HomeMy WebLinkAbout3C Financing Agreement - 2022 Potawatomi Zoo Project
FINANCING AGREEMENT
by and among
POTAWATOMI ZOOLOGICAL SOCIETY, INC.
and
CITY OF SOUTH BEND BUILDING CORPORATION
and
CITY OF SOUTH BEND, INDIANA
Dated as of March 1, 2022
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND EXHIBITS ...............................................................3
Section 1.1. Terms Defined .....................................................................................3
Section 1.2. Rules of Interpretation .........................................................................5
ARTICLE II REPRESENTATIONS; USE OF BOND PROCEEDS ...........................6
Section 2.1. Representations by Issuer ....................................................................6
Section 2.2. Representations by Building Corporation. The Building Corporation
represents and warrants that: ..................................................................6
Section 2.3. Representations by Corporation ...........................................................7
ARTICLE III PARTICULAR COVENANTS OF THE ISSUER, BUILDING
CORPORATION AND CORPORATION ..........................................................9
Section 3.1. Consent to Assignment to Trustee .......................................................9
Section 3.2. Payment of Principal and Interest; Payment of Pledged Revenues .....9
Section 3.3. Maintenance of Existence ....................................................................9
Section 3.4. Building Corporation and Corporation Not Responsible for Bond
Payments ................................................................................................9
Section 3.5. Payment of Costs of Issuance of Bonds, Other Fees and Expenses ..10
Section 3.6. Completion and Use of the Project ....................................................10
Section 3.7. Indemnity by Corporation. .................................................................11
Section 3.8. Fees and Expenses of Corporation .....................................................11
Section 3.9. Tax Covenants. ..................................................................................11
Section 3.10. Limitations on Use of Project. .........................................................12
ARTICLE IV IMMUNITY .............................................................................................13
Section 4.1. Extent of Covenants of Issuer; No Personal Liability .......................13
Section 4.2. Liability of Issuer ...............................................................................13
ARTICLE V SUPPLEMENTS AND AMENDMENTS TO THIS FINANCING
AGREEMENT .....................................................................................................14
Section 5.1. Supplements and Amendments to Financing Agreement ..................14
ARTICLE VI MISCELLANEOUS PROVISIONS ......................................................15
Section 6.1. Financing Agreement for Benefit of Parties Hereto ..........................15
Section 6.2. Severability ........................................................................................15
Section 6.3. Addresses for Notice and Demands ...................................................15
Section 6.4. Successors and Assigns......................................................................16
Section 6.5. Counterparts .......................................................................................16
Section 6.6. Governing Law ..................................................................................16
FINANCING AGREEMENT
This FINANCING AGREEMENT, dated as of March 1, 2022 (the “Financing
Agreement”) by and among the POTAWATOMI ZOOLOGICAL SOCIETY, INC., an Indiana
non-profit corporation (the “Corporation”), the CITY OF SOUTH BEND BUILDING
CORPORATION (the “Building Corporation”), and the CITY OF SOUTH BEND, INDIANA (the
“Issuer” or “City”), a municipal corporation duly organized and validly existing under the laws of
the State of Indiana (the “State”).
RECITALS
WHEREAS, Indiana Code, Title 36, Article 7, Chapters 11.9 and 12, as supplemented and
amended (collectively, the “Act”), authorizes and empowers the Issuer to issue revenue bonds and
enter into agreements with companies to allow companies to acquire or construct economic
development facilities and vests the Issuer with powers that may be necessary to enable it to
accomplish such purposes; and
WHEREAS, after giving notice in accordance with the Act and Indiana Code 5-3-1, the
City of South Bend Economic Development Commission (the “Economic Development
Commission”) held a public hearing regarding the Project (as defined herein), and, upon finding
that the Project and the proposed financing of the acquisition, construction, expansion, renovation,
equipping, furnishing and improvement thereof (i) will create or retain employment opportunities
in the City, (ii) will benefit the health and general welfare of the citizens of the City and the State,
and (iii) will comply with the purposes and provisions of the Act, the Economic Development
Commission adopted a resolution, and the Common Council of the Issuer (the “Common
Council”) adopted an ordinance, approving the proposed financing for the Project; and
WHEREAS, the Issuer intends to issue its City of South Bend, Indiana, Potawatomi Zoo
Project Economic Development Lease Rental Revenue Bonds, Series 2022 (Potawatomi Zoo
Project), in the aggregate principal amount not to exceed $_______ (the “Series 2022 Bonds”),
pursuant to a Trust Indenture, dated as of March 1, 2022 (the “Indenture”), by and between the
Issuer and [U.S. Bank National Association], as trustee (the “Trustee”), for the purpose of
providing funds to pay a portion of the costs of the Project and costs related to the issuance of the
Series 2022 Bonds; and
WHEREAS, the Series 2022 Bonds issued under the Indenture will be payable solely from
certain lease rental payments (the “Lease Rentals”) made by the South Bend Redevelopment
Commission (the “Commission”) to the Building Corporation pursuant to a lease dated as of
December 1, 2021 (the “Lease”); and
WHEREAS, the Commission expects to pay the Lease Rentals to the Building Corporation
from certain St. Joseph County Hotel-Motel Tax Revenues pledged by the St. Joseph County
Hotel-Motel Tax Board pursuant to Indiana Code 6-9-1-6.3 and if during the term of the Lease,
such revenues are insufficient, the Lease Rentals will be paid by the levy of a special benefits tax
pursuant to Indiana Code 36-7-14-27 and 36-7-14-25.2; and
WHEREAS, the Building Corporation now desires to assign it rights under the Lease,
including the right to receive the Lease Rentals, to the Issuer pursuant to the terms of this
Agreement.
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PRELIMINARY STATEMENT AND GRANTING CLAUSES
In consideration of the premises, the provision of the proceeds of the Series 2022 Bonds to
the Corporation for the purpose of funding the Project, and of other good and valuable
consideration, the receipt of which is hereby acknowledged, including without limitation,
representations, warranties and commitments given by the Corporation to the Issuer and the
Building Corporation hereunder, the receipt of which is hereby acknowledged, the Building
Corporation has executed and delivered this Financing Agreement and by these presents does
assign, grant, and warrant and grant a security interest in, to the Issuer and its successors and
assigns forever, all right title and interest of the Building Corporation in the Lease, including the
Lease Rentals.
TO HAVE AND HOLD all and singular, the above described property (the “Security”),
whether now owned or hereafter acquired, unto the Issuer, its successors and assigns forever,
provided, however, that upon the payment of all of the principal of and interest on the Bonds and
the Corporation and the Building Corporation shall keep, perform and observe all and singular the
covenants and promises expressed herein to be kept, performed and observed by the Corporation
and the Building Corporation, then this Financing Agreement and the rights hereby granted shall
cease, determine and be void; otherwise to remain in full force and effect.
The Issuer, the Building Corporation and the Corporation hereby further covenant and
agree as follows:
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ARTICLE I
DEFINITIONS AND EXHIBITS
Section 1.1. Terms Defined. Capitalized terms used in this Financing Agreement that are
not otherwise defined herein, shall have the meanings provided for such terms in the Indenture.
As used in this Financing Agreement, the following terms shall have the following meanings
unless the context clearly otherwise requires:
“Act” means, collectively, Indiana Code 36-7-11.9 and 36-7-12.
“Bondholder” or “owner of a Bond” or any similar term means the owner of any Bond.
“Bond Fund” means the Bond Fund to be created and established by Section 4.2 of the
Indenture.
“Bond Ordinance” means Ordinance No. ___________, adopted by the Common Council
on December ______, 2022, authorizing the issuance of the Series 2022 Bonds to finance the costs
of the Project and pledging the Pledged Revenues to the payment of the principal of and interest
on the Bonds.
“Bond Proceeds” means an amount equal to $_____________ (which equals the face
amount of the Bonds plus original issue premium of $__________, less an underwriter’s discount
of $___________, less costs of issuance of the Bonds ($__________) and less an amount used to
purchase a municipal bond debt service reserve insurance policy to satisfy the requirements of the
debt service reserve fund under the Indenture ($_____________)) to be provided for out of the
proceeds of the Bonds, plus investment earnings, all of which will be made available to the
Corporation, pursuant to the terms of this Financing Agreement and the Indenture, to pay for
Eligible Costs.
“Building Corporation” means the City of South Bend Building Corporation, an Indiana
non-profit corporation organized for the purpose of financing buildings and other capital
improvements in the City.
“City Parties” means, collectively, (a) the Issuer and the Economic Development
Commission, and their successors and assigns, (b) any financial advisor or legal counsel to any
entity listed in subclause (a) hereof, (c) the underwriter for the Bonds, (d) the owners of the Bonds
(beneficial or otherwise), and (e) the Trustee.
“Commission” means the South Bend Redevelopment Commission, the governing body of
the South Bend Department of Redevelopment and the Redevelopment District of the City of
South Bend, Indiana, existing and operating under the provisions of Indiana Code 36-7-14, as
amended from time to time.
“Code” means the Internal Revenue Code of 1986, as amended, the regulations (whether
proposed, temporary, or final) promulgated thereunder or the statutory predecessor thereof, and
any amendments of, or successor provisions to, the foregoing and any official rulings,
announcements, notices, procedures, and judicial determinations, regarding any of the foregoing.
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“Construction Fund” means the Series 2022 Construction Fund established by Section 4.5
of the Indenture.
“Corporation” means Potawatomi Zoological Society, Inc., an Indiana non-profit
corporation, together with each of its successors and assigns under Sections 3.2 and 6.4 hereof.
“Disbursement” means the transfer of all or any portion of Bond Proceeds by the Trustee
from the Construction Fund to the Corporation to fund Eligible Costs approved by the City.
“Disbursement Request” means any request from the Corporation to the Trustee for a
Disbursement, which request is subject to the prior written approval of the City. The form of
Disbursement Request is attached as Exhibit B to the Indenture.
“Economic Development Commission” means the City of South Bend Economic
Development Commission.
“Eligible Costs” means the costs of the Project specifically described in the Disbursement
Requests approved by the City.
“Indenture” means the Trust Indenture, dated as of March 1, 2022, by and between the
Issuer and the Trustee, authorizing and securing the Series 2022 Bonds.
“Issuer” or “City” means the City of South Bend, Indiana, a municipal corporation duly
organized and validly existing under the laws of the State.
“Lease” means the Lease, dated as of December 1, 2021, between the Building
Corporation, as lessor, and the Commission, as lessor, and all supplements and amendments
thereto
“Lease Rentals” means the lease rentals paid by the Commission, as lessee under the Lease.
“Pledged Revenues” shall have the meaning set forth in the Indenture.
“Project” means the construction, renovation, equipping, furnishing and improving of the
Potawatomi Zoo, located at 500 South Greenlawn Avenue within the City (the “Zoo”), including,
without limitation, all or any portion of the following: (i) the renovation, construction and
equipping of a new lion habitat to include a new rock façade, new fencing and a new visitor
viewing area; (ii) the construction, equipping and furnishing a new concession and dining facility
in the North American portion of the Zoo, permitting visitors to view a newly constructed black
bear habitat which will permit the introduction of a new species for the Zoo; (iii) replacement of
the existing corporate and family picnic area with a new covered pavilion along with a new kitchen
area and new fencing, pathways and storage areas; (iv) renovation of the North American animal
habitats to meet modern Zoo standards including without limitation the construction and equipping
of a new holding barn in the center and the installation of new fencing and habitat esthetics; and
(v) the construction and equipping of a new Tiger habitat to meet current accreditation standards
for zoos which will include the construction of a new, modern habitat within a portion of
Potawatomi Park land not currently being utilized by the Zoo.
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“Series 2022 Bonds” or “Bonds” means the City of South Bend, Indiana, Economic
Development Revenue Bonds, Series 2022 (Potawatomi Zoo Project), anticipated to be issued
pursuant to the Indenture, in an aggregate principal amount not to exceed $___________, for the
purpose of paying a portion of the costs of the Project, paying for a debt service reserve surety
policy to satisfy the requirements of the debt service reserve fund for the Bonds, and a portion of
the costs related to the issuance thereof.
“State” means the State of Indiana.
“Trustee” means initially [U.S. Bank National Association] or any successor trustee
serving in such capacity under the Indenture.
Section 1.2. Rules of Interpretation. For all purposes of this Financing Agreement, except
as expressly provided herein or unless the context otherwise requires:
(a) “This Financing Agreement” means this instrument as originally executed and as it
may from time to time be supplemented or amended pursuant to the applicable provisions hereof.
(b) All references in this instrument to designated “Articles,” “Sections” and other
subdivisions are to the designated Articles, Sections and other subdivisions of this instrument as
originally executed. The words “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Financing Agreement as a whole and not to any particular Article, Section or
other subdivision.
(c) The terms defined in this Article have the meanings assigned to them in this Article
and include the plural as well as the singular and the singular as well as the plural.
(d) All accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles as consistently applied.
(e) Any terms not defined herein but defined in the Indenture shall have the same
meaning herein.
(f) The terms defined elsewhere in this Financing Agreement shall have the meanings
therein prescribed for them.
(g) The word “including” and any variation thereof means “including, without
limitation” and must not be construed to limit any general statement that it follows to the specific
or similar items or matters immediately following it.
(h) Where a term is defined, another part of speech or grammatical form of that term
shall have a corresponding meaning.
(End of Article I)
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ARTICLE II
REPRESENTATIONS; USE OF BOND PROCEEDS
Section 2.1. Representations by Issuer. The Issuer represents and warrants that:
(a) The Issuer is a municipal corporation organized and existing under the laws of the
State. Under the provisions of the Act, the Issuer is authorized to enter into the transactions
contemplated by this Financing Agreement and to carry out its obligations hereunder. The Issuer
has been duly authorized to execute and deliver this Financing Agreement. The Issuer agrees that
it will do or cause to be done all things within its control and necessary to preserve and keep in
full force and effect its existence.
(b) Subject to the terms of this Agreement, the Issuer shall issue the Series 2022 Bonds
in the aggregate principal amount not to exceed $_____________, in order to pay the costs of the
Project approved by the Issuer, pay the cost of a debt service reserve surety policy to satisfy the
requirements of the debt service reserve fund under the Indenture, and to pay the costs of issuance
incurred in connection therewith, all for the purpose of creating or retaining employment
opportunities in the City and benefiting the health and general welfare of the citizens of the City
and the State.
Section 2.2. Representations by Building Corporation. The Building Corporation
represents and warrants that:
(a) The Building Corporation is a non-profit corporation duly organized and validly
existing under the laws of the State of Indiana solely for the purpose to serve as an on-behalf of
issuer to the City for the purpose of completing capital improvements in the City.
(b) Neither the execution and delivery of this Financing Agreement, the consummation
of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Financing Agreement, conflicts with or results in a breach of the terms,
conditions or provisions of the Building Corporation’s Articles of Incorporation or By-laws, or
any restriction or any agreement or instrument to which the Building Corporation is now a party
or by which it is bound or to which any of its property or assets is subject or (except in such manner
as will not materially impair the ability of the Building Corporation to perform its obligations
hereunder), or any statute, order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Building Corporation or its property, or constitutes a default under any
of the foregoing, or results in the creation or imposition of any lien, charge or encumbrance
whatsoever upon any of the property or assets of the Building Corporation under the terms of any
instrument or agreement, except as may be set forth in this Financing Agreement.
(c) There are no actions, suits or proceedings pending, or, to the knowledge of the
Building Corporation, threatened, before any court, administrative agency or arbitrator which,
individually or in the aggregate, if determined adversely to the Building Corporation, could
materially and adversely affect the transactions contemplated by this Financing Agreement or
which in any way would affect the validity and enforceability of such document or the ability of
the Building Corporation to perform its obligations under this Financing Agreement.
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(d) This Financing Agreement has been duly executed and delivered by the Building
Corporation and constitutes the legal, valid and binding agreement of the Building Corporation,
enforceable against the Building Corporation in accordance with its terms, except as may be
limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors’
rights in general. The enforceability of the Building Corporation’s obligations under said
document is subject to general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(e) No event has occurred and is continuing which with the lapse of time or the giving
of notice would constitute an event of default under this Financing Agreement.
Section 2.3. Representations by Corporation. The Corporation represents and warrants
that:
(a) It is a non-profit corporation duly organized and validly existing under the laws of
the State of Indiana and is an organization described in Section 501(c)(3) of the Code, exempt
from federal income taxation under Section 501(a) of the Code, and is not a private foundation
within the meaning of Section 509 (a) of the Code, is not in violation of any laws in any manner
material to its ability to perform its obligations under this Financing Agreement, and has full power
to enter into and by proper action has duly authorized the execution and delivery of this Financing
Agreement.
(b) Neither the execution and delivery of this Financing Agreement, the consummation
of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Financing Agreement, conflicts with or results in a breach of the terms,
conditions or provisions of the Corporation’s Articles of Incorporation or By-laws, or any
restriction or any agreement or instrument to which the Corporation is now a party or by which it
is bound or to which any of its property or assets is subject or (except in such manner as will not
materially impair the ability of the Corporation to perform its obligations hereunder), or any
statute, order, rule or regulation of any court or governmental agency or body having jurisdiction
over the Corporation or its property, or constitutes a default under any of the foregoing, or results
in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the
property or assets of the Corporation under the terms of any instrument or agreement, except as
may be set forth in this Financing Agreement.
(c) There are no actions, suits or proceedings pending, or, to the knowledge of the
Corporation, threatened, before any court, administrative agency or arbitrator which, individually
or in the aggregate, if determined adversely to the Corporation, could materially and adversely
affect the transactions contemplated by this Financing Agreement or which in any way would
affect the validity and enforceability of such document or the ability of the Corporation to perform
its obligations under this Financing Agreement.
(d) This Financing Agreement has been duly executed and delivered by the
Corporation and constitutes the legal, valid and binding agreement of the Corporation, enforceable
against the Corporation in accordance with its terms, except as may be limited by bankruptcy,
insolvency, or other similar laws affecting the enforcement of creditors’ rights in general.
(e) No event has occurred and is continuing which with the lapse of time or the giving
of notice would constitute an event of default under this Financing Agreement. The enforceability
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of the Corporation’s obligations under said document is subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law or in equity).
(End of Article II)
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ARTICLE III
PARTICULAR COVENANTS OF THE ISSUER, BUILDING CORPORATION AND
CORPORATION
Section 3.1. Consent to Assignment to Trustee. The Building Corporation and the
Corporation acknowledge and consent to the assignment of the Lease Rentals and the assignment
of the Issuer’s rights hereunder to the Trustee pursuant to the Indenture and agrees that the Trustee
may enforce the rights, remedies and privileges granted to the Issuer hereunder.
Section 3.2. Payment of Principal and Interest; Payment of Pledged Revenues.
(a) In accordance with the Indenture, the Series 2022 Bonds, if and when issued, shall
be payable solely and only from Pledged Revenues, including without limitation, the Lease
Rentals. Under no circumstances shall the Building Corporation or the Corporation be liable for
making any payments due under the Indenture or the Series 2022 Bonds, including any payment
of the principal of, premium, if any, or interest on any of the Series 2022 Bonds, as the payments
on the Series 2022 Bonds shall be payable solely from the Pledged Revenues, including, without
limitation, the Lease Rentals.
(b) In accordance with the terms of the Indenture, the Issuer shall transfer to the Trustee
for deposit into the Bond Fund (as defined in the Indenture), on or before each February 1 and
August 1 (or on such other dates and in such manner required by the Bond Ordinance), the Pledged
Revenues in an amount sufficient to pay the principal of and interest due on the Series 2022 Bonds
on the next February 1 or August 1 together with any Annual Fees as described and defined in the
Indenture.
(c) Under no circumstances shall the Building Corporation or the Corporation be liable
for payment of any other costs or expenses under or in connection with this Financing Agreement
or the transactions contemplated by this Financing Agreement, the Indenture or the Series 2022
Bonds. Any amounts owed to the Trustee shall be payable solely from the Lease Rentals (or other
Pledged Revenues available for such purpose) pursuant to the terms of the Lease.
Section 3.3. Maintenance of Existence. The Building Corporation and the Corporation
each covenant and agree that it will maintain its existence as Indiana non-profit corporation, will
not, while the Series 2022 Bonds remain outstanding, dissolve or otherwise dispose of all or
substantially all of its assets, will not consolidate with or merge into another entity, or permit one
or more other entities to consolidate or merge with it, and will not sell or transfer any ownership
interests in itself in any manner that would result in a change of control of itself, without (i) the
express written consent of the Issuer and (ii) providing to the Issuer an opinion of Bond Counsel
to the effect that such transaction will not cause the interest on the Series 2022 Bonds to be included
in the gross income of the holders thereof for federal income tax purposes. For purposes of this
section, “control” (including the terms “controlling”) means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of the Building
Corporation or the Corporation, respectively, whether through the ownership of voting securities,
by contract, or by other means.
Section 3.4. Building Corporation and Corporation Not Responsible for Bond Payments.
Notwithstanding anything in this Financing Agreement to the contrary, the Issuer acknowledges
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and agrees that each of the Building Corporation or the Corporation is in no way (i) guaranteeing
or providing credit enhancement for or supporting financially or otherwise the issuance, sale or
resale, offering or reoffering, or payment of the Bonds, or (ii) guaranteeing or providing credit
enhancement for or supporting financially or otherwise the payment of the principal of or premium
or interest on the Bonds (or any portion thereof). The Issuer further acknowledges and agrees that
the neither the Building Corporation nor the Corporation will indemnify, defend or hold harmless
the Issuer or any City Parties against any losses, liabilities, expenses (including attorneys’ and
other professionals’ fees and expenses), claims and damages asserted against, resulting to, imposed
upon or suffered by the Issuer or the City Parties or any of them to the extent arising from or
attributable to the issuance, sale or resale, offering or reoffering, or payment of the Bonds.
Section 3.5. Payment of Costs of Issuance of Bonds, Other Fees and Expenses. The Issuer
shall pay from the proceeds of the sale of the Bonds, as necessary, the costs of issuance of the
Bonds. Neither the Building Corporation nor the Corporation is obligated to pay (except from the
proceeds of the Bonds) any costs of issuance of the Bonds or any related costs, fees or expenses in
connection with the issuance, sale or offering of the Bonds; nor is Building Corporation or the
Corporation obligated to pay any fees, charges or expenses in connection with or related to the
Bonds after the Bonds have been issued, which fees, charges and expenses include financial
advisory and/or accounting fees, charges and expenses, Trustee and other fiduciary fees and
expenses and Issuer fees and expenses (including in each instance legal fees and expenses), all of
which are obligations of the Issuer.
Section 3.6. Completion and Use of the Project.
(a) The Corporation agrees that it will make, execute, acknowledge and deliver (or
cause to be made, executed, acknowledged and delivered) any contracts, orders, receipts, writings
and instructions with any other persons, firms or corporations and in general do all things
reasonably within its power which may be requisite or proper for the substantial completion (as
certified by the Corporation) of the construction, expansion, renovation, equipping, furnishing,
and improvement of the Project, and, upon subsequent completion of the Project, the Corporation
will operate and maintain the Project in such manner as reasonably within Corporation’s power so
as to conform with all applicable and material zoning, planning, building, environmental and other
applicable governmental regulations and so as to be consistent with the Act.
(b) The Issuer shall deposit all proceeds from the sale of the Bonds in the manner
specified in Article III of the Indenture, and the Issuer shall maintain such proceeds and funds in
the manner specified in Article IV of the Indenture. Under the Indenture, the Trustee, on behalf of
the Issuer, is authorized and directed to make payments from the Construction Fund to pay for
costs of the Project approved by the Issuer, or to reimburse the Corporation for any costs of the
Project approved by the Issuer, with any such disbursements to be made in accordance with the
terms and conditions of the Indenture and this Financing Agreement. The Corporation agrees to
direct such requisitions to the Trustee as may be necessary to effect payments out of the
Construction Fund for costs of the Project approved by the Issuer, all in accordance with Section
4.5 of the Indenture and this Financing Agreement.
(c) Any moneys remaining in the Construction Fund after completion of the Project
shall be transferred and applied in the manner provided in the Indenture.
(d) The Corporation hereby acknowledges receipt of a copy of the Indenture.
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Section 3.7. Indemnity by Corporation. The Corporation will pay, and protect, indemnify
and save the City Parties, the Building Corporation, the Bondholders and the Trustee harmless
from and against, all liabilities, losses, damages, costs, expenses (including attorneys’ fees and
expenses of the City Parties, the Building Corporation and the Trustee), causes of action, suits,
claims, demands and judgments of any nature arising from or relating to:
(a) Violation of any contract, agreement or restriction by the Corporation relating to
the Project, or a part thereof; and
(b) Violation by the Corporation of any law, ordinance or regulation arising out of the
ownership, occupancy or use of the Project, or a part thereof.
Section 3.8. Fees and Expenses of Corporation. The Corporation hereby covenants and
agrees to pay any and all fees, charges and expenses, including legal counsel, of the Corporation
incurred in connection with this Financing Agreement to the extent that any such fees, charges and
expenses of the Corporation are not paid or provided for out of the proceeds of the Bonds in
accordance with the terms of the Indenture and in the amounts set forth in Exhibit C thereto, which
are deemed to be approved by the Corporation without further action or authorization.
Section 3.9. Tax Covenants. The Corporation hereby represents that it has taken and
caused to be taken, and covenants that it will take and cause to be taken, all actions that may be
required of it, alone or in conjunction with the Issuer, for the interest on the Series 2022 Bonds to
be and remain excluded from gross income for federal income tax purposes, and represents that it
has not taken or permitted to be taken on its behalf, and covenants that it will not take or permit to
be taken on its behalf, any actions that would adversely affect such exclusion under the provisions
of the Code.
The Corporation and the Issuer each covenant to the owners of the Series 2022 Bonds that,
notwithstanding any other provision of this Financing Agreement or any other instruments, it shall
take no action, nor shall the Corporation direct the Trustee to take or approve any action or make
any investment or use of proceeds of the Series 2022 Bonds or any other moneys which may arise
out of or in connection with this Financing Agreement, the Indenture or the Project, which would
cause the Series 2022 Bonds to be treated as “arbitrage bonds” within the meaning of Section 148
of the Code. In addition, the Corporation covenants and agrees to comply with the requirements
of Section 148(f) of the Code as it may be applicable to the Series 2022 Bonds or the proceeds
derived from the sale of the Series 2022 Bonds or any other moneys which may arise out of or in
connection with this Financing Agreement, the Indenture or the Project throughout the term of the
Series 2022 Bonds.
The Corporation shall provide the Issuer with, and the Issuer may base its certifications on,
a certificate of an appropriate officer, employee or agent of or consultant to the Corporation for
inclusion in the transcript of proceedings for the Series 2022 Bonds, setting forth the reasonable
expectations of the Corporation on the date of delivery of and payment for the Series 2022 Bonds
regarding the amount and use of the proceeds of the Series 2022 Bonds and the facts, estimates
and circumstances on which those expectations are based.
No provision of this Financing Agreement shall be construed to impose upon the Trustee
any obligation or responsibility for compliance with arbitrage regulations.
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Section 3.10. Limitations on Use of Project. The Corporation agrees that it will not use
the Project, or permit the Project to be used, in such a way as to subject the Corporation to the tax
imposed by Section 511 of the Code, on unrelated business taxable income, as defined in Section
512 thereof, unless such use will in no way adversely affect the status of the Corporation as an
organization described in Section 501(c)(3) of the Code or adversely affect the exclusion from
gross income of the interest on the Series 2022 Bonds under the Code; nor will it use or permit the
Project to be used by any non-exempt person in such manner as would result in the inclusion of
interest on the Series 2022 Bonds in gross income for federal income tax purposes under Section
103 of the Code; nor will it act or fail to act in any other manner which would adversely affect the
exclusion from gross income for federal income tax purposes of the interest on the Series 2022
Bonds. The Corporation further covenants that none of its revenues, income or profits, whether
realized or unrealized, will be distributed to any of its officers or members, or inure to the benefit
of any private person, association or corporation, other than for the lawful corporate purposes of
the Corporation; provided, however, that the Corporation may pay to any person, association or
corporation the value of any service or product performed for or supplied to the Corporation by
such person, association or corporation.
(End of Article III)
13
ARTICLE IV
IMMUNITY
Section 4.1. Extent of Covenants of Issuer; No Personal Liability. No recourse shall be
had for the payment of the principal of or interest on any of the Bonds or for any claim based
thereon or upon any obligation, covenant or agreement contained in the Bonds, the Indenture or
this Financing Agreement against any past, present or future member, director, officer, agent,
attorney or employee of the Issuer or the Building Corporation or the Corporation, or any
incorporator, member, director, officer, employee, agent, attorney or trustee of any successor
thereto, as such, either directly or through the Issuer or the Building Corporation or the Corporation
or any successor thereto, under any rule of law or equity, statute or constitution or by the
enforcement of any assessment or penalty or otherwise, and all such liability of any such
incorporator, member, director, officer, employee, agent, attorney or trustee as such is hereby
expressly waived and released as a condition of and consideration for the execution of the
Indenture and this Financing Agreement (and any other agreement entered into by the Issuer with
respect thereto) and the issuance of the Bonds.
Section 4.2. Liability of Issuer. Any and all obligations of the Issuer under this Financing
Agreement are special, limited obligations of the Issuer, payable solely out of the Pledged
Revenues and as otherwise provided under this Financing Agreement and the Indenture. The
obligations of the Issuer hereunder shall not be deemed to constitute an indebtedness or an
obligation of the Issuer, the State or any political subdivision or taxing authority thereof within the
purview of any constitution limitation or provision, or a pledge of the faith and credit or a charge
against the credit or general taxing powers, if any, of the Issuer, the State or any political
subdivision or taxing authority thereof.
(End of Article IV)
14
ARTICLE V
SUPPLEMENTS AND AMENDMENTS TO THIS FINANCING AGREEMENT
Section 5.1. Supplements and Amendments to Financing Agreement. The Issuer, the
Building Corporation and Corporation may from time to time enter into such supplements and
amendments to this Financing Agreement as to them may seem necessary or desirable.
(End of Article V)
15
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1. Financing Agreement for Benefit of Parties Hereto. Nothing in this Financing
Agreement, express or implied, is intended or shall be construed to confer upon, or to give to, any
person other than the parties hereto, their successors and assigns, any right, remedy or claim under
or by reason of this Financing Agreement or any covenant, condition or stipulation hereof; and the
covenants, stipulations and agreements in this Financing Agreement contained are and shall be for
the sole and exclusive benefit of the parties hereto, and their successors and assigns.
Notwithstanding anything in this Financing Agreement to the contrary, the Trustee under the
Indenture is not a party to this Financing Agreement, nor is the Trustee entitled to any right, remedy
or claim under or by reason of this Financing Agreement or any covenant, condition or stipulation
hereof.
Section 6.2. Severability. In case any one or more of the provisions contained in this
Financing Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein shall not in any way
be affected or impaired thereby.
Section 6.3. Addresses for Notice and Demands. All notices, demands, certificates or other
communications hereunder shall be sufficiently given when received or upon first refusal thereof
or mailed by certified mail, postage prepaid, or sent by nationally recognized overnight courier
with proper address as indicated below. The Issuer and the Corporation may, by written notice
given by each to the others, designate any address or addresses to which notices, demands,
certificates or other communications to them shall be sent when required as contemplated by this
Financing Agreement. Until otherwise provided by the respective parties, all notices, demands,
certificates and communications to each of them shall be addressed as follows:
To the Issuer: City of South Bend, Indiana
227 West Jefferson Blvd
Suite 1200N
South Bend, IN 46601
Attn: Controller
To the Building Corporation City of South Bend, Indiana
227 West Jefferson Blvd
Suite 1200N
South Bend, IN 46601
Attn: Controller
To the Corporation: Potawatomi Zoological Society, Inc.
500 South Greenlawn Ave.
South Bend, IN 46615
Attention: Executive Director
16
Section 6.4. Successors and Assigns.
(a) Subject to Section 6.1 hereof, whenever in this Financing Agreement any of the
parties hereto is named or referred to, the successors and assigns of such party shall be deemed to
be included and all the covenants, promises and agreements in this Financing Agreement contained
by or on behalf of the Corporation, by or on behalf of the Building Corporation, or by or on behalf
of the Issuer, shall bind and inure to the benefit of the respective successors and assigns, whether
so expressed or not.
(b) The Corporation or the Building Corporation may assign this Financing Agreement
or any of its rights or obligations under this Financing Agreement only upon the written consent
of the Issuer which shall not be unreasonably withheld and the Corporation or the Building
Corporation, as the case may be, providing to the Issuer the opinion of Bond Counsel described in
Section 3.2 hereof.
Section 6.5. Counterparts. This Financing Agreement is being executed in any number of
counterparts, each of which is an original and all of which are identical. Each counterpart of this
Financing Agreement is to be deemed an original hereof and all counterparts collectively are to be
deemed but one instrument.
Section 6.6. Governing Law. It is the intention of the parties hereto that this Financing
Agreement and the rights and obligations of the parties hereunder shall be governed by and
construed and enforced in accordance with, the laws of Indiana.
(End of Article VI)
IN WITNESS WHEREOF, the Issuer, the Building Corporation, and the Corporation have
caused this Financing Agreement to be executed in their respective names, and the Issuer has
caused its official seal to be hereunto affixed and attested by the Clerk of the City, all as of the
date first above written.
POTAWATOMI ZOOLOGICAL SOCIETY INC.,
a non-profit corporation
By:
Printed Name:
Title:
CITY OF SOUTH BEND BUILDING
CORPORATION, a non-profit corporation
By:
Printed Name:
Title:
CITY OF SOUTH BEND, INDIANA
(SEAL)
James Mueller, Mayor
Attest:
Dawn M. Jones, MPA, Clerk
[Signature Page to Financing Agreement]
DMS 21386902v1