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HomeMy WebLinkAboutNo. 2466 approving a modification to a Second Addendum to Lease for Certain Public Improvements and regarding other related matters (Century Center)• RESOLUTION NO. ~ ~~ ~ RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION APPROVING A MODIFICATION TO A SECOND ADDENDUM TO LEASE FOR CERTAIN PUBLIC IMPROVEMENTS AND REGARDING OTHER RELATED MATTERS WHEREAS, the South Bend Redevelopment Commission (the "Commission"), governing body of the South Bend Department of Redevelopment and the South Bend Redevelopment District (the "Redevelopment District"), exists and operates under the provisions of Indiana Code 36-7-14, as amended from time to time (the "Act"); and WHEREAS, the Commission has adopted various resolutions (i) declaring certain real estate in the Redevelopment District, known as the South Bend Central Development Area (the "Area"), to be a redevelopment area within the meaning of the Act, determining that it would be of public utility and benefit to redevelop the Area pursuant to a development plan, as amended, and (ii) designating the entire Area as an allocation area having boundaries as described in Declaratory Resolution No. 137, as amended; and WHEREAS, the Common Council of the City has previously adopted an • ordinance creating the South Bend Redevelopment Authority (the "Authority") pursuant to Indiana Code 36-7-14.5 as a separate body, corporate and politic, and as an instrumentality of the City of South Bend, Indiana, to finance local public improvements for lease to the Commission; and WHEREAS, the Authority previously entered into a lease by and between the Authority and the Commission dated as of November 1, 1993, as amended by an addendum to lease dated as of June 3, 1994 (collectively, the "Lease"), which Lease was heretofore approved by the Commission, and pursuant to which the Authority leases to the Commission certain real estate and local public improvements at the Century Center; and WHEREAS, the Commission desires to undertake certain local public improvements located in the Area including, without limitation, the following improvements to the Century Center: (i) the addition of skylight safety film, the replacement of boilers and chillers, repairs on Island Park, the replacement of the fire alarm and security systems, the renovation of seven (7) restrooms, the renovation of C Hall, the replacement of the roofs, site lighting additions, exterior masonry work, and additional enhancements to the building, grounds and streetscape including, but not limited to, street level and river level interior and exterior signage, enhancement to the upper level offices, and enhancement to the front of building and viewing park and related improvements (collectively, the "2008 Project"); and WHEREAS, the Authority has adopted a resolution indicating its intent to issue its lease rental revenue bonds to finance the costs of the renovation and equipping of the 2008 BDDBOI 5310473v1 Project and related expenses pursuant to Indiana Code 36-7-14.5-19 and approving a proposed second addendum to the Lease between the Authority and the Commission for the 2008 Project (the "Second Addendum"); and WHEREAS, on May 16, 2008, the Commission approved the preliminary plans and specifications and cost estimates and the proposed Second Addendum, determined that the 2008 Project was not a "controlled project" as such term is defined by Indiana Code 6-1.1-20- 1.1, scheduled a public hearing on the Second Addendum to be held on June 13, 2008, at 10:00 a.m. (local time), and authorized the publication of a notice of public hearing on the Second Addendum pursuant to Indiana Code 5-3-1; and WHEREAS, a notice of public hearing on the Second Addendum was published in accordance with Indiana Code 5-3-1; and WHEREAS, the Commission, on June 13, 2008, held a public hearing and all interested parties were provided the opportunity to be heard at the hearing, following which the Commission adopted Resolution No. 2459 determining that the rentals proposed to be paid pursuant to the Second Addendum are fair and reasonable and authorizing the execution of the Second Addendum; and WHEREAS, the Commission, as set forth in the Second Addendum approved by Resolution No. 2459, determined to pay rent for the 2008 Project to the Authority, at a rate not to exceed One Million One Hundred Nine Thousand and 00/100 Dollars ($1,109,000.00) per year in semiannual installments beginning on the day the 2008 Project is complete and ready for use, or April 15, 2009, whichever is later, subject to reduction as set forth in the Second Addendum; and WHEREAS, the Common Council of the City (the "Common Council"), in considering approval of the Second Addendum, adopted an ordinance at its meeting on June 23, 2008, modifying and approving the Second Addendum as so modified to reduce the rent payable pursuant to the Second Addendum to an amount not to exceed Six Hundred Thousand and 00/100 Dollars ($600,000.00) per year in semiannual installments and directing the Commission and the Authority to approve a modification to the Second Addendum; and WHEREAS, the Commission desires to approve the Second Addendum in the form approved by the Common Council with the reduced not to exceed maximum rent; NOW, THEREFORE, BE IT RESOLVED, by the South Bend Redevelopment Commission as follows: 1. Consistent with the approval of the Second Addendum by the Common Council, the Commission hereby approves of the payment of rent pursuant to the Second Addendum at a maximum rate not to exceed Six Hundred Thousand and 00/100 Dollars ($600,000.00) per year in semiannual installments beginning on the day the 2008 Project is completed and ready for use, or April 15, 2009, whichever is later, subject to reduction as set forth in the Second Addendum. The Commission confirms its earlier findings set forth in BDDBOI 5310473v1 - 2 - Resolution No. 2459 that the rent to be paid by the Second Addendum, is fair and reasonable, and the use of the 2008 Project throughout the term of the Second Addendum will serve the public purpose of the City and is in the best interests of its residents. The Second Addendum as modified and approved is set forth hereto as Exhibit A. 2. The Commission confirms that the President, Vice President and Secretary of this Commission, and each of them, is hereby authorized and directed to take all such further actions and to execute and attest the Second Addendum and all such other instruments as are desirable to carry out the transactions contemplated by this Resolution, in such form as the President, Vice President and Secretary executing and attesting the same shall deem proper, to be evidenced by the execution thereof. This Resolution shall be in full force and effect after its adoption by the Commission. • • ***** BDDBOI 5310473v1 - 3 - ADOPTED at a meeting of the South Bend Redevelopment Commission held on June 25, 2008, at the County-City Building, Room 1308, 227 West Jefferson Boulevard, South Bend, Indiana. SOUTH BEND REDEVELOPMENT COMMISSION By: ~L~LG~'~~ ,. I ~ Marcia I. Jones, Presiderit,. ATTEST: re ~s, ecr y • BDDBOI 5310473v1 - 4 - • • Second Addendum to Lease (See Attached) BDDBOI 5310473v1 - 5 - Exhibit A • SECOND ADDENDUM TO THE LEASE DATED AS OF NOVEMBER 1, 1993 Between SOUTH BEND REDEVELOPMENT AUTHORITY and • SOUTH BEND REDEVELOPMENT COMMISSION DATED AS OF JUNE 1, 2008 (Century Center 2008 Project) BDDB01 5233044v3 INDEX • Page Section 1. Definitions ..................................................................................................................... 1 Section 2. Lease of 2008 Project ..................................................................................................... 2 Section 3. Rental Payments ............................................................................................................. 2 Section 4. Rental Payment Dates and Amounts .............................................................................. 2 Section 5. Abatement of Rent ......................................................................................................... 3 Section 6. Net Lease ....................................................................................................................... 4 Section 7. Nonliability of Authority ............................................................................................... 4 Section 8. Alterations ...................................................................................................................... 4 Section 9. Insurance ........................................................................................................................ 4 Section 10. Use of Insurance and Condemnation Proceeds ............................................................ 5 Section 11. Liability Insurance ....................................................................................................... 5 • Section 12. General Insurance Provisions ...................................................................................... 5 Section 13. General Covenants ....................................................................................................... 5 Section 14. Option to Purchase ....................................................................................................... 6 Section 15. Defaults ........................................................................................................................ 6 Section 16. Notices ......................................................................................................................... 6 Section 17. Construction of Covenants ........................................................................................... 7 Section 18. Successors or Assigns .................................................................................................. 7 Section 19. Supplement to Lease .................................................................................................... 7 Exhibit A 2008 Project Description • BDDB01 5233044v3 SECOND ADDENDUM TO LEASE • This Second Addendum to Lease entered into as of the 1St day of June, 2008, between the SOUTH BEND REDEVELOPMENT AUTHORITY, a body corporate and politic organized and existing under Indiana Code 36-7-14.5 (the "Authority") and the SOUTH BEND REDEVELOPMENT COMMISSION, the governing body of the City of South Bend Department of Redevelopment and the Redevelopment District of the City of South Bend, Indiana (the "Lessee"), acting for and on behalf of the City of South Bend, Indiana, for the purpose of amending the Lease dated as of November 1, 1993, as amended by an Addendum to Lease dated as of June 3, 1994 both of which were recorded in the office of the St. Joseph County Recorder as Documents 9423717 and 9423718, respectively (hereinafter collectively referred to as the "Lease"). WITNESSETH: Section 1. Definitions. The terms defined in this Section 1 shall for all purposes of this Second Addendum to Lease have the meanings herein specified unless the context otherwise requires and shall supplement the definitions contained in the Lease. "2008 Bonds" means South Bend Redevelopment Authority Lease Rental Revenue Bonds (Century Center 2008 Project). "2008 Century Center Principal and Interest Account" means the account by that name created in the Redevelopment District Bond Fund by the 2008 Lease • Resolution. "2008 Lease Resolution" means the resolution of the Commission passed on .2008, establishing funds for the payment of lease rentals. "2008 Project" means the real estate (including all right-of--way easements contained therein) in St. Joseph County, Indiana, described as the Century Center Portion in Exhibit A of the Lease and the local public improvements to be completed thereon by the Authority or its agent according to the plans and specifications prepared by its consultants, all as described in Exhibit A hereto. The above mentioned plans and specifications may be changed and additional construction work may be performed and improvements may be purchased by the Authority, but only with the approval of the Lessee, and only if such changes or modifications or additional construction work or improvements do not alter the character of the 2008 Project or reduce the value thereof. Any such additional construction work or additional improvements shall be part of the property covered by this Second Addendum to Lease. The above-mentioned plans and specifications have been filed with and approved by the Lessee. "2008 Trust Agreement" means the Trust Agreement dated as of , 2008, between the Authority and the Trustee, securing the 2008 Bonds. "Trustee" means the financial institution selected to serve as trustee pursuant to the 2008 Trust Agreement, and any successor trustee. BDDBOI 5233044v3 Any term not defined herein, which is defined in the 2008 Lease Resolution, the • Lease or in the 2008 Trust Agreement, shall have the meaning as defined in such resolution, lease or agreement. Section 2. Lease of 2008 Project. In consideration of the rentals and other terms and conditions herein specified the Authority does hereby lease, demise and let to the Lessee the 2008 Project: TO HAVE AND TO HOLD the same with all rights, privileges, easements and appurtenances thereunto belonging, unto the Lessee for a term not to exceed twenty (20) years, beginning on the date the 2008 Project is complete and ready for use and ending on the day prior to such date at most twenty (20) years thereafter (the "2008 Term"). However, the term set forth in this Second Addendum to Lease with respect to the 2008 Project shall terminate at the earlier of (a) the exercise of the option to purchase the 2008 Project by Lessee and payment of the option price, or (b) the payment or defeasance of all obligations of Lessor incurred (i) to finance the cost of the 2008 Project, (ii) to refund such obligations, (iii) to refund such refunding obligations. The date the 2008 Project is complete and ready for use shall be endorsed on this Second Addendum to Lease at the end hereof by the parties hereto as soon as the same can be done after such completion date and such endorsement shall be recorded as an addendum to the Lease. The Authority hereby represents that it is possessed of a good and indefeasible estate in fee simple subject only to Permitted Encumbrances, to the real estate described as the Century Center portion in Exhibit A of the Lease, and the Authority warrants and will defend the same against all claims whatsoever not suffered or caused by the acts or omissions of the Lessee. Section 3. Rental Payments. • (a) During the term of this Second Addendum to Lease, the Lessee agrees to pay rental for said premises as set forth in Section 4 hereof. Such rental shall be paid from the 2008 Century Center Principal and Interest Account of the Redevelopment District Bond Fund. All rentals payable under the terms of this Second Addendum to Lease shall be paid to the Trustee or to such other bank or trust company as may from time to time succeed the Trustee under the 2008 Trust Agreement. All payments so made shall be considered as payments to the Authority of the rentals payable hereunder. The Lessee shall receive credit for any Bond maturing within seven (7) days of the date of the lease rental payment, at the face value thereof, which the Lessee acquires and delivers to the Trustee as a part of its lease rental payment; and (b) As additional rental the Lessee agrees to pay all fees, charges and reimbursement of expenses of the Trustee under the 2008 Trust Agreement and all prudent charges and expenses of the Authority incurred in the performance of its obligations hereunder. Section 4. Rental Payment Dates and Amounts. The first semiannual rental installment in the amount of Three Hundred Thousand and 00/100 Dollars ($300,000.00) shall be due on the day that the 2008 Project is completed and ready for use or April 15, 2009, whichever is later. If completion is later than April 15, 2009, the first installment shall be in an amount which provides for rental at the rate of $300,000.00 for the semiannual period in which the 2008 Project is completed and ready for use, prorated from the date of completion until the first April 15 or October 15 following such date of completion. Thereafter such rentals shall be BDDBOI 5233044v3 - 2 - payable in advance in semiannual installments of $300,000.00 on April 15 and October 15 of each year. The last semiannual rental payment due before the expiration of this Second Addendum to Lease shall be adjusted to provide for rental at the amount specified above for the applicable semiannual period prorated from the date such installment is due to the date of the expiration of this Second Addendum to Lease (without taking into account any subsequent early termination of this Second Addendum to Lease pursuant to Section 2 hereof). After the sale of the 2008 Bonds issued by the Authority to pay the cost of the 2008 Project and other expenses incidental thereto, the sum of the first and second semiannual rental installments and the sum of the third and fourth semiannual rental installments, and so on, shall be reduced to an amount equal to the multiple of One Thousand Dollars ($1,000.00) next highest to the highest sum of principal and interest due in any year ending on a Bond maturity date on such 2008 Bonds plus Three Thousand Dollars ($3,000), payable in equal semiannual installments, assuming for such purposes that the semiannual rental installment payable following completion of the 2008 Project is due on April 15, 2009. Such amount of reduced annual rental shall be endorsed on this Second Addendum to Lease at the end hereof by the parties hereto as soon as the same can be done after the sale of said 2008 Bonds, and such endorsement shall be recorded as an addendum to the Lease. The Lessee will not take any action or fail to take any action that would result in the loss of the exclusion from gross income for federal tax purposes of interest on the 2008 Bonds pursuant to Section 103(a) of the Internal Revenue Code of 1986, as amended (the • "Code"), as in effect on the date of delivery of the 2008 Bonds, nor will the Lessee act in any manner which would adversely affect such exclusion. The Lessee further covenants that it will not make any investment or do any other act or thing during the period that any Bond is outstanding hereunder which would cause any Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations thereunder as in effect on the date of delivery of the 2008 Bonds. All officers, members, employees and agents of the Lessee are authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the Lessee as of the date the 2008 Bonds are issued and to enter into covenants on behalf of the Lessee evidencing the Lessee's commitments made herein. Section 5. Abatement of Rent. In the event that all or a portion of the 2008 Project shall be damaged or destroyed so as to render the damaged or destroyed portion of the 2008 Project unfit for its intended use, it shall then be the obligation of the Authority to restore and reconstruct the damaged or destroyed portion of the 2008 Project as promptly as may be done, unavoidable strikes and other causes beyond the control of the Authority excepted, if, in the opinion of an independent registered architect, registered engineer, construction manager or contractor selected by the Lessee and acceptable to the Trustee, (i) the cost of such restoration or reconstruction does not exceed the amount of the proceeds received by the Authority from the insurance provided for in Section 9 hereof plus other moneys available therefor and (ii) such restoration or reconstruction can be completed within the period of time covered by the rental value insurance provided for in Section 9 hereof. If either or both conditions shall not exist, the proceeds received from the insurance provided for in Section 9 hereof shall be applied to the option to purchase price provided for in Section 14 hereof. The rental shall be abated pro rata for BDDBOI 5233044v3 - 3 - the period during which the damaged or destroyed portion of the 2008 Project is unfit for its intended use. Section 6. Net Lease. It is expressly understood and agreed that this Second Addendum to Lease shall be what is known as a net lease (i_e., the rent being absolutely net to the Authority and that all other expenses in connection with the 2008 Project of any nature whatsoever shall be those of the Lessee) and that during the lease term the Lessee shall be obligated to pay as its expenses without reimbursement from the Authority all costs of taxes and assessments, if any, and maintenance, operation and use in connection with or relating to the 2008 Project, including but not limited to all costs and expenses of all services, repair or replacement of all parts of the 2008 Project or improvements of the 2008 Project. Section 7. Nonliability of Authority. The Authority shall not be liable for damage caused by hidden defects or failure to keep the 2008 Project in repair and shall not be liable for any damage done or occasioned by or from plumbing, gas, water, or other pipes or the bursting or leaking of plumbing or heating fixtures in connection with said premises, nor for damage occasioned by water, snow or ice. The Authority shall not be liable for any injury to the Lessee or any sublessee of the Lessee or any other person which injury occurs on, in or about the 2008 Project howsoever arising. The Authority shall not be liable for damage to the Lessee's property or to the property of any sublessee of the Lessee or of any other person which may be located in, upon or about the 2008 Project. Section 8. Alterations. Lessee shall have the right, without the consent of the Authority, to make all alterations, modifications and additions and to do all improvements it • deems necessary or desirable to the 2008 Project, which do not reduce the rental value of the 2008 Project. Section 9. Insurance. The Lessee, at its own expense, will, during the full 2008 Term, keep the 2008 Project insured against physical loss or damage, however caused, with such exceptions as are ordinarily required by insurers of properties of a similar type, in good and responsible insurance companies acceptable to the Authority. Such insurance shall be in an amount at least equal to the greater of (i) the option to purchase price or (ii) one hundred percent (100%) of the full replacement cost of such 2008 Project as certified by a registered architect, a registered engineer, or professional appraisal engineer, selected by the Authority with the approval of the Trustee, on the effective date of this Second Addendum to Lease and on or before the first day of April of each year thereafter; provided that such certification shall not be required so long as the amount of such insurance shall be in an amount at least equal to the option to purchase price. Such appraisal may be based upon a recognized index of conversion factors. In no event shall the insurance be in an amount which causes the Lessee to be a co-insurer for the 2008 Project. Such insurance may contain a provision for a deductible in an amount not exceeding $25,000. Lessee agrees to pay the deductible amount of any loss to the Authority. A blanket public institutional property insurance form may be used if: (a) the insurance on the 2008 Project is not less than the amount required by this Section, • BDDBOI 5233044v3 - ~l - (b) the Lessee subordinates its claim for damage or destruction to other buildings or improvements to claims for damage or destruction of the 2008 Project, and (c) the insurance proceeds related to damage to or destruction of the 2008 Project are payable to the Trustee. During the full 2008 Term, the Lessee will also, at its own expense, maintain rental or rental value insurance in an amount at least equal to the full rental specified in Section 4 for a period of two (2) years against physical loss or damage of the type insured against pursuant to the preceding requirements of this Section. Such policies shall be for the benefit of and shall be made payable to the Trustee. Section 10. Use of Insurance and Condemnation Proceeds. Proceeds of insurance against damage to or destruction of the 2008 Project or proceeds of any condemnation of the 2008 Project shall be paid to and held by the Trustee and used to pay for reconstruction or replacement of the 2008 Project in accordance with plans approved by the Authority and the Lessee, unless the Lessee elects to exercise its option to purchase. Section 11. Liability Insurance. The Lessee shall, at all times during the full 2008 Term, keep in effect, public liability and property damage insurance, insuring the Lessee, the Authority and the Trustee in amounts customarily carried for similar properties. Such insurance may be provided under the public liability self-insurance program of the City of South Bend. Section 12. General Insurance Provisions. All insurance policies required by Sections 9 and 11, shall be with insurance companies rated B+ or better by A.M. Best Company (or a comparable rating service if A.M. Best company ceases to exist or rate insurance companies), and shall be countersigned by an agent of the insurer who is a resident of the State of Indiana, and such policies, or copies thereof, and the certificate of the architect or engineer referred to in Section 9 shall be deposited with the Authority and the Trustee. If, at any time, the Lessee fails to maintain insurance in accordance with Sections 9 and 11, such insurance may be obtained by the Authority, or may be obtained by the Trustee, and the amount paid for such insurance shall be added to the amount of rental payable by the Lessee under this Second Addendum to Lease; provided, however, that neither the Authority nor the Trustee shall be under any obligation to obtain such insurance, and any action or non-action of the Authority or Trustee in this regard shall not relieve the Lessee of any consequences of a default in failing to obtain such insurance. Section 13. General Covenants. The Lessee shall not assign this Second Addendum to Lease. The Lessee covenants that, except for Permitted Encumbrances, it will not encumber the 2008 Project, or permit any encumbrance to exist thereon, and that it shall use and maintain the 2008 Project in accordance with the laws and ordinances of the United States of America, the State of Indiana, and all other proper governmental authorities. The Authority agrees that it will, at the request of the Lessee, execute and deliver to or upon the order of the Lessee such instrument or instruments as may be reasonably required by the Lessee in order to subject the 2008 Project, or the Authority's interest therein, to such encumbrances as shall be BDDB01 5233044v3 - 5 - specified in such request and as shall be permitted by the provisions of this Section 13 or otherwise by the definition of "Permitted Encumbrances". Section 14. Option to Purchase. The Authority hereby grants Lessee the right and option, on any rental payment date, upon thirty days' written notice to the Authority, to purchase the 2008 Project at a price equal to the amount required to enable the Authority to provide for the redemption of all outstanding 2008 Bonds, all premiums payable on the redemption thereof, and accrued and unpaid interest, and to pay the cost of redeeming the 2008 Bonds and liquidating the Authority if it is to be liquidated. Upon request of the Lessee, the Authority agrees to furnish an itemized statement setting forth the amounts required to be paid by the Lessee on the next rental payment date in order to purchase the 2008 Project in accordance with the preceding paragraph. If the Lessee exercises its option to purchase, the Lessee shall pay to the Trustee that portion of the purchase price which is required to provide for the payment of all the 2008 Bonds, including all premiums payable on the redemption thereof, accrued and unpaid interest thereon and the costs of redemption thereof. Such payment shall not be made until the Trustee gives to the Lessee a written statement that such amount will be sufficient to retire all 2008 Bonds including all premiums payable on the redemption thereof and accrued and unpaid interest. The remainder of such purchase price, if any, shall be paid by the Lessee to the Authority. Nothing herein contained shall be construed to provide that the Lessee shall be under • any obligation to purchase the 2008 Project, or under any obligation in respect to any creditors or bondholders of the Authority. If the Lessee has not exercised its option to purchase the 2008 Project at the expiration of the term of the Second Addendum to Lease and upon the full discharge and performance by the Lessee of its obligations under this Second Addendum to Lease, the Authority shall execute a deed of the 2008 Project to the Lessee conveying good and merchantable title thereto, subject only to Permitted Encumbrances. Section 1 S. Defaults. If the Lessee shall (a) default in the payment of any rentals or other sums payable to the Authority hereunder, or in the payment of any other sum herein required to be paid for the Authority, (b) fail to comply with the terms set forth in the 2008 Lease Resolution, or (c) default in the observance of any other covenant, agreement or condition hereof, and such default under (c) shall continue for ninety (90) days after written notice to correct the same, then, in any of such events, the Authority may proceed to protect and enforce its rights, either at law or in equity, by suit, action, mandamus or other proceedings, whether for specific performance of any covenant or agreement contained herein or for the enforcement of any other appropriate legal or equitable remedy. Section 16. Notices. Whenever either party shall be required to give notice to the other under this Second Addendum to Lease, it shall be sufficient service of such notice to deposit the same in the United States mail, in an envelope duly stamped, registered and • BDDBOI >233044v3 - 6 - addressed to the other party at its last known place of business. A copy of any notice shall be mailed by first-class mail to the Trustee at its last known place of business. Section 17. Construction of Covenants. All provisions contained herein shall be construed in accordance with the provisions of the Act and to the extent of inconsistencies, if any, between the covenants and agreements in this Lease and the provisions of the Act, the provisions of said Act shall be deemed to be controlling and binding upon the parties. Section 18. Successors or Assigns. All covenants of this Second Addendum to Lease, whether by the Authority or the Lessee, shall be binding upon the successors and assigns of the respective parties hereto. Section 19. Supplement to Lease. Nothing herein is meant to otherwise amend the Lease or impede the payment of the lease rentals for the Project, as defined in the Lease. This Second Addendum to Lease shall supplement the Lease. ***** • • BDDBOI 5233044v3 - 7 - IN WITNESS WHEREOF, the parties hereto have caused this Second Addendum to Lease to be executed for and on their behalf as of the day and year first hereinabove written. ATTEST: By: SOUTH BEND REDEVELOPMENT AUTHORITY President Secretary-Treasurer ~J By: SOUTH BEND REDEVELOPMENT COMMISSION ATTEST: Secretary • President BDDBOI 5233044v3 - $ - STATE OF INDIANA ) SS: COUNTY OF ST. JOSEPH ) Before me, the undersigned, a Notary Public in and for said State, personally appeared and ,personally known by me to be the President and Secretary-Treasurer, respectively, of the South Bend Redevelopment Authority, and acknowledged the execution of the foregoing Second Addendum to Lease for and on behalf of said Authority. WITNESS my hand and Notarial Seal this day of 2008. (SEAL) (Written Signature) (Printed Signature) My commission expires: Resident of St. Joseph County, Indiana STATE OF INDIANA ) SS: COUNTY OF ST. JOSEPH ) Before me, the undersigned, a Notary Public in and for said State, personally appeared and ,personally known by me to be the President and Secretary, respectively, of the South Bend Redevelopment Commission, and acknowledged the execution of the foregoing Second Addendum to Lease for and on behalf of said Commission. WITNESS my hand and Notarial Seal this day of , 2008. (SEAL) (Written Signature) My commission expires: Resident of St. Joseph County, Indiana (Printed Signature) "I affirm, under the penalties for perjury, that I have taken reasonable care to redact each Social Security number in this document unless required by law." Randolph R. Rompola. This instrument was prepared by Randolph R. Rompola, BAKER & DANIELS LLP, 202 South Michigan Street, Suite 1400, South Bend, Indiana 46601. • BDDBOI 5233044v3 - 9 - EXHIBIT A 2008 PROJECT DESCRIPTION The 2008 Project consists of certain local public improvements including, without limitation, the following improvements to the Century Center: the addition of skylight safety film, the replacement of boilers and chillers, repairs on Island Park, the replacement of the fire alarm and security systems, the renovation of seven (7) restrooms, the renovation of C Hall, the replacement of the roofs, site lighting additions, exterior masonry work, and additional enhancements to the building, grounds and streetscape including, but not limited to, street level and river level interior and exterior signage, enhancement to the upper level offices, and enhancement to the front of building and viewing park and related improvements, and the acquisition of an interest in certain improvements previously financed with the issuance of the St. Joseph County, Indiana Special Tax Bonds of 1992, which were previously refunded with the issuance of the St. Joseph County, Indiana Special Tax Bonds of 1998. • • BDDBOI 5233044v3 • SECOND ADDENDUM TO THE LEASE DATED AS OF NOVEMBER 1, 1993 Between SOUTH BEND REDEVELOPMENT AUTHORITY and • SOUTH BEND REDEVELOPMENT COMMISSION DATED AS OF JUNE 1, 2008 (Century Center 2008 Project) • BDDB01 5233044v3 INDEX • Page Section 1. Definitions ............................................................. ........................................................1 Section 2. Lease of 2008 Project ............................................. ........................................................2 Section 3. Rental Payments .............................................................................................................2 Section 4. Rental Payment Dates and Amounts ..............................................................................2 Section 5. Abatement of Rent .........................................................................................................3 Section 6. Net Lease .......................................................................................................................4 Section 7. Nonliability of Authority ...............................................................................................4 Section 8. Alterations ......................................................................................................................4 Section 9. Insurance ................................................................. .......................................................4 Section 10. Use of Insurance and Condemnation Proceeds ............................................................5 Section 11. Liability Insurance .......................................................................................................5 • Section 12. General Insurance Provisions ............................... .......................................................5 Section 13. General Covenants .......................................................................................................5 Section 14. Option to Purchase ................................................ .......................................................6 Section 15. Defaults ................................................................. .......................................................6 Section 16. Notices .................................................................. .......................................................6 Section 17. Construction of Covenants .................................... .......................................................7 Section 18. Successors or Assigns ........................................... .......................................................7 Section 19. Supplement to Lease ............................................. .......................................................7 Exhibit A 2008 Project Description • E3DDB01 5233044v3 SECOND ADDENDUM TO LEASE • This Second Addendum to Lease entered into as of the 1S` day of June, 2008, between the SOUTH BEND REDEVELOPMENT AUTHORITY, a body corporate and politic organized and existing under Indiana Code 36-7-14.5 (the "Authority") and the SOUTH BEND REDEVELOPMENT COMMISSION, the governing body of the City of South Bend Department of Redevelopment and the Redevelopment District of the City of South Bend, Indiana (the "Lessee"), acting for and on behalf of the City of South Bend, Indiana, for the purpose of amending the Lease dated as of November 1, 1993, as amended by an Addendum to Lease dated as of June 3, 1994 both of which were recorded in the office of the St. Joseph County Recorder as Documents 9423717 and 9423718, respectively (hereinafter collectively referred to as the "Lease"). WITNESSETH: Section 1. Definitions. The terms defined in this Section 1 shall for all purposes of this Second Addendum to Lease have the meanings herein specified unless the context otherwise requires and shall supplement the definitions contained in the Lease. "2008 Bonds" means South Bend Redevelopment Authority Lease Rental Revenue Bonds (Century Center 2008 Project). "2008 Century Center Principal and Interest Account" means the account by that name created in the Redevelopment District Bond Fund by the 2008 Lease • Resolution. "2008 Lease Resolution" means the resolution of the Commission passed on , 2008, establishing funds for the payment of lease rentals. "2008 Project" means the real estate (including all right-of--way easements contained therein) in St. Joseph County, Indiana, described as the Century Center Portion in Exhibit A of the Lease and the local public improvements to be completed thereon by the Authority or its agent according to the plans and specifications prepared by its consultants, all as described in Exhibit A hereto. The above mentioned plans and specifications may be changed and additional construction work may be performed and improvements may be purchased by the Authority, but only with the approval of the Lessee, and only if such changes or modifications or additional construction work or improvements do not alter the character of the 2008 Project or reduce the value thereof. Any such additional construction work or additional improvements shall be part of the property covered by this Second Addendum to Lease. The above-mentioned plans and specifications have been filed with and approved by the Lessee. "2008 Trust Agreement" means the Trust Agreement dated as of , 2008, between the Authority and the Trustee, securing the 2008 Bonds. "Trustee" means the financial institution selected to serve as trustee pursuant to the 2008 Trust Agreement, and any successor trustee. • BDDB01 5233044v3 Any term not defined herein, which is defined in the 2008 Lease Resolution, the . Lease or in the 2008 Trust Agreement, shall have the meaning as defined in such resolution, lease or agreement. Section 2. Lease of 2008 Project. In consideration of the rentals and other terms and conditions herein specified the Authority does hereby lease, demise and let to the Lessee the 2008 Project: TO HAVE AND TO HOLD the same with all rights, privileges, easements and appurtenances thereunto belonging, unto the Lessee for a term not to exceed twenty (20) years, beginning on the date the 2008 Project is complete and ready for use and ending on the day prior to such date at most twenty (20) years thereafter (the "2008 Term"). However, the term set forth in this Second Addendum to Lease with respect to the 2008 Project shall terminate at the earlier of (a) the exercise of the option to purchase the 2008 Project by Lessee and payment of the option price, or (b) the payment or defeasance of all obligations of Lessor incurred (i) to finance the cost of the 2008 Project, (ii) to refund such obligations, (iii) to refund such refunding obligations. The date the 2008 Project is complete and ready for use shall be endorsed on this Second Addendum to Lease at the end hereof by the parties hereto as soon as the same can be done after such completion date and such endorsement shall be recorded as an addendum to the Lease. The Authority hereby represents that it is possessed of a good and indefeasible estate in fee simple subject only to Permitted Encumbrances, to the real estate described as the Century Center portion in Exhibit A of the Lease, and the Authority warrants and will defend the same against all claims whatsoever not suffered or caused by the acts or omissions of the Lessee. Section 3. Rental Payments. • (a) During the term of this Second Addendum to Lease, the Lessee agrees to pay rental for said premises as set forth in Section 4 hereof. Such rental shall be paid from the 2008 Century Center Principal and Interest Account of the Redevelopment District Bond Fund. All rentals payable under the terms of this Second Addendum to Lease shall be paid to the Trustee or to such other bank or trust company as may from time to time succeed the Trustee under the 2008 Trust Agreement. All payments so made shall be considered as payments to the Authority of the rentals payable hereunder. The Lessee shall receive credit for any Bond maturing within seven (7) days of the date of the lease rental payment, at the face value thereof, which the Lessee acquires and delivers to the Trustee as a part of its lease rental payment; and (b) As additional rental the Lessee agrees to pay all fees, charges and reimbursement of expenses of the Trustee under the 2008 Trust Agreement and all prudent charges and expenses of the Authority incurred in the performance of its obligations hereunder. Section 4. Rental Payment Dates and Amounts. The first semiannual rental installment in the amount of Three Hundred Thousand and 00/100 Dollars ($300,000.00) shall be due on the day that the 2008 Project is completed and ready for use or April 15, 2009, whichever is later. If completion is later than April 15, 2009, the first installment shall be in an amount which provides for rental at the rate of $300,000.00 for the semiannual period in which the 2008 Project is completed and ready for use, prorated from the date of completion until the first April 15 or October 15 following such date of completion. Thereafter such rentals shall be BDDBOI 5233044v3 - 2 - payable in advance in semiannual installments of $300,000.00 on April 15 and October 15 of • each year. The last semiannual rental payment due before the expiration of this Second Addendum to Lease shall be adjusted to provide for rental at the amount specified above for the applicable semiannual period prorated from the date such installment is due to the date of the expiration of this Second Addendum to Lease (without taking into account any subsequent early termination of this Second Addendum to Lease pursuant to Section 2 hereof). After the sale of the 2008 Bonds issued by the Authority to pay the cost of the 2008 Project and other expenses incidental thereto, the sum of the first and second semiannual rental installments and the sum of the third and fourth semiannual rental installments, and so on, shall be reduced to an amount equal to the multiple of One Thousand Dollars ($1,000.00) next highest to the highest sum of principal and interest due in any year ending on a Bond maturity date on such 2008 Bonds plus Three Thousand Dollars ($3,000), payable in equal semiannual installments, assuming for such purposes that the semiannual rental installment payable following completion of the 2008 Project is due on April 15, 2009. Such amount of reduced annual rental shall be endorsed on this Second Addendum to Lease at the end hereof by the parties hereto as soon as the same can be done after the sale of said 2008 Bonds, and such endorsement shall be recorded as an addendum to the Lease. The Lessee will not take any action or fail to take any action that would result in the loss of the exclusion from gross income for federal tax purposes of interest on the 2008 Bonds pursuant to Section 103(a) of the Internal Revenue Code of 1986, as amended (the • "Code"), as in effect on the date of delivery of the 2008 Bonds, nor will the Lessee act in any manner which would adversely affect such exclusion. The Lessee further covenants that it will not make any investment or do any other act or thing during the period that any Bond is outstanding hereunder which would cause any Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations thereunder as in effect on the date of delivery of the 2008 Bonds. All officers, members, employees and agents of the Lessee are authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the Lessee as of the date the 2008 Bonds are issued and to enter into covenants on behalf of the Lessee evidencing the Lessee's commitments made herein. Section 5. Abatement of Rent. In the event that all or a portion of the 2008 Project shall be damaged or destroyed so as to render the damaged or destroyed portion of the 2008 Project unfit for its intended use, it shall then be the obligation of the Authority to restore and reconstruct the damaged or destroyed portion of the 2008 Project as promptly as may be done, unavoidable strikes and other causes beyond the control of the Authority excepted, if, in the opinion of an independent registered architect, registered engineer, construction manager or contractor selected by the Lessee and acceptable to the Trustee, (i) the cost of such restoration or reconstruction does not exceed the amount of the proceeds received by the Authority from the insurance provided for in Section 9 hereof plus other moneys available therefor and (ii) such restoration or reconstruction can be completed within the period of time covered by the rental value insurance provided for in Section 9 hereof. If either or both conditions shall not exist, the proceeds received from the insurance provided for in Section 9 hereof shall be applied to the option to purchase price provided for in Section 14 hereof. The rental shall be abated pro rata for BDDBOI 5233044v3 - 3 - the period during which the damaged or destroyed portion of the 2008 Project is unfit for its intended use. Section 6. Net Lease. It is expressly understood and agreed that this Second Addendum to Lease shall be what is known as a net lease (i.e., the rent being absolutely net to the Authority and that all other expenses in connection with the 2008 Project of any nature whatsoever shall be those of the Lessee) and that during the lease term the Lessee shall be obligated to pay as its expenses without reimbursement from the Authority all costs of taxes and assessments, if any, and maintenance, operation and use in connection with or relating to the 2008 Project, including but not limited to all costs and expenses of all services, repair or replacement of all parts of the 2008 Project or improvements of the 2008 Project. Section 7. Nonliability of Authority. The Authority shall not be liable for damage caused by hidden defects or failure to keep the 2008 Project in repair and shall not be liable for any damage done or occasioned by or from plumbing, gas, water, or other pipes or the bursting or leaking of plumbing or heating fixtures in connection with said premises, nor for damage occasioned by water, snow or ice. The Authority shall not be liable for any injury to the Lessee or any sublessee of the Lessee or any other person which injury occurs on, in or about the 2008 Project howsoever arising. The Authority shall not be liable for damage to the Lessee's property or to the property of any sublessee of the Lessee or of any other person which may be located in, upon or about the 2008 Project. Section 8. Alterations. Lessee shall have the right, without the consent of the Authority, to make all alterations, modifications and additions and to do all improvements it deems necessary or desirable to the 2008 Project, which do not reduce the rental value of the 2008 Project. Section 9. Insurance. The Lessee, at its own expense, will, during the full 2008 Term, keep the 2008 Project insured against physical loss or damage, however caused, with such exceptions as are ordinarily required by insurers of properties of a similar type, in good and responsible insurance companies acceptable to the Authority. Such insurance shall be in an amount at least equal to the greater of (i) the option to purchase price or (ii) one hundred percent (100%) of the full replacement cost of such 2008 Project as certified by a registered architect, a registered engineer, or professional appraisal engineer, selected by the Authority with the approval of the Trustee, on the effective date of this Second Addendum to Lease and on or before the first day of April of each year thereafter; provided that such certification shall not be required so long as the amount of such insurance shall be in an amount at least equal to the option to purchase price. Such appraisal may be based upon a recognized index of conversion factors. In no event shall the insurance be in an amount which causes the Lessee to be a co-insurer for the 2008 Project. Such insurance may contain a provision for a deductible in an amount not exceeding $25,000. Lessee agrees to pay the deductible amount of any loss to the Authority. A blanket public institutional property insurance form may be used if: (a) the insurance on the 2008 Project is not less than the amount required by this Section, • BDDBOI 5233044v3 - 4 - (b) the Lessee subordinates its claim for damage or destruction to other buildings or improvements to claims for damage or destruction of the 2008 Project, and (c) the insurance proceeds related to damage to or destruction of the 2008 Project are payable to the Trustee. During the full 2008 Term, the Lessee will also, at its own expense, maintain rental or rental value insurance in an amount at least equal to the full rental specified in Section 4 for a period of two (2) years against physical loss or damage of the type insured against pursuant to the preceding requirements of this Section. Such policies shall be for the benefit of and shall be made payable to the Trustee. Section 10. Use of Insurance and Condemnation Proceeds. Proceeds of insurance against damage to or destruction of the 2008 Project or proceeds of any condemnation of the 2008 Project shall be paid to and held by the Trustee and used to pay for reconstruction or replacement of the 2008 Project in accordance with plans approved by the Authority and the Lessee, unless the Lessee elects to exercise its option to purchase. Section 11. Liability Insurance. The Lessee shall, at all times during the full 2008 Term, keep in effect, public liability and property damage insurance, insuring the Lessee, the Authority and the Trustee in amounts customarily carried for similar properties. Such insurance may be provided under the public liability self-insurance program of the City of South Bend. • Section 12. General Insurance Provisions. All insurance policies required by Sections 9 and 11, shall be with insurance companies rated B+ or better by A.M. Best Company (or a comparable rating service if A.M. Best company ceases to exist or rate insurance companies), and shall be countersigned by an agent of the insurer who is a resident of the State of Indiana, and such policies, or copies thereof, and the certificate of the architect or engineer referred to in Section 9 shall be deposited with the Authority and the Trustee. If, at any time, the Lessee fails to maintain insurance in accordance with Sections 9 and 11, such insurance may be obtained by the Authority, or may be obtained by the Trustee, and the amount paid for such insurance shall be added to the amount of rental payable by the Lessee under this Second Addendum to Lease; provided, however, that neither the Authority nor the Trustee shall be under any obligation to obtain such insurance, and any action or non-action of the Authority or Trustee in this regard shall not relieve the Lessee of any consequences of a default in failing to obtain such insurance. Section 13. General Covenants. The Lessee shall not assign this Second Addendum to Lease. The Lessee covenants that, except for Permitted Encumbrances, it will not encumber the 2008 Project, or permit any encumbrance to exist thereon, and that it shall use and maintain the 2008 Project in accordance with the laws and ordinances of the United States of America, the State of Indiana, and all other proper governmental authorities. The Authority agrees that it will, at the request of the Lessee, execute and deliver to or upon the order of the Lessee such instrument or instruments as may be reasonably required by the Lessee in order to subject the 2008 Project, or the Authority's interest therein, to such encumbrances as shall be BDDBOI 5233044v3 - 5 - specified in such request and as shall be permitted by the provisions of this Section 13 or otherwise by the definition of "Permitted Encumbrances". Section 14. Option to Purchase. The Authority hereby grants Lessee the right and option, on any rental payment date, upon thirty days' written notice to the Authority, to purchase the 2008 Project at a price equal to the amount required to enable the Authority to provide for the redemption of all outstanding 2008 Bonds, all premiums payable on the redemption thereof, and accrued and unpaid interest, and to pay the cost of redeeming the 2008 Bonds and liquidating the Authority if it is to be liquidated. Upon request of the Lessee, the Authority agrees to furnish an itemized statement setting forth the amounts required to be paid by the Lessee on the next rental payment date in order to purchase the 2008 Project in accordance with the preceding paragraph. If the Lessee exercises its option ~to purchase, the Lessee shall pay to the Trustee that portion of the purchase price which is required to provide for the payment of all the 2008 Bonds, including all premiums payable on the redemption thereof, accrued and unpaid interest thereon and the costs of redemption thereof. Such payment shall not be made until the Trustee gives to the Lessee a written statement that such amount will be sufficient to retire all 2008 Bonds including all premiums payable on the redemption thereof and accrued and unpaid interest. The remainder of such purchase price, if any, shall be paid by the Lessee to the Authority. Nothing herein contained shall be construed to provide that the Lessee shall be under any obligation to purchase the 2008 Project, or under any obligation in respect to any creditors or bondholders of the Authority. If the Lessee has not exercised its option to purchase the 2008 Project at the expiration of the term of the Second Addendum to Lease and upon the full discharge and performance by the Lessee of its obligations under this Second Addendum to Lease, the Authority shall execute a deed of the 2008 Project to the Lessee conveying good and merchantable title thereto, subject only to Permitted Encumbrances. Section 15. Defaults. If the Lessee shall (a) default in the payment of any rentals or other sums payable to the Authority hereunder, or in the payment of any other sum herein required to be paid for the Authority, (b) fail to comply with the terms set forth in the 2008 Lease Resolution, or (c) default in the observance of any other covenant, agreement or condition hereof, and such default under (c) shall continue for ninety (90) days after written notice to correct the same, then, in any of such events, the Authority may proceed to protect and enforce its rights, either at law or in equity, by suit, action, mandamus or other proceedings, whether for specific performance of any covenant or agreement contained herein or for the enforcement of any other appropriate legal or equitable remedy. Section 16. Notices. Whenever either party shall be required to give notice to the other under this Second Addendum to Lease, it shall be sufficient service of such notice to deposit the same in the United States mail, in an envelope duly stamped, registered and • BDDBOI 5233044v3 - 6 - addressed to the other party at its last known place of business. A copy of any notice shall be mailed by first-class mail to the Trustee at its last known place of business. Section 17. Construction of Covenants. All provisions contained herein shall be construed in accordance with the provisions of the Act and to the extent of inconsistencies, if any, between the covenants and agreements in this Lease and the provisions of the Act, the provisions of said Act shall be deemed to be controlling and binding upon the parties. Section 18. Successors or Assigns. All covenants of this Second Addendum to Lease, whether by the Authority or the Lessee, shall be binding upon the successors and assigns of the respective parties hereto. Section 19. Supplement to Lease. Nothing herein is meant to otherwise amend the Lease or impede the payment of the lease rentals for the Project, as defined in the Lease. This Second Addendum to Lease shall supplement the Lease. ***** • M BDDBOI 5233044v3 - 7 - IN WITNESS WHEREOF, the parties hereto have caused this Second Addendum to Lease to be executed for and on their behalf as of the day and year first hereinabove written. ATTEST: By: SOUTH BEND REDEVELOPMENT AUTHORITY President Jose .'11v~,rez Secretary-Treasurer Rai=~ael Thomas • SOUTH BEND REDEVELOPMENT COMMISSION B ~ ~ ~~, President P•larcia .Tones ATTEST: et eg ry owne BDDBOI 5233044v3 - g - STATE OF INDIANA ) SS: COUNTY OF ST. JOSEPH ) Before me, the undersigned, a Notary Public in and for said State, personally appeared Tnc9~d~cr~r9g and Raphael Thomas ,personally known by me to be the President and Secretary-Treasurer, respectively, of the South Bend Redevelopment Authority, and acknowledged the execution of the foregoing Second Addendum to Lease for and on behalf of said Authority. WITNESS my hand and Notarial Seal this (SEAL) My commission expires: Resident of St. Joseph County, Indiana STATE OF INDIANA ) SS: COUNTY OF ST. JOSEPH ) day of , 2008. (Written Signature) (Printed Signature) Before me, the undersigned, a Notary Public in and for said State, personally appeared Marcia Jones and Gregory Downes ,personally known by me to be the President and Secretary, respectively, of the South Bend Redevelopment Commission, and acknowledged the execution of the foregoing Second Addendum to Lease for and on behalf of said Commission. WITNESS my hand and Notarial Seal this 25thday of June , 2008. (SEAL) ~--~ ( ritten Signatur ) Cheryl K. Phipps e) My commission expires: Cheryl K. Phipps ~ State of Indiana Notary Put~lic Resident of St. Joseph County, Indiana Residern of 3t. Joseph County M Commission Expires 1 /~!' "I affirm, under the penalties for perjury, that I have taken reasonable care to redact each Social Security number in this document unless required by law." Randolph R. Rompola. This instrument was prepared by Randolph R. Rompola, BAKER & DANIELS LLP, 202 South Michigan Street, Suite 1400, South Bend, Indiana 46601. • BDDBOI 5233044v3 - 9 - EXHIBIT A 2008 PROJECT DESCRIPTION The 2008 Project consists of certain local public improvements including, without limitation, the following improvements to the Century Center: the addition of skylight safety film, the replacement of boilers and chillers, repairs on Island Park, the replacement of the fire alarm and security systems, the renovation of seven (7) restrooms, the renovation of C Hall, the replacement of the roofs, site lighting additions, exterior masonry work, and additional enhancements to the building, grounds and streetscape including, but not limited to, street level and river level interior and exterior signage, enhancement to the upper level offices, and enhancement to the front of building and viewing park and related improvements, and the acquisition of an interest in certain improvements previously financed with the issuance of the St. Joseph County, Indiana Special Tax Bonds of 1992, which were previously refunded with the issuance of the St. Joseph County, Indiana Special Tax Bonds of 1998. • r BDDBOI 5233044v3