, names, titles and signatures of the
officers of the Borrower authorized to execute the Loan
Documents and to request Advances; and
(C) A true and accurate copy of the Charter of the Borrower.
(iii) The opinion of counsel to the Borrower covering such
matters as set forth on Exhibit B.
(iv) A facifity fee paid to the Lender in the amount of $16,500.
31(b) Other Matters. All organizational and legal proceedings
relating to the Borrower and all instruments and agreements in connection with the
transactions confemplated by this Agreement shall be satisfactory in scope, form and
substance to the Lender and its counsel, and the Lender shall have received all
information and copies of all documents, including records of municipal
proceedings, which it may reasonably have requested in connection therewith, such
documents where appropriate to be certified by proper Borrower or governmental
authorities.
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3.1(c) Fees and Ex�enses. The Lender shall have received all fees
and other amounts due and payable by the Borrower on or prior to the Closing Date,
including the reasonable fees and expenses of counsel to the Lender payable
pursuant Eo Section $.2.
Seciion 3.2 Conditions Precedent to all Advances The Lender shall
not have any obligafion to make any Advance (including Advances after the initial
Advance) hereunder usiless all representations and warranties of the Borrower
made in this Agreement remain true and coxrect and no Default or Event of DefaulE
exists.
ARTICLE TV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender:
Section 4.1 Organization, Standing. Etc. The Borrower is a
municipality duly organized and validly existing under the laws of the State of
Minnesota and has a11 requisite power and authority to carry on its business as now
conducted, to enter into this Agreement and to issue the Note and to perform its
obiigations hereunder and thereunder. This Agreement and the Note have been
duly authorized by all necessary municipal action and when executed and delivered
will be the legal and binding obligations of the Borrower. The execution and
delivery of this Agreement and the Note will not violate the Borrower's charter or
other organizational documents or any ordinance, statute or other law applicable to
the Borrower. No governmental consent or exemption is required in connection
with the Borrower's execution and delivery of this Agreement and the Note except
for those which have already been obtained.
Section 42 Financial Statements and No Material Adverse Chanee
The Borrower's and the Utility's audited financial statements as at December 31,
1996, and unaudited financial statements as at June 30, 1997, as heretofore furnished
to the Lender, have been prepared in accordance with GAAP. Neither the Borrawer
nor the Utility has any material obligation or liability not disclosed in such financial
statements, and there has been no material adverse change in the condition of the
Borrower or the Utility since the dates of such financial statements.
Section 4.3 Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Borrower, threatened against or affecting the
Borrower which, if determined adversely to the Borrower, would have, a material
adverse effect on the condition of the Borrower. The Borrower is not in violation of
any law or regulation (including environmental laws and regulations and laws
relating to employee benefit plans) where such violation could reasonably be
expected to impose a material liability on the Borrower.
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ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitment shall have expired or been terminated and the
Note and all of the Borrower's ofher obligations to the Lender under this
Agreement shall have been paid in full, unless the Lender shall otherwise consent
in writing:
Section 5.1 Financial Statements and Re�orts. The Borrower will
furnish to the Lender:
5.1(a) As soon as available and in any event within 210 days
after the end of each fis�al year of the Borrower, financiai statements of the
Borrower and the Utility consisting of at least a balance sheet, a statemenf of
revenue, expenditures and changes in retained earnings, and a statement of cash
flow, in each case as at the end of such year, setting forth in each case in comparative
form corresponding figures from the previous annual audit, certified without
qualification by the State Auditor of the State of Minnesota or other independent
certified public accountants of recognized national standing selected by the Borrower
and acceptabie to the Lender.
5.1(b) As soon as available and in any event within 20 days
after the end of each fiscal quarter, unaudited financial statements for the Borrower
and the Utility for such quarter and for the period from the beginning of such fiscal
year to the end of such quarter, substantially similar to the annual audited
statements, along with a statement signed by the chief financial officer of the
Borrower stating that as at the end of such quarter there did not exist any Default or
Event of Default or, if such Defauit or Event of Default existed, specifying the nature
and period of existence thereof and what action the Borrower proposes to take with
respect thereto.
5.1(c) Immediately upon any officer of the Borrower becoming
aware of any Default or Event of Default, a notice describing the nature thereot and
what action the Borrower proposes to take with respect thereto.
5.1(d) From time to time, such other information regarding the
business, operation and financial condition of the Borrower or the Utility as the
Lender may reasonabiy request.
Section 5.2 Ortanizational Existence. The Borrower will maintain its
existence as a municipality under the laws of Minnesota.
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Section 5.3 Insurance. The Borrower will, with respect to the Utility,
maintain with financially sound and reputable insurance companies such insurance
as may be required by law and such other insurance in such amounts and against
such hazards as is customary in the case of reputable Persons engaged in the same or
similar business and similarly situated.
Section 5.4 ns ection. The Borrower will permit any Person
designated by the Lender to visit and inspect any of the properties, books and
financial records of the Borrower and the Utility, to examine and to make copies of
the books of accounts and other financial records of the Borrower and the Utility,
and to discuss the affairs, finances and accounts of the Borrower and the Utility with
its officers at such reasonable times and intervals as the Lender may designate.
Section 5.5 Maintenance of Pro.�erties. The Borrower will maintain its
properties related to the Utility in good condition, repair and working order, and
supplied with all necessary equipment, and make all necessary repairs, renewals,
replacements, betterments and improvements thereto, all as may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
Section 5.6 Books and Records. The Borrower wi11 keep adequate and
proper records and books of account in which full and correct entries will be made of
its dealings, business and affairs.
Section 5.7 Com�liance. The Borrower will comply in all material
respects with all laws, rules and regulations to which it anay be subject.
Section 5.8 Notice of Litigation. The Borrower will give prompt
written notice to the Lender of the commencement of any action, suit or proceeding
affecting the Borrower or the Utility where an adverse outcome could reasonably be
expected to have a material adverse effect upon the Borrower or the Utility.
SecEion 5.9 Plans. The Borrower will maintain any employee benefit
plans in campliance with all material requirements of applicable laws and
regulations.
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ARTICLE VI
NEGATNE COVENANTS
Until the Commiiment shall have expired or been terminated and the
Note and ali of the Borrower's other obligations to the Lender under this
Agreement shall have been paid in full, unless the Lender shall otherwise consent
in writing:
Section 6.1 Mer�er. The Borrower will not merge or consolidate or
enter into any analogous reorganization or transaction with respect to the Utility
with any Person.
Section 6.2 Sa1e of Assets. The Borrower will not seii, transfer, lease or
otherwise convey all or any substantial part of the assets of the Utility.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default. The occurrence of any one or more of
the foliowing events shall constitute an Event of Default:
7.1(a) The Borrower shall fail to make when due, whether by
acceleration or otherwise, any payment of principai of or interest on the Note or any
other obligations of the Borrower to the Lender pursuant to this Agreement.
7.1(b) Any representation or warranty made by or on behalf of
the Borrower in this Agreement or by or on behalf of the Borrower in any certificate,
statement, report or document herewith or hereafter furnished to the Lender
pursuant to this Agreement shall prove to have been false or misleading in any
material respect on the date as of which the facts set forth are stated or certified.
7.1(c) The Borrower shall fail to comply with Sections 5.2 or 5.3
or any Section of Article VI.
7.1(d) The Borrower shall fail to compiy with any other
agreement, covenant, condition, provision or term contained in this Agreement
(other than those hereinabove set forth in this Section 71) and such failure to
comply shall continue for 20 calendar days after whichever of the following dates is
the earliest: (i) the date the Borrower gives notice of such failure to the Lender, (ii)
the dafe the Borrower should have given noEice ot such failure to the Lender
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pursuant to Section 5.1, or (iii) the date the Lender gives notice of such failure to the
Borrower.
7.1(e) The Borrower shall become insolvenE or shall generally
not pay its debts as they mature or shall apply for, shall consent to, or shail acquiesce
in the appointment of a custodian, trusfee or receiver of the Borrower ox for a
substantial parE of the property thereof or, in the absence of such application,
consent or acquiescence, a custadian, frustee or receiver shall be appointed for the
Borrower or for a substantial part of the property thereof and shall not be discharged
within 45 days, or the Borrower shall make an assignment for the benefit of
creditors.
7.1(� Any bankruptcy, reorganization, debt arrangement or other
proceedings under any bankruptcy or insolvency law shall be instituted by or against
the Borrower and, if instituted against the Borrower, shall have been consented to
or acquiesced in by the Borrower or shall remain undismissed for 60 days, or an
order for relief shall have been entered against the Borrower.
7.1(g) Any dissolution or liquidation proceeding shall be
instituted by or against the Borrower and, if instituted against the Borrower, shall be
consented to or acquiesced in by the Borrower or shall remain for 45 days
undismissed.
7.1(h) A judgment or judgments for the payment of money in
excess of the sum of $500,000 in the aggregate shall be rendered against the Borrower
and either (i) the judgment creditor executes on such judgment or (ii) such
judgment remains unpaid or undischarged for more than 60 days from the date of
entry thereof or such longer period during which execution of such judgment shall
be stayed during an appeal from such judgment.
7.1(i) The maturity of any material indebtedness of the Borrower
(other than indebtedness under this Agreement) shall be accelerated, or the
Borrower shall fail fo pay any such material indebtedness when due (after the lapse
of any applicable grace period) or any event shall occur or condition shall exist and
shall continue for more than the period of grace, if any, applicable thereto and shall
have the effect of causing, or permitting the holder of any such indebtedness to
cause, such material indebtedness to become due prior to its stated maturity or to
realize upon any collateral given as security therefor. For purposes of this Section,
indebtedness of the Borrower shall be deemed "maferial" if it exceeds $1,000,000 as to
any item of indebtedness or in the aggregate for all items of indebtedness with
respect fo which any of the events described in this Section has occurred.
7.1(j) Any execution or attachment shall be issued whereby any
substantial part of the property of the Borrower shali be taken or attempted to be
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taken and the same shall not have been vacated or stayed within 30 days after the
issuance thereof.
Section 7.2 Remedies. If (a) any Event of Default described in
Sections 7.1 (e), (fl or (g) shall occur with respect to the Borrower, the Commihnent
shall automaticaily terminate and the Note and all other obligations of the
Borrower to the Lender under this Agreement shall automatically become
immediately due and payable, or (b) any other Event of Defauit shall occur and be
continuing, then fhe Lender may (i) declare the Commitment terminated,
whereupon the Commitment shall terminate, and (ii) dedare the Note and all other
obiigations of the Borrower to the Lender under this Agreemen4 to be forEhwith due
and payable, whereupon the same shall immediately become due and payable, in
each case without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived, anything in this Agreement or in the Note to
the contrary notwithstanding. Upon the occurrence of any of the events described
in clauses (a} or (b) of the preceding sentence the Lender may exercise ali rights and
remedies under this Agreement, the Note and any related agreements and under
any applicable law.
Section 7.3 Offset. In addition to the remedies set forth in Section 7.2,
upon the occurrence of any Event of Default and thereafter while the same be
continuing, the Borrower hereby irrevocably authorizes the Lender to set off all
sums owing by the Borrower to the Lender hereunder against all deposits and
credits of the Borrower with, and any and all claims of the Borrower against, the
Lender to the extent such deposits and credits represent net revenues of the Utility
which are not subject to a claim having a higher priority than the claim of the
Lender.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Modifications. Notwithstanding any provisions to the
contrary herein, any term of this Agreement may be amended with the written
�onsent of the Boxrower; rorovided that no amendment, modification or waiver of
any provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be in writing and
signed by the Lender, and then such amendment, modifications, waiver or consent
shall be effective only in the specific instance and for the purpose for which given.
Section &.2 Costs and Expenses. Whether or not the transactions
contemplated hereby are consummated, the Borrower agrees to reimburse the
Lender upon demand for all reasonable out-of-pocket expenses paid or incurred by
the Lender (including filing and recording costs and fees and expenses of Dorsey &
Whitney LLP, counsel to the Lender) in connection with the negotiation,
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preparation, approval, review, execution, delivery, amendment, modification,
interpretation, collection and enforcement of this Agreement and the Note. The
obligations of the Borrower under this Section shall survive any termination of this
Agreement.
Section 8.3 Waivers. etc No failure on the parf of the Lender or the
holder of the Note to exercise and no delay in exercising any power or right
hereunder shail operaEe as a waiver thereof; nor shall any single or partiai exercise
of any power or right preclude any other or further exercise thereof or the exercise of
any other power or right. The rights and remedies of the Lender hereunder are
cumula�ive and not exclusive of any right or remedy the Lender otherwise has.
Section 8.4 Notices. Except when telephonic notice is expressly
authorized by this Agreement, any notice or other communication to any party in
connection with this Agreement shall be in writing and shall be sent by manual
delivery, telefacsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on the signaftzre
page hereof, or at such other address as such party shall have specified to the other
party hereto in writing. All periods of notice shall be measured from the date of
delivery thereof if manually delivered, from the date of sending thereof if sent by
telefacsimile transmission, from the first Business Day after the date of sending if
sent by overnight courier, or from four days after the date of mailing if mailed;
provided however, that any notice to the Lender under Article II shall be deemed to
have been given only when received by the Lender.
Section 8.5 Successors and Assigns; Dis�osition of Loans. This
Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that the Borrower may not assign its
rights ox delegate its obligations hereunder without the prior written consent of the
Lender. The Lender may at any time sell, assign, transfer, grant participations in, or
otherwise dispose of any portion of the Commitment and/or Advances to banks or
other financial institutions. The Lender may disclose any information regarding the
Borrower in the Lender's possession to any prospective buyer or participant.
5ection 8.6 Governing Law and Construcfion. THE VALIDIT'Y,
C01�3STRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AN17 THE
NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES
THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES
APPLICABLE TO NATIONAL BANKS.
SecEion S.7 Consent to JurisdicEion. AT THE OPTION OF THE
LENDER, THIS AGREEMENT AND THE NOTE MAY BE ENFORCED IN ANY
FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN
COUNTY, MINNESOTA; AND THE BORROWER CONSENTS TO THE
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JURI5DICTIQN AND VENUE OF ANY SUCH COURT AND WAIVES ANY
ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE
EVENT THE BORROWER COMMENCES ANY ACTION IN ANOTHER
JURISDICTION OR VENUE UNDER ANY TORT dR CONTRACT THEORY
ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY
THIS AGIZEEMENT, THE LENDER AT ITS OPTION SHALL BE ENTITLED TO
HAVE THE CASE TRANSFERRED TO ONE OF T'HE JL7RISDICTIONS AND
VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED
WITHOUT PREJUDICE.
Section 8.8 Waiver of Jury Trial. EACH OF THE BORROWER AND
THE LENDER IRBEVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL SY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTE AND ANX OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 8.9 Captions. The captions or headings herein and any table of
contents hereto are for convenience only and in no way define, lunit or describe the
scope or intent of any provision ot this Agreement.
Section 8.10 Entire Agreement. This Agreement and the other Loan
Documents embody the enEire agreement and understanding between the Borrower
and the Lender with respect to the subject matter hereof and thereof. This
Agreement supersedes all prior agreements and understandings relaYing to the
subject matter hereof.
Section 8.11 Counter�arts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and either of the parties hereto may execute this Agreement by
signing any such counterpart.
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IN 4VITNESS WHEILEOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
CTTY dF SAINT PAUL, M7NNESOTA
B
Norman Coleman
Title: Mayor
Borrower's Address:
Attention: Director, Office of
Financial Services
_ Kellogg Boulevard
Saint Paul, Minnesota 55101
Telefacsimile No.: (612) 266-_
Lender's Address:
First Bank National Association
Marquette Avenue Office
90 South Sixth Street
Minneapolis, Minnesota 55402
Telefacsimile No.: (612) 973-8368
And
[Print name]
Title: Clerk
And
[Print nameJ
Title: Director, Office of Financial Services
FIRST BANK NATIONAL ASSOCIATION
By
Print Name
Title
�
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EXHIBTT A TO
CREDIT AGREEMENT
REVOLVING NOTE
$16,500,000
October _,1997
Minneapolis, Minnesota
(To be provided by Borrower, in foxm and substance acceptable to the Lendera
97-iaY�"
EXHISTT B TO
CREDTT AGREEMEI�TT
MAT'TERS TO BE COVERED BY
OPINION OF COUNSEL TO THE BORROWER
'The opinion of counsel Eo the Borrower which is called for by Secfion
3.1 of the Credit Agreement (the "Credit Agreement") shall be addressed to the
Lender and dated the date of the Credit Agreement. It shall be satisfactory in form
and substance to the Lender and shall cover the matters set fox�h below, subject to
such assumptions, exceptions and qualifications as may be acceptable to the Lender
and counsel to the Lender. Capitalized terms not de£ined herein have the meanings
given to them in the Credit Agreement.
1. The Borrower is a public body corporate and politic duly organized and
validly existing under the laws of the State of Minnesota.
2. The Borrower has full power and authority to execute and deliver the
Credit Agreement and Note, and to perform its obligations thereunder.
3. The execution, delivery and performance by the Borrower of the Credit
Agreement and Note have been duly authorized by all necessary action by its City
Council, and are not in conflict with any provision of its enabling statute or its b�-
laws.
4. To the best of our knowledge, based on reasonable inquiry and
investigation, the execution, delivery and performance of the Credit Agreement and
Note do not constitute a default under any contractual restriction or other provision
binding upon the Borrower or affecting any of its property, do not contravene any
provision of law or any order, decree, judgment or other determination of any
court, tribunal or other governmental authority or instrumentality, and will not
resuit in or require the creation or imposition of any mortgage, lien, security interest
or other charge or encumbrance on any property owned by the Borrower.
5. The Credit Agreement and I�ote constitute the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their respective terms, except to the extent limited by insolvency, moratorium,
bankruptcy, reorganization or other similar laws of general application relating to or
affecting the enforcement of creditors' rights, and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equiEy or
at law).
6. No consent, approval, authori2ation or registration by or with any
governmental body or authority other than those already obtained is required on
the part of the Borrower in connection wifih the execution and delivery of the Credit
Agreement or Note or performance of or compliance with the terms, provisions or
conditions thereof.
Council File # q�� �'� y S
Green Sheet # �o U ��
RESOLUTION
SAINT PAUL, MINNESOTA
P�esented By
Referred Ta
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ACCEPTING PROPOSAL ON
$16,500,000 LINE OF CREDIT
FOR WATER UTILITY
WAEREAS, the Director, Office of Financial Services,
has presented a proposal for a$16,500,000 revolving line of
credit (the "Line of Credit") from First Bank National
Association (the "Bank°) to the City of Saint Paul, Minnesota
(the '�City"), as a way to temporarily finance improvements to the
City's Water Utility; and
the Line of Credit shall be incorporated in a Taxable Water
Revenue Revolving Note of 1997 (the "Note"); and
WHEREAS, the terms of the Line of Credit are set forth
in a Credit Agreement (the ��Credit Agreement") to be executed by
the Bank and City, and the obligation to repay amounts drawn on
WHEREAS, there are currently outstanding bonds of the
City payable from Net Revenues of the City's Water Utility,
specifically the City's (a) $11,175,000 Water Revenue Bonds,
Series 1993E (the "1993 Bonds"), issued pursuant to a resolution
adopted by this Council on June 15, 1993, of which $7,790,000
remain outstanding, and (b) $7,000,000 Water Revenue Refunding
Bonds, Series 1997C (the "1997 Bonds"), issued pursuant to a
resolution adopted by this Council on June 11, 1997, of which
$7,000,000 remain outstanding; and
365435_1
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WHEREAS, the proceeds of the Line of Credit will
finance on a tempozary basis various improvements (the "Project")
to the City's municipal water utility (the "Water Utility"j,
which has since its acquisition in 1885 been under the
jurisdiction of the Board of Water Commissioners (the "BOard");
and
WHEREAS, the Project is best financed long term by a
loan from the Minnesota Public Facilities Authority, but loans
are not yet available under the new water loan program, and other
financing is necessary before contracts for the construction of
the Project may be entered into; and
WHEREAS, the Line of Credit is a form of temporary
financing authorized by Minnesota Statutes, Section 475.61,
Subdivisions 5 and 6; and .
WHEREAS, the Board and this Council deem it necessary
and expedient to undertake the Line of Credit and issue the Note;
and
WHEREAS, the parity tests of the resolutions
authorizing the 1993 Bonds and 1997 Bonds are not met with
respect to the City's repayment obligation should amounts be
drawn upon the Line of Credit, and it is necessary and desirable
to provide for payments of amounts drawn on the Line of Credit
and Note, and interest thereon, as a temporar�r obligation
subordinaCe to the 1993 Bonds and 1997 Bonds; and
WAEREAS, pursuant to Minnesota Statutes, Section
475.60, Subdivision 2(9?, public sale requirements do noC apply
to the Line of Credit and Note, because the City has retained an
independent financial advisor and this Council has determined to
enter into the Line of Credit and issue the Note by private
negotiation; and
WHEREAS, Rule 15c2-12 of the Securities and Sxchange
Commission, which prohibits '�participating underwriters" from
purchasing or selling bonds unless the City undertakes to provide
certain continuing disclosure with respect to the bonds, does not
apply to the Line of Credit and Note due to the denomination
thereof:
NOW, TAERSFORE, BE IT RESOL,VED by the Council o£ the
City of Saint Paul, Minnesota, as follows:
1. Acceptance of Proposal. The proposal of First
Bank National Association to enter into the Line of Credit with
the City for a$76,500,000 revolving loan, evidenced by the Note,
in accordance with the Credit Agreement, is hereby accepted.
365438.7 2
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Payment for the Note shall be advanced in installments as draws
are made on the Line of Credit, all as provided in the Credit
Agreement.
2. Title; Amount: Oriainal Issue Date; Maturity. The
City's indebtedness under the I,ine of Credit shall be
inCOrporated in a Note titled "Ta�cable Water Revenue Revolving
Note of 1997" (the "Note"). The Note shall be in the principal
amount of $16,500,000, or so much thereof as shall be advanced
pursuant Co the Credit Agreement. The Note sha11 be issued
forthwith, shall be dated with its date of issuance, and shall be
issued as a fully registered note. The Note shall mature 364
days after its issuance.
3. Purpose. The Line of Credit shall provide funds
to temporarily finance the Proj.ect, being improvements to the
Water Utility (the "Improvements"). The total cost of the
Project, which sha11 include all costs enumerated in Minnesota
Statutes, Section 475.65, is estimated to be at least equal to
the amount of the Line of Credit and Note.
4. Interest. Amounts advanced under the Line of
Credit on the Note shall bear interest payable as provided in the
Credit Agreement, calculated on the basis of actual days elapsed
and a 360-day year, at the applicable variable rate per annum set
forth in the Credit Agreement. Interest on the Note shall be
paid on each Interest Payment Date by check or draft mailed to
the person in whose name the Note is registered (the "Holder") on
the registration books of the City.
5. Redemption and Prepavment. The Note shall be
subject to redempeion and prepayment at the option of the City or
mandatorily as provided in the Credit Agreement.
6. Registration of Note. At the time of issuance and
delivery of the Note, the Treasurer of the City shall register
the Note in the name of the payee in a note register which she
and her suecessors in office sha11 maintain for the purpose of
registering the ownership of the I3ote. The 13ote shall be
prepared for execution with an appropriate text and spaces for
notation of registration. The force and effect of such regis-
tration shall be as stated in the form of Note hereinafter set
forth. Payment of principal installments and interest, whether
upon redemption or otherwise, made with respect to the Note, may
be made to the registered holder thereof or to his, her or its
1ega1 representative, without presentation or surrender of the
Note.
365438.1 3
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1 7.
2 Certificate of
3 the following
Farm of Note. The Note, together with the
Registration thereon, shall be in substantially
form:
365438.1 �
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iJI3ITED STATES OF AMERICA
STATE OF MINNESOTA
RAMSEY COUNTY
CITY OF SAINT PAUL
R-1
Maximum
$16,500,Od0
TAXABLE WATER REVEPIIJE REVOLVING NOTE OF 1997
MATURITY
DATE
DATE OF
ORIGINAL IS�UE
October , 1998
October _, 1997
REGISTERED OWNER: FIRST BANK NATIONAL ASSOCIATION
MAXIMUM PRINCIPAL AMOUNT: SIXTEEN MILLION FIVE HUNDRED TAOUSAND
DOLLARS
KNOW ALL PER50NS BY THESE PRESENTS that Che City of
Saint Paul, Ramsey County, Minnesota (the "Issuer" or "City"),
certifies that it is indebted and for value received gromises to
pay to the registered owner specified above, or registered
assigns, solely from the sources and in the manner hereinafter
set forth, the principal amount specified above, or so much
thereof as shall be advanced, on the maturity date specified
above, unless called for earlier redemption, and to pay interest
on so much of the principal amount as may be advanced from time
to time as provided in the Credit Agreement (as defined below)
and remains unpaid, on the last day of each month (each, an
"Interest Payment Date"), commencing November 30, 1997, at the
variable rate per annum specified in the Credit Agreement
(calculated an the basis of actual days elapsed and a 360-day
year) until the principal sum is paid or has been provided £ar.
The principal of this Note is payable at maturity upon
presentation and surrender hereof at the principal office of the
Treasurer of the City of Saint Pau1, in Saint Pau1, Minnesota
(the "NOte Registrar"), acting as paying agent or any successor
paying agent duly appointed by the Issuer. Interest on this Note
will be paid on each interest Payment Date by check or draft
mailed to the person in whose name this Note is registered (the
��Holder" or "Noteholder") on the registration books of the Issuer
maintained by the Alote Registrar. The principal of and premium,
if any, and interest on this Note are payable in lawful money of
the iTnitetl States of AmeriCa.
Principal and Interest Payments. Interest shall accrue
only on the aggregate amount of this Note which has been advanced
365438.1 5
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under the Credit Agreement dated as of October , 1997, by and
between the City and First Bank National Association tthe "Credit
Agreement°). Principal and interest paid other than at maturity
of this Note are payable without presentation or surrender of
this Note.
Date of Payment Not Business Day. If the date for
payment of the principal of, or interest on, this Note shall be a
Saturday, Sunday, legal holiday or a day on which banking
institutions in the City of Minneapolis, Minnesota, are
authorized by law or executive order to close, then the date for
such payment shall be the next succeeding day which is not a
Saturday, Sunday, legal holiday or a day on which such banking
institutions are authorized to close, and payment on such date
sha11 have the same force and effect as if made on the nominal
date of payment. .
Redemption. This Note is subject to redemption and
prepayment at the option of the Issuer or mandatorily as provided
in the Credit Agreement.
Issuance: Puroose; Special Obligation. This Note has
been issued pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota and the Charter
of the Issuer, and pursuant to a resolution adopted by the City
Council of the Issuer on October , 1997 (the "Resolution"), for
the purpose of providing moneys to temporarily finance various
improvements to the Issuer's Water Utility. This Note is payable
out of the 1997 Note Debt Service Account of the Board of Water
Commissioners Water Utility Enterprise Fund, to which fund there
have been pledged on a subordinate basis Net Revenues of the
Water Utility and into which fund there are to be paid proceeds
of the definitive revenue bonds which the Issuer is required by
law to issue at or prior to the maturity of this Note for the
purpose of refunding the same if the Net Revenues theretofore
received or collected are not sufficient for the full payment
thereof. This Note and the interest hereon are payable solely
and exclusively £rom the Net Revenues of the Water Utility of the
Issuer pledged to the payment thereof, and do not constitute a
debt of the Issuer or of the Saint Paul Board of Water
Commissioners within the meaning of any constitutional, Charter
or statutory limitation of indebtedness. `Phis I3ote is issued as
a subordinate lien upon the Net Revenues of the Water Utility of
the Issuer.
Registration; Transfer. This Note shall be registered
in the name of the payee on the books of the City by presenting
this Note for registration to the City's Treasurer, who will
endorse his or her name and note the date of registration
opgosite the name of the payee in the certificate of registration
365438.7 6
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attached hereto. Thereafter this Note may be transferred to a
bona fide purchaser only by delivery with an assignment duly
executed by the registered owner or his, her or its legal
representative, and the City may treat the registered owner as
the person exclusively entitled to exercise all the rights and
powers of an owner until this Note is presented with such
assignment for registration of transfer, accompanied by assurance
of the nature provided by law that the assignment is genuine and
effective, and until such transfer is registered on said books
and noted hereon by the City�s Treasurer.
Fees upon Transfer or Loss. The Note Registrar may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer or
exchange of this Note and any 1ega1 or unusual costs regarding
transfers and lost instruments.
Credit Aareement. The terms and conditions of the
Credit Agreement are incorporated herein by reference and made a
part hereof. The Credit Agreement may be attached to this Note,
and shall be attached to this Note if the holder of this Note is
any person other than First Bank National Association.
Taxable Interest: Not Oualified Tax-Exempt Obliaation.
The City intends that none of the interest on this Note wi11 be
excluded from gross income for United States income tax purposes
or from both gross income and taxable net income for State of
Minnesota income tax purposes. This Note, as a taxable
obligation, is not eligible to be designated by the Issuer as a
"qualified tax-exempt obligation" for purposes of Section
265(b)(3) of the federal Internal Revenue Code of 1986, as
amended.
IT IS HEREBY CERTIFIED AND RECITED that a11 acts,
conditions and things required by the Constitution and laws of
the State of Minnesota and the Charter of the Issuer to be done,
to happen and to be per£ormed, precedent to and in the issuance
of this Note, have been done, have happened and have been
performed, in regular and due form, time and manner as required
by law; that this Note, together with all other debts of the
Issuer outstanding on the date of original issue hereof, being
the date of its actual issuance and delivery to the original
purchaser, does not exceed any constitutional or statutory or
Charter limitation of indebtedness; and that the Issuer will
establish rates and charges for the water service furnished by
its Water TJtility sufficient in amount, with all other sources,
to promptly meet the principal and interest requirements of this
issue_
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IN WITNESS WHEREOF, the City of Saint Paul, Ramsey
County, Minnesota, by its City Council has caused this Note to be
sealed with its official seal and to be executed on its behalf by
the signature of its N3ayor, attested by the signature of its
Clerk, and countersigned by the signature of its Director, Office
of Einancial Services.
(SEAL)
365438.1
CITY OF SAINT PAUL,
RAMSEY COUN'PY, MINNE50TA
Mayor
Attest:
City Clerk
Countersigned:
X X X
Director, Office of Financial
Services
F7
a�-jay..s
CEI2TIFICATE OF REGISTRATION
The transfer of ownership of the principal amount of
the attached Note may be made only by the registered owner or
his, her or its legal representative last noted below.
DATE OF SIGNATURE OF
REGISTRATION REGISTERED OWNER CITY TRSASURER
First Bank
National Association
Marquette Avenue Office
90 South Sixth Street
October , 1997 Minneapolis MN 55402 X X X
365438.1 9
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8. Execution. The Note shall be executed on behalf
of the City by the signatures of its Mayor, Clerk and Director,
Office of Financial Services, each with the effect noted on the
form of the Note, and be sealed with the seal of the City. In
the event of disability or resignation or other absence of any
such officer, the Note may be signed by the manual or facsimile
signature of that officer who may act on behalf of such absent or
disabled officer. In case any such officer whose signature or
facsimile of whose signature shall appear on the Note shall cease
to be such officer before the delivery of the Note, such
signature or facsimile shall nevertheless be valid and sufficient
for a11 purposes, the same as if he or she had remained in office
until delivery.
9. Deliverv; Application of Proceeds. The Note when
so prepared and executed shall•be delivered by the Director,
Office of Financial Services, to the Bank, and the Bank shall not
be obliged to see to the proper application thereof.
10. Fund and Accounts. For the convenience and proper
administration of the proceeds from the sale of the Note and for
the payment of principal of and interest on the Note and fees
with respect to the I3ote, the Board of Water Commissioners Water
Utility Enterprise Fund (the "Water [Ttility E'und", heretofore in
resolutions relating to the 1993 Bonds and 1997 Sonds also
referred to as the "Water Utility Fund") hereCofore created shall
continue in force and effect as a separate fund of the City and
of the Soard until a11 of the Note, and interest thereon and fees
with respect thereto, are fully paid and retired. In the Water
Utility Fund there is hereby created a 1997 Note Account and a
1997 Note Debt Service Account and in addition there are, and
there shall continue to be, the following accounts:
(a) A"1997 Note Account", to which shall be credited
all proceeds of the Note drawn on the Line of Credit. It is
recognized that amounts may be drawn on the Line of Credit
in reimbursement for costs expended on the Project, and that
accordingly the moneys need not in such circumstance be
placed in the 1997 Note Account but may be applied directly
to the reimbursement. The 1997 Note Account shall be used
to pay costs of the Project, including all costs enumerated
in Minnesota Statutes, Section 475.65. The moneys in the
1997 Note Account shall be used solely for the purposes
herein set forth and for no other purpose, except that any
surplus in the 1997 Note Account shall be deposited in the
1997 Note Debt Service Account.
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3b5438,1
(b) An "Operation and Maintenance Account", into which
shall be paid all gross revenues and earnings derived from
the operation of the Water Utility system including any
assessments which may from time to time be levied with
respect to the Water Utility. From this account there shall
be paid all, but only, current expenses oP said system.
Current expenses shall include the reasonable and necessary
costs of administering, operating, maintaining and insuring
the system, salaries, wages, costs of materials and
supplies, costs of water production and distribution,
necessary legal, engineering and auditing services, and all
other items which, by sound accounting practices, constitute
normal, reasonable and current costs of operation and
maintenance, but excluding any allowance for depreciation,
extraordinary repairs and payments into the Revenue Bond
Debt Service Account, 1997 Note Debt Service Account and
Reserve Account. There shall at all times be maintained in
said account a reserve in an amount sufficient to cover the
operation and maintenance costs of the Water Utility system
for the ensuing fifteen (15} day period; neither said
reserve nor any annual addition thereto shall constitute
��Net Revenues'� as defined below_ The balance from time to
time remaining in the Operation and Maintenance Account,
including interest or other earnings received from the
investment of any moneys in the Water Utility Fund, after
paying or providing for the foregoing items, sha11
constitute, and are referred to in this resolution as, "Net
Revenues". Payments of fees Co trustees for bonds, to
providers of liquidity facilities or credit enhancement
facilities for bonds and remarketing agents for bonds are
also current expenses.
(C) A"Revenue Bond Debt Service Account", into which
there shall be credited and to which there is hereby
irrevocably pledged from the Net Revenues of the operation
of the Water LStility system monthly, a sum equal to at least
1/12 of the total principal and interest on the 1993 Bonds
and 1997 Bonds and any other bonds issued on a parity
therewith during the ensuing twelve (12) months; provided,
however, that no further payments need be made to said
account when the moneys held therein are sufficient for the
payment of all principal and interest due on said bonds on
and prior to the next maturity date. No money shall be paid
out of said account except to pay principal, premium, iP
any, and interest on the 1993 Bonds and 1997 Bonds and any
other bonds which are issued on a parity with the 1993 Bonds
and 1997 Sonds.
(d) A"Reserve Account", which was heretofore creaCed,
and is hereby continued, to be used only when and if moneys
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in the Revenue Bond Debt Service Account or other moneys
available therefor are insufficient to pay principal,
premium, if any, and interest on the bonds payable from the
Revenue Bond Debt Service Account; provided, however, that
the moneys in the Reserve Account may be used to prepay said
bonds, when such prepayment wi11 retire a11 of the bonds
then outstanding. Amounts already in the Resezve Account
pursuant to the resolutions authorizing the issuance of the
1993 Bonds and 1997 Bonds shall be maintained therein to the
extent necessary to equal the amount required to be
maintained in the Reserve Account as set forth below, being
initially amounts required for the 1993 Bonds and 1997
Bonds. Whenever the moneys in the Reserve Account exceed
the amount required to he maintained in the Reserve Account
as set forth below, such excess may be transferred to the
Revenue Bond Debt Service_ACCOUnt; and whenever the moneys
in the Reserve Account shall be less than said amount, the
Reserve Account shall be restored ta said amount from the
next available Net Revenues. The amount required to be
maintained in the Reserve Account shall be an amount equal
to the lesser of: (1) ten percent (10%) of the original
principal amount of the 1993 Bonds and 1997 Bonds and otYter
bonds payable from the Revenue Bond Debt Service Account
issued after the 1993 Bonds on a parity of lien therewith,
or (2) the maximum principal and interest due in any year on
the bonds payable from the Revenue Sond Debt Service
Account; and whenever the moneys in the Reserve Account
exceed such amount required to be maintained therein, such
excess may be transferred to the Revenue Bond Debt Service
Account. When only bonds issued after the 1994 Bonds are
outstanding, the "maximum principal and interest due in any
year" on variable rate bonds shall be calculated at such
time (for any variable rate bonds issued prior to such time)
or in connection with their issuance (for variable rate
bonds issued after such time) assuming the variable rate
bonds bear fixed interest for the remainder of their terms
or for their terms, as appropriate, at the rates prevailing
at such time (for any variable rate bonds issued prior to
such time) or at the time of their issuance (for variable
rate bonds issued after such time) for utility revenue bonds
of comparable quality, maturity and taxable or tax-exempt
status, provided that other or different assumptions may be
used if necessary to obtain an investment grade credit
rating for the variable rate bonds or to maintain the credit
rating(s) then in effect for the bonds then outstanding.
(e) A"1997 Note Debt Service Account", into which
shall be paid (1) monthly from Net Revenues amounts
necessary to make the payments authorized in this
subparagraph and (2) the proceeds of the long term bonds or
365438.1 12
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additional temporary bonds issued to refund the Note in an
amount sufficient, together with any other moneys in the
account, to pay the principal of, and interest on, the Note.
From the account shall be paid (1) the Commitment Fees (as
defined in the Credit Agreement) of O.OSa per annum on the
average daily unused Commitment Amount (as defined in the
Credit Agreement), payable in arrears on the last day of
each month and on the Maturity Date (as defined in the
Credit AgreemenC), t2) on the last day of each month,
interest on the Note, and (3) upon a prepayment or on the
Maturity Date, the principal of the Note.
(f) Net Revenues in excess of those required for the
foregoing purposes may be used for any proper purpose.
(g) The money in the Water Utility Fund sha11 be
allotted and paid to the various accounts herein estal�lished
in the order in which said accounts are lisCed on a
cumulative basis, and if in any month the money in said
accounts is insufficient to place the required amount in any
accounts, the deficiency shall be made up in the following
month or months after payment into all other accounts having
a prior claim on said Net Revenues have been made in full.
(h) A11 mone}� held in the Revenue Bond Debt Service
Account and the Reserve Account created by this resolution
shall be kept separate and apart from all other municipal
funds and accounts.
(i) Notwithstanding anything to the contrary herein,
moneys in the Water Utility Fund and any account thereof may
be used to pay any rebate of excess arbitrage earnings on
gross proceeds of the 1993 Bonds, 1994 Bonds and 1997 Bonds
to be paid to the United States in order to maintain the
exclusion from gross income under Section 103 of the Code
(as hereinafter defined) of the intere5t on the 1993 Bonds,
1994 Bonds and 1997 Bonds.
(j) Accounts created for bonds, notes or obligations
with a lien on Net Revenues subordinate to the lien of the
1997 Bonds shall be maintained and operated as required b}�
the resolutions authorizing the same.
11. Pledae of Proceeds of Lpna Term Bonds. To provide
moneys for the prompt and full payment of principal of, and
interest on, the Note, the City sha11 issue and se11 a long term
bond or bonds or additional temporary obligations at or prior to
the maturity date of the Note, as required by Minnesota Statutes,
Section 475.61, Subdivisions 5 and 6. It is hereby found,
determined and declared that a11 conditions precedent to the
365438.M1 13
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offering of definitive obligations of the City to refund the Note
to the necessary within the meaning of Minnesota Statutes,
Section 475.61, Subdivisions 5 and 6, have been met and exist.
12_ Note Subordinate; Prioritv. The pledge of Net
Revenues to the payments of amounts due on the Line of Credit and
Note is hereby made e�cpressly junior to, and subordinate to, the
pledge of Net Revenues to the payment of the 1993 Bonds, 1997
Bonds and any obligations issued on a parity of lien with the
1993 Bonds and 1997 Bonds. The 1993 Bonds and 1997 Bonds shall
be a first charge and lien upon the Net Revenues of the Water
t3tility.
No part of such NeC Revenues sha11 be pledged to the
payment of any general obligation bonds issued by the City while
any 1993 Bonds or 1997 Bonds or bonds issued on a parity
therewith remain outstanding and undischarged, unless the pledge
of Net Revenues to such general obligation bonds is expressly
made a second and subsequent lien and the City and Board covenant
to make the rates and chazges of the Water i3tility sufficient to
timely pay such general obligation bonds.
Until the Note is paid in full, no additional revenue
obligations payable from the Revenue Bond Debt Service Account or
1997 Note Debt Service Account shall be hereafter issued unless
(1) the same are expressly made a lien upon the I3et Revenues of
the Water Utility which is junior to, and subsequent to, the lien
of the Note or (2) the Bank or other Holder of the Note consents
to a higher priority of the lien for such revenue obligations.
13. Insufficient Amounts In the event that the
moneys in the 1997 Note Debt Service Account shall be
insufficient at any particular time to pay the amounts due on the
LVote, said moneys shall first be applied to the payment of the
accrued interest on the Note, and any balance shall be applied in
payment of the principal of the Note, provided further that if it
shall ever be determined by a court of competent jurisdiction
while any of the Note remains outstanding that the sums available
and to become available for the payment of the principal thereof
and interest thereon are insufficient whether or not then due,
then the moneys in the 1997 Note Debt Service Account shall be
applied in payment of all principal then outstanding whether or
not then due and the interest accrued thereon to Che date of
payment.
14
other Holder
and with the
as follows:
CovenanCS. For the protection of the Bank or
of the Note, the City herein covenants and agrees to
Bank or other Holder of the Note from time to time
365438.7 14
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(a) It wi11 at all times through its Board adequately
maintain a:.d efficiently operate the Water Utility as a City
utility. It will from time to time make all needful and
proper repairs, replacements, additions and betterments to
the equipment and facilities o£ said Water Utility so that
they may at all times be operated properly and
advantageously, and whenever any equipment of said system
shall have been worn out, destroyed or otherwise become
insufficient for proper use, it shall be promptly replaced
or repaired so that the value and efficiency of the
facilities shall be at all times fully maintained and its
revenues unencumbered by reason thereof.
(b) The rates for all water service and the charges
for all water supplied by the Water Utility Co the City and
its residents and to all other consumers shall be reasonable
and just, taking into account the cost and value of the
Water Utility, the cost of maintaining and operating the
Water Utility and the proper and necessary allowances for
depreciation, the amounts required for the payment of
principal and interest on the bonds and Note payable from
the Net Revenues of the Water Utility, and all other sums
customarily paid from the revenues of the Water Utility.
(c) It will as required by Section 10.11.2 of the City
Charter (and it will continue to do so whether or not
required by said Charter) establish, maintain and collect
such charges and rates as will produce revenues sufficient
to pay the reasonable cost of operation, repair and
maintenance of the Water Utility and to pay the interest on
and principal of the 1993 Bonds, 1997 Bonds and all bonds on
a parity of lien with the 1993 Bonds and 1997 Bonds and of
the Note, as and when they become due, as we11 as to provide
sufficient money to make the required appropriations to the
various funds and accounts established herein. The City
will review the schedule of rates and charges for the Water
Utility at least annually when the Board budget is reviewed.
(d) It will not sell, lease, mortgage, or in any manner
dispose of the Water Utility or any part thereof (including
any and all extensions and additions that may be made
thereto) until all revenue bonds or obligations payable from
the Net Revenues of the'Water Utility or any part thereof
have been paid in full; provided, however, that the City may
sell the Water Utility or any part thereof if simultaneously
with or prior to said sale all of the outstanding bonds are
discharged in accordance with the resolutians authorizing
the issuance of the 1993 Bonds and 1997 Bonds. This
covenant shall not be construed to prevent the sale by the
City at fair market value of real estate, equipment or other
365438.1 15
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non-revenue-producing properties which in the judgment of
the City have become unnecessary, uneconomical or
inexpedient to use in connection with the Water Utility
provided that suitable facil.ities are obtained in place
thereof and provided further that nothing herein is intended
to prevent the City or Board from terminating or otherwise
preventing the termination of contracts for the furnishing
of water.
(e) It shall cause to be kept proper books, records and
accounts adapted to the Water Utility separate fram other
accounts to be audited at the end of each fiscal year. A
copy of said audit shall be furnished, withaut cost, to the
Bank or other Holder of the Nate. If the City fails to
provide such audit within a reasonable time after the end of
said fiscal year, the Bank or other Holder of the Note may
cause such audit to be made at the expense of the City. The
expense of preparing such audit shall be paid as current
operating expenses of the Water Utility. The Bank or other
Holder of the Note, or their duly appointed representatives,
from time to time shall have the right, at all reasonable
times, to inspect the Water Utility system anfl to inspect
and copy the books, records, accounts and data relating
thereto. The City agrees to furnish copies of such audiC,
without cost, to the Bank or other Holder of the Note at
their request within a reasonable time after the end of each
fiscal year.
(f1 It wi11 EaiChfully and punctually perEoxm a11
duties with reference to the Wate� Utility required by the
City Charter, the Constitution and laws of the State of
Minnesota and this resolution.
ig) It will grant no franchise to any competing
utility.
15. Amendments. No change, amendment, modification or
alteration sha11 be made in the covenants made with the Bank or
other Holder of the Note without the consent of the Bank or other
Holder of the Note, except for changes, amendments, modifications
and alterations (a) made to cure any ambiguity or formal defect
or omission, or (b) which would not materially prejudice the Bank
or other Holder of the Note.
16. Fiscal Year As used in this resolution the words
"fiscal year" shall mean the twelve (12) month period beginning
on January 1 of each year and ending on December 31 of the same
year. Should it be deemed advisable at some later date to change
the fiscal yearly basis, the same may be done by proper actions
365438.1 1 6
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to that effect, which change shall not constitute an amendment or
modification of this resolution.
17. xppropriation. The City hereby appropriates, from
Net Revenues, sums sufficient to pay the facility fee required by
Section 3.1 of the Credit Agreement and the costs and expenses
required by Section 8.2 of the Credit Agreement.
18. Records and Certifieates. The officers of the
City are hereby authorized and directed to prepare and furnish to
the Bank, and to the attorneys approving the legality of the
issuance of the Note, certified copies of all proceedings and
records of the City relating to the Note and to the financial
condition and affairs of the City, and such othe� affidavits,
certificates and information as are required to show the facts
relating to the legality and marketability of the Note as the
same appear from the books and records under their custody and
control or as otherwise known to them, and a11 such certified
copies, certificates and affidavits, including any heretofore
furnished, shall be deemed representatians of the City as to the
facts recited therein.
19. Interest Taxable: No Designation of Oualified
Tax-Exempt Obligation. The City intends that none of the
interest on the Note will be excluded from gross income for
I3nited States income tax purposes or from both gross income and
taxable net income for State of Minnesota income tax purposes.
The Note, as a taxable obligation, is not eligible to be
qualified as a"qualified tax-exempt obligation" within the
meaning of Section 265(b)(3) of the federal Internal Revenue Code
of 1986, as amended.
20. Credit Agreement. The Mayor, C1erk, and DireCtor,
Office of Financial Services, are authorized and directed to
execute and deliver the Credit Agreement in substantially the
form submitted to this Council, with such changes, modifications,
additions and deletions as shall be necessary and appropriate and
approved by bond counsel. Execution by such officers of the
Credit Agreement shall be conclusive evidence as to the necessity
and propriety of changes and their approval by bond counsel. The
Credit Agreement may be attached to the Note, and shall be
attached to the Note if the Holder of the Note is any person
other than the Bank.
21. Covenant with Bank or Other Holder. Each and all
of the terms and provisions of this resolution shall be and
constitute a covenant on the part of the City to and with the
Bank or other Holder from time to time of the Note.
365438.1 17
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22. Supplemental Resolution. Prior resolutions of the
City governing the Water Utility Fund are hereby supplemented to
the extent necessary to give effect to the provisions of
paragraph 10 of this resolution.
23. Negotiated Sale. The City has retained Springsted
Incorporated as an independent financial advisor, and this
Council has heretofore determined, and does hereby determine, to
enter into the Line of Credit and to sell the Note by private
negotiation to the Bank, all as provided by Minnesota Statutes,
Section 475.60, Subdivision 2(9).
24. Severabilitv. If any section, paragraph or
provision of this resolution shall be held to be invalid or
unenforceable for any reason, the invalidity or unenforceability
of such section, paragraph or provision shall not affect any of
the remaining provisions of this resolution.
365438.7
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1 25 . Fieadinas . Fieadings in thi
2 included for convenience of reference onl
3 hereof, and shall not limit or define the
4 provision hereof.
s resolution are
y and are not a part
meaning of any
4dopted by Council: Date � i�- � ���q �
ldoption Cert'rfied by Council Secretary
; �..�,� a _ �„P�i
pproved by May • � ° � a �' � g ?"
�: l ,� ��,�.
Requested by Department of:
v
Iri- �z�
Office of Financial Services
By:
Form Approved by City Attomey
Bv . `� .� ° � -�-� -
ro- �- ��
Ap roved a or f r ubmi ion o Council
By: -�� 1 ��lit--r"
19
a�-�a�l.s
Office of Financial Services
Martha Rantorowicz
10/O1j97
TOTAL # OF SIGNATURE PAGES
GREEN SHEET
o��n,�,r owECra�
No
1 -'�• 1 _
Q�.,� 1-J_ � �«�
❑�.,�.�. ❑..�s
p�.�,�,��„��z p
(CUP ALl LOCATIONS FOR SIGNATURE)
60926
This resolution accepts the proposal frota First Bank National Association to enter into a
of credit with the City for a$16,500,000 revolving loan.
PLANNING COMMISSION
CIB CObIbiRTEE
CIVIL SERVICE COMMISSION
Hss this pe�sor�rm erer wnA�etl under a contract fwtlNS deparlmenYT
YES NO
Nas this P���� evM been a cilY emPbYeeT
YES NO
Ocea ihic Pe�Mrm W�e%s a sldU r�M mmw1�Y7�%ed bY a�Y Gnre�t ctt'! emPbYee4
YES NO
isll�ispe(eonlfimiatargetedvenda? .
YES NO
The Water Utility is in need of a way to temporarily finance improvements to the Utility
it awaits long term financing from the MinnesoCa Public Facilities Authority.
The Water Utility can enter into e, c�n.struction contract for its improve now.
[9��3t: ' ���Z.��z4e+e° t P '�' '�ui.
Ov f 2 5���
�ISADVANTAGESIFAPPROVED
NONE �„._ .�,R_ .,_..�.��.•`
Improvements would have to be delayed until the State financing is available.
�.,,
707ALAMOUN7OFTRANSACTIONf__
FUNDING SOURCE
,
CO37/REVENUE BUDfiETED (CIRGLE ON�
ACTM7Y NUMBER
YES NO
'uLwcw. MFOahuNiwN (IXF' W M
9 � - iaYs
Draft 9 30 97
CREDTT AGREEMENT
THIS CREDTT AGIZEEMENT, dated as of October _,1997, is by and
befween 'TI-3E CITY OF SAINT PAiTL, MINNESOTA, a municipality organized
under the laws of the State of Minnesota (the "Borrower"), and FI12ST BANK
NATIONAL ASSOCIATION, a national banking association (the "Lender").
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Defined Terms. As used in this Agreement the following
terms shall have the following respective meanings
"Advance": Any portion of the outstanding Revolving Loan by the
Lender which is subject to an available inEerest rate option. An Advance may be a
Eurodoilar Rate Advance, or, with respect to any period when the Eurodoliar Rate is
unavailable, a Reference Rate Advance.
"Ad�usted Eurodollar Rate": With respect to each Eurodollar Rate
Advance, the rate (rounded upward, if necessary, to the next one hundredth of one
percent) deterxnined by dividing the Eurodollar Rate by 1.00 minus the Eurodollar `
Reserve Percentage.
"A�plicable Margin°: With respect to:
(a) Eurodoliar Rate Advances -- 0.4$%.
(b) Reference Rate Advances -- minus 2.0°l0.
"Board": The Board of Governors of the Federal Reserve System or
any successor thereto.
"Business Da�': Any day (other than a Saturday, Sunday or legal
holiday in the State of Minnesota) on which national banks are permitted to be open
for business in Minneapolis, Minnesota.
"Closing Date": The date of this Agreement.
"Commitment": The obligation of the Lender to make Advances to
the Borrower in an aggregate principal amount outstanding at any time not to
exceed the Commitment Amount upon the terms and subject to the conditions and
limitations of this Agreement.
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"Commitment Amount": $16,500,000, or such lesser amount to which
the Commitment Amount is reduced pursuant to Section 2.6.
°Commitment Fees°: As defined in Section 29.
"T?efault": Any evenE which, with the giving of notice (whether such
notice is required under Section 7.1, or under some other provision of this
Agreement, or otherwise) or lapse of time, or both, would constitute an Event of
Default.
°Eurodollar Business Da�": A Business Day which is also a day for
trading by and beEween banks in United States dollar deposits in the interbank
Eurodollar market and a day on which banks are open for business in New York
City.
"Eurodollar Rate': With respect to each Eurodollar Rate Advance, the
average offered rate for one month deposits in United States dollars (rounded
upward, if necessary, to the nearest 1/16 of 1%) for delivery of such deposits on each
Eurodollar Business Day, or if any day is not a Eurodollar Business Day, on the first
preceding Eurodollar Business Day which rate appears on fhe Reuters Screen LIBO
page as of 11:00 a.m., London time (or such other time as of which such rate appears}
on each Burodollar Business Day, or the rate for such deposits determined by the
Lender at such time based on such other published service of general application as
shall be selected by the Lender for such purpose; provided, that in lieu of
determining the rate in the foregoing manner, if not so determinable on such date,
at the option of the Lender, the Lender may determine the rate based on rates at
which one xnonth United States dollar deposits are offered to the Lender in the
interbank Eurodollar market at such time for delivery in Immediately Available
Funds on each Eurodollar Business Day in an amount approximately equal to the
Advance by the Lender (rounded upward, if necessary, to the nearest 1(16 of 1%).
"Reuters Screen LIBO page" means the display designated as page "LISO" on the
Reuters Monitor Money Rate Screen (or such other page as may replace the LIBO
page on such service for the purpose of displaying London interbank offered rates of
major banks for United States dollar deposits). For purposes of determining any
interest rate hereunder or under any other Loan Document which is based on the
Eurodollar Rate, such interest rate shall change as and when the Eurodollar Rate
shall change.
"Eurodollar Rate Advance°: An Advance with respect to which the
interest rate is determined by reference to the Adjusted Eurodoliar Rate.
"Eurodollar Reserve Percentage": As of any day, that percentage
(expressed as a decimal} which is in effect on such day, as prescribed by the Board for
determining the maximum xeserve requirement (including any basic, supplemental
or emergency reserves) for a member bank of the Federal Reserve System, with
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deposits comparable in amount to those held by the Lender, in respect of
"Eurocurrency Liabilities" as such term is defined in Regulation D of the Board. The
rate of interest applicable to any outstanding Eurodollar Rate Advances shall be
adjusted automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default": Any event described in Secfion 7.1.
"GAAP": Generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Pubiic Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements bp such other
entity as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of any date of determination.
"Loan Documents": This Agreement and the Note.
"Lien": With respecf to any Person, any security interest, mortgage,
pledge, 1ien, charge, encumbrance, title retention agreement or analogous
instrument or device (including the interest of each lessor under any capitalized
lease), in, of or on any assets or properties of such Person, now owned or hereafter
acquixed, whefher arising by agreement or operation of law.
"Maturitv Date": October � 1998.
"Note": As de£ined in Section 2.3.
"Person": Any natural person, corporation, partnership, limited
partnership, joint venture, firm, association, trust, unincorporated organization,
government or governmentai agency ox political subdivision or any other entity,
whether acting in an individual, fiduciary or other capacity.
"Reference Rate°: The rate of interest from time to time publicly
announced by the Lender as its "reference rate." 'I'he Lender may lend to its
custorners at rates that are at, above or below the Reference Rate. For purposes of
determining any interest raee hereunder or under any other Loan Document which
is based on the Reference Rate, such interest shall change as and when the Reference
Rate shall change.
"Reference Rate Advances": An Advance with respecE to which the
interest rate is determined by reference to the Reference Rate.
"Re�ulatory Change": Any change after the date of this Agreement in
federal, state or foreign laws or regulations or the adoption or making after such
daEe of any interpretations, directives or requests applying to a class of banks
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including the Lender under any federal, state or foreign laws or regulations
(whether or not having the force of law) by any court or govemmental or monetary
authorify charged with the 9nterpretation or administration thereof.
"Revolving Loan°: As defined in Section 2.1.
"Ufilit�': 'The Borrower's municipal water utility under the
jurisdiciion of the Borrower's Board of Water Commissioners.
Section 1.2 Accounting Terms and Calculations. Except as may be
expressly provided to the contrary herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP.
Section 1.3 Other Definitional Terms.Terms of Construction. The
words "hereof", "herein" and "hereunder" and words of similar import when used
in fihis Agreement shall refer to this Agreement as a whole, and not to any
particular provision of this Agreement. References to Sections, E�ibits, Schedules
and the like references are to Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise expressly provided. The words "include", "includes°
and "including" shall be deemed to be followed by the phrase "without limitation".
Unless the context in which used herein otherwise clearly requires, "or" has the
inclusive meaning represented by the phrase "and/or°. All incorporations by
reference of covenants, terms, definitions or other provisions from other
agreements are incorporated into this Agreement as if such provisions were fully set
forth herein, and include all necessary definitions and related provisions from such
other agreements. All covenants, terms, definitions and other provisions from
other agreements incorporated into this Agreement by reference shall survive any
termination of such other agreements until the obligations of the Borrower under
this Agreement and the Note are irrevocably paid in full and the Commitment is
terminated.
ARTICLE II
TERMS OF LENDING
Section 2.1 The Revolving Commitment. On the terms and subject to
the conditions hereof, the Lender agrees to make loans (collectively, the "Revolving
Loan') to the Borrower on a revolving basis at any time and from time to time from
the Closing Date to the Maturity Date, during which period the Borrower may
borrow, repay and reborrow in accordance with the provisions hereof, provided that
the unpaid principal amount of the outstanding Revolving Loan shall not at any
time, in the aggregate, exceed the Commitment Amount. Advances shall be
obtained and maintained, but subject to the limitations hereof, as Eurodollar Rate
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Advances at all times the Eurodollar Rate is available as an interest rate option, and
as Reference Rate Advances at all other times.
Section 2.2 Procedure for Advances. Any request by the Borrower for a
Advance shall be in writing, or by telephone and must be given so as to be received
by the Lender not later Ehan 12:00 Noon (Minneapolis time) on the date of the
requested Advance. Each request for an Advance shall specify (i) the date of the
Advance, and (ii) the amount of the Advance to be made on such date which shall
be in a minimum amount of $100,060 or, if more, an integral muitiple thereof. Each
request for an Advance shall be irrevocable and shall be deemed a representation by
the Borrower that on the requested Advance date and after giving effect to such
Advance the applicable conditions specified in Ariicle III have been and will
continue be satisfied. Unless the Lender determines that any applicable condition
specified in Article III has not been satisfied, the Lender will make available to the
Borrower at the Lender's principal office in Minneapolis, 1Vlinnesota in immediately
available funds not later than 1:00 p.m. {Minneapolis time) on the requested
Advance date the amount of the requested Advance.
Section 2.3 The Note. The Advances shall be evidenced by a single
promissory note of the Borrower (the "Note"), substantially in the form of Exhibit A
hereto, in the amount of the Commitment Amount originally in effect. The Lender
shall enter in its ledgers and records the amount of each Advance made and the
payments made thereon, and the Lender is authorized by the Borrower to enter on a
schedule attached fo the Note a record of such Advances and payments.
Section 2.4 Interest Rates and Interest Pa�ments. Interest shall accrue
and be payable on the Advances as follows:
(a) Each Eurodollar Rate Advance shall bear interest on the unpaid
principal amount thereof at a varying rate per annum equal to the sum of (i)
the Adjusted Eurodollar Rate, plus (ii) the Applicable Margin.
(b) Each Reference Rate Advance shall bear interest on the unpaid
principai amount thereof at a varying rate per annum equal to Ehe sum of (i)
the Reference Rate, plus (ii) the Applicable Margin, provided that no portion
of the Revolving Loan shall bear interest at fhe Reference Rate plus the
Applicabie Margin uniess the Eurodollar Rate is not available as an interest
rate option.
(c) Interest shall be payable (i) with respect to each Advance on the last
day of each month; (ii) with respecE to a11 Advances, upon any permitted
prepayment (on the amount prepaid); and (iii) with respect to all Advances,
on the MaturiEy Date.
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Section 2.5 Re�a�ment and Pre�a�nent. Principal of the Note shall be
payable in full on the Maturity Date.
Section 2.6 O�tional Reduction of Commitment AmounE ar
Termination of Commitment. The Borrower may, at any time, upon not less than 5
Business Days prior written noEice to the Lender, reduce the Commitment AmounE,
with any such reduction in a minimum amount of $100,000, or, if more, in an
integral multiple of $100,000; provided, however the Borrower may not at any time
reduce the Commihnent Amount below the then unpaid principal balance of the
Note. The Borrower may, at any time, upon not less than 5 Business Days prior
written notice to the Lender, terminate the Commitment in its entirety. Upon
EerminaEion of the Commitment pursuant to this Section, the Borrower shall pay to
the Lender all unpaid obligations of the Borrower to the Lender hereunder.
Section 2.7 Commitment Fee. The Borrower shall pap to the Lender
fees {the "Commitment Fees") in an amount determined by applying a rate of 0.05%
per annum to the average daily unused Commitment Amount for the period from
the date of this Agreement to the Maturity Date. Such Commitment Fees are
payable in arrears monEhly on the last day of each month and on the Maturity Date.
Section 2.& Com,�utation. Commitment Fees and interest on the Note
shall be computed on the basis of actual days elapsed and a year of 360 days.
Section 2.9 Use of Proceeds. The proceeds of the Advances shaii be
used for capital improvements to the Utility, in a manner not in conflict with any of
the Borrower's covenants in this Agreement.
Section 2.10 �atiita 1 Ade_c�uac�. In the event that any Regulatory
Change reduces or shali have the effect of reducing the rate of return on the
Lender's capital or the capital of its parent corporation (by an amount the Lender
deems material} as a consequence of fhe Commitment and/or the Advances to a
level below that which the Lender or its parent corporation could have achieved but
for such Regulatory Change (taking into account the Lender's policies and the
policies of its parent corporation with respect to capital adequacy), then the Borrower
shall, within five days after written notice and demand from the Lender, pay to the
Lender additional amounts sufficient to compensate the Lender or its parent
corporation for such reduction. Any determination by the Lender under this
Section and any certificate as to the amount of such reduction given to the Borrower
by the Lender shall be final, conclusive and binding for all purposes, absent error.
Section 2.11 Interesf Rate Not Ascertainable, Etc. If, on or prior to the
date for determining the Adjusted Eurodollar Rate in respect of any Advance or
Eurodoilar Rate Advance, the Lender determines (which determination shali be
conclusive and binding, absent error) that:
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(a) deposits in dollars (in the applicable amount) are not being made
available to the Lender in the relevant markeE, or
(b) the Adjusted Eurodollar Rate will not adequately and fairly reflect
the cost to the Lender of funding or maintaining Eurodollar IZate Advances,
the Lender shall forthwith give notice to the Borrower of such determination,
whereupon the obiigation of the Lender to make or continue any Advance as a
Eurodollar Rate Advance shall be suspended until the Lender notifies the Borrower
that the circumstances giving rise to such suspension no longer exist. Whi�e any
such suspension continues, all further Advances by the Lender shall be made as
Reference Rate Advances.
Section 2.12 Increased Cost. If any Regulatory Change:
(a) shall subject the Lender to any fax, duty or other charge wifh respect
to its Eurodollar Rate Advances the Note or its obligation to make Eurodollar
Rate Advances or shall change the basis of taxation of payment to the Lender
of the principal of or interest on Eurodollar Rate Advances or any other
amounts due under this Agreement in respect of Eurodollar Rate Advances
or its obligaEion to make Eurodollar Rate Advances (excepE for changes in the
rate of tax on fihe overall net income of the Lender imposed by the
jurisdiction in which the Lender s principal office is located); or
(b) shall impose, modify or deem applicable any reserve, special
deposit, capital requirement or similar requirement (including, without
limitation, any such requirement imposed by the Board, but excluding with
respect to any Eurodoilar Rate Advance any such requirement to the extent
included in calculating the applicable Adjusted Eurodollar Rate) against assets
of, deposits with or for the account of, or credit extended by, the Lender, the
interbank Eurodollar market, or the certificate of deposit market, or shall
impose, modify or deem applicable any other condition affecting its
Eurodollar Rate Advances, the Note or its obligation to make Eurodollar Rate
Advances and ehe result of any of the foregoing is to increase the cost to the
Lender of making or maintaining any Eurodollar Rate Advance, or to reduce
the amount of any sum received or receivable by the Lender under this
Agreement or under the Note,
then, within 30 days after demand by the Lender, the Borrower shall pay to the
Lender such additional amount or amounts as will compensate the Lender for such
increased cost or reduction. The Lender will promptly notify the Borrower of any
event of which it has knowledge, occurring after the date hereof, which will entitle
the Lender to compensation pursuant to this Section. A certificate of the Lender
ciaiming compensation under this Section, setting forth the additional amount or
amounts to be paid to it hereunder and stating in reasonable detail the basis for the
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charge and the method of computation, shall be conclusive in the absence of error.
In determining such amount, the Lender may use any reasonable averaging and
atEribution methods. Failure on the part of the Lender to demand compensation for
any increased costs or reduction in amounts received or receivable with respect to
any Eurodollar Rate Advance at any time shall not constitute a waiver of the
Lender's rights to demand compensation for any increased costs or reducfion in
amounts received or receivable at any other fime.
Section 2.13 Ille ali . If any Regulatory Change shall make iE
unlawful or impossible for the Lender to make, maintain or fund any Eurodollar
Rate Advance, the Lender shall notify the Borrower, whereupon the obligation of
the Lender to make or continue any Advance as a Eurodollar Rate Advance shall be
suspended until the Lender notifies the Borrower that the circumstances giving rise
to such suspension no longer exist. If the Lender determines that it may not
lawfully continue to maintain any Eurodoilar Rate Advance, all of the affected
Advances shall be automatically converted to Reference Ra�e Advances as of the
date of the Lender's notice, and upon such conversion the Borrower shall
indemnify the Lender.
Section 2.14 Discretion of Lender as to Manner of Fundine. The
Lender shall be entitled to fund and maintain its funding of Eurodollar Rate
Advances in any manner it may elect, it being understood, however, that tor the
purposes of this Agreement all determinations hereunder (but excluding
determinations that the Lender may elect to make from the Reuters screen) shall be
made as if the Lender had actually tunded and maintained each Eurodollar Rate
Advance.
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ARTICLE III
CONDTTIONS PRECEDENT
Section 3.1 Conditions of Initial Advance. The obligafion of Ehe
Lender to make the initial Advance hereunder shall be subject to the prior or
simultaneous fulfillment of each of the following conditions:
3.1(a) Documents. The Lender shall have received
the following:
(i) This Agreement and the Note executed by a duly auYhorized
officer (or officers) of the Borrower and dated the Closing Date.
(ii) A certificate of the Clerk of the Borrower dated as of the
Closing Date and certifying as to the following:
(A) A true and accurate copy of the municipai resolutions of
the Borrower authorizing the execution, delivery and
performance of the Loan Documents, and other
agreements, instrument and documents contemplated
hereby and thereby;
(B) The incumbency, names, titles and signatures of the
officers of the Borrower authorized to execute the Loan
Documents and to request Advances; and
(C) A true and accurate copy of the Charter of the Borrower.
(iii) The opinion of counsel to the Borrower covering such
matters as set forth on Exhibit B.
(iv) A facifity fee paid to the Lender in the amount of $16,500.
31(b) Other Matters. All organizational and legal proceedings
relating to the Borrower and all instruments and agreements in connection with the
transactions confemplated by this Agreement shall be satisfactory in scope, form and
substance to the Lender and its counsel, and the Lender shall have received all
information and copies of all documents, including records of municipal
proceedings, which it may reasonably have requested in connection therewith, such
documents where appropriate to be certified by proper Borrower or governmental
authorities.
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3.1(c) Fees and Ex�enses. The Lender shall have received all fees
and other amounts due and payable by the Borrower on or prior to the Closing Date,
including the reasonable fees and expenses of counsel to the Lender payable
pursuant Eo Section $.2.
Seciion 3.2 Conditions Precedent to all Advances The Lender shall
not have any obligafion to make any Advance (including Advances after the initial
Advance) hereunder usiless all representations and warranties of the Borrower
made in this Agreement remain true and coxrect and no Default or Event of DefaulE
exists.
ARTICLE TV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender:
Section 4.1 Organization, Standing. Etc. The Borrower is a
municipality duly organized and validly existing under the laws of the State of
Minnesota and has a11 requisite power and authority to carry on its business as now
conducted, to enter into this Agreement and to issue the Note and to perform its
obiigations hereunder and thereunder. This Agreement and the Note have been
duly authorized by all necessary municipal action and when executed and delivered
will be the legal and binding obligations of the Borrower. The execution and
delivery of this Agreement and the Note will not violate the Borrower's charter or
other organizational documents or any ordinance, statute or other law applicable to
the Borrower. No governmental consent or exemption is required in connection
with the Borrower's execution and delivery of this Agreement and the Note except
for those which have already been obtained.
Section 42 Financial Statements and No Material Adverse Chanee
The Borrower's and the Utility's audited financial statements as at December 31,
1996, and unaudited financial statements as at June 30, 1997, as heretofore furnished
to the Lender, have been prepared in accordance with GAAP. Neither the Borrawer
nor the Utility has any material obligation or liability not disclosed in such financial
statements, and there has been no material adverse change in the condition of the
Borrower or the Utility since the dates of such financial statements.
Section 4.3 Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Borrower, threatened against or affecting the
Borrower which, if determined adversely to the Borrower, would have, a material
adverse effect on the condition of the Borrower. The Borrower is not in violation of
any law or regulation (including environmental laws and regulations and laws
relating to employee benefit plans) where such violation could reasonably be
expected to impose a material liability on the Borrower.
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ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitment shall have expired or been terminated and the
Note and all of the Borrower's ofher obligations to the Lender under this
Agreement shall have been paid in full, unless the Lender shall otherwise consent
in writing:
Section 5.1 Financial Statements and Re�orts. The Borrower will
furnish to the Lender:
5.1(a) As soon as available and in any event within 210 days
after the end of each fis�al year of the Borrower, financiai statements of the
Borrower and the Utility consisting of at least a balance sheet, a statemenf of
revenue, expenditures and changes in retained earnings, and a statement of cash
flow, in each case as at the end of such year, setting forth in each case in comparative
form corresponding figures from the previous annual audit, certified without
qualification by the State Auditor of the State of Minnesota or other independent
certified public accountants of recognized national standing selected by the Borrower
and acceptabie to the Lender.
5.1(b) As soon as available and in any event within 20 days
after the end of each fiscal quarter, unaudited financial statements for the Borrower
and the Utility for such quarter and for the period from the beginning of such fiscal
year to the end of such quarter, substantially similar to the annual audited
statements, along with a statement signed by the chief financial officer of the
Borrower stating that as at the end of such quarter there did not exist any Default or
Event of Default or, if such Defauit or Event of Default existed, specifying the nature
and period of existence thereof and what action the Borrower proposes to take with
respect thereto.
5.1(c) Immediately upon any officer of the Borrower becoming
aware of any Default or Event of Default, a notice describing the nature thereot and
what action the Borrower proposes to take with respect thereto.
5.1(d) From time to time, such other information regarding the
business, operation and financial condition of the Borrower or the Utility as the
Lender may reasonabiy request.
Section 5.2 Ortanizational Existence. The Borrower will maintain its
existence as a municipality under the laws of Minnesota.
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Section 5.3 Insurance. The Borrower will, with respect to the Utility,
maintain with financially sound and reputable insurance companies such insurance
as may be required by law and such other insurance in such amounts and against
such hazards as is customary in the case of reputable Persons engaged in the same or
similar business and similarly situated.
Section 5.4 ns ection. The Borrower will permit any Person
designated by the Lender to visit and inspect any of the properties, books and
financial records of the Borrower and the Utility, to examine and to make copies of
the books of accounts and other financial records of the Borrower and the Utility,
and to discuss the affairs, finances and accounts of the Borrower and the Utility with
its officers at such reasonable times and intervals as the Lender may designate.
Section 5.5 Maintenance of Pro.�erties. The Borrower will maintain its
properties related to the Utility in good condition, repair and working order, and
supplied with all necessary equipment, and make all necessary repairs, renewals,
replacements, betterments and improvements thereto, all as may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
Section 5.6 Books and Records. The Borrower wi11 keep adequate and
proper records and books of account in which full and correct entries will be made of
its dealings, business and affairs.
Section 5.7 Com�liance. The Borrower will comply in all material
respects with all laws, rules and regulations to which it anay be subject.
Section 5.8 Notice of Litigation. The Borrower will give prompt
written notice to the Lender of the commencement of any action, suit or proceeding
affecting the Borrower or the Utility where an adverse outcome could reasonably be
expected to have a material adverse effect upon the Borrower or the Utility.
SecEion 5.9 Plans. The Borrower will maintain any employee benefit
plans in campliance with all material requirements of applicable laws and
regulations.
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ARTICLE VI
NEGATNE COVENANTS
Until the Commiiment shall have expired or been terminated and the
Note and ali of the Borrower's other obligations to the Lender under this
Agreement shall have been paid in full, unless the Lender shall otherwise consent
in writing:
Section 6.1 Mer�er. The Borrower will not merge or consolidate or
enter into any analogous reorganization or transaction with respect to the Utility
with any Person.
Section 6.2 Sa1e of Assets. The Borrower will not seii, transfer, lease or
otherwise convey all or any substantial part of the assets of the Utility.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default. The occurrence of any one or more of
the foliowing events shall constitute an Event of Default:
7.1(a) The Borrower shall fail to make when due, whether by
acceleration or otherwise, any payment of principai of or interest on the Note or any
other obligations of the Borrower to the Lender pursuant to this Agreement.
7.1(b) Any representation or warranty made by or on behalf of
the Borrower in this Agreement or by or on behalf of the Borrower in any certificate,
statement, report or document herewith or hereafter furnished to the Lender
pursuant to this Agreement shall prove to have been false or misleading in any
material respect on the date as of which the facts set forth are stated or certified.
7.1(c) The Borrower shall fail to comply with Sections 5.2 or 5.3
or any Section of Article VI.
7.1(d) The Borrower shall fail to compiy with any other
agreement, covenant, condition, provision or term contained in this Agreement
(other than those hereinabove set forth in this Section 71) and such failure to
comply shall continue for 20 calendar days after whichever of the following dates is
the earliest: (i) the date the Borrower gives notice of such failure to the Lender, (ii)
the dafe the Borrower should have given noEice ot such failure to the Lender
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pursuant to Section 5.1, or (iii) the date the Lender gives notice of such failure to the
Borrower.
7.1(e) The Borrower shall become insolvenE or shall generally
not pay its debts as they mature or shall apply for, shall consent to, or shail acquiesce
in the appointment of a custodian, trusfee or receiver of the Borrower ox for a
substantial parE of the property thereof or, in the absence of such application,
consent or acquiescence, a custadian, frustee or receiver shall be appointed for the
Borrower or for a substantial part of the property thereof and shall not be discharged
within 45 days, or the Borrower shall make an assignment for the benefit of
creditors.
7.1(� Any bankruptcy, reorganization, debt arrangement or other
proceedings under any bankruptcy or insolvency law shall be instituted by or against
the Borrower and, if instituted against the Borrower, shall have been consented to
or acquiesced in by the Borrower or shall remain undismissed for 60 days, or an
order for relief shall have been entered against the Borrower.
7.1(g) Any dissolution or liquidation proceeding shall be
instituted by or against the Borrower and, if instituted against the Borrower, shall be
consented to or acquiesced in by the Borrower or shall remain for 45 days
undismissed.
7.1(h) A judgment or judgments for the payment of money in
excess of the sum of $500,000 in the aggregate shall be rendered against the Borrower
and either (i) the judgment creditor executes on such judgment or (ii) such
judgment remains unpaid or undischarged for more than 60 days from the date of
entry thereof or such longer period during which execution of such judgment shall
be stayed during an appeal from such judgment.
7.1(i) The maturity of any material indebtedness of the Borrower
(other than indebtedness under this Agreement) shall be accelerated, or the
Borrower shall fail fo pay any such material indebtedness when due (after the lapse
of any applicable grace period) or any event shall occur or condition shall exist and
shall continue for more than the period of grace, if any, applicable thereto and shall
have the effect of causing, or permitting the holder of any such indebtedness to
cause, such material indebtedness to become due prior to its stated maturity or to
realize upon any collateral given as security therefor. For purposes of this Section,
indebtedness of the Borrower shall be deemed "maferial" if it exceeds $1,000,000 as to
any item of indebtedness or in the aggregate for all items of indebtedness with
respect fo which any of the events described in this Section has occurred.
7.1(j) Any execution or attachment shall be issued whereby any
substantial part of the property of the Borrower shali be taken or attempted to be
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taken and the same shall not have been vacated or stayed within 30 days after the
issuance thereof.
Section 7.2 Remedies. If (a) any Event of Default described in
Sections 7.1 (e), (fl or (g) shall occur with respect to the Borrower, the Commihnent
shall automaticaily terminate and the Note and all other obligations of the
Borrower to the Lender under this Agreement shall automatically become
immediately due and payable, or (b) any other Event of Defauit shall occur and be
continuing, then fhe Lender may (i) declare the Commitment terminated,
whereupon the Commitment shall terminate, and (ii) dedare the Note and all other
obiigations of the Borrower to the Lender under this Agreemen4 to be forEhwith due
and payable, whereupon the same shall immediately become due and payable, in
each case without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived, anything in this Agreement or in the Note to
the contrary notwithstanding. Upon the occurrence of any of the events described
in clauses (a} or (b) of the preceding sentence the Lender may exercise ali rights and
remedies under this Agreement, the Note and any related agreements and under
any applicable law.
Section 7.3 Offset. In addition to the remedies set forth in Section 7.2,
upon the occurrence of any Event of Default and thereafter while the same be
continuing, the Borrower hereby irrevocably authorizes the Lender to set off all
sums owing by the Borrower to the Lender hereunder against all deposits and
credits of the Borrower with, and any and all claims of the Borrower against, the
Lender to the extent such deposits and credits represent net revenues of the Utility
which are not subject to a claim having a higher priority than the claim of the
Lender.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Modifications. Notwithstanding any provisions to the
contrary herein, any term of this Agreement may be amended with the written
�onsent of the Boxrower; rorovided that no amendment, modification or waiver of
any provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be in writing and
signed by the Lender, and then such amendment, modifications, waiver or consent
shall be effective only in the specific instance and for the purpose for which given.
Section &.2 Costs and Expenses. Whether or not the transactions
contemplated hereby are consummated, the Borrower agrees to reimburse the
Lender upon demand for all reasonable out-of-pocket expenses paid or incurred by
the Lender (including filing and recording costs and fees and expenses of Dorsey &
Whitney LLP, counsel to the Lender) in connection with the negotiation,
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preparation, approval, review, execution, delivery, amendment, modification,
interpretation, collection and enforcement of this Agreement and the Note. The
obligations of the Borrower under this Section shall survive any termination of this
Agreement.
Section 8.3 Waivers. etc No failure on the parf of the Lender or the
holder of the Note to exercise and no delay in exercising any power or right
hereunder shail operaEe as a waiver thereof; nor shall any single or partiai exercise
of any power or right preclude any other or further exercise thereof or the exercise of
any other power or right. The rights and remedies of the Lender hereunder are
cumula�ive and not exclusive of any right or remedy the Lender otherwise has.
Section 8.4 Notices. Except when telephonic notice is expressly
authorized by this Agreement, any notice or other communication to any party in
connection with this Agreement shall be in writing and shall be sent by manual
delivery, telefacsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on the signaftzre
page hereof, or at such other address as such party shall have specified to the other
party hereto in writing. All periods of notice shall be measured from the date of
delivery thereof if manually delivered, from the date of sending thereof if sent by
telefacsimile transmission, from the first Business Day after the date of sending if
sent by overnight courier, or from four days after the date of mailing if mailed;
provided however, that any notice to the Lender under Article II shall be deemed to
have been given only when received by the Lender.
Section 8.5 Successors and Assigns; Dis�osition of Loans. This
Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that the Borrower may not assign its
rights ox delegate its obligations hereunder without the prior written consent of the
Lender. The Lender may at any time sell, assign, transfer, grant participations in, or
otherwise dispose of any portion of the Commitment and/or Advances to banks or
other financial institutions. The Lender may disclose any information regarding the
Borrower in the Lender's possession to any prospective buyer or participant.
5ection 8.6 Governing Law and Construcfion. THE VALIDIT'Y,
C01�3STRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AN17 THE
NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES
THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES
APPLICABLE TO NATIONAL BANKS.
SecEion S.7 Consent to JurisdicEion. AT THE OPTION OF THE
LENDER, THIS AGREEMENT AND THE NOTE MAY BE ENFORCED IN ANY
FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN
COUNTY, MINNESOTA; AND THE BORROWER CONSENTS TO THE
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JURI5DICTIQN AND VENUE OF ANY SUCH COURT AND WAIVES ANY
ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE
EVENT THE BORROWER COMMENCES ANY ACTION IN ANOTHER
JURISDICTION OR VENUE UNDER ANY TORT dR CONTRACT THEORY
ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY
THIS AGIZEEMENT, THE LENDER AT ITS OPTION SHALL BE ENTITLED TO
HAVE THE CASE TRANSFERRED TO ONE OF T'HE JL7RISDICTIONS AND
VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED
WITHOUT PREJUDICE.
Section 8.8 Waiver of Jury Trial. EACH OF THE BORROWER AND
THE LENDER IRBEVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL SY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTE AND ANX OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 8.9 Captions. The captions or headings herein and any table of
contents hereto are for convenience only and in no way define, lunit or describe the
scope or intent of any provision ot this Agreement.
Section 8.10 Entire Agreement. This Agreement and the other Loan
Documents embody the enEire agreement and understanding between the Borrower
and the Lender with respect to the subject matter hereof and thereof. This
Agreement supersedes all prior agreements and understandings relaYing to the
subject matter hereof.
Section 8.11 Counter�arts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and either of the parties hereto may execute this Agreement by
signing any such counterpart.
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IN 4VITNESS WHEILEOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
CTTY dF SAINT PAUL, M7NNESOTA
B
Norman Coleman
Title: Mayor
Borrower's Address:
Attention: Director, Office of
Financial Services
_ Kellogg Boulevard
Saint Paul, Minnesota 55101
Telefacsimile No.: (612) 266-_
Lender's Address:
First Bank National Association
Marquette Avenue Office
90 South Sixth Street
Minneapolis, Minnesota 55402
Telefacsimile No.: (612) 973-8368
And
[Print name]
Title: Clerk
And
[Print nameJ
Title: Director, Office of Financial Services
FIRST BANK NATIONAL ASSOCIATION
By
Print Name
Title
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EXHIBTT A TO
CREDIT AGREEMENT
REVOLVING NOTE
$16,500,000
October _,1997
Minneapolis, Minnesota
(To be provided by Borrower, in foxm and substance acceptable to the Lendera
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EXHISTT B TO
CREDTT AGREEMEI�TT
MAT'TERS TO BE COVERED BY
OPINION OF COUNSEL TO THE BORROWER
'The opinion of counsel Eo the Borrower which is called for by Secfion
3.1 of the Credit Agreement (the "Credit Agreement") shall be addressed to the
Lender and dated the date of the Credit Agreement. It shall be satisfactory in form
and substance to the Lender and shall cover the matters set fox�h below, subject to
such assumptions, exceptions and qualifications as may be acceptable to the Lender
and counsel to the Lender. Capitalized terms not de£ined herein have the meanings
given to them in the Credit Agreement.
1. The Borrower is a public body corporate and politic duly organized and
validly existing under the laws of the State of Minnesota.
2. The Borrower has full power and authority to execute and deliver the
Credit Agreement and Note, and to perform its obligations thereunder.
3. The execution, delivery and performance by the Borrower of the Credit
Agreement and Note have been duly authorized by all necessary action by its City
Council, and are not in conflict with any provision of its enabling statute or its b�-
laws.
4. To the best of our knowledge, based on reasonable inquiry and
investigation, the execution, delivery and performance of the Credit Agreement and
Note do not constitute a default under any contractual restriction or other provision
binding upon the Borrower or affecting any of its property, do not contravene any
provision of law or any order, decree, judgment or other determination of any
court, tribunal or other governmental authority or instrumentality, and will not
resuit in or require the creation or imposition of any mortgage, lien, security interest
or other charge or encumbrance on any property owned by the Borrower.
5. The Credit Agreement and I�ote constitute the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their respective terms, except to the extent limited by insolvency, moratorium,
bankruptcy, reorganization or other similar laws of general application relating to or
affecting the enforcement of creditors' rights, and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equiEy or
at law).
6. No consent, approval, authori2ation or registration by or with any
governmental body or authority other than those already obtained is required on
the part of the Borrower in connection wifih the execution and delivery of the Credit
Agreement or Note or performance of or compliance with the terms, provisions or
conditions thereof.
Council File # q�� �'� y S
Green Sheet # �o U ��
RESOLUTION
SAINT PAUL, MINNESOTA
P�esented By
Referred Ta
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ACCEPTING PROPOSAL ON
$16,500,000 LINE OF CREDIT
FOR WATER UTILITY
WAEREAS, the Director, Office of Financial Services,
has presented a proposal for a$16,500,000 revolving line of
credit (the "Line of Credit") from First Bank National
Association (the "Bank°) to the City of Saint Paul, Minnesota
(the '�City"), as a way to temporarily finance improvements to the
City's Water Utility; and
the Line of Credit shall be incorporated in a Taxable Water
Revenue Revolving Note of 1997 (the "Note"); and
WHEREAS, the terms of the Line of Credit are set forth
in a Credit Agreement (the ��Credit Agreement") to be executed by
the Bank and City, and the obligation to repay amounts drawn on
WHEREAS, there are currently outstanding bonds of the
City payable from Net Revenues of the City's Water Utility,
specifically the City's (a) $11,175,000 Water Revenue Bonds,
Series 1993E (the "1993 Bonds"), issued pursuant to a resolution
adopted by this Council on June 15, 1993, of which $7,790,000
remain outstanding, and (b) $7,000,000 Water Revenue Refunding
Bonds, Series 1997C (the "1997 Bonds"), issued pursuant to a
resolution adopted by this Council on June 11, 1997, of which
$7,000,000 remain outstanding; and
365435_1
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WHEREAS, the proceeds of the Line of Credit will
finance on a tempozary basis various improvements (the "Project")
to the City's municipal water utility (the "Water Utility"j,
which has since its acquisition in 1885 been under the
jurisdiction of the Board of Water Commissioners (the "BOard");
and
WHEREAS, the Project is best financed long term by a
loan from the Minnesota Public Facilities Authority, but loans
are not yet available under the new water loan program, and other
financing is necessary before contracts for the construction of
the Project may be entered into; and
WHEREAS, the Line of Credit is a form of temporary
financing authorized by Minnesota Statutes, Section 475.61,
Subdivisions 5 and 6; and .
WHEREAS, the Board and this Council deem it necessary
and expedient to undertake the Line of Credit and issue the Note;
and
WHEREAS, the parity tests of the resolutions
authorizing the 1993 Bonds and 1997 Bonds are not met with
respect to the City's repayment obligation should amounts be
drawn upon the Line of Credit, and it is necessary and desirable
to provide for payments of amounts drawn on the Line of Credit
and Note, and interest thereon, as a temporar�r obligation
subordinaCe to the 1993 Bonds and 1997 Bonds; and
WAEREAS, pursuant to Minnesota Statutes, Section
475.60, Subdivision 2(9?, public sale requirements do noC apply
to the Line of Credit and Note, because the City has retained an
independent financial advisor and this Council has determined to
enter into the Line of Credit and issue the Note by private
negotiation; and
WHEREAS, Rule 15c2-12 of the Securities and Sxchange
Commission, which prohibits '�participating underwriters" from
purchasing or selling bonds unless the City undertakes to provide
certain continuing disclosure with respect to the bonds, does not
apply to the Line of Credit and Note due to the denomination
thereof:
NOW, TAERSFORE, BE IT RESOL,VED by the Council o£ the
City of Saint Paul, Minnesota, as follows:
1. Acceptance of Proposal. The proposal of First
Bank National Association to enter into the Line of Credit with
the City for a$76,500,000 revolving loan, evidenced by the Note,
in accordance with the Credit Agreement, is hereby accepted.
365438.7 2
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Payment for the Note shall be advanced in installments as draws
are made on the Line of Credit, all as provided in the Credit
Agreement.
2. Title; Amount: Oriainal Issue Date; Maturity. The
City's indebtedness under the I,ine of Credit shall be
inCOrporated in a Note titled "Ta�cable Water Revenue Revolving
Note of 1997" (the "Note"). The Note shall be in the principal
amount of $16,500,000, or so much thereof as shall be advanced
pursuant Co the Credit Agreement. The Note sha11 be issued
forthwith, shall be dated with its date of issuance, and shall be
issued as a fully registered note. The Note shall mature 364
days after its issuance.
3. Purpose. The Line of Credit shall provide funds
to temporarily finance the Proj.ect, being improvements to the
Water Utility (the "Improvements"). The total cost of the
Project, which sha11 include all costs enumerated in Minnesota
Statutes, Section 475.65, is estimated to be at least equal to
the amount of the Line of Credit and Note.
4. Interest. Amounts advanced under the Line of
Credit on the Note shall bear interest payable as provided in the
Credit Agreement, calculated on the basis of actual days elapsed
and a 360-day year, at the applicable variable rate per annum set
forth in the Credit Agreement. Interest on the Note shall be
paid on each Interest Payment Date by check or draft mailed to
the person in whose name the Note is registered (the "Holder") on
the registration books of the City.
5. Redemption and Prepavment. The Note shall be
subject to redempeion and prepayment at the option of the City or
mandatorily as provided in the Credit Agreement.
6. Registration of Note. At the time of issuance and
delivery of the Note, the Treasurer of the City shall register
the Note in the name of the payee in a note register which she
and her suecessors in office sha11 maintain for the purpose of
registering the ownership of the I3ote. The 13ote shall be
prepared for execution with an appropriate text and spaces for
notation of registration. The force and effect of such regis-
tration shall be as stated in the form of Note hereinafter set
forth. Payment of principal installments and interest, whether
upon redemption or otherwise, made with respect to the Note, may
be made to the registered holder thereof or to his, her or its
1ega1 representative, without presentation or surrender of the
Note.
365438.1 3
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1 7.
2 Certificate of
3 the following
Farm of Note. The Note, together with the
Registration thereon, shall be in substantially
form:
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iJI3ITED STATES OF AMERICA
STATE OF MINNESOTA
RAMSEY COUNTY
CITY OF SAINT PAUL
R-1
Maximum
$16,500,Od0
TAXABLE WATER REVEPIIJE REVOLVING NOTE OF 1997
MATURITY
DATE
DATE OF
ORIGINAL IS�UE
October , 1998
October _, 1997
REGISTERED OWNER: FIRST BANK NATIONAL ASSOCIATION
MAXIMUM PRINCIPAL AMOUNT: SIXTEEN MILLION FIVE HUNDRED TAOUSAND
DOLLARS
KNOW ALL PER50NS BY THESE PRESENTS that Che City of
Saint Paul, Ramsey County, Minnesota (the "Issuer" or "City"),
certifies that it is indebted and for value received gromises to
pay to the registered owner specified above, or registered
assigns, solely from the sources and in the manner hereinafter
set forth, the principal amount specified above, or so much
thereof as shall be advanced, on the maturity date specified
above, unless called for earlier redemption, and to pay interest
on so much of the principal amount as may be advanced from time
to time as provided in the Credit Agreement (as defined below)
and remains unpaid, on the last day of each month (each, an
"Interest Payment Date"), commencing November 30, 1997, at the
variable rate per annum specified in the Credit Agreement
(calculated an the basis of actual days elapsed and a 360-day
year) until the principal sum is paid or has been provided £ar.
The principal of this Note is payable at maturity upon
presentation and surrender hereof at the principal office of the
Treasurer of the City of Saint Pau1, in Saint Pau1, Minnesota
(the "NOte Registrar"), acting as paying agent or any successor
paying agent duly appointed by the Issuer. Interest on this Note
will be paid on each interest Payment Date by check or draft
mailed to the person in whose name this Note is registered (the
��Holder" or "Noteholder") on the registration books of the Issuer
maintained by the Alote Registrar. The principal of and premium,
if any, and interest on this Note are payable in lawful money of
the iTnitetl States of AmeriCa.
Principal and Interest Payments. Interest shall accrue
only on the aggregate amount of this Note which has been advanced
365438.1 5
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under the Credit Agreement dated as of October , 1997, by and
between the City and First Bank National Association tthe "Credit
Agreement°). Principal and interest paid other than at maturity
of this Note are payable without presentation or surrender of
this Note.
Date of Payment Not Business Day. If the date for
payment of the principal of, or interest on, this Note shall be a
Saturday, Sunday, legal holiday or a day on which banking
institutions in the City of Minneapolis, Minnesota, are
authorized by law or executive order to close, then the date for
such payment shall be the next succeeding day which is not a
Saturday, Sunday, legal holiday or a day on which such banking
institutions are authorized to close, and payment on such date
sha11 have the same force and effect as if made on the nominal
date of payment. .
Redemption. This Note is subject to redemption and
prepayment at the option of the Issuer or mandatorily as provided
in the Credit Agreement.
Issuance: Puroose; Special Obligation. This Note has
been issued pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota and the Charter
of the Issuer, and pursuant to a resolution adopted by the City
Council of the Issuer on October , 1997 (the "Resolution"), for
the purpose of providing moneys to temporarily finance various
improvements to the Issuer's Water Utility. This Note is payable
out of the 1997 Note Debt Service Account of the Board of Water
Commissioners Water Utility Enterprise Fund, to which fund there
have been pledged on a subordinate basis Net Revenues of the
Water Utility and into which fund there are to be paid proceeds
of the definitive revenue bonds which the Issuer is required by
law to issue at or prior to the maturity of this Note for the
purpose of refunding the same if the Net Revenues theretofore
received or collected are not sufficient for the full payment
thereof. This Note and the interest hereon are payable solely
and exclusively £rom the Net Revenues of the Water Utility of the
Issuer pledged to the payment thereof, and do not constitute a
debt of the Issuer or of the Saint Paul Board of Water
Commissioners within the meaning of any constitutional, Charter
or statutory limitation of indebtedness. `Phis I3ote is issued as
a subordinate lien upon the Net Revenues of the Water Utility of
the Issuer.
Registration; Transfer. This Note shall be registered
in the name of the payee on the books of the City by presenting
this Note for registration to the City's Treasurer, who will
endorse his or her name and note the date of registration
opgosite the name of the payee in the certificate of registration
365438.7 6
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attached hereto. Thereafter this Note may be transferred to a
bona fide purchaser only by delivery with an assignment duly
executed by the registered owner or his, her or its legal
representative, and the City may treat the registered owner as
the person exclusively entitled to exercise all the rights and
powers of an owner until this Note is presented with such
assignment for registration of transfer, accompanied by assurance
of the nature provided by law that the assignment is genuine and
effective, and until such transfer is registered on said books
and noted hereon by the City�s Treasurer.
Fees upon Transfer or Loss. The Note Registrar may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer or
exchange of this Note and any 1ega1 or unusual costs regarding
transfers and lost instruments.
Credit Aareement. The terms and conditions of the
Credit Agreement are incorporated herein by reference and made a
part hereof. The Credit Agreement may be attached to this Note,
and shall be attached to this Note if the holder of this Note is
any person other than First Bank National Association.
Taxable Interest: Not Oualified Tax-Exempt Obliaation.
The City intends that none of the interest on this Note wi11 be
excluded from gross income for United States income tax purposes
or from both gross income and taxable net income for State of
Minnesota income tax purposes. This Note, as a taxable
obligation, is not eligible to be designated by the Issuer as a
"qualified tax-exempt obligation" for purposes of Section
265(b)(3) of the federal Internal Revenue Code of 1986, as
amended.
IT IS HEREBY CERTIFIED AND RECITED that a11 acts,
conditions and things required by the Constitution and laws of
the State of Minnesota and the Charter of the Issuer to be done,
to happen and to be per£ormed, precedent to and in the issuance
of this Note, have been done, have happened and have been
performed, in regular and due form, time and manner as required
by law; that this Note, together with all other debts of the
Issuer outstanding on the date of original issue hereof, being
the date of its actual issuance and delivery to the original
purchaser, does not exceed any constitutional or statutory or
Charter limitation of indebtedness; and that the Issuer will
establish rates and charges for the water service furnished by
its Water TJtility sufficient in amount, with all other sources,
to promptly meet the principal and interest requirements of this
issue_
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IN WITNESS WHEREOF, the City of Saint Paul, Ramsey
County, Minnesota, by its City Council has caused this Note to be
sealed with its official seal and to be executed on its behalf by
the signature of its N3ayor, attested by the signature of its
Clerk, and countersigned by the signature of its Director, Office
of Einancial Services.
(SEAL)
365438.1
CITY OF SAINT PAUL,
RAMSEY COUN'PY, MINNE50TA
Mayor
Attest:
City Clerk
Countersigned:
X X X
Director, Office of Financial
Services
F7
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CEI2TIFICATE OF REGISTRATION
The transfer of ownership of the principal amount of
the attached Note may be made only by the registered owner or
his, her or its legal representative last noted below.
DATE OF SIGNATURE OF
REGISTRATION REGISTERED OWNER CITY TRSASURER
First Bank
National Association
Marquette Avenue Office
90 South Sixth Street
October , 1997 Minneapolis MN 55402 X X X
365438.1 9
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8. Execution. The Note shall be executed on behalf
of the City by the signatures of its Mayor, Clerk and Director,
Office of Financial Services, each with the effect noted on the
form of the Note, and be sealed with the seal of the City. In
the event of disability or resignation or other absence of any
such officer, the Note may be signed by the manual or facsimile
signature of that officer who may act on behalf of such absent or
disabled officer. In case any such officer whose signature or
facsimile of whose signature shall appear on the Note shall cease
to be such officer before the delivery of the Note, such
signature or facsimile shall nevertheless be valid and sufficient
for a11 purposes, the same as if he or she had remained in office
until delivery.
9. Deliverv; Application of Proceeds. The Note when
so prepared and executed shall•be delivered by the Director,
Office of Financial Services, to the Bank, and the Bank shall not
be obliged to see to the proper application thereof.
10. Fund and Accounts. For the convenience and proper
administration of the proceeds from the sale of the Note and for
the payment of principal of and interest on the Note and fees
with respect to the I3ote, the Board of Water Commissioners Water
Utility Enterprise Fund (the "Water [Ttility E'und", heretofore in
resolutions relating to the 1993 Bonds and 1997 Sonds also
referred to as the "Water Utility Fund") hereCofore created shall
continue in force and effect as a separate fund of the City and
of the Soard until a11 of the Note, and interest thereon and fees
with respect thereto, are fully paid and retired. In the Water
Utility Fund there is hereby created a 1997 Note Account and a
1997 Note Debt Service Account and in addition there are, and
there shall continue to be, the following accounts:
(a) A"1997 Note Account", to which shall be credited
all proceeds of the Note drawn on the Line of Credit. It is
recognized that amounts may be drawn on the Line of Credit
in reimbursement for costs expended on the Project, and that
accordingly the moneys need not in such circumstance be
placed in the 1997 Note Account but may be applied directly
to the reimbursement. The 1997 Note Account shall be used
to pay costs of the Project, including all costs enumerated
in Minnesota Statutes, Section 475.65. The moneys in the
1997 Note Account shall be used solely for the purposes
herein set forth and for no other purpose, except that any
surplus in the 1997 Note Account shall be deposited in the
1997 Note Debt Service Account.
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3b5438,1
(b) An "Operation and Maintenance Account", into which
shall be paid all gross revenues and earnings derived from
the operation of the Water Utility system including any
assessments which may from time to time be levied with
respect to the Water Utility. From this account there shall
be paid all, but only, current expenses oP said system.
Current expenses shall include the reasonable and necessary
costs of administering, operating, maintaining and insuring
the system, salaries, wages, costs of materials and
supplies, costs of water production and distribution,
necessary legal, engineering and auditing services, and all
other items which, by sound accounting practices, constitute
normal, reasonable and current costs of operation and
maintenance, but excluding any allowance for depreciation,
extraordinary repairs and payments into the Revenue Bond
Debt Service Account, 1997 Note Debt Service Account and
Reserve Account. There shall at all times be maintained in
said account a reserve in an amount sufficient to cover the
operation and maintenance costs of the Water Utility system
for the ensuing fifteen (15} day period; neither said
reserve nor any annual addition thereto shall constitute
��Net Revenues'� as defined below_ The balance from time to
time remaining in the Operation and Maintenance Account,
including interest or other earnings received from the
investment of any moneys in the Water Utility Fund, after
paying or providing for the foregoing items, sha11
constitute, and are referred to in this resolution as, "Net
Revenues". Payments of fees Co trustees for bonds, to
providers of liquidity facilities or credit enhancement
facilities for bonds and remarketing agents for bonds are
also current expenses.
(C) A"Revenue Bond Debt Service Account", into which
there shall be credited and to which there is hereby
irrevocably pledged from the Net Revenues of the operation
of the Water LStility system monthly, a sum equal to at least
1/12 of the total principal and interest on the 1993 Bonds
and 1997 Bonds and any other bonds issued on a parity
therewith during the ensuing twelve (12) months; provided,
however, that no further payments need be made to said
account when the moneys held therein are sufficient for the
payment of all principal and interest due on said bonds on
and prior to the next maturity date. No money shall be paid
out of said account except to pay principal, premium, iP
any, and interest on the 1993 Bonds and 1997 Bonds and any
other bonds which are issued on a parity with the 1993 Bonds
and 1997 Sonds.
(d) A"Reserve Account", which was heretofore creaCed,
and is hereby continued, to be used only when and if moneys
11
q? _ �ays
in the Revenue Bond Debt Service Account or other moneys
available therefor are insufficient to pay principal,
premium, if any, and interest on the bonds payable from the
Revenue Bond Debt Service Account; provided, however, that
the moneys in the Reserve Account may be used to prepay said
bonds, when such prepayment wi11 retire a11 of the bonds
then outstanding. Amounts already in the Resezve Account
pursuant to the resolutions authorizing the issuance of the
1993 Bonds and 1997 Bonds shall be maintained therein to the
extent necessary to equal the amount required to be
maintained in the Reserve Account as set forth below, being
initially amounts required for the 1993 Bonds and 1997
Bonds. Whenever the moneys in the Reserve Account exceed
the amount required to he maintained in the Reserve Account
as set forth below, such excess may be transferred to the
Revenue Bond Debt Service_ACCOUnt; and whenever the moneys
in the Reserve Account shall be less than said amount, the
Reserve Account shall be restored ta said amount from the
next available Net Revenues. The amount required to be
maintained in the Reserve Account shall be an amount equal
to the lesser of: (1) ten percent (10%) of the original
principal amount of the 1993 Bonds and 1997 Bonds and otYter
bonds payable from the Revenue Bond Debt Service Account
issued after the 1993 Bonds on a parity of lien therewith,
or (2) the maximum principal and interest due in any year on
the bonds payable from the Revenue Sond Debt Service
Account; and whenever the moneys in the Reserve Account
exceed such amount required to be maintained therein, such
excess may be transferred to the Revenue Bond Debt Service
Account. When only bonds issued after the 1994 Bonds are
outstanding, the "maximum principal and interest due in any
year" on variable rate bonds shall be calculated at such
time (for any variable rate bonds issued prior to such time)
or in connection with their issuance (for variable rate
bonds issued after such time) assuming the variable rate
bonds bear fixed interest for the remainder of their terms
or for their terms, as appropriate, at the rates prevailing
at such time (for any variable rate bonds issued prior to
such time) or at the time of their issuance (for variable
rate bonds issued after such time) for utility revenue bonds
of comparable quality, maturity and taxable or tax-exempt
status, provided that other or different assumptions may be
used if necessary to obtain an investment grade credit
rating for the variable rate bonds or to maintain the credit
rating(s) then in effect for the bonds then outstanding.
(e) A"1997 Note Debt Service Account", into which
shall be paid (1) monthly from Net Revenues amounts
necessary to make the payments authorized in this
subparagraph and (2) the proceeds of the long term bonds or
365438.1 12
9�-1�.N�
additional temporary bonds issued to refund the Note in an
amount sufficient, together with any other moneys in the
account, to pay the principal of, and interest on, the Note.
From the account shall be paid (1) the Commitment Fees (as
defined in the Credit Agreement) of O.OSa per annum on the
average daily unused Commitment Amount (as defined in the
Credit Agreement), payable in arrears on the last day of
each month and on the Maturity Date (as defined in the
Credit AgreemenC), t2) on the last day of each month,
interest on the Note, and (3) upon a prepayment or on the
Maturity Date, the principal of the Note.
(f) Net Revenues in excess of those required for the
foregoing purposes may be used for any proper purpose.
(g) The money in the Water Utility Fund sha11 be
allotted and paid to the various accounts herein estal�lished
in the order in which said accounts are lisCed on a
cumulative basis, and if in any month the money in said
accounts is insufficient to place the required amount in any
accounts, the deficiency shall be made up in the following
month or months after payment into all other accounts having
a prior claim on said Net Revenues have been made in full.
(h) A11 mone}� held in the Revenue Bond Debt Service
Account and the Reserve Account created by this resolution
shall be kept separate and apart from all other municipal
funds and accounts.
(i) Notwithstanding anything to the contrary herein,
moneys in the Water Utility Fund and any account thereof may
be used to pay any rebate of excess arbitrage earnings on
gross proceeds of the 1993 Bonds, 1994 Bonds and 1997 Bonds
to be paid to the United States in order to maintain the
exclusion from gross income under Section 103 of the Code
(as hereinafter defined) of the intere5t on the 1993 Bonds,
1994 Bonds and 1997 Bonds.
(j) Accounts created for bonds, notes or obligations
with a lien on Net Revenues subordinate to the lien of the
1997 Bonds shall be maintained and operated as required b}�
the resolutions authorizing the same.
11. Pledae of Proceeds of Lpna Term Bonds. To provide
moneys for the prompt and full payment of principal of, and
interest on, the Note, the City sha11 issue and se11 a long term
bond or bonds or additional temporary obligations at or prior to
the maturity date of the Note, as required by Minnesota Statutes,
Section 475.61, Subdivisions 5 and 6. It is hereby found,
determined and declared that a11 conditions precedent to the
365438.M1 13
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offering of definitive obligations of the City to refund the Note
to the necessary within the meaning of Minnesota Statutes,
Section 475.61, Subdivisions 5 and 6, have been met and exist.
12_ Note Subordinate; Prioritv. The pledge of Net
Revenues to the payments of amounts due on the Line of Credit and
Note is hereby made e�cpressly junior to, and subordinate to, the
pledge of Net Revenues to the payment of the 1993 Bonds, 1997
Bonds and any obligations issued on a parity of lien with the
1993 Bonds and 1997 Bonds. The 1993 Bonds and 1997 Bonds shall
be a first charge and lien upon the Net Revenues of the Water
t3tility.
No part of such NeC Revenues sha11 be pledged to the
payment of any general obligation bonds issued by the City while
any 1993 Bonds or 1997 Bonds or bonds issued on a parity
therewith remain outstanding and undischarged, unless the pledge
of Net Revenues to such general obligation bonds is expressly
made a second and subsequent lien and the City and Board covenant
to make the rates and chazges of the Water i3tility sufficient to
timely pay such general obligation bonds.
Until the Note is paid in full, no additional revenue
obligations payable from the Revenue Bond Debt Service Account or
1997 Note Debt Service Account shall be hereafter issued unless
(1) the same are expressly made a lien upon the I3et Revenues of
the Water Utility which is junior to, and subsequent to, the lien
of the Note or (2) the Bank or other Holder of the Note consents
to a higher priority of the lien for such revenue obligations.
13. Insufficient Amounts In the event that the
moneys in the 1997 Note Debt Service Account shall be
insufficient at any particular time to pay the amounts due on the
LVote, said moneys shall first be applied to the payment of the
accrued interest on the Note, and any balance shall be applied in
payment of the principal of the Note, provided further that if it
shall ever be determined by a court of competent jurisdiction
while any of the Note remains outstanding that the sums available
and to become available for the payment of the principal thereof
and interest thereon are insufficient whether or not then due,
then the moneys in the 1997 Note Debt Service Account shall be
applied in payment of all principal then outstanding whether or
not then due and the interest accrued thereon to Che date of
payment.
14
other Holder
and with the
as follows:
CovenanCS. For the protection of the Bank or
of the Note, the City herein covenants and agrees to
Bank or other Holder of the Note from time to time
365438.7 14
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(a) It wi11 at all times through its Board adequately
maintain a:.d efficiently operate the Water Utility as a City
utility. It will from time to time make all needful and
proper repairs, replacements, additions and betterments to
the equipment and facilities o£ said Water Utility so that
they may at all times be operated properly and
advantageously, and whenever any equipment of said system
shall have been worn out, destroyed or otherwise become
insufficient for proper use, it shall be promptly replaced
or repaired so that the value and efficiency of the
facilities shall be at all times fully maintained and its
revenues unencumbered by reason thereof.
(b) The rates for all water service and the charges
for all water supplied by the Water Utility Co the City and
its residents and to all other consumers shall be reasonable
and just, taking into account the cost and value of the
Water Utility, the cost of maintaining and operating the
Water Utility and the proper and necessary allowances for
depreciation, the amounts required for the payment of
principal and interest on the bonds and Note payable from
the Net Revenues of the Water Utility, and all other sums
customarily paid from the revenues of the Water Utility.
(c) It will as required by Section 10.11.2 of the City
Charter (and it will continue to do so whether or not
required by said Charter) establish, maintain and collect
such charges and rates as will produce revenues sufficient
to pay the reasonable cost of operation, repair and
maintenance of the Water Utility and to pay the interest on
and principal of the 1993 Bonds, 1997 Bonds and all bonds on
a parity of lien with the 1993 Bonds and 1997 Bonds and of
the Note, as and when they become due, as we11 as to provide
sufficient money to make the required appropriations to the
various funds and accounts established herein. The City
will review the schedule of rates and charges for the Water
Utility at least annually when the Board budget is reviewed.
(d) It will not sell, lease, mortgage, or in any manner
dispose of the Water Utility or any part thereof (including
any and all extensions and additions that may be made
thereto) until all revenue bonds or obligations payable from
the Net Revenues of the'Water Utility or any part thereof
have been paid in full; provided, however, that the City may
sell the Water Utility or any part thereof if simultaneously
with or prior to said sale all of the outstanding bonds are
discharged in accordance with the resolutians authorizing
the issuance of the 1993 Bonds and 1997 Bonds. This
covenant shall not be construed to prevent the sale by the
City at fair market value of real estate, equipment or other
365438.1 15
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non-revenue-producing properties which in the judgment of
the City have become unnecessary, uneconomical or
inexpedient to use in connection with the Water Utility
provided that suitable facil.ities are obtained in place
thereof and provided further that nothing herein is intended
to prevent the City or Board from terminating or otherwise
preventing the termination of contracts for the furnishing
of water.
(e) It shall cause to be kept proper books, records and
accounts adapted to the Water Utility separate fram other
accounts to be audited at the end of each fiscal year. A
copy of said audit shall be furnished, withaut cost, to the
Bank or other Holder of the Nate. If the City fails to
provide such audit within a reasonable time after the end of
said fiscal year, the Bank or other Holder of the Note may
cause such audit to be made at the expense of the City. The
expense of preparing such audit shall be paid as current
operating expenses of the Water Utility. The Bank or other
Holder of the Note, or their duly appointed representatives,
from time to time shall have the right, at all reasonable
times, to inspect the Water Utility system anfl to inspect
and copy the books, records, accounts and data relating
thereto. The City agrees to furnish copies of such audiC,
without cost, to the Bank or other Holder of the Note at
their request within a reasonable time after the end of each
fiscal year.
(f1 It wi11 EaiChfully and punctually perEoxm a11
duties with reference to the Wate� Utility required by the
City Charter, the Constitution and laws of the State of
Minnesota and this resolution.
ig) It will grant no franchise to any competing
utility.
15. Amendments. No change, amendment, modification or
alteration sha11 be made in the covenants made with the Bank or
other Holder of the Note without the consent of the Bank or other
Holder of the Note, except for changes, amendments, modifications
and alterations (a) made to cure any ambiguity or formal defect
or omission, or (b) which would not materially prejudice the Bank
or other Holder of the Note.
16. Fiscal Year As used in this resolution the words
"fiscal year" shall mean the twelve (12) month period beginning
on January 1 of each year and ending on December 31 of the same
year. Should it be deemed advisable at some later date to change
the fiscal yearly basis, the same may be done by proper actions
365438.1 1 6
q�-1ay5
to that effect, which change shall not constitute an amendment or
modification of this resolution.
17. xppropriation. The City hereby appropriates, from
Net Revenues, sums sufficient to pay the facility fee required by
Section 3.1 of the Credit Agreement and the costs and expenses
required by Section 8.2 of the Credit Agreement.
18. Records and Certifieates. The officers of the
City are hereby authorized and directed to prepare and furnish to
the Bank, and to the attorneys approving the legality of the
issuance of the Note, certified copies of all proceedings and
records of the City relating to the Note and to the financial
condition and affairs of the City, and such othe� affidavits,
certificates and information as are required to show the facts
relating to the legality and marketability of the Note as the
same appear from the books and records under their custody and
control or as otherwise known to them, and a11 such certified
copies, certificates and affidavits, including any heretofore
furnished, shall be deemed representatians of the City as to the
facts recited therein.
19. Interest Taxable: No Designation of Oualified
Tax-Exempt Obligation. The City intends that none of the
interest on the Note will be excluded from gross income for
I3nited States income tax purposes or from both gross income and
taxable net income for State of Minnesota income tax purposes.
The Note, as a taxable obligation, is not eligible to be
qualified as a"qualified tax-exempt obligation" within the
meaning of Section 265(b)(3) of the federal Internal Revenue Code
of 1986, as amended.
20. Credit Agreement. The Mayor, C1erk, and DireCtor,
Office of Financial Services, are authorized and directed to
execute and deliver the Credit Agreement in substantially the
form submitted to this Council, with such changes, modifications,
additions and deletions as shall be necessary and appropriate and
approved by bond counsel. Execution by such officers of the
Credit Agreement shall be conclusive evidence as to the necessity
and propriety of changes and their approval by bond counsel. The
Credit Agreement may be attached to the Note, and shall be
attached to the Note if the Holder of the Note is any person
other than the Bank.
21. Covenant with Bank or Other Holder. Each and all
of the terms and provisions of this resolution shall be and
constitute a covenant on the part of the City to and with the
Bank or other Holder from time to time of the Note.
365438.1 17
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3
4
5
6
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9
10
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i2
13
14
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22. Supplemental Resolution. Prior resolutions of the
City governing the Water Utility Fund are hereby supplemented to
the extent necessary to give effect to the provisions of
paragraph 10 of this resolution.
23. Negotiated Sale. The City has retained Springsted
Incorporated as an independent financial advisor, and this
Council has heretofore determined, and does hereby determine, to
enter into the Line of Credit and to sell the Note by private
negotiation to the Bank, all as provided by Minnesota Statutes,
Section 475.60, Subdivision 2(9).
24. Severabilitv. If any section, paragraph or
provision of this resolution shall be held to be invalid or
unenforceable for any reason, the invalidity or unenforceability
of such section, paragraph or provision shall not affect any of
the remaining provisions of this resolution.
365438.7
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1 25 . Fieadinas . Fieadings in thi
2 included for convenience of reference onl
3 hereof, and shall not limit or define the
4 provision hereof.
s resolution are
y and are not a part
meaning of any
4dopted by Council: Date � i�- � ���q �
ldoption Cert'rfied by Council Secretary
; �..�,� a _ �„P�i
pproved by May • � ° � a �' � g ?"
�: l ,� ��,�.
Requested by Department of:
v
Iri- �z�
Office of Financial Services
By:
Form Approved by City Attomey
Bv . `� .� ° � -�-� -
ro- �- ��
Ap roved a or f r ubmi ion o Council
By: -�� 1 ��lit--r"
19
a�-�a�l.s
Office of Financial Services
Martha Rantorowicz
10/O1j97
TOTAL # OF SIGNATURE PAGES
GREEN SHEET
o��n,�,r owECra�
No
1 -'�• 1 _
Q�.,� 1-J_ � �«�
❑�.,�.�. ❑..�s
p�.�,�,��„��z p
(CUP ALl LOCATIONS FOR SIGNATURE)
60926
This resolution accepts the proposal frota First Bank National Association to enter into a
of credit with the City for a$16,500,000 revolving loan.
PLANNING COMMISSION
CIB CObIbiRTEE
CIVIL SERVICE COMMISSION
Hss this pe�sor�rm erer wnA�etl under a contract fwtlNS deparlmenYT
YES NO
Nas this P���� evM been a cilY emPbYeeT
YES NO
Ocea ihic Pe�Mrm W�e%s a sldU r�M mmw1�Y7�%ed bY a�Y Gnre�t ctt'! emPbYee4
YES NO
isll�ispe(eonlfimiatargetedvenda? .
YES NO
The Water Utility is in need of a way to temporarily finance improvements to the Utility
it awaits long term financing from the MinnesoCa Public Facilities Authority.
The Water Utility can enter into e, c�n.struction contract for its improve now.
[9��3t: ' ���Z.��z4e+e° t P '�' '�ui.
Ov f 2 5���
�ISADVANTAGESIFAPPROVED
NONE �„._ .�,R_ .,_..�.��.•`
Improvements would have to be delayed until the State financing is available.
�.,,
707ALAMOUN7OFTRANSACTIONf__
FUNDING SOURCE
,
CO37/REVENUE BUDfiETED (CIRGLE ON�
ACTM7Y NUMBER
YES NO
'uLwcw. MFOahuNiwN (IXF' W M
9 � - iaYs
Draft 9 30 97
CREDTT AGREEMENT
THIS CREDTT AGIZEEMENT, dated as of October _,1997, is by and
befween 'TI-3E CITY OF SAINT PAiTL, MINNESOTA, a municipality organized
under the laws of the State of Minnesota (the "Borrower"), and FI12ST BANK
NATIONAL ASSOCIATION, a national banking association (the "Lender").
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Defined Terms. As used in this Agreement the following
terms shall have the following respective meanings
"Advance": Any portion of the outstanding Revolving Loan by the
Lender which is subject to an available inEerest rate option. An Advance may be a
Eurodoilar Rate Advance, or, with respect to any period when the Eurodoliar Rate is
unavailable, a Reference Rate Advance.
"Ad�usted Eurodollar Rate": With respect to each Eurodollar Rate
Advance, the rate (rounded upward, if necessary, to the next one hundredth of one
percent) deterxnined by dividing the Eurodollar Rate by 1.00 minus the Eurodollar `
Reserve Percentage.
"A�plicable Margin°: With respect to:
(a) Eurodoliar Rate Advances -- 0.4$%.
(b) Reference Rate Advances -- minus 2.0°l0.
"Board": The Board of Governors of the Federal Reserve System or
any successor thereto.
"Business Da�': Any day (other than a Saturday, Sunday or legal
holiday in the State of Minnesota) on which national banks are permitted to be open
for business in Minneapolis, Minnesota.
"Closing Date": The date of this Agreement.
"Commitment": The obligation of the Lender to make Advances to
the Borrower in an aggregate principal amount outstanding at any time not to
exceed the Commitment Amount upon the terms and subject to the conditions and
limitations of this Agreement.
97 - /d ys
"Commitment Amount": $16,500,000, or such lesser amount to which
the Commitment Amount is reduced pursuant to Section 2.6.
°Commitment Fees°: As defined in Section 29.
"T?efault": Any evenE which, with the giving of notice (whether such
notice is required under Section 7.1, or under some other provision of this
Agreement, or otherwise) or lapse of time, or both, would constitute an Event of
Default.
°Eurodollar Business Da�": A Business Day which is also a day for
trading by and beEween banks in United States dollar deposits in the interbank
Eurodollar market and a day on which banks are open for business in New York
City.
"Eurodollar Rate': With respect to each Eurodollar Rate Advance, the
average offered rate for one month deposits in United States dollars (rounded
upward, if necessary, to the nearest 1/16 of 1%) for delivery of such deposits on each
Eurodollar Business Day, or if any day is not a Eurodollar Business Day, on the first
preceding Eurodollar Business Day which rate appears on fhe Reuters Screen LIBO
page as of 11:00 a.m., London time (or such other time as of which such rate appears}
on each Burodollar Business Day, or the rate for such deposits determined by the
Lender at such time based on such other published service of general application as
shall be selected by the Lender for such purpose; provided, that in lieu of
determining the rate in the foregoing manner, if not so determinable on such date,
at the option of the Lender, the Lender may determine the rate based on rates at
which one xnonth United States dollar deposits are offered to the Lender in the
interbank Eurodollar market at such time for delivery in Immediately Available
Funds on each Eurodollar Business Day in an amount approximately equal to the
Advance by the Lender (rounded upward, if necessary, to the nearest 1(16 of 1%).
"Reuters Screen LIBO page" means the display designated as page "LISO" on the
Reuters Monitor Money Rate Screen (or such other page as may replace the LIBO
page on such service for the purpose of displaying London interbank offered rates of
major banks for United States dollar deposits). For purposes of determining any
interest rate hereunder or under any other Loan Document which is based on the
Eurodollar Rate, such interest rate shall change as and when the Eurodollar Rate
shall change.
"Eurodollar Rate Advance°: An Advance with respect to which the
interest rate is determined by reference to the Adjusted Eurodoliar Rate.
"Eurodollar Reserve Percentage": As of any day, that percentage
(expressed as a decimal} which is in effect on such day, as prescribed by the Board for
determining the maximum xeserve requirement (including any basic, supplemental
or emergency reserves) for a member bank of the Federal Reserve System, with
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97- iay,�
deposits comparable in amount to those held by the Lender, in respect of
"Eurocurrency Liabilities" as such term is defined in Regulation D of the Board. The
rate of interest applicable to any outstanding Eurodollar Rate Advances shall be
adjusted automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default": Any event described in Secfion 7.1.
"GAAP": Generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Pubiic Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements bp such other
entity as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of any date of determination.
"Loan Documents": This Agreement and the Note.
"Lien": With respecf to any Person, any security interest, mortgage,
pledge, 1ien, charge, encumbrance, title retention agreement or analogous
instrument or device (including the interest of each lessor under any capitalized
lease), in, of or on any assets or properties of such Person, now owned or hereafter
acquixed, whefher arising by agreement or operation of law.
"Maturitv Date": October � 1998.
"Note": As de£ined in Section 2.3.
"Person": Any natural person, corporation, partnership, limited
partnership, joint venture, firm, association, trust, unincorporated organization,
government or governmentai agency ox political subdivision or any other entity,
whether acting in an individual, fiduciary or other capacity.
"Reference Rate°: The rate of interest from time to time publicly
announced by the Lender as its "reference rate." 'I'he Lender may lend to its
custorners at rates that are at, above or below the Reference Rate. For purposes of
determining any interest raee hereunder or under any other Loan Document which
is based on the Reference Rate, such interest shall change as and when the Reference
Rate shall change.
"Reference Rate Advances": An Advance with respecE to which the
interest rate is determined by reference to the Reference Rate.
"Re�ulatory Change": Any change after the date of this Agreement in
federal, state or foreign laws or regulations or the adoption or making after such
daEe of any interpretations, directives or requests applying to a class of banks
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9 7 - /.Z �1S
including the Lender under any federal, state or foreign laws or regulations
(whether or not having the force of law) by any court or govemmental or monetary
authorify charged with the 9nterpretation or administration thereof.
"Revolving Loan°: As defined in Section 2.1.
"Ufilit�': 'The Borrower's municipal water utility under the
jurisdiciion of the Borrower's Board of Water Commissioners.
Section 1.2 Accounting Terms and Calculations. Except as may be
expressly provided to the contrary herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP.
Section 1.3 Other Definitional Terms.Terms of Construction. The
words "hereof", "herein" and "hereunder" and words of similar import when used
in fihis Agreement shall refer to this Agreement as a whole, and not to any
particular provision of this Agreement. References to Sections, E�ibits, Schedules
and the like references are to Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise expressly provided. The words "include", "includes°
and "including" shall be deemed to be followed by the phrase "without limitation".
Unless the context in which used herein otherwise clearly requires, "or" has the
inclusive meaning represented by the phrase "and/or°. All incorporations by
reference of covenants, terms, definitions or other provisions from other
agreements are incorporated into this Agreement as if such provisions were fully set
forth herein, and include all necessary definitions and related provisions from such
other agreements. All covenants, terms, definitions and other provisions from
other agreements incorporated into this Agreement by reference shall survive any
termination of such other agreements until the obligations of the Borrower under
this Agreement and the Note are irrevocably paid in full and the Commitment is
terminated.
ARTICLE II
TERMS OF LENDING
Section 2.1 The Revolving Commitment. On the terms and subject to
the conditions hereof, the Lender agrees to make loans (collectively, the "Revolving
Loan') to the Borrower on a revolving basis at any time and from time to time from
the Closing Date to the Maturity Date, during which period the Borrower may
borrow, repay and reborrow in accordance with the provisions hereof, provided that
the unpaid principal amount of the outstanding Revolving Loan shall not at any
time, in the aggregate, exceed the Commitment Amount. Advances shall be
obtained and maintained, but subject to the limitations hereof, as Eurodollar Rate
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97-iays
Advances at all times the Eurodollar Rate is available as an interest rate option, and
as Reference Rate Advances at all other times.
Section 2.2 Procedure for Advances. Any request by the Borrower for a
Advance shall be in writing, or by telephone and must be given so as to be received
by the Lender not later Ehan 12:00 Noon (Minneapolis time) on the date of the
requested Advance. Each request for an Advance shall specify (i) the date of the
Advance, and (ii) the amount of the Advance to be made on such date which shall
be in a minimum amount of $100,060 or, if more, an integral muitiple thereof. Each
request for an Advance shall be irrevocable and shall be deemed a representation by
the Borrower that on the requested Advance date and after giving effect to such
Advance the applicable conditions specified in Ariicle III have been and will
continue be satisfied. Unless the Lender determines that any applicable condition
specified in Article III has not been satisfied, the Lender will make available to the
Borrower at the Lender's principal office in Minneapolis, 1Vlinnesota in immediately
available funds not later than 1:00 p.m. {Minneapolis time) on the requested
Advance date the amount of the requested Advance.
Section 2.3 The Note. The Advances shall be evidenced by a single
promissory note of the Borrower (the "Note"), substantially in the form of Exhibit A
hereto, in the amount of the Commitment Amount originally in effect. The Lender
shall enter in its ledgers and records the amount of each Advance made and the
payments made thereon, and the Lender is authorized by the Borrower to enter on a
schedule attached fo the Note a record of such Advances and payments.
Section 2.4 Interest Rates and Interest Pa�ments. Interest shall accrue
and be payable on the Advances as follows:
(a) Each Eurodollar Rate Advance shall bear interest on the unpaid
principal amount thereof at a varying rate per annum equal to the sum of (i)
the Adjusted Eurodollar Rate, plus (ii) the Applicable Margin.
(b) Each Reference Rate Advance shall bear interest on the unpaid
principai amount thereof at a varying rate per annum equal to Ehe sum of (i)
the Reference Rate, plus (ii) the Applicable Margin, provided that no portion
of the Revolving Loan shall bear interest at fhe Reference Rate plus the
Applicabie Margin uniess the Eurodollar Rate is not available as an interest
rate option.
(c) Interest shall be payable (i) with respect to each Advance on the last
day of each month; (ii) with respecE to a11 Advances, upon any permitted
prepayment (on the amount prepaid); and (iii) with respect to all Advances,
on the MaturiEy Date.
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Section 2.5 Re�a�ment and Pre�a�nent. Principal of the Note shall be
payable in full on the Maturity Date.
Section 2.6 O�tional Reduction of Commitment AmounE ar
Termination of Commitment. The Borrower may, at any time, upon not less than 5
Business Days prior written noEice to the Lender, reduce the Commitment AmounE,
with any such reduction in a minimum amount of $100,000, or, if more, in an
integral multiple of $100,000; provided, however the Borrower may not at any time
reduce the Commihnent Amount below the then unpaid principal balance of the
Note. The Borrower may, at any time, upon not less than 5 Business Days prior
written notice to the Lender, terminate the Commitment in its entirety. Upon
EerminaEion of the Commitment pursuant to this Section, the Borrower shall pay to
the Lender all unpaid obligations of the Borrower to the Lender hereunder.
Section 2.7 Commitment Fee. The Borrower shall pap to the Lender
fees {the "Commitment Fees") in an amount determined by applying a rate of 0.05%
per annum to the average daily unused Commitment Amount for the period from
the date of this Agreement to the Maturity Date. Such Commitment Fees are
payable in arrears monEhly on the last day of each month and on the Maturity Date.
Section 2.& Com,�utation. Commitment Fees and interest on the Note
shall be computed on the basis of actual days elapsed and a year of 360 days.
Section 2.9 Use of Proceeds. The proceeds of the Advances shaii be
used for capital improvements to the Utility, in a manner not in conflict with any of
the Borrower's covenants in this Agreement.
Section 2.10 �atiita 1 Ade_c�uac�. In the event that any Regulatory
Change reduces or shali have the effect of reducing the rate of return on the
Lender's capital or the capital of its parent corporation (by an amount the Lender
deems material} as a consequence of fhe Commitment and/or the Advances to a
level below that which the Lender or its parent corporation could have achieved but
for such Regulatory Change (taking into account the Lender's policies and the
policies of its parent corporation with respect to capital adequacy), then the Borrower
shall, within five days after written notice and demand from the Lender, pay to the
Lender additional amounts sufficient to compensate the Lender or its parent
corporation for such reduction. Any determination by the Lender under this
Section and any certificate as to the amount of such reduction given to the Borrower
by the Lender shall be final, conclusive and binding for all purposes, absent error.
Section 2.11 Interesf Rate Not Ascertainable, Etc. If, on or prior to the
date for determining the Adjusted Eurodollar Rate in respect of any Advance or
Eurodoilar Rate Advance, the Lender determines (which determination shali be
conclusive and binding, absent error) that:
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(a) deposits in dollars (in the applicable amount) are not being made
available to the Lender in the relevant markeE, or
(b) the Adjusted Eurodollar Rate will not adequately and fairly reflect
the cost to the Lender of funding or maintaining Eurodollar IZate Advances,
the Lender shall forthwith give notice to the Borrower of such determination,
whereupon the obiigation of the Lender to make or continue any Advance as a
Eurodollar Rate Advance shall be suspended until the Lender notifies the Borrower
that the circumstances giving rise to such suspension no longer exist. Whi�e any
such suspension continues, all further Advances by the Lender shall be made as
Reference Rate Advances.
Section 2.12 Increased Cost. If any Regulatory Change:
(a) shall subject the Lender to any fax, duty or other charge wifh respect
to its Eurodollar Rate Advances the Note or its obligation to make Eurodollar
Rate Advances or shall change the basis of taxation of payment to the Lender
of the principal of or interest on Eurodollar Rate Advances or any other
amounts due under this Agreement in respect of Eurodollar Rate Advances
or its obligaEion to make Eurodollar Rate Advances (excepE for changes in the
rate of tax on fihe overall net income of the Lender imposed by the
jurisdiction in which the Lender s principal office is located); or
(b) shall impose, modify or deem applicable any reserve, special
deposit, capital requirement or similar requirement (including, without
limitation, any such requirement imposed by the Board, but excluding with
respect to any Eurodoilar Rate Advance any such requirement to the extent
included in calculating the applicable Adjusted Eurodollar Rate) against assets
of, deposits with or for the account of, or credit extended by, the Lender, the
interbank Eurodollar market, or the certificate of deposit market, or shall
impose, modify or deem applicable any other condition affecting its
Eurodollar Rate Advances, the Note or its obligation to make Eurodollar Rate
Advances and ehe result of any of the foregoing is to increase the cost to the
Lender of making or maintaining any Eurodollar Rate Advance, or to reduce
the amount of any sum received or receivable by the Lender under this
Agreement or under the Note,
then, within 30 days after demand by the Lender, the Borrower shall pay to the
Lender such additional amount or amounts as will compensate the Lender for such
increased cost or reduction. The Lender will promptly notify the Borrower of any
event of which it has knowledge, occurring after the date hereof, which will entitle
the Lender to compensation pursuant to this Section. A certificate of the Lender
ciaiming compensation under this Section, setting forth the additional amount or
amounts to be paid to it hereunder and stating in reasonable detail the basis for the
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charge and the method of computation, shall be conclusive in the absence of error.
In determining such amount, the Lender may use any reasonable averaging and
atEribution methods. Failure on the part of the Lender to demand compensation for
any increased costs or reduction in amounts received or receivable with respect to
any Eurodollar Rate Advance at any time shall not constitute a waiver of the
Lender's rights to demand compensation for any increased costs or reducfion in
amounts received or receivable at any other fime.
Section 2.13 Ille ali . If any Regulatory Change shall make iE
unlawful or impossible for the Lender to make, maintain or fund any Eurodollar
Rate Advance, the Lender shall notify the Borrower, whereupon the obligation of
the Lender to make or continue any Advance as a Eurodollar Rate Advance shall be
suspended until the Lender notifies the Borrower that the circumstances giving rise
to such suspension no longer exist. If the Lender determines that it may not
lawfully continue to maintain any Eurodoilar Rate Advance, all of the affected
Advances shall be automatically converted to Reference Ra�e Advances as of the
date of the Lender's notice, and upon such conversion the Borrower shall
indemnify the Lender.
Section 2.14 Discretion of Lender as to Manner of Fundine. The
Lender shall be entitled to fund and maintain its funding of Eurodollar Rate
Advances in any manner it may elect, it being understood, however, that tor the
purposes of this Agreement all determinations hereunder (but excluding
determinations that the Lender may elect to make from the Reuters screen) shall be
made as if the Lender had actually tunded and maintained each Eurodollar Rate
Advance.
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9 � - �ays
ARTICLE III
CONDTTIONS PRECEDENT
Section 3.1 Conditions of Initial Advance. The obligafion of Ehe
Lender to make the initial Advance hereunder shall be subject to the prior or
simultaneous fulfillment of each of the following conditions:
3.1(a) Documents. The Lender shall have received
the following:
(i) This Agreement and the Note executed by a duly auYhorized
officer (or officers) of the Borrower and dated the Closing Date.
(ii) A certificate of the Clerk of the Borrower dated as of the
Closing Date and certifying as to the following:
(A) A true and accurate copy of the municipai resolutions of
the Borrower authorizing the execution, delivery and
performance of the Loan Documents, and other
agreements, instrument and documents contemplated
hereby and thereby;
(B) The incumbency, names, titles and signatures of the
officers of the Borrower authorized to execute the Loan
Documents and to request Advances; and
(C) A true and accurate copy of the Charter of the Borrower.
(iii) The opinion of counsel to the Borrower covering such
matters as set forth on Exhibit B.
(iv) A facifity fee paid to the Lender in the amount of $16,500.
31(b) Other Matters. All organizational and legal proceedings
relating to the Borrower and all instruments and agreements in connection with the
transactions confemplated by this Agreement shall be satisfactory in scope, form and
substance to the Lender and its counsel, and the Lender shall have received all
information and copies of all documents, including records of municipal
proceedings, which it may reasonably have requested in connection therewith, such
documents where appropriate to be certified by proper Borrower or governmental
authorities.
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3.1(c) Fees and Ex�enses. The Lender shall have received all fees
and other amounts due and payable by the Borrower on or prior to the Closing Date,
including the reasonable fees and expenses of counsel to the Lender payable
pursuant Eo Section $.2.
Seciion 3.2 Conditions Precedent to all Advances The Lender shall
not have any obligafion to make any Advance (including Advances after the initial
Advance) hereunder usiless all representations and warranties of the Borrower
made in this Agreement remain true and coxrect and no Default or Event of DefaulE
exists.
ARTICLE TV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender:
Section 4.1 Organization, Standing. Etc. The Borrower is a
municipality duly organized and validly existing under the laws of the State of
Minnesota and has a11 requisite power and authority to carry on its business as now
conducted, to enter into this Agreement and to issue the Note and to perform its
obiigations hereunder and thereunder. This Agreement and the Note have been
duly authorized by all necessary municipal action and when executed and delivered
will be the legal and binding obligations of the Borrower. The execution and
delivery of this Agreement and the Note will not violate the Borrower's charter or
other organizational documents or any ordinance, statute or other law applicable to
the Borrower. No governmental consent or exemption is required in connection
with the Borrower's execution and delivery of this Agreement and the Note except
for those which have already been obtained.
Section 42 Financial Statements and No Material Adverse Chanee
The Borrower's and the Utility's audited financial statements as at December 31,
1996, and unaudited financial statements as at June 30, 1997, as heretofore furnished
to the Lender, have been prepared in accordance with GAAP. Neither the Borrawer
nor the Utility has any material obligation or liability not disclosed in such financial
statements, and there has been no material adverse change in the condition of the
Borrower or the Utility since the dates of such financial statements.
Section 4.3 Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Borrower, threatened against or affecting the
Borrower which, if determined adversely to the Borrower, would have, a material
adverse effect on the condition of the Borrower. The Borrower is not in violation of
any law or regulation (including environmental laws and regulations and laws
relating to employee benefit plans) where such violation could reasonably be
expected to impose a material liability on the Borrower.
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ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitment shall have expired or been terminated and the
Note and all of the Borrower's ofher obligations to the Lender under this
Agreement shall have been paid in full, unless the Lender shall otherwise consent
in writing:
Section 5.1 Financial Statements and Re�orts. The Borrower will
furnish to the Lender:
5.1(a) As soon as available and in any event within 210 days
after the end of each fis�al year of the Borrower, financiai statements of the
Borrower and the Utility consisting of at least a balance sheet, a statemenf of
revenue, expenditures and changes in retained earnings, and a statement of cash
flow, in each case as at the end of such year, setting forth in each case in comparative
form corresponding figures from the previous annual audit, certified without
qualification by the State Auditor of the State of Minnesota or other independent
certified public accountants of recognized national standing selected by the Borrower
and acceptabie to the Lender.
5.1(b) As soon as available and in any event within 20 days
after the end of each fiscal quarter, unaudited financial statements for the Borrower
and the Utility for such quarter and for the period from the beginning of such fiscal
year to the end of such quarter, substantially similar to the annual audited
statements, along with a statement signed by the chief financial officer of the
Borrower stating that as at the end of such quarter there did not exist any Default or
Event of Default or, if such Defauit or Event of Default existed, specifying the nature
and period of existence thereof and what action the Borrower proposes to take with
respect thereto.
5.1(c) Immediately upon any officer of the Borrower becoming
aware of any Default or Event of Default, a notice describing the nature thereot and
what action the Borrower proposes to take with respect thereto.
5.1(d) From time to time, such other information regarding the
business, operation and financial condition of the Borrower or the Utility as the
Lender may reasonabiy request.
Section 5.2 Ortanizational Existence. The Borrower will maintain its
existence as a municipality under the laws of Minnesota.
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Section 5.3 Insurance. The Borrower will, with respect to the Utility,
maintain with financially sound and reputable insurance companies such insurance
as may be required by law and such other insurance in such amounts and against
such hazards as is customary in the case of reputable Persons engaged in the same or
similar business and similarly situated.
Section 5.4 ns ection. The Borrower will permit any Person
designated by the Lender to visit and inspect any of the properties, books and
financial records of the Borrower and the Utility, to examine and to make copies of
the books of accounts and other financial records of the Borrower and the Utility,
and to discuss the affairs, finances and accounts of the Borrower and the Utility with
its officers at such reasonable times and intervals as the Lender may designate.
Section 5.5 Maintenance of Pro.�erties. The Borrower will maintain its
properties related to the Utility in good condition, repair and working order, and
supplied with all necessary equipment, and make all necessary repairs, renewals,
replacements, betterments and improvements thereto, all as may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
Section 5.6 Books and Records. The Borrower wi11 keep adequate and
proper records and books of account in which full and correct entries will be made of
its dealings, business and affairs.
Section 5.7 Com�liance. The Borrower will comply in all material
respects with all laws, rules and regulations to which it anay be subject.
Section 5.8 Notice of Litigation. The Borrower will give prompt
written notice to the Lender of the commencement of any action, suit or proceeding
affecting the Borrower or the Utility where an adverse outcome could reasonably be
expected to have a material adverse effect upon the Borrower or the Utility.
SecEion 5.9 Plans. The Borrower will maintain any employee benefit
plans in campliance with all material requirements of applicable laws and
regulations.
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ARTICLE VI
NEGATNE COVENANTS
Until the Commiiment shall have expired or been terminated and the
Note and ali of the Borrower's other obligations to the Lender under this
Agreement shall have been paid in full, unless the Lender shall otherwise consent
in writing:
Section 6.1 Mer�er. The Borrower will not merge or consolidate or
enter into any analogous reorganization or transaction with respect to the Utility
with any Person.
Section 6.2 Sa1e of Assets. The Borrower will not seii, transfer, lease or
otherwise convey all or any substantial part of the assets of the Utility.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default. The occurrence of any one or more of
the foliowing events shall constitute an Event of Default:
7.1(a) The Borrower shall fail to make when due, whether by
acceleration or otherwise, any payment of principai of or interest on the Note or any
other obligations of the Borrower to the Lender pursuant to this Agreement.
7.1(b) Any representation or warranty made by or on behalf of
the Borrower in this Agreement or by or on behalf of the Borrower in any certificate,
statement, report or document herewith or hereafter furnished to the Lender
pursuant to this Agreement shall prove to have been false or misleading in any
material respect on the date as of which the facts set forth are stated or certified.
7.1(c) The Borrower shall fail to comply with Sections 5.2 or 5.3
or any Section of Article VI.
7.1(d) The Borrower shall fail to compiy with any other
agreement, covenant, condition, provision or term contained in this Agreement
(other than those hereinabove set forth in this Section 71) and such failure to
comply shall continue for 20 calendar days after whichever of the following dates is
the earliest: (i) the date the Borrower gives notice of such failure to the Lender, (ii)
the dafe the Borrower should have given noEice ot such failure to the Lender
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pursuant to Section 5.1, or (iii) the date the Lender gives notice of such failure to the
Borrower.
7.1(e) The Borrower shall become insolvenE or shall generally
not pay its debts as they mature or shall apply for, shall consent to, or shail acquiesce
in the appointment of a custodian, trusfee or receiver of the Borrower ox for a
substantial parE of the property thereof or, in the absence of such application,
consent or acquiescence, a custadian, frustee or receiver shall be appointed for the
Borrower or for a substantial part of the property thereof and shall not be discharged
within 45 days, or the Borrower shall make an assignment for the benefit of
creditors.
7.1(� Any bankruptcy, reorganization, debt arrangement or other
proceedings under any bankruptcy or insolvency law shall be instituted by or against
the Borrower and, if instituted against the Borrower, shall have been consented to
or acquiesced in by the Borrower or shall remain undismissed for 60 days, or an
order for relief shall have been entered against the Borrower.
7.1(g) Any dissolution or liquidation proceeding shall be
instituted by or against the Borrower and, if instituted against the Borrower, shall be
consented to or acquiesced in by the Borrower or shall remain for 45 days
undismissed.
7.1(h) A judgment or judgments for the payment of money in
excess of the sum of $500,000 in the aggregate shall be rendered against the Borrower
and either (i) the judgment creditor executes on such judgment or (ii) such
judgment remains unpaid or undischarged for more than 60 days from the date of
entry thereof or such longer period during which execution of such judgment shall
be stayed during an appeal from such judgment.
7.1(i) The maturity of any material indebtedness of the Borrower
(other than indebtedness under this Agreement) shall be accelerated, or the
Borrower shall fail fo pay any such material indebtedness when due (after the lapse
of any applicable grace period) or any event shall occur or condition shall exist and
shall continue for more than the period of grace, if any, applicable thereto and shall
have the effect of causing, or permitting the holder of any such indebtedness to
cause, such material indebtedness to become due prior to its stated maturity or to
realize upon any collateral given as security therefor. For purposes of this Section,
indebtedness of the Borrower shall be deemed "maferial" if it exceeds $1,000,000 as to
any item of indebtedness or in the aggregate for all items of indebtedness with
respect fo which any of the events described in this Section has occurred.
7.1(j) Any execution or attachment shall be issued whereby any
substantial part of the property of the Borrower shali be taken or attempted to be
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taken and the same shall not have been vacated or stayed within 30 days after the
issuance thereof.
Section 7.2 Remedies. If (a) any Event of Default described in
Sections 7.1 (e), (fl or (g) shall occur with respect to the Borrower, the Commihnent
shall automaticaily terminate and the Note and all other obligations of the
Borrower to the Lender under this Agreement shall automatically become
immediately due and payable, or (b) any other Event of Defauit shall occur and be
continuing, then fhe Lender may (i) declare the Commitment terminated,
whereupon the Commitment shall terminate, and (ii) dedare the Note and all other
obiigations of the Borrower to the Lender under this Agreemen4 to be forEhwith due
and payable, whereupon the same shall immediately become due and payable, in
each case without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived, anything in this Agreement or in the Note to
the contrary notwithstanding. Upon the occurrence of any of the events described
in clauses (a} or (b) of the preceding sentence the Lender may exercise ali rights and
remedies under this Agreement, the Note and any related agreements and under
any applicable law.
Section 7.3 Offset. In addition to the remedies set forth in Section 7.2,
upon the occurrence of any Event of Default and thereafter while the same be
continuing, the Borrower hereby irrevocably authorizes the Lender to set off all
sums owing by the Borrower to the Lender hereunder against all deposits and
credits of the Borrower with, and any and all claims of the Borrower against, the
Lender to the extent such deposits and credits represent net revenues of the Utility
which are not subject to a claim having a higher priority than the claim of the
Lender.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Modifications. Notwithstanding any provisions to the
contrary herein, any term of this Agreement may be amended with the written
�onsent of the Boxrower; rorovided that no amendment, modification or waiver of
any provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be in writing and
signed by the Lender, and then such amendment, modifications, waiver or consent
shall be effective only in the specific instance and for the purpose for which given.
Section &.2 Costs and Expenses. Whether or not the transactions
contemplated hereby are consummated, the Borrower agrees to reimburse the
Lender upon demand for all reasonable out-of-pocket expenses paid or incurred by
the Lender (including filing and recording costs and fees and expenses of Dorsey &
Whitney LLP, counsel to the Lender) in connection with the negotiation,
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preparation, approval, review, execution, delivery, amendment, modification,
interpretation, collection and enforcement of this Agreement and the Note. The
obligations of the Borrower under this Section shall survive any termination of this
Agreement.
Section 8.3 Waivers. etc No failure on the parf of the Lender or the
holder of the Note to exercise and no delay in exercising any power or right
hereunder shail operaEe as a waiver thereof; nor shall any single or partiai exercise
of any power or right preclude any other or further exercise thereof or the exercise of
any other power or right. The rights and remedies of the Lender hereunder are
cumula�ive and not exclusive of any right or remedy the Lender otherwise has.
Section 8.4 Notices. Except when telephonic notice is expressly
authorized by this Agreement, any notice or other communication to any party in
connection with this Agreement shall be in writing and shall be sent by manual
delivery, telefacsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on the signaftzre
page hereof, or at such other address as such party shall have specified to the other
party hereto in writing. All periods of notice shall be measured from the date of
delivery thereof if manually delivered, from the date of sending thereof if sent by
telefacsimile transmission, from the first Business Day after the date of sending if
sent by overnight courier, or from four days after the date of mailing if mailed;
provided however, that any notice to the Lender under Article II shall be deemed to
have been given only when received by the Lender.
Section 8.5 Successors and Assigns; Dis�osition of Loans. This
Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that the Borrower may not assign its
rights ox delegate its obligations hereunder without the prior written consent of the
Lender. The Lender may at any time sell, assign, transfer, grant participations in, or
otherwise dispose of any portion of the Commitment and/or Advances to banks or
other financial institutions. The Lender may disclose any information regarding the
Borrower in the Lender's possession to any prospective buyer or participant.
5ection 8.6 Governing Law and Construcfion. THE VALIDIT'Y,
C01�3STRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AN17 THE
NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES
THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES
APPLICABLE TO NATIONAL BANKS.
SecEion S.7 Consent to JurisdicEion. AT THE OPTION OF THE
LENDER, THIS AGREEMENT AND THE NOTE MAY BE ENFORCED IN ANY
FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN
COUNTY, MINNESOTA; AND THE BORROWER CONSENTS TO THE
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JURI5DICTIQN AND VENUE OF ANY SUCH COURT AND WAIVES ANY
ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE
EVENT THE BORROWER COMMENCES ANY ACTION IN ANOTHER
JURISDICTION OR VENUE UNDER ANY TORT dR CONTRACT THEORY
ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY
THIS AGIZEEMENT, THE LENDER AT ITS OPTION SHALL BE ENTITLED TO
HAVE THE CASE TRANSFERRED TO ONE OF T'HE JL7RISDICTIONS AND
VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED
WITHOUT PREJUDICE.
Section 8.8 Waiver of Jury Trial. EACH OF THE BORROWER AND
THE LENDER IRBEVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL SY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTE AND ANX OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 8.9 Captions. The captions or headings herein and any table of
contents hereto are for convenience only and in no way define, lunit or describe the
scope or intent of any provision ot this Agreement.
Section 8.10 Entire Agreement. This Agreement and the other Loan
Documents embody the enEire agreement and understanding between the Borrower
and the Lender with respect to the subject matter hereof and thereof. This
Agreement supersedes all prior agreements and understandings relaYing to the
subject matter hereof.
Section 8.11 Counter�arts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and either of the parties hereto may execute this Agreement by
signing any such counterpart.
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IN 4VITNESS WHEILEOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
CTTY dF SAINT PAUL, M7NNESOTA
B
Norman Coleman
Title: Mayor
Borrower's Address:
Attention: Director, Office of
Financial Services
_ Kellogg Boulevard
Saint Paul, Minnesota 55101
Telefacsimile No.: (612) 266-_
Lender's Address:
First Bank National Association
Marquette Avenue Office
90 South Sixth Street
Minneapolis, Minnesota 55402
Telefacsimile No.: (612) 973-8368
And
[Print name]
Title: Clerk
And
[Print nameJ
Title: Director, Office of Financial Services
FIRST BANK NATIONAL ASSOCIATION
By
Print Name
Title
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EXHIBTT A TO
CREDIT AGREEMENT
REVOLVING NOTE
$16,500,000
October _,1997
Minneapolis, Minnesota
(To be provided by Borrower, in foxm and substance acceptable to the Lendera
97-iaY�"
EXHISTT B TO
CREDTT AGREEMEI�TT
MAT'TERS TO BE COVERED BY
OPINION OF COUNSEL TO THE BORROWER
'The opinion of counsel Eo the Borrower which is called for by Secfion
3.1 of the Credit Agreement (the "Credit Agreement") shall be addressed to the
Lender and dated the date of the Credit Agreement. It shall be satisfactory in form
and substance to the Lender and shall cover the matters set fox�h below, subject to
such assumptions, exceptions and qualifications as may be acceptable to the Lender
and counsel to the Lender. Capitalized terms not de£ined herein have the meanings
given to them in the Credit Agreement.
1. The Borrower is a public body corporate and politic duly organized and
validly existing under the laws of the State of Minnesota.
2. The Borrower has full power and authority to execute and deliver the
Credit Agreement and Note, and to perform its obligations thereunder.
3. The execution, delivery and performance by the Borrower of the Credit
Agreement and Note have been duly authorized by all necessary action by its City
Council, and are not in conflict with any provision of its enabling statute or its b�-
laws.
4. To the best of our knowledge, based on reasonable inquiry and
investigation, the execution, delivery and performance of the Credit Agreement and
Note do not constitute a default under any contractual restriction or other provision
binding upon the Borrower or affecting any of its property, do not contravene any
provision of law or any order, decree, judgment or other determination of any
court, tribunal or other governmental authority or instrumentality, and will not
resuit in or require the creation or imposition of any mortgage, lien, security interest
or other charge or encumbrance on any property owned by the Borrower.
5. The Credit Agreement and I�ote constitute the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their respective terms, except to the extent limited by insolvency, moratorium,
bankruptcy, reorganization or other similar laws of general application relating to or
affecting the enforcement of creditors' rights, and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equiEy or
at law).
6. No consent, approval, authori2ation or registration by or with any
governmental body or authority other than those already obtained is required on
the part of the Borrower in connection wifih the execution and delivery of the Credit
Agreement or Note or performance of or compliance with the terms, provisions or
conditions thereof.