2007-045RESOLUTION N0.2007-045
A RESOLUTION AWARDING THE SALE OF $10,000,000 GENERAL
OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2007A; FIXING
THEIR FORM AND SPECIFICATIONS;
DIRECTING THEIR EXECUTION AND DELIVERY;
AND PROVIDING FOR THEIR PAYMENT
BE IT RESOLVED By the City Council of the City of Hopkins, Hennepin County,
Minnesota (the "City") as follows:
Section 1. Sale of Bonds.
1.01 It is hereby determined that:
(a) The Housing and Redevelopment Authority in and for the City of Hopkins (the
"Authority") previously issued its $10,760,000 Housing and Redevelopment Authority in and for
the City of Hopkins Public Facility Lease Revenue Bonds, Series 2002A, dated December 12,
2002 (the "Series 2002A Bonds"), the proceeds of which were used to finance the acquisition
and construction of a public works facility located within the City (the "Facilities").
(b) The Series 2002A Bonds are secured by lease payments by the City pursuant to a
Lease-Purchase Agreement between the Authority and the City dated as of December 1, 2002
(the "Lease").
(c) Under the Lease, the City has the option to purchase the Facilities by paying the
outstanding Purchase Price, defined in the Lease as the amount necessary to provide for the full
and timely payment of all interest and premium, if any, on the principal of the outstanding Series
2002A Bonds to maturity or an earlier redemption date, if applicable.
(d) The City is authorized by Minnesota Statutes, Section 475.521 (the "Act") to
finance certain capital improvements under an approved capital improvement plan by the
issuance of general obligation bonds of the City payable from ad valorem taxes. Capital
improvements include (among other things) acquisition or betterment of public lands, buildings
or other improvements for the purpose of a public safety facility.
(e) On May 1 S, 2007 the City held a public hearing regarding a five year capital
improvement plan (the "Plan"), regarding issuance of bonds in the maximum principal amount of
$10,000,000 to finance the acquisition of the Facilities through issuance of refunding bonds, all
in accordance with the Act. On the same date, the City Council approved the Plan providing for
issuance of such refunding bonds.
(f) No petition requesting a referendum regarding issuance of bonds under the Plan
was filed within 30 days after the date of the hearing regarding such bonds.
(g) The City is authorized by Minnesota Statutes, Chapter 475, and specifically
Section 475.67, Subdivision 3 thereof, to issue and sell its general obligation bonds to refund
obligations and the interest thereon before the due date of the obligations, if consistent with
covenants made with the holders thereof, when determined by the City Council to be necessary
or desirable for the reduction of debt service cost to the City or for the extension or adjustment of
maturities in relation to the resources available for their payment.
(h) Minnesota Statutes, Section 475.67, Subdivision 4 permits the sale of refunding
bonds more than six months prior to the date on which the obligations to be refunded may be
called for redemption, subject to the conditions set forth in Minnesota Statutes, Section 475.67,
Subdivisions 5 through 12; provided, however, that subdivision 12 of that section applies only in
the case of refunding of general obligations and therefore does not apply to refunding of the
Series 2002A Bonds.
(i) It is necessary and desirable for the City to reduce its debt service costs and
thereby issue its $ General Obligation Capital Improvement Plan Bonds,
Series 2007A (the "Bonds") to refund the Authority's Series 2002A Bonds, of which $9,550,000
in principal amount is currently outstanding and $6,755,000 is callable on February 1, 2013 and
any date thereafter.
(j) As required by the Act, the City has determined that:
(i) the expected useful life of the Facilities will be at least five years; and
(ii) the amount of principal and interest due in any year on all outstanding
bonds issued by the City under the Act, including the Bonds, will not
exceed .16 percent of the taxable market value of property in the City for
taxes payable in 2007.
(k) The City is authorized by Minnesota Statutes, Section 475.60, Subdivision 2(9) to
negotiate the sale of the Bonds, it being determined that the City has retained an independent
financial adviser in connection with such sale.
1.02. Award to the Purchaser and Interest Rates. The proposal of
(the "Purchaser"), as provided for on Exhibit A of this resolution, to
purchase the Bonds is determined to be a reasonable offer and is accepted, the proposal being to
purchase the Bonds at a price of $ plus accrued interest to date of delivery, for
Bonds bearing interest as follows:
Year
Interest Rate
Year Interest Rate
2008 2016
2009 2017
2010 2018
2011 2019
2012 2020
2013 2021
2014 2022
2015 2023
True interest cost:
1.03. Purchase Contract. The sum of $ being the amount proposed by the
Purchaser in excess of $
314308v3 AJP.HP110-73
is credited to the Debt Service Fund hereinafter
C-2
created, or credited to the Escrow Account hereinafter created, as determined by the City's
financial advisor. The City Finance Director is directed to deposit the good faith check of the
Purchaser, pending completion of the sale of the Bonds, and to return the good faith checks of
the unsuccessful proposers forthwith. The Mayor and City Manager are directed to execute a
contract with the Purchaser on behalf of the City.
1.04. Terms of the Bonds and Principal Amounts. The City will forthwith issue and
sell the Bonds pursuant to Minnesota Statutes, Chapter 475, in the total principal amount of
$ ,originally dated August 14, 2007, in the denomination of $5,000 each or any
integral multiple thereof, numbered No. R-l, upward, bearing interest as above set forth, and
which mature serially on February 1 in the years and amounts as follows:
Year Amount Year Amount
2008 2016
2009 2017
2010 2018
2011 2019
2012 2020
2013 2021
2014 2022
2015 2023
1.05. Optional Redemption. The City may elect on February 1, 2015, and on any day
thereafter to prepay Bonds due on or after February 1, 2016. Redemption may be in whole or in
part and if in part, at the option of the City and in such manner as the City will determine. If less
than all Bonds of a maturity are called for redemption, the City will notify DTC (as defined in
Section 8 hereof) of the particular amount of such maturity to be prepaid. DTC will determine
by lot the amount of each participant's interest in such maturity to be redeemed and each
participant will then select by lot the beneficial ownership interests in such maturity to be
redeemed. Prepayments will be at a price of par plus accrued interest.
1.06. Term Bonds. To be completed if Term Bonds are requested by the Purchaser.
Section 2. Registration and Payment.
2.01. Registered Form. The Bonds will be issued only in fully registered form. The
interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by
check or draft issued by the Registrar described herein.
2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest
payment date preceding the date of authentication to which interest on the Bond has been paid or
made available for payment, unless (i) the date of authentication is an interest payment date to
which interest has been paid or made available for payment, in which case the Bond will be
dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest
payment date, in which case the Bond will be dated as of the date of original issue. The interest
on the Bonds is payable on February 1 and August 1 of each year, commencing February 1,
314308v3 AJP HP110-73 C_3
2008, to the registered owners of record as of the close of business on the fifteenth day of the
immediately preceding month, whether or not that day is a business day.
2.03. Registration. The City will appoint, and will maintain, a bond registrar, transfer
agent, authenticating agent and paying agent (the "Registrar"). The effect of registration and the
rights and duties of the City and the Registrar with respect thereto are as follows:
(a) Re ister. The Registrar must keep at its principal corporate trust office a
bond register in which the Registrar provides for the registration of ownership of Bonds
and the registration of transfers and exchanges of Bonds entitled to be registered,
transferred or exchanged.
(b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed
by the registered owner thereof or accompanied by a written instrument of transfer, in
form satisfactory to the Registrar, duly executed by the registered owner thereof or by an
attorney duly authorized by the registered owner in writing, the Registrar will
authenticate and deliver, in the name of the designated transferee or transferees, one or
more new Bonds of a like aggregate principal amount and maturity, as requested by the
transferor. The Registrar may, however, close the books for registration of any transfer
after the fifteenth day of the month preceding each interest payment date and until that
interest payment date.
(c) Exchange of .Bonds. When Bonds are surrendered by the registered owner
for exchange the Registrar will authenticate and deliver one or more new Bonds of a like
aggregate principal amount and maturity as requested by the registered owner or the
owner's attorney in writing.
(d) Cancellation. Bonds surrendered upon transfer or exchange will be
promptly cancelled by the Registrar and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When a Bond is presented to the
Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is
satisfied that the endorsement on the Bond or separate instrument of transfer is valid and
genuine and that the requested transfer is legally authorized. The Registrar will incur no
liability for the refusal, in good faith, to make transfers which it, in its judgment, deems
improper or unauthorized.
(f) Persons Deemed Owners. The City and the Registrar may treat the person
in whose name a Bond is registered in the bond register as the absolute owner of the
Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on
account of, the principal of and interest on the Bond and for all other purposes, and
payments so made to a registered owner or upon the owner's order will be valid and
effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or
sums so paid.
(g) Taxes, Fees and Charges. The Registrar may impose a charge upon the
owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar
314308v3 AJP HP110-73 C-4
for any tax, fee or other governmental charge required to be paid with respect to the
transfer or exchange.
(h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated
or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount,
number, maturity date and tenor in exchange and substitution for and upon cancellation
of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or
lost, upon the payment of the reasonable expenses and charges of the Registrar in
connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing
with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or
lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate
bond or indemnity in form, substance and amount satisfactory to it and as provided by
law, in which both the City and the Registrar must be named as obligees. Bonds so
surrendered to the Registrar will be cancelled by the Registrar and evidence of such
cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond
has already matured or been called for redemption in accordance with its terms it is not
necessary to issue a new Bond prior to payment.
(i) Redemption. In the event any of the Bonds are called for redemption,
notice thereof identifying the Bonds to be redeemed will be given by the Registrar by
mailing a copy of the redemption notice by first class mail (postage prepaid) to the
registered owner of each Bond to be redeemed at the address shown on the registration
books kept by the Registrar and by publishing the notice if required by law. Failure to
give notice by publication or by mail to any registered owner, or any defect therein, will
not affect the validity of the proceedings for the redemption of Bonds. Bonds so called
for redemption will cease to bear interest after the specified redemption date, provided
that the funds for the redemption are on deposit with the place of payment at that time.
2.04. Appointment of Initial Registrar. The City appoints $anlcers Trust Company, Des
Moines, Iowa, as the initial Registrar. The Mayor and the City Manager are authorized to
execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or
consolidation of the Registrar with another corporation, if the resulting corporation is a bank or
trust company authorized by law to conduct such business, the resulting corporation is authorized
to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the
Registrar for the services performed. The City reserves the right to remove the Registrar upon 30
days' notice and upon the appointment of a successor Registrar, in which event the predecessor
Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must
deliver the bond register to the successor Registrar. On or before each principal or interest due
date, without further order of this Council, the City Finance Director must transmit to the
Registrar monies sufficient for the payment of all principal and interest then due.
2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the
direction of the City Manager and executed on behalf of the City by the signatures of the Mayor
and the City Manager, provided that all signatures may be printed, engraved or lithographed
facsimiles of the originals. If an officer whose signature or a facsimile of whose signature
appears on the Bonds ceases to be such officer before the delivery of any Bond, that signature or
facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had
remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or
314308v3 AJP HP110-73 C_5
obligatory for any purpose or entitled to any security or benefit under this Resolution unless and
until a certificate of authentication on the Bond has been duly executed by the manual signature
of an authorized representative of the Registrar. Certificates of authentication on different Bonds
need not be signed by the same representative. The executed certificate of authentication on a
Bond is conclusive evidence that it has been authenticated and delivered under this Resolution.
When the Bonds have been so prepared, executed and authenticated, the City Finance Director
will deliver the same to the Purchaser upon payment of the purchase price in accordance with the
contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the
application of the purchase price.
2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive
Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3
with such changes as may be necessary to reflect more than one maturity in a single temporary
bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be
exchanged therefor and cancelled.
Section 3. Form of Bond.
3.01. The Bonds will be printed or typewritten in substantially the following form:
No. R- UNITED STATES OF AMERICA $
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF HOPKINS
GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN
BOND, SERIES 2007A
Date of
Rate Maturity Original Issue CUSIP
February 1, 20_ August 14, 2007
Registered Owner: Cede & Co.
The City of Hopkins, Minnesota, a duly organized and existing municipal corporation
and political subdivision in Hennepin County, Minnesota (the "City"), acknowledges itself to be
indebted and for value received promises to pay to the Registered Owner specified above or
registered assigns, the principal sum of $ on the maturity date specified above with
interest thereon from the date hereof at the annual rate specified above, payable February 1 and
August 1 in each year, commencing February 1, 2008, to the person in whose name this Bond is
registered at the close of business on the fifteenth day (whether or not a business day) of the
immediately preceding month. The interest hereon and, upon presentation and surrender hereof,
the principal hereof are payable in lawful money of the United States of America by check or
314308v3 AJP HP110-73 C-6
draft by Bankers Trust Company, Des Moines, Iowa, as Registrar, Paying Agent, Transfer Agent
and Authenticating Agent, or its designated successor under the Resolution described herein. For
the prompt and full payment of such principal and interest as the same respectively become due,
the full faith and credit and taxing powers of the City have been and are hereby irrevocably
pledged.
The City may elect on February 1, 2015, and on any date thereafter to prepay Bonds due
on or after February 1, 2016. Redemption may be in whole or in part and if in part, at the option
of the City and in such manner as the City will determine. If less than all Bonds of a maturity are
called for redemption, the City will notify Depository Trust Company ("DTC") of the particular
amount of such maturity to be prepaid. DTC will determine by lot the amount of each
participant's interest in such maturity to be redeemed and each .participant will then select by lot
the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a
price of par plus accrued interest.
This Bond is one of an issue in the aggregate principal amount of $ all of like
original issue date and tenor, except as to number, maturity date, redemption privilege, and
interest rate, all issued pursuant to a resolution adopted by the City Council on July 17, 2007
(the "Resolution"), for the purpose of providing money to acquire the City's public works and
fire station facility by prepaying outstanding lease payments under aLease-Purchase Agreement
between the City and the Housing and Redevelopment Authority in and for the City of Hopkins
(the "Authority") and to refund the outstanding lease-revenue bonds issued by the Authority to
finance that facility, pursuant to and in full conformity with the home rule charter of the City and
the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections
475.521 and 475.67, and the principal hereof and interest hereon are payable primarily from ad
valorem taxes, as set forth in the Resolution to which reference is made for a full statement of
rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged
for payment of this Bond and the City Council has obligated itself to levy additional ad valorem
taxes on all taxable property in the City in the event of any deficiency in taxes pledged, which
additional taxes may be levied without limitation as to rate or amount. The Bonds of this series
are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple
thereof of single maturities.
As provided in the Resolution and subject to certain limitations set forth therein, this
Bond is transferable upon the books of the City at the principal office of the Registrar, by the
registered owner hereof in person or by the owner's attorney duly authorized in writing, upon
surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly
executed by the registered owner or the owner's attorney; and may also be surrendered in
exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City
will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of
the same aggregate principal amount, bearing interest at the same rate and maturing on the same
date, subject to reimbursement for any tax, fee or governmental charge required to be paid with
respect to such transfer or exchange.
The City and the Registrar may deem and treat the person in whose name this Bond is
registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of
receiving payment and for all other purposes, and neither the City nor the Registrar will be
affected by any notice to the contrary.
314308v3 AJP HPllO-73 C_'~
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts,
conditions and things required by the home rule charter of the City and the Constitution and laws
of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and
in the issuance of this Bond in order to make it a valid and binding general obligation of the City
in accordance with its terms, have been done, do exist, have happened and have been performed
as so required, and that the issuance of this Bond does not cause the indebtedness of the City to
exceed any constitutional, statutory or charter limitation of indebtedness.
This Bond is not valid or obligatory for any purpose or entitled to any security or benefit
under the Resolution until the Certificate of Authentication hereon has been executed by the
Registrar by manual signature of one of its authorized representatives.
IN WITNESS WHEREOF, the City of Hopkins, Hennepin County, Minnesota, by its City
Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures
of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth
below.
Dated:
CITY OF HOPKINS, MINNESOTA
~Facsimile~ Facsimile)
City Manager Mayor
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
BANKERS TRUST COMPANY
By
Authorized Representative
The following abbreviations, when used in the inscription on the face of this Bond, will
be construed as though they were written out in full according to applicable laws or regulations:
314308v3 AJP HP110-73 c_g
TEN COM -- as tenants
in common
TEN ENT -- as tenants
by entireties
JT TEN -- as joint tenants with
right of survivorship and
not as tenants in common
~~usr~
Custodian
~lviinor~
under Uniform Gifts or
Transfers to Minors
Act............
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and all rights thereunder, and
does hereby irrevocably constitute and appoint attorney to
transfer the said Bond on the books kept for registration of the within Bond, with full power of
substitution in the premises.
Dated:
Notice: The assignor's signature to this assignment must correspond with the name as it
appears upon the face of the within Bond in every particular, without alteration or
any change whatever.
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion
Program ("SEMP"), the New York Stock Exchange, Inc. Medallion Signatures Program ("MSP")
or other such "signature guarantee program" as may be determined by the Registrar in addition
to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange
Act of 1934, as amended.
The Registrar will not effect transfer of this Bond unless the information concerning the
assignee requested below is provided.
Name and Address:
31430&v3 AJP HPll0-73
C-9
UNIF GIFT MIN ACT
(Include information for all joint owners if this
Bond is held by joint account.)
Please insert social security or other
identifying number of assignee
PROVISIONS AS TO REGISTRATION
The ownership of the principal of and interest on the within Bond has been registered on
the books of the Registrar in the name of the person last noted below.
Date of Re istration
Re istered Owner
Signature of
Officer of Registrar
3.02. The City Manager is authorized and directed to obtain a copy of the proposed
approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to
be complete except as to dating thereof and cause the opinion to be printed on or accompany
each Bond.
Section 4. Payment~Security; Pledges and Covenants.
4.01. Debt Service Fund. (a) The Bonds are payable from the General Obligation
Capital Improvement Plan Bonds, Series 2007A Debt Service Fund (the "Debt Service Fund")
hereby created, and the proceeds of ad valorem taxes hereinafter levied (the "Taxes") are hereby
pledged to the Debt Service Fund.
(b) There is also hereby appropriated to the Debt Service Fund (i) any amount over
the minimum purchase price of the Bonds paid by the Purchaser, to the extent not deposited in
the Escrow Account under Section 5.02; and (ii) upon funding of the Escrow Agreement
hereunder, the balance of funds in the Bond Fund established under the Indenture (as defined in
Section 5 hereof) for the Series 2002A Bonds; provided, however, that the City Finance Director
is hereby authorized and directed to transfer from the Bond Fund those amounts determined by
actuarial calculation at the time of delivery of the Bonds to be necessary to properly fund the
Escrow Account established by Section 5 of this Resolution.
(c) If a payment of principal or interest on the Bonds becomes due when there is not
sufficient money in the Debt Service Fund to pay the same, the City Finance Director will pay
such principal or interest from the general fund of the City, and the general fund will be
reimbursed for those advances out of the proceeds of the Taxes levied by this resolution when
collected.
Cede & Co.
Federal ID #13-2555119
314308v3 AJP HP110-73 C-10
4.02. Tax Levy. For the purpose of paying the principal of and interest on the Bonds,
there is hereby levied a direct annul irrepealable ad valorem tax upon all of the taxable property
in the City, which will be spread upon the tax rolls and collected with and as part of other general
taxes of the City. Such tax will be credited to the Debt Service Fund above provided and will be
in the years and amounts as follows (year stated being year of levy for collection the following
year):
Year Levy
(See Exhibit B)
4.03. County Auditor's Certificate as to Re istg ration. The City Clerk is directed to file
a certified copy of this resolution with the Taxpayer Services Division Manager of Hennepin
County and to obtain the certificate required by Minnesota Statutes, Section 475.63.
4.04. Certification to County Auditor as to Debt Service Fund Amount. It is hereby
determined that the estimated collection of the foregoing Taxes will produce at least five percent
in excess of the amount needed to meet when due, the principal and interest payments on the
Bonds. The tax levy herein provided will be irrepealable until all of the Bonds are paid, provided
that the City Manager may annually, at the time the City makes its tax levies, certify to the
Taxpayer Services Division Manager of Hennepin County the amount available in the Debt
Service Fund to pay principal and interest due during the ensuing year, and the Taxpayer
Services Division Manager of Hennepin County will thereupon reduce the levy collectible during
such year by the amount so certified.
Section 5. Refunding; Redemption of Series 2002A Bonds.
5.01. Generally. The Series 2002A Bonds were issued by the Authority pursuant to the
Mortgage and Security Agreement and Trust Indenture between the Authority and Bankers Trust
Company (the "Trustee"), dated as of December 1, 2002 (the "Indenture") and secured by the
Lease. The City has determined to prepay all lease payments due under the Lease (i.e., the
Purchase Price thereunder), which is the amount necessary to defease the 200$ through 2013
maturities of the Series 2002A Bonds and to redeem the 2014 through 2023 maturities of the
Series 2002A Bonds on February 1, 2013 (the "Redemption Date"),
5.02. Purchase of Investment Securities to Fund the Escrow Account. It is necessary to
purchase from Bond proceeds investment securities required to fund the Escrow Account
pursuant to this Resolution. Ehlers & Associates, Inc. as agent for the City is hereby authorized
and directed to purchase for and on behalf of the City and in its name, appropriate securities to
fund the Escrow Account. Upon the issuance and delivery of the Bonds, the securities so
purchased will be deposited with the Escrow Agent and held pursuant to the terms of the Escrow
Agreement and the Resolution. As of the date of delivery of and payment for the Bonds the
proceeds of the Bonds (the "Proceeds"), in the amount of $ are hereby
appropriated for such purpose as will be necessary to pay the principal of, interest on and
redemption premium (if any) on the Series 2002A Bonds to their maturity or the date on which
they are called for redemption, whichever date is earlier, less necessary expenses of the issuance
of the Bonds and less any amount of Proceeds in excess of $ required to be
314308v3 AJP HP 110-73 C-11
deposited in the Debt Service Fund, are hereby pledged and appropriated and will be deposited in
an escrow account (the "Escrow Account") with Bankers Trust Company, Des Moines, Iowa, a
suitable financial institution, whose deposits are insured by the Federal Deposit Insurance
Corporation, whose combined capital and surplus is not less than $500,000 and said financial
institution is hereby designated escrow agent (the "Escrow Agent") for such funds. The
Proceeds will be invested in securities maturing or callable at the option of the holder on such
dates and bearing interest at such rates as will be required to provide sufficient funds, together
with any cash or other funds retained in the Escrow Account, to pay when due the interest to
accrue on each of the Series 2002A Bonds at maturity or on the date on which it is called as
herein provided and to pay the principal amount of each such obligation at maturity or on the
date on which it has been called for redemption and to pay any premium required far redemption
on such date. The monies in the Escrow Account will be used solely for the purposes herein set
forth and for no other purpose, except that if any surplus will remain in the Escrow Account after
all of the Series 2002A Bonds and interest (and any premium) thereon are paid, then such
balance will be transferred to the City.
5.03. Investment Yields and Applicable Arbitrage Regulations. No portion of the
proceeds of the Bonds will be used directly or indirectly to acquire higher yielding investments
or to replace funds which were used directly or indirectly to acquire higher yielding investments,
except (i) for a reasonable temporary period until such proceeds are needed for the purpose for
which the Bonds were issued, and (ii) in addition to the above, in an amount not greater than the
lesser of five percent of the proceeds of the Bonds or $100,000. To this effect, any proceeds of
the Bonds and any sums from time to time held in the Debt Service Fund (or any other City
account which will be used to pay principal and interest to become due on the Bonds) in excess
of amounts which under the applicable federal arbitrage regulations may be invested without
regard as to yield will not be invested at a yield in excess of the applicable yield restrictions
imposed by the arbitrage regulations on such investments after taking into account any
applicable temporary periods or minor portion made available under the federal arbitrage
regulations. In addition, the proceeds of the Bonds and money in the Debt Service Fund will not
be invested in obligations or deposits issued by, guaranteed by or insured by the United States or
any agency or instrumentality thereof if and to the extent that such investment would cause the
Bonds to be federally guaranteed within the meaning of Section 149(b) of the Internal Revenue
Code of 1986, as amended (the "Code").
5.04. General Obligation Pledge. For the prompt and full payment of the principal of
and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing
powers of the City will be and are hereby irrevocably pledged. If the balance in the Escrow
Account or Debt Service Fund is ever insufficient to pay all principal and interest then due on the
Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of
monies in the general fund of the City which are available for such purpose, and such general
fund may be reimbursed with or without interest from the Escrow Account or Debt Service
Account when a sufficient balance is available therein.
5.05. Escrow A reement. On or prior to the delivery of the Bonds, the Mayor and the
City Manager are hereby authorized and directed to execute on behalf of the City a Refunding
Escrow Agreement (the "Escrow Agreement") with the Escrow Agent in substantially the form now
on file with the City Clerk. All essential terms and conditions of the Escrow Agreement including
payment by the City of reasonable charges for the services of the Escrow Agent, are hereby
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approved and adopted and made a part of this resolution, and the City covenants that it will
promptly enforce all provisions thereof in the event of default thereunder by the Escrow Agent.
5.06. Payment at Maturity or Redemption of Series 2002A Bonds. It is hereby found
and determined that Proceeds of the Bonds available and appropriated to the Escrow Account will
be sufficient, together with the permitted earnings on the investment of the Escrow Account without
reinvestment, to pay at maturity or redemption all of the principal of, interest on and redemption
premium (if any) on the Series 2002A Bonds.
5.07. Purchase of Securities and Compliance with the Act. Securities purchased from
the monies in the Escrow Account will be limited to securities that are both Permitted Investments
under the Indenture and specified in Minnesota Statutes, Section 475.67, Subdivision 8. The City's
financial adviser is hereby authorized and directed to purchase for and on behalf of the City and in
its name, appropriate securities to fund the Escrow Account. Upon the issuance and delivery of the
Bonds, the securities so purchased will be deposited with the Escrow Agent and held pursuant to the
terms of the Escrow Agreement and the Resolution.
5.08. Notice of Call for Redemption. The Series 2002A Bonds maturing on February 1,
2014 and thereafter will be redeemed and prepaid on the Redemption Date. The Series 2002A
Bonds will be redeemed and prepaid in accordance with the terms of the Series 2002A Bonds
and the Indenture and in accordance with the terms and conditions set forth in the form of Notice
of Call for Redemption attached hereto as Exhibit C which terms and conditions are hereby
approved and incorporated herein by reference. The Trustee for the Series 2002A Bonds is
authorized and directed to send a copy of the Notice of Call for Redemption to each registered
holder of the Series 2002A Bonds.
5.09. Amendment to Lease. The Mayor and City Manager are authorized to execute a
First Amendment to Lease-Purchase Agreement between the City and the Authority, with the
consent of the Trustee, in substantially the form on file with the City Clerk, which amendment
directs the Trustee to waive the requirement of the Lease to receive an opinion of nationally
recognized bankruptcy counsel stating that any prepayment of principal and interest on the Series
2002A Bonds from money or securities deposited in escrow will not constitute a voidable
preference under the U.S. Bankruptcy Code.
Section 6. Authentication of Transcript.
6.01. City Proceedings and Records. The officers of the city are authorized and
directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds,
certified copies of proceedings and records of the City relating to the Bonds and to the financial
condition and affairs of the City, and such other certificates, affidavits and transcripts as may be
required to show the facts within their knowledge or as shown by the books and records in their
custody and under their control, relating to the validity and marketability of the Bonds and such
instruments, including any heretofore furnished, will be deemed representations of the City as to
the facts stated therein.
6.02. Certification as to Official Statement. The Mayor, City Manager and Finance
Director are hereby authorized and directed to certify that they have examined the Official
Statement prepared and circulated in connection with the issuance and sale of the Bonds and that
314308v3 A7P HPllO-73 ~_ I3
to the best of their knowledge and belief the Official Statement is a complete and accurate
representation of the facts and representations made therein as of the date of the Official
Statement.
Section 7. Tax Covenants.
7.01. Tax-Exempt Bonds. The City covenants and agrees with the holders from time to
time of the Bonds that it will not take or permit to be taken by any of its officers, employees or
agents any action which would cause the interest on the Bonds to become subject to taxation
under the Code and the Treasury Regulations promulgated thereunder, in effect at the time of
such actions, and that it will take or cause its officers, employees or agents to take, all affirmative
action within its power that maybe necessary to ensure that such interest will not become subject
to taxation under the Code and applicable Treasury Regulations, as presently existing or as
hereafter amended and made applicable to the Bonds.
7.02. Tax Covenants. The City will comply with requirements necessary under the
Code to establish and maintain the exclusion from gross income of the interest on the Bonds
under Section 103 of the Code, including without limitation requirements relating to temporary
periods for investments and limitations on amounts invested at a yield greater than the yield on
the Bonds and the rebate of excess investment earnings to the United States.
7.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of
the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the
Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of
the Code.
7.04. Procedural Requirements. The City will use its best efforts to comply with any
federal procedural requirements which may apply in order to effectuate the designations made by
this section.
Section 8. Book-Entry System.
8.01. DTC. The Bonds will be initially issued in the form of a separate single
typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.04
hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration
books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust
Company, New York, New York, and its successors and assigns ("DTC"). Except as provided in
this section, all of the outstanding Bonds will be registered in the registration books kept by the
Registrar in the name of Cede & Co., as nominee of DTC.
8.02. Participants. With respect to Bonds registered in the registration books kept by
the Registrar in the name of Cede & Co., as nominee of DTC, the City and the Registrar will
have no responsibility or obligation to any broker dealers, banks and other financial institutions
from time to time for which DTC holds Bonds as securities depository (the "Participants") or to
any other person on behalf of which a Participant holds an interest in the ,Bonds, including but
not limited to any responsibility or obligation with respect to (i) the accuracy of the records of
DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the
delivery to any Participant or any other person (other than a registered owner of Bonds, as shown
314308v3 A1P HP110-73 C-14
by the registration books kept by the Registrar), of any notice with respect to the Bonds,
including any notice of redemption, or (iii) the payment to any Participant or any other person,
other than a registered owner of Bonds, of any amount with respect to principal of, premium, if
any, or interest on the Bonds. The City and the Registrar may treat and consider the person in
whose name each Bond is registered in the registration books kept by the Registrar as the holder
and absolute owner of such Bond for the purpose of payment of principal, premium and interest
with respect to such Bond, for the purpose of registering transfers with respect to such Bonds,
and for all other purposes. The Registrar, acting as paying agent, will pay all principal of,
premium, if any, and interest on the Bonds only to or on the order of the respective registered
owners, as shown in the registration books kept by the Registrar, and all such payments will be
valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of
principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid.
No person other than a registered owner of Bonds, as shown in the registration books kept by the
Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon
delivery by DTC to the City Manager of a written notice to the effect that DTC has determined to
substitute a new nominee in place of Cede & Co., the words "Cede & Co.," will refer to such
new nominee of DTC; and upon receipt of such a notice, the City Manager will promptly deliver
a copy of the same to the Registrar.
8.03. Representation Letter. The City has heretofore executed and delivered to DTC a
Blanket Issuer Letter of Representations (the "Representation Letter") which will govern
payment of principal of, premium, if any, and interest on the Bonds and notices with respect to
the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to
the Bonds will agree to take all action necessary for all representations of the City in the
Representation letter with respect to the Registrar and Paying Agent, respectively, to be complied
with at all times.
8.04. Transfers Outside Book-Entry System. In the event the City, by resolution of the
City Council, determines that it is in the best interests of the persons having beneficial interests
in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon
DTC will notify the Participants, of the availability through DTC of Bond certificates. In such
event the City will issue, transfer and exchange Bond certificates as requested by DTC and any
other registered owners in accordance with the provisions of this Resolution. DTC may
determine to discontinue providing its services with respect to the Bonds at any time by giving
notice to the City and discharging its responsibilities with respect thereto under applicable law.
In such event, if no successor securities depository is appointed, the City will issue and the
Registrar will authenticate Bond certificates in accordance with this resolution and the provisions
hereof will apply to the transfer, exchange and method of payment thereof.
8.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution
to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC,
payments with respect to principal of, premium, if any, and interest on the Bond and notices with
respect to the Bond will be made and given, respectively in the manner provided in DTC's
Operational Arrangements as set forth in the Representation Letter.
Section 9. Continuing_Disclosure.
314308v3 AJP HP 110-73 ~_ 1 S
9.01. Cit~Compliance with Provisions of Continuing_Disclosure Certificate. The
City hereby covenants and agrees that it will comply with and carry out all of the provisions of
the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution,
failure of the City to comply with the Continuing Disclosure Certificate will not be considered an
event of default with respect to the Bonds; however, any Bondholder may take such actions as
may be necessary and appropriate, including seeking mandate or specific performance by court
order, to cause the City to comply with its obligations under this section.
9.02. Definition. "Continuing Disclosure Certificate" means that certain Continuing
Disclosure Certificate executed by the Mayor and City Manager and dated the date of issuance
and delivery of the Bonds, as originally executed and as it may be amended from time to time in
accordance with the terms thereof.
Section 10. Defeasance.
10.01, Pledges, Covenants, and Other Rights to Cease. When all Bonds and all interest
thereon have been discharged as provided in this section, all pledges, covenants and other rights
granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full
faith and credit of the City for the prompt and full payment of the principal of and interest on the
Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any
date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof
in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing
with the Registrar a sum sufficient fox the payment thereof in full with interest accrued to the date of
such deposit.
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