2012-25RESOLUTION NO. 2012- 25
COUNCIL MEMBER WOLFF INTRODUCED THE FOLLOWING RESOLUTION:
WHEREAS, the City of Blair, in the State of Nebraska (the "City ") previously entered
into a Water Service Agreement dated June 27, 2000 (the "Water Service Agreement "), between
the City and Cargill, Incorporated, a Delaware corporation ( "Cargill "), as supplemented by the
First Addendum to Water Service Agreement dated as of February 27, 2001 (the "First
Addendum "), and as amended by the First Amendment to Water Service Agreement dated
March 9, 2007 (the "First Amendment" and, together with the Water Service Agreement and the
First Addendum, the "Agreement "), a copy of which Agreement is attached hereto as Exhibit A
and is incorporated by reference into this resolution (capitalized terms used in this Resolution
and not otherwise defined herein shall have the meanings provided in the Agreement or the
Second Amendment referred to below, as applicable);
WHEREAS, in anticipation of improvements to the City's water system to increase
capacity for the City's provision of water to Cargill, Third Parties and the City, and related
financing by the City, it is necessary and advisable to amend the Agreement by entering into an
amendment to the Agreement;
NOW, THEREFORE, BE IT RESOLVED, that the execution and delivery of a Second
Amendment to Water Service Agreement, substantially in the form attached hereto as Exhibit B
(but with such changes, completions, and revisions as are deemed necessary or advisable by the
Mayor and City Clerk, which may include, without limitation, completion of exhibits to such
agreement as necessary or advisable to provide appropriate Debt Service Coverage, taking into
account financing issued and expected to be issued for improvements referenced in the
Agreement and said Second Amendment to Water Service Agreement, hereinafter the "Second
Amendment ") is hereby approved, the execution and delivery of the Second Amendment by such
officers to be conclusive evidence of the City's approval thereof without further action of the
Council; and
BE IT FURTHER RESOLVED, that the Mayor and City Clerk of the City are hereby
authorized and directed to finalize and execute the Second Amendment on behalf of the City;
II
BE IT FURTHER RESOLVED, that the terms of the Agreement, as amended by the
Second Amendment, are hereby confirmed and approved in all respects; and
BE IT FURTHER RESOLVED, that the Mayor and City Clerk of the City are hereby
authorized to do all things and execute all such documents as may by them be deemed necessary
and proper to finalize and execute the Second Amendment as contemplated by this Resolution.
PASSED AND APPROVED THIS 28TH DAY OF AUGUST, 2012.
COUNCIL MEMBER WOLFF MOVED THAT THE RESOLUTION BE ADOPTED AS
READ, AND SAID MOTION WAS SECONDED BY COUNCIL MEMBER SHEPARD.
UPON ROLL CALL, COUNCIL MEMBERS SHEPARD, STEWART, RYAN, KEPHART,
CHRISTIANSEN, WOLFF, HALL AND JENSEN VOTING "AYE" AND COUNCIL
MEMBERS NONE VOTING "NAY", THE MAYOR DECLARED THE FOREGOING
RESOLUTION PASSED AND APPROVED THIS 28TH DAY OF AUGUST, 2012.
CITY OF BLAIR, NEBRASKA
James, Realph, Mayor
ATTEST:
Brenda R. Wheeler, City Clerk
(SEAL)
STATE OF NEBRASKA )
) :ss:
WASHINGTON COUNTY )
BRENDA R. WHEELER, hereby certifies that she is the duly appointed, qualified and acting
City Clerk of the City of Blair, Nebraska, and that the above and foregoing Resolution was
passed and adopted at a regular meeting of the Mayor and City Council of said City, held on the
28th day of August, 2012.
BRENDA R. WHEELER, CITY CLERK
64 1/ � JJ
WATER SERVICE AGREEMENT
A This WATER SERVICE AGREEMENT (this "Agreement made and executed this
_ day of uo f, , 2000, by and among the CITY OF BLAIR, NEBRASKA, a
city of the first class existing under and by virtue of the laws of the State of Nebraska (the
"City "), whose address for purposes of this Agreement is 218 South 16`' Street, Blair, Nebraska
68008 (Attn: City Administrator), and CARGILL, INCORPORATED, a Delaware corporation
authorized to transact business in the State of Nebraska (the "Company "), whose address for
purposes of this Agreement is 650 Industrial Road, Blair, Nebraska 68008 (Attn: General
Manager or Operations Manager);
ITNESSETH
WHEREAS, the City owns and operates a system of waterworks and water supply (as
now existing or hereafter extended or improved, the "Water System ") which serves the City and
its inhabitants as well as customers in the area surrounding the City; and
WHEREAS, Company is engaged in the business of processing corn and corn products at
an existing facility (as now existing or hereafter improved, the "Plant ") located on certain real
property in the vicinity of the City of Blair, Nebraska, as more particularly described on Exhibit
"A" attached hereto (the "Real Estate "); and
WHEREAS, Company supplies corn products to third parties ( "Third Parties ") that are
located adjacent to the Plant on the Real Estate; and
WHEREAS, in connection with Company's operations at the Plant, Company and Third
Parties utilize a significant quantity of water which is currently provided by the City from the
Water System; and
WHEREAS, given the current and anticipated quantity of water used by Company and
Third Parties, the Water System, as it currently exists, lacks the capacity to provide a sufficient
quantity of water to the Plant for the present and anticipated needs of the Company and Third
Parties; and
WHEREAS, the City is willing -to expand and improve the Water System by the
construction of certain additions and improvements to* the Water System, as are more particularly
described on Exhibit `B" attached hereto (the "Improvements ") to increase the capacity thereof
to meet the needs of the Company and Third Parties and the anticipated needs of the City; and
WHEREAS, the Company is willing to commit to certain payments to the City as
described herein in order to induce the City to construct the Improvements; and
WHEREAS, the City and the Company wish to set forth their respective understandings
relating to the Water System and the Plant and the actions to be taken in reliance upon such
understandings by each such party;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter made, City
and Company hereby agree as follows:
1. Representations and Warranties of City The City represents and warrants to
Company that the City is a municipal corporation organized and in existence under the laws of
the State of Nebraska, and is and has. been duly authorized to enter into this Agreement and to
carry out its obligations hereunder.
2. Representations and Warranties of Company Company represents and warrants to the
City as follows:
a. Company is a corporation duly incorporated and in existence under the laws of
the State of Delaware, qualified to do business and in good standing in the State
of Nebraska, and is and has been duly authorized to enter into this Agreement and
to carry out its obligations hereunder.
b. The execution of this Agreement and the consummation of the transactions
contemplated hereby and the fulfillment and compliance with the terms and
conditions hereof will not violate any provision of Company's Articles of
Incorporation or By -Laws and will not conflict with or result in the breach of any
terms or provisions of any restriction, agreement or instrument to which it is a
party or by which it is bound, or constitute a default under any of the foregoing.
3. Agreement to Provide Water Service During the term of this Agreement, City will
make available to the Company water service from the Water System in accordance with the
following parameters:
Scheduled Usage
July 1, 2000 to December 31, 2000
January 1, 2001 to July 31, 2001
August 1, 2001 to December 31, 2001
January 1, 2002 to December 31, 2002
January 1, 2003 to December 31, 2003
January 1, 2004 to December 31, 2004
January 1, 2005 to December 30, 2015
4.8 Million Gallons Per Day ( "MGD ")
5.0 MGD
5.7 MGD
6:2 MGD
7.7 MGD
7.7 MGD
10.0 MGD
In addition to the above Scheduled Usage, as and to the extent available, the City may, in
its discretion, make additional service available to Company subject to the payment by Company
2
of "Additional Payments" as described below. Company may, in turn, make available to Third
Parties a portion of the Scheduled Usage and such additional service, provided that such Third
Parties may only use such flows for their operations on the Real Estate.
4. Payments For and in consideration of the City's agreement to make the Scheduled
Usage available to the Company, Company agrees as follows:
a. Minimum Payments Company shall pay to the City, on the first day of each
calendar month beginning with the month of July of 2000, and continuing until
December 30, 2015, minimum payments (each, a "Minimum Payment ") in the
amounts set forth on Exhibit "C" attached hereto.
b. Billing Statements; Additional Payments The City shall provide to the
Company a regular monthly billing statement (each, a "Billing Statement ")
setting forththe actual quantity of water used by the Company at the Real Estate
(including usage by Third Parties) during the preceding billing cycle (the "Actual
Usage "), together with; a statement of the amount (the "Monthly Billing
Amount ") which would be billed to the Company for the Actual Usage based on
a rate of 45.0 cents per One Hundred Cubic Feet of water (the "Billing Rate ")
provided to the Company. In the event the Monthly Billing Amount exceeds the
Minimum Payment for such period, the Company shall pay to the City the
difference between such Monthly Billing Amount and such Minimum Payment
(each such payment, an "Additional Payment "), such Additional Payments to be
made within 15 days of the date of such Billing Statement. In the event that the
Monthly Billing Amount is less than the Minimum Payment for such period, no
Additional Payment shall be due, and the Company shall not be entitled to any
refund or credit.
c. Payment Adjustment In the event of a general rate increase to all users of
water services from the plant, the Minimum Payments and the Billing Rate shall
be increased by the same percentage as such general rate increase.
Nothing provided herein shall be construed to require City to provide to Company any water
service in excess of Scheduled Usage. Water service beyond Scheduled Usage may be supplied
by City to the Company at the City's discretion, as and when the same is available.
5. Payment Obligations Unconditional Minimum Payments and Additional Payments
shall be payable without setoff, deduction or abatement, in such amounts and at such times as are
set forth above. Company agrees that Minimum Payments and Additional Payments shall be due
and payable as stated herein regardless of the quantity of water actually used by the Company at
the Real Estate (including usage by Third Parties) (even if less than the Scheduled Usage, or
even if Company should cease operations at the Plant). Minimum Payments and Additional
Payments shall continue to be due and payable as stated herein notwithstanding the existence or
3
continuation of any City Default (as defined below), so long as: (a) the 21 -day grace period
provided for in Section 8 has not expired; or (b) City has commenced to cure such default within
such 21 -day grace period and is diligently pursuing completion of the same; or (c) such City
Default is due to any natural disaster, act of God, strike or labor dispute, civil disturbance,
terrorism, the imposition of material restrictions or requirements by or under new federal or state
environmental legislation, or other cause beyond the reasonable control of the City.
6. Events of Default by Company Each of the following shall constitute a default by the
Company under this Agreement (each, a "Company Default "):
a. Should Company fail to make any Minimum Payment, Additional Payment, or
other payment due under this Agreement as and when the same is due;
b. Should Company fail to comply with any other provision of this Agreement;
c. Should any representation of Company contained in this Agreement be or
become false or misleading in any material respect.
7. Remedies of City Upon Company's Default In the event of a Company Default:
a. City may take all actions permitted by law and this Agreement to collect any
sums due under this Agreement, and may take all actions permitted by law to
enforce any non - monetary provision of this Agreement;
b. In the event of a Company Default based on Company's failure to pay any
Minimum Payment, Additional Payment or other sum due hereunder as and when
the same is due, City may declare immediately due and payable, an amount
sufficient to pay off, redeem or defease the following described Bonds and Loan:
(i) All of the Bonds (as defined in Section 10), including principal,
accrued interest and redemption premium, if any, PLUS,
(ii) The total outstanding balance of principal and interest under
Nebraska Department of Environmental Quality Drinking Water
State Revolving Loan Program Project/Loan No. D311007
(hereinafter referred to as "the Loan "), the original principal
amount of which was in an amount of up to $6,815,700.00; LESS
(iii) The amount set forth on Exhibit "D" attached hereto and
incorporated by this reference herein, corresponding to the date of
default.
M
In addition to the payment calculated pursuant to 7(b)(i), (ii) and (iii) set forth
above, Company shall also pay all other reasonable costs and expenses incurred
by the City in connection with the payoff, redemption or defeasance of the Bonds
and the Loan, including, without limitation, attorneys' fees and fees of
accountants and consultants (all of such sums are herein collectively referred to as
the "Defeasance Payment "). Notwithstanding the foregoing, the Defeasance
payment shall not exceed $11,500,000.
c. In the event that any Company Default (other than a Company Default
described in Subsection (a) of Paragraph 6): (a) shall continue for a period
exceeding 21 days (or, in the event that such default is of a nature that it cannot
reasonably be cured within such 21 -day period, shall continue beyond such time
as is reasonably necessary to cure such default); or (b) shall occur on more than
two occasions in any twelve -month period; then Company shall immediately pay
to City the Defeasance Payment and City may, at its option, terminate this
Agreement.
8. City's Default In the event of any default by the City in the performance of its
obligations under this Agreement (each, a "City Default ") which is not cured within 21 days
after written notice from Company (or, in the event that such default is of a nature that it cannot
reasonably be cured within such 21 -day period, and so long as the City commences to cure such
default within such 21 -day period and thereafter diligently pursues the same to completion,
within such time as is reasonably necessary to cure such default), Company's sole and exclusive
remedy shall be to pursue specific performance or mandamus of the City's obligations hereunder
as and to the extent permitted by law. Company hereby expressly waives any and all claims for
damages, against City in the event of any City Default.
9. Company's Records and Reports For purposes of monitoring Company's compliance
with this Agreement, Company agrees to permit the City to have access to all records relating to
usage of water by Company and Third Parties under this Agreement, and to provide to City (or,
with respect to matters concerning Third Parties, cause to be provided to City), upon request, a
certified statement signed by a qualified Registered Professional Engineer showing compliance
with the provisions of this Agreement. Upon request, Company shall also furnish to City such
information and /or documents as are reasonably necessary for purposes of confirming any
representation made or action to be taken by the Company hereunder, or the existence or
nonexistence of any Company's Default hereunder. Company shall also provide to City copies
of all notices, requests for information, and other documents and correspondence received from
any Third Party or governmental entity relating to the Plant or the Actual Usage.
10. Required Disclosures Company acknowledges that the City's interest in this
Agreement will be pledged and assigned as security for certain bonds (the "Bonds ") to be issued
by the City to finance the construction of the Improvements and/or to refinance, redeem or
5
defease outstanding bonds or indebtedness for the Water System. To assist the initial purchaser
of the Bonds in complying with the requirements of Rule 15c2 -12 (the "Rule ") promulgated by
the Securities and Exchange Commission, it is necessary for Company to undertake, as an
"obligated person" under the Rule, to provide to the City certain information in accordance with
the requirements of the Rule. Accordingly, during the term of this Agreement, Company shall
provide to the City such information as is reasonably necessary to satisfy the requirements of the
Rule, including, without limitation, Company's annual audited financial statements in the form
set forth in Schedule 10 attached hereto: Company shall have the right to review copies of the
Bonds and a copy of the City's ordinance authorizing the issuance of the Bonds.
11. Term and Termination This Agreement shall be effective as of the date first above
written and shall continue in effect until the 1S day of January, 2016, at which time the City's
obligation to provide water service under the terms of this Agreement shall cease. This
Agreement may be terminated by, the City at any time prior to the commencement of
construction of the Improvements in the event that: (a) it is determined that the actual cost of
completion of the Improvements exceeds $7,000,000; (b) the City is unable to obtain necessary
permits, licenses, easements or other approvals for the construction of the Improvements
notwithstanding the City's reasonable best efforts to obtain the same; or (c) the City does not
receive from the Nebraska Investment Finance Authority volume cap allocation for the Bonds in
an amount not less than $11,500,000. In the event of termination of this Agreement under (a) or
(b) or (c) above, the parties shall equally share the amounts actually expended by the City in
connection with the Improvements, including, without limitation, sums actually expended or
committed for design, engineering, permits and approvals, and right -of -way acquisition. At any
time on or after July 1, 2000, Company may terminate this Agreement by making payment to the
City in the amount of the Defeasance Payment.
12. Indemnity Company shall indemnify and hold the City and its officials, council
members, and employees harmless from and against any and all loss, damages, claims, demands,
actions, causes of action, penalties, fines, fees, judgments, costs and expenses, of any nature
whatsoever, incurred by the City and arising in connection with, or incident to, Company's usage
of water by the Company or Third Parties under this Agreement or Company's breach of this
Agreement. The provisions of this paragraph shall survive the expiration or earlier termination
of this Agreement.
13. Effect on Other Agreements
a. The Company and the City have previously entered into an Estoppel
Agreement, dated as of May 2, 1994 (the "Estoppel Agreement "), pertaining to
water service for the Plant. This Agreement supersedes and replaces said
Estoppel Agreement in its entirety, and neither the Company nor the City shall
have any obligations under said Estoppel Agreement from and after the effective
date of this Agreement.
G'l
b. The Company and the City have previously entered into an Agreement dated
February. 1, 2000 (the "Cost Sharing Agreement "), concerning the sharing of
certain costs relating to the design of the Improvements. In the event that the
Bonds are issued, all sums due under the HDR Agreement (as defined in the Cost
Sharing Agreement) will be paid by the City from Bond Proceeds. In the event
that the Bonds are not issued or the Improvements are not completed, such costs
will be shared as provided in the Cost Sharing Agreement and, in the event that
such costs have been paid by the City from its own funds, Company shall
reimburse the City for the Company's share promptly upon demand.
14. Miscellaneous
a. Notices Any notice under this Agreement shall be in writing and shall be
effective when actually delivered, or when deposited with a nationally recognized
overnight courier, or, if mailed, shall be deemed effective when deposited in the
United States mail, certified or registered mail, postage prepaid, return receipt
requested, directed to the party or parties at its or their respective addresses set
forth above. Any party may change its address for notices under this Agreement
by giving formal written notice to the other parties specifying that the purpose of
the notice is to change the party's address.
b.. Governing Law This Agreement has been delivered to City and accepted by
City in the State of Nebraska, and shall be governed by and construed in
accordance with the laws of the State of Nebraska. '
c. Assignment This Agreement may not be assigned by either party without the
express written consent of the other party; provided, however that the City may
assign this Agreement without consent to a properly - permitted successor operator
of the Water System and the City may also assign or pledge its interest in this .
Agreement in connection with the issuance of the Bonds and the Loan. Company
may assign this Agreement to any successor operator of the Plant without the
consent of the City, provided that (a) Company shall provide written notice to
City at least sixty (60) days prior to the effective date of such assignment, and (b)
Company agrees that Company shall remain fully and primarily liable under this
Agreement notwithstanding any such assignment or the assumption by the
assignee of any or all of Company's obligations hereunder.
d. Paragraph Headings Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions of this
Agreement.
e. Severability If a court of competent jurisdiction finds any provision of this
7
Agreement to be invalid or unenforceable as to any person or circumstances, such
finding shall not render that provision invalid or unenforceable as to any other
persons or circumstances. If feasible, any such offending provision shall be
deemed to be modified to be within the limits of enforceability or validity;
however, if the offending provision cannot be so modified, it shall be stricken and
all other provisions of this Agreement in all other respects shall remain valid and
enforceable.
f. Binding Effect; Successors and Assigns Subject to the limitations on
assignment stated in this Agreement, this Agreement shall be binding upon and
inure to the benefit of the parties, their heirs, legatees, devisees, personal
representatives, successors and assigns.
g. Time of the Essence Time is of the essence of this Agreement.
h. Counterparts This Agreement may be executed in several counterparts, each
of which shall be an original and all of which shall constitute but one and the
same instrument.
i. Entire Agreement Amendments This Agreement constitutes the entire
understanding and agreement of the parties as to the matters set forth in this
Agreement. No alteration of or amendment to this Agreement shall be effective
unless made in writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.
j . City Authorization The execution of this Agreement by the City was
authorized by resolution of the City Council of the City duly adopted on
TMe ZT , 2000.
IN WITNESS WHEREOF, Company and City have executed this Agreement, effective
as of the date first above written.
CITY OF BLAIR, NEBRASKA
(SEAL)
By:
Name: A(ch ac,[
ATTEST:
Name: Znfr\'da lak l IM
Title:
8
Title: li t r ��
(SEAL)
ATTEST:
Name:
V V
Title: A6ecl
� I
CARGILL, INCORPORATED
By:
Name: D ��� T �d ee-r
Title: V
WE
Exhibit "A"
TRACT A: The North Half of the Northwest Quarter (NV2 NWl /4) and Tax Lot Ten (10) in
Section Eighteen (18), Township eighteen (18) North, Range Twelve (12) East of
the 6' P.M., Washington County, Nebraska..
TRACT B: Tax Lot 237 in Section Thirteen (13), Township Eighteen (18) North, Range
Eleven (11) East of the 6th P.M., Washington County, Nebraska.
TRACT C: The Northwest Quarter of the Southeast Quarter (NWl /4 SEi /4); the Southeast
Quarter of the Northwest Quarter (SE /4 NWl /4); Tax Lots Thirty- Eight, Forty -Six,
Thirty -One and Thirty -Two all in Section Eighteen (18), Township Eighteen (18)
North, Range Twelve (12) East of the 6 P.M., Washington County, Nebraska.
TRACT D: Tax Lot One (1) in Section Seven (7), Township Eighteen (18) North, Range
Twelve (12) East of the 6th P.M., Washington County, Nebraska.
TRACT E: Tax Lot Two (2) in Section Seven (7), Township Eighteen (18) North, Range
Twelve (12) East of the 6 P.M., Washington County, Nebraska
TRACT F: Lot Two (2), Cargill Subdivision 1, Washington County, Nebraska
TRACT G: The Northwest Quarter of the Southwest Quarter (NWl /4 SWl /4) and Tax Lot
Sixteen (16) all in Section Seventeen (17), Township Eighteen (18) North, Range
Twelve (12) East of the 6th P.M., Washington County, Nebraska.
TRACT H: Tax Lot Eighteen (18) in Section Seventeen (17), Township Eighteen (18) North,
Range Twelve (12) East of the 6 P. M., Washington County, Nebraska.
TRACT I: Tax Lot Nineteen (19) in Section Seventeen (17), Township Eighteen (18) North,
Range Twelve (12) East of the 6 P.M., Washington County, Nebraska.
TRACT J: Tax Lots Twenty- Eight, Twenty -Nine, Thirty and Thirty -Three (28, 29, 30 & 33)
all in Section Eighteen ' 18), Township Eighteen (18) North, Range Twelve (12)
East of the 6 P.M., Wahington County, Nebraska.
Exhibit "B"
"Improvements"
Legal Description (Water Treatment Plant):
Tax Lot 14 in Section 5, Township 18
North, Range 12, East of the 6 P.M.,
Washington County, Nebraska,
Tax Lot 5 in Section 6, Township 18
North, Range 12, East of the 6 th P..,
Washington County, Nebraska.
Description of Work to be Done
City is expanding water treatment capacity to an estimated capacity of 14.0 MGD.
Expansion shall include the installation of high service pumps for the purpose of
providing Cargill and Third Parties industrial water service at higher anticipated levels
and also providing the balance of the City water service with interconnection for fire and
emergency flow.
Exhibit "C"
"Minimum Payments"
Minimum Monthly Payments
From
Minimum Monthly Payment
Amount
July 1, 2000
through
December 31, 2000
$106,650.00
January 1, 2001
through
July 30, 2001
$111,100.00
August 1, 2001
through
December 31, 2001
$126,650.00
January 1, 2002
through
December 31, 2002
$137,750.00
January 1, 2003
through
December 31, 2003
$171,000.00
January 1, 2004
through
December 31, 2004
$171,000.00
January 1, 2005
through
December 31, 2005
$222,100.00
January 1, 2006
through
December 31, 2006
$222,100.00
January 1, 2007
through
December 31, 2007
$222,100.00
January 1, 2008
through
December 31, 2008
$222,000.00
January 1, 2009
through
December 31, 2009
$222,000.00
January 1, 2010
through
December 31, 2010
$222,000.00
January 1, 2011
through
December 31, 2011
$222,000.00
January 1, 2012
through
December 31, 2012
$222,000.00
January 1, 2013
through
December 31, 2013
$222,000.00
January 1, 2014
through
December 31, 2014
$222,000.00
January 1, 2015
through
December 31, 2015
$222,000.00
Exhibit cc »
Date
Amount
May 1, 2001
through
April 30, 2002
$1,505,000
May 1, 2002
through
April 30, 2003
$1,410,000
May 1, 2003
through
April 30, 2004
$1,315,000
May .1, 2004
through
April 30, 2005
$1,215,000
May 1, 2005
through
April 30, 2006
$1,100,000
May 1, 2006
through
April 30, 2007
$1,005,000
May 1, 2007
through
April 30, 2008
$ 890
May 1, 2008
through
April 30, 2009
$ 770,000
May 1, 2009
through
April 30, 2010
$- 645
May 1, 2010
through
April 30, 2011
$ 515,000
May 1, 2011
through
April 30, 2012
$ 385,000
May 1, 2012
through
April 30, 2013
$ 240,000
May 1, 2013
through
April 30, 2014
$ 90
May 1, 2014
$ - 0 -
Schedule 10
Schedule C
Cargill, For
Incorporated
Cargill, Incorporated ( "Cargill ") began as a small grain elevator in Conover, Iowa, in
1865 and has grown into one of the largest privately owned companies in the world. With
corporate headquarters in Minneapolis, Minnesota, Cargill is an international marketer,
processor and distributor of agriculture, food, financial and industrial products and services
with some 82,000 employees in 59 countries. Cargill has entered into numerous joint
ventures to help the company create new products and opportunities as well as address
specific business needs worldwide. On April 18, 2000, Cargill reported $191 million in
earnings for the third quarter ended February.29, 2000, compared with $192 million a year
ago. That brought earnings for the first nine months of fiscal 2000 to $486 million,
compared with last year's $779 million, which included a one -time gain from the sale of the
Company's international seed business. The following table summarizes the financial
highlights of Cargill for the fiscal years indicated:
millions Cargill, Incorporated and Consolidated Subsidiaries
Financial Highlights 1996-1999
or billions)
1 95 1996 1997 1998 1999
Sales
Net Earnings
Current Assets
Property & Other Assets
Total Assets
Current Liabilities
Net Worth
1 i Me
Dun & Bradstreet
$50,907 $55 $55,695 $51 $45,714
671
902
814
468
597
13
14,991
16,500
19,930
17,379
5
6,022
6,921
7,139
8,089
19,310
21,013
23,421
27,069
25,468
11,259
11,908
12,800
15,507
13,115
5
5
6,592
6
7,165
0
Standard and Pooes
Al
A+
P -1
A-1
'kl
n
5A1
00- 6249189
Source: www.cargill.com
AUGUST 31, 2012
SECOND AMENDMENT TO WATER SERVICE AGREEMENT
This SECOND AMENDMENT TO WATER SERVICE AGREEMENT (this "Second Amendment' '), dated
as of the 1st day of September, 2012, by and between the CITY OF BLAIR, NEBRASKA, a city of the first class
existing under and by virtue of the laws of the State of Nebraska (the "City "), whose address for purposes of this
Second Amendment is 218 South 16 Street, Blair, Nebraska 68008 (Attn: City Administrator), and CARGILL,
INCORPORATED, a Delaware corporation authorized to transact business in the State of Nebraska (the "Company "),
whose primary address is 15407 McGinty Road West, Wayzata, Minnesota, 55391, individually each a "Party ",
collectively the "Parties ";
WITNESSETH:
WHEREAS, the City and the Company are parties to that Water Service Agreement dated June 27, 2000 (the
"Water Service Agreement''), as supplemented by the Addendum to Water Service Agreement dated as of February 27,
2001 (the "First Addendum "), as amended by the First Amendment to Water Service Agreement dated as of March 9,
2007 (the "First Amendment"; the Water Service Agreement as supplemented by the First Addendum and as amended
by the First Amendment is referred to herein as the "Existing Agreement'; capitalized terms used in this Second
Amendment and not otherwise defined herein shall have the meanings given to such terms in the Existing Agreement);
and
WHEREAS, the Water System, as it currently exists, lacks the capacity to provide a sufficient quantity of
water to the Company's wet corn milling manufacturing facility located at 650 Industrial Park Drive, Blair Nebraska
(the "Plant ") for the present and anticipated needs of the Company and Third Parties and the anticipated needs of the
City; and
WHEREAS, the City is willing to expand and improve portions of the Water System by the construction of
certain additions and improvements to the Water System, and specifically to the City's water treatment plant ( " Water
Treatment Plant'') and the pumps and piping used to supply water to industrial customers ( " Industrial Water
Supply "), as are more particularly described on Exhibit "A" attached hereto (the "2012 Improvements ") to increase the
capacity thereof to meet the present and anticipated needs of the Company and Third Parties and the anticipated needs
of the City; and
WHEREAS, the Company is willing to commit to certain additional payments to the City (which reflect the
payments required under the terms of the Existing Agreement and additional payments in order to allow the City to
finance and construct the 2012 Improvements);
WHEREAS, the Parties wish to extend the term of the Existing Agreement, all as provided herein; and
WHEREAS, the City and the Company wish to amend the Existing Agreement as provided herein to set forth
their respective understandings relating to the Water System and the Plant and the actions to be taken based upon such
understandings by each such Party;
NOW THEREFORE, in consideration of the mutual covenants hereinafter made, City and Company hereby
agree as follows:
1. Representations and Warranties of City The City represents and warrants to Company that the City
is a municipal corporation organized and in existence under the laws of the State of Nebraska, and is and has been duly
authorized to enter into this Second Amendment and to carry out its obligations under the Existing Agreement and this
Second Amendment (the Existing Agreement, as amended by this Second Amendment, is referred to herein as the
"Agreement'').
2. Representations and Warranties of Company Company represents and warrants to the City as
follows:
a. Company is a corporation duly incorporated and in existence and good standing under the
laws of the State of Delaware, qualified to do business and in good standing in the State of Nebraska, and is
3765479v3 (08/22/2012)
and has been duly authorized to enter into this Second Amendment and to carry out its obligations under the
Agreement.
b. The execution of this Second Amendment and the consummation of the transactions
contemplated hereby and the fulfillment and compliance with the terms and conditions of the Agreement will
not violate any current provision of Company's Articles of Incorporation or Bylaws and will not conflict with
or result in the breach of any terms or provisions of any restriction, agreement or instrument to which it is
presently a party or by which it is bound, or constitute a default under any of the foregoing.
Amendments to Existing Agreement
ment
a. Amendment and Restatement of Section 3 of Existing Agreement Prior to October 1, 2012
(the "Effective Date "), the obligations of the City to provide water service shall be governed by Section 3 of
the Existing Agreement. From and after the Effective Date, Section 3 of the Existing Agreement shall be
further amended and restated in its entirety as follows:
3. Agreement to Provide Water Service: Scheduled Usage. During the term of this
Agreement, the City will make available to the Company water service f °om the Water System in
accordance with the following parameters:
(i) From Effective Date through March 31, 2014, Twelve and One -half
(12.5) million gallons per day (MGD); and
(ii) From April 1, 2014 (or the date of substantial completion of the 2012
Improvements, whichever is later, hereinafter the "Adjustment Date') through
March 31, 2037, Fifteen and One -half (15.5) MGD;
upon and subject to the terms and conditions of this Agreement (the "Scheduled Usage' ). The City
may, in its discretion and subject to Water System capacity limitations, make service available to
Company in excess of Scheduled Usage ( "Additional Usage ")subject to the payment by Company of
"Additional Payments" as described below. Company may, in turn, make available to Third Parties
a portion of the Scheduled Usage and any Additional Usage.
City and Company agree to cooperate reasonably with the goals of (1) satisfying Company's peak
usage requirements, and (2) ensuring that the Water Treatment Plant and Water System operate
within their capacities (including but not limited to storage systems). Company will cooperate with
the Cite to ensure that the Water Treatment Plant complies with applicable flow rate limits,
including but not limited to those specified in the Water Treatment Plant's Nebraska Department of
Health and Human Services Permit (as amended fi°om tune to time, the "Permit'). In the event
Company's flow rate is limited to 10,800 gallons per ininute ( "GPM ") to enable City to comply with
the Permit, then during such time that the Company's flow rate is so limited, the flow rate for the
balance of the Water System shall not exceed 3,100 GPM. City shall, in good faith and with due
diligence, operate the Water System to fully utilize the capability of the Water Treatment Plant f lters
and its water storage systems.
b. Amendment and Restatement of Section 4 of Existing Agreement Prior to the Effective
Date, the obligations of the Company to make payments to the City shall be governed by Section 4 of the
Existing Agreement. From and after the Effective Date, Section 4 of the Existing Agreement shall be further
amended and restated in its entirety as follows:
4. Minimum Payments; Additional Pa vine ents For and in consideration of the City's
agreement to make the Scheduled Usage available to the Company as provided herein, Company
agrees as follows:
a. Minimum Payments Company shall pay to the City, on the first day of
each calendar month beginning with the month of October 2012, and continuing until the
2
last day of March 2014, minimum payments (each, a "Minimum Payment ") in the
amounts set forth on Revised Exhibit "C" attached hereto for the periods described therein,
which payments represent the fixed monthly charge for any monthly water usage up to the
Scheduled Usage per monthly billing period (the `Base Monthly Water Quantity').
Company is not entitled to any rebate, credit or set -off for the unused portion, if any, of the
Base Monthly Water Quantity (i.e., the unused portion is forfeited at the end of each
monthly period). Additional Usage, if any, shall be billed pursuant to Subparaayph 4(b)
immediately below.
b. Billing Statements: Additional Payments The City shall provide to the
Company a regular monthly billing statement (each, a "Billing Statement ") setting forth
the actual quantity of water used by the Company at the Real Estate (including usage by
Third Parties) during the preceding billing cycle (the "Actual Usage'). In the event that
the Actual Usage exceeds the Base Monthly Water Quantity attributable to such monthly
billing cycle, then Company shall be charged at a rate of [Sixty -Six Cents (66¢)] per One
Hundred Cubic Feet of water (the "Excess Billing Rate') for the Additional Usage
attributable to such billing cycle ( "Additional Payments'). Company shall pay Additional
Payments within fifteen (1 S) days of the date of such billing statement.
C. Adjustments for Financing The City presently anticipates incurring
temporary financing for the 2012 Improvements by issuing its water system revenue bond
anticipation notes. If at the time the City enters into arrangements for financing (through
the issuance of Bonds or otherwise), it is determined that the revenues of the Water System
are not sufficient to meet the debt service coverage requirements applicable to all Bonds
under the various ordinances and related documents governing such Bonds (collectively
"Debt Service Requirements') and the City deems it appropriate to increase Minimum
Payments and Excess Billing Rate, then Minimum Payments and Excess Billing Rate shall
be increased by an amount reasonably necessary to satisfy Debt Service Requirements.
d. Adjustment per Rate Study Prior to the expiration of each five (5) year
anniversary of this Second Amendment or at any other time as mutually agreed between the
Parties, the City will conduct a rate study ( "Rate Study') by a qualified firm of
independent consulting engineers ( "Rate Consultant") to determine whether the revenues
of the Water System (including amounts payable hereunder) are sufficient to satisfy the
Debt Service Requirements. The results of each Rate Study shall be provided to Company
along with all assumptions, data, and calculations to support the conclusions of the Rate
Study. The Rate Study shall allocate all costs incurred for service to the Company (to
include costs for operating, debt service for improvements to Water Treatment Plant and
Industrial Water Supply for benefit of the Company), and Debt Service Requirements. If, as
a result of such Rate Study, it is determined that the Minimum Payments and/or Excess
Billing Rate are not sufficient, together with other revenues of the Water System, to meet
Debt Service Requirements, the City may, after consulting with the Company, increase
Minimum Payments and Excess Billing Rate to the extent, and only to the extent reasonably
necessary to satisfy Debt Service Requirements If, as a result of such Rate Study, it is
determined that the Minimum Payments and/or Excess Billing Rate are more than
sufficient, together with other revenues of the Water System, to meet Debt Service
Requirements, the City shall, after consulting with the Company, decrease Minimum
Payments and Excess Billing Rate by the corresponding amount to the extent and only to
the extent reasonably necessary to satisfy the Debt Service Requirements.
e. Legal Requirements The parties acknowledge that from time to time
there may be laws, regulations, orders or requirements imposed by EPA or NDEQ or other
regulatory authorities, requiring new or modified improvements or processes which may
increase costs to the City for the construction, maintenance or operation of the Water
Treatment Plant or the provision of water service to the Company hereunder ( "Legal
Requirements'). If due to any Legal Requirements, it is determined that the revenues of
the Water System are not sufficient to meet Debt Service Requirements and the City deems
it appropriate to increase Minimum Payments and Excess Billing Rate, then Minimum
Payments and Excess Billing Rate shall be increased by an amount reasonably necessary to
satisfy Debt Service Requirements.
At the request of the City, the City and Company shall promptly enter into an appropriate
amendment to this Agreement in order to reflect any adjustments to Minimum Payments and Excess
Billing Rate imposed under the provisions of clause (c), (d) or (e). Nothing provided herein shall be
construed to require City to provide to Company any water service resulting inflow rates at any time
in excess of Scheduled Usage or quantities for any billing cycle in excess of the Base Monthly Water
Quantity. Water service beyond Scheduled Usage or in excess of the Base Monthly Water Quantity
may be supplied by City to the Company at the City's discretion, as and when the same is available.
C. Amendment and Restatement of Section 11 of Existing Agreement Section 11 of the
Existing Agreement is hereby further amended and restated in its entirety as follows:
11. Term and Termination This Agreement shall be effective as of the date first above
written and shall continue in effect until the 31st day of March, 2037, at which time the City's
obligation to provide water service under the terms of the Agreement shall cease. This Second
Amendment may be terminated by either Party at any time prior to the commencement of the
construction of the 2012 Improvements or the issuance of Bonds to finance the 2012 Improvements
in the event that (a) it is determined that the actual cost of the 2012 Improvements exceeds
$8,200,000 (b) the City is unable to obtain the necessary permits, license, easements or other
approvals for the construction of the 2012 Improvements; or (c) the City is not able to obtain the
financing needed to execute the 2012 Improvements. In the event of termination of this Second
Amendment for any of reasons (a), (b) or (c) above, the Parties shall equally share any amount
expended by either Party in pursuing the 2012 Improvements, including, without limitation, design,
engineering, permitting, approval, and acquisition fees. Company may terminate this Second
Amendment at any time after May 1, 2012 by making payment to the City in the amount of the
Defeasance Payment and any and all costs incurred by City for 2012 Improvements including,
without limitation, sums actually expended or committed for design, engineering, permits and
approvals, and any right -of -way acquisition. In the event the 2012 Improvements are not completed
as contemplated under this Second Amendment, the Existing Agreement shall continue in full force
and effect unless otherwise agreed between City and Company.
4. Adjustment to Payments Based on Actual Construction Cost and/or Increased Financing Costs If:
(a) the actual cost of construction to include construction, engineering, OPPD reimbursement and costs of financing for
the 2012 Improvements exceeds $8,200,000, and /or (b) the actual borrowing costs of the City are increased, because
the City is not able to receive from the Nebraska Investment Finance Authority volume cap allocation for the City's
revenue bond anticipation notes in an amount sufficient to finance the 2012 Improvements, or otherwise, then the City
and the Company shall further amend the Agreement to reflect increased Minimum Payments and Excess Billing Rate
in an amount necessary to satisfy the Debt Service Requirements.
5. Use of Accumulated Debt Service Coverage City acknowledges that the Minimum Payments
payable hereunder are designed to pen the City to satisfy Debt Service Coverage, which includes amounts in excess
of actual requirements for debt service on the Bonds (the "Excess Portion ") in order to comply with covenants relating
to the Bonds. The Excess Portion shall be treated as general revenues of the Water System and is not required to be
segregated or retained in any separate fund or used for any particular purpose. However, notwithstanding anything
herein to the contrary, commencing with calendar year 2014, City agrees, as long as Company is not in default under
the Agreement and all Debt Service Requirements attributable to Company are satisfied, to place fifty percent (50 %) of
the each previous calendar year's Excess Portion in a separate fund ( "Industrial Service Fund"). The Industrial
Service Fund shall be used to fund major maintenance and improvements to the Industrial Water Supply and /or Water
Treatment Plant. City and Company shall meet as needed and at a minimum of annually to discuss, review, evaluate
and, to the extent permitted by law, to mutually agree upon, a list of projects to be funded from the Industrial Service
Fund.
4
6. Modification of Certain Definitions and Related Provisions. All references in the Existing
Agreement to: (a) the "Improvements" shall mean and include the Improvements, as defined in the Existing
Agreement, and the 2012 Improvements as described herein; and (b) the "Bontis" shall refer to all outstanding and
future loans, bond anticipation notes, bonds and other indebtedness issued to improve the Water System to provide
service to the Company and Third Parties, and shall include, without limitation, the Bonds (as defined in the Existing
Agreement), any bond anticipation notes or other indebtedness issued to pay costs of the 2012 Improvements, and any
bonds, loans or other permanent financing issued to pay such bond anticipation notes or other indebtedness.
Notwithstanding the provisions of Section 7(b) of the Water Service Agreement, the Defeasance Payment may exceed
the sum of $11,500,000, but shall not exceed the sum necessary to fully fund a defeasance escrow for all Bonds issued
to finance facilities to provide water service to the Company and Third Parties as shown on Exhibit "E" attached to this
Second Amendment.
7. Replacement of Exhibit "C " . Exhibit "C" to the Existing Agreement is hereby replaced in its
entirety with Revised Exhibit "C" attached hereto.
8. Entire Agreement, Effect on Existing Agreement Miscellaneous The Agreement constitutes the
entire understanding and agreement of the parties as to the matters set forth in the Agreement. No alteration of or
amendment to the Agreement shall be effective unless made in writing and signed by the party or parties sought to be
charged or bound by the alteration or amendment. Except as specifically amended hereby, the Existing Agreement
shall remain in full force and effect and is hereby ratified and affirmed in all respects. This Second Amendment may
be executed in any one or number of counterparts, each of which shall be deemed an original and which together shall
constitute one and the same instrument.
9. Federal Tax Laws The Company and the City acknowledge that some or all of the Bonds may be
issued as obligations the interest on which is exempt from gross income for federal income tax purposes ( "Tax- Exempt
Obligations "). If and to the extent that the tenns of the Agreement (or any modification hereto) does not comply with
the requirements for Tax - Exempt Obligations, the City and Cargill agree to work together in good faith to amend the
Agreement or take other appropriate actions in order to comply with such requirements.
[SIGNATURES APPEAR ON FOLLOWING PAGE(S)]
ATTEST:
o6vx4 1,e,
Name: & -f e 6N V") c c
Title: c'a
(SEAL)
GE
III DARLYS D
fl RAL NOTARY State of Nebraska
D. SYLVIS
P. Jan. 3, 013
MY Comm, Exp. Jan. 3, 2013
ATTEST:
Name: T, \A D
Title:
CARGILL, INCORPORATED
By:
Name: "awn ATKinson
Title: AVP, Cargill OM Milling.,
0
Exhibit "A"
2012 Improvements to the Water Treatment Plant and /or the Industrial Water Supply ( "2012 Improvements ")
The Water Treatment Plant expansion will generally include increasi the f ollowing:
• Increase chemical storage
• Increase filtering capacity
• Additional pumping capacity of intake structure
• Instrumentation and control systems.
Modifications include the following:
• Construct a new electrical and chemical feed building for intake structure.
• Expand the chlorine storage building
• Construct a polymer chemical storage and feed room.
• New electrical service for intake structure and Water Treatment Plant.
• New filter building and two new filter bays
• New pump motors and controls for raw water pumps
Electrical /Chemical Feed Building for Intake Structure
Construct a new electrical /chemical feed building that will allow for the increased electrical capacity
needed to install new and larger motors for the three existing raw water pumps at the intake structure. The building
will be split into two separate rooms. The first room will house the new variable frequency drives and motor control
cabinets for the new and larger pump motors located in the intake structure. The other portion of the building will
provide storage and feed equipment for chemicals used at the intake structure. The building size will be
approximately 50 x 50 feet square. The building addition includes all related HVAC and electrical requirements.
Chlorine Storage
The existing chlorine storage area will be expanded to provide adequate storage for thirty (30) days of
chlorine storage based on the new plant capacity of 20 MGD treatment. The expansion will allow for a total of 14
ton chlorine cylinders storage. The building expansion is approximately 24 x 13 feet. The building addition
includes all related HVAC and electrical requirements.
Polymer Storage and Feed Addition
The project includes a new building addition to store polymer and related feed equipment. Equipment
includes storage tanks capable of storing 30 days of chemical use based on the new plant capacity of 20 MGD
treatment. There are three new storage tanks, day tank and related piping for the chemical feed system. The
addition is approximately 15 x 18 feet. The building addition includes all related HVAC and electrical requirements.
Filter Building
There will be a new filter building constructed adding two filter bays to the Water Treatment Plant. The
two filter bays will include filter media and related piping. The new filter building will be connected to the existing
filter buildings of the Water Treatment Plant with a connecting corridor. The building will be approximately 52 x
60 feet and the connecting corridor will be approximately 24 x 40 feet. The building addition includes all related
HVAC and electrical requirements.
Electrical Upgrades
The project has numerous electrical upgrades throughout the project. There will be a new transformer
installed at the new electrical building and sized to accommodate the large power demand of the larger pump motors
at the City's Water Treatment Plant Intake structure. The primary source of power for the Water Treatment Plant
will be from the Cargill substations with backup or redundant power source from Blair substation. Both substations
are owned by OPPD.
Traveling Screen
The project includes a new traveling screen for the intake structure to provide redundant equipment for a
critical component of the Water Treatment Plant complex.
Instrumentation and Control
Connect instrumentation and control of new equipment into existing PLC based control system. There will
be four new System Control and Data Analyzing stations installed throughout the Water Treatment Plant.
Industrial Supply Pumps
The project includes the addition of one (1) industrial supply pump.
Revised Exhibit "C"
Applicable Period
"Minimum Payments"
Base Monthly Water Quantity
(Cubic Feet per Monthly
Billing Period)
Monthly Minimum Payment
$416,806 ($0.82 per 100 Cu. Ft.)
$535,748 ($0.85 per 100 Cu. Ft.)
October 1, 2012 to March 30, 2014
April 1, 2014 to Sept. 30, 2027
50,830,000
63,029,189
*Subject to adjustment as provided in Agreement
Exhibit E
City of Blair Debt for expansions providing capacity to Cargill
Ordinance
Finance Instrument
Maturity Date
Principal
1908
Water 2000 SRF
12/15/2015
$2,619,457
1909
Water Bond 2000
06/15/2014
270,000
2191
Water Bond 2010
06/15/2031
6
2191
Water Bond 2010
06/15/2018
770,000
2217
Water Bond 2012
06/15/2032
9,480
2224
Water BAN 2012
See Note A
See Note B
Note A: It is anticipated issue date will be 09/01 /2012. BAN's are expected to have a five (5) year maturity and be
subject to redemption at par any time after three (3) years from the date of issue. BANs are expected to be
refinanced prior to maturity date once revenues increase and stabilize to meet bond coverage requirements.
Note B: Ordinance authorized up to $8,000,000 in BANs for 2012 expansion project.
DOCS/1091607.12