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CR 2012-100 Award Sale of Bonds - G. O. Capital Improvement Plan Bonds Series 2012AA:a August 21, 2012 Council Report 2012-100 City of Hopkins AWARD SALE OF BONDS — G.O. Capital Improvement Plan Bonds Series 2012A Proposed Action Staff recommends approval of the following motion: Approve resolution No. 2012-063 awarding the sale of General Obligation Capital Improvement Plan Bonds, series 2012A, in the original aggregate principal amount of $1,985,000; fixing their form and specifications; directing their execution and delivery; nrovidingfor their payment; providing for the escrowing and investment of the proceeds thereof; and providing for the redemption of bonds refunded thereby. With this motion the sale of the bonds will be awarded based on the recommendation of Ehlers and Associates, Inc., financial advisor for this project. Overview The City of Hopkins has the authority to issue bonds at a lower price to pay for early retirement of existing debt. It has been demonstrated that current bond rates have gone down and the city has an opportunity to issue new bonds at a lower rates to pay off old bonds that are at higher rates. This will be an advance refunding of the 2003A HRA Revenues bonds that are callable in 2015. The present value savings is estimated to be $141,831 equal to 6.91% of the refunded principal or approximately $15,000 per year over the next 11 years. The HRA will also be utilizi8ng $238,955 from the existing Debt Service Reserve Fund held in escrow to buy down the bonds and shorten the maturity by one year. At the July 17, 2012 Council Meeting, the Council authorized the sale of $1,985,000 G.O. CIP bonds for refunding the aforementioned bond issue. The bids will be accepted until 11:00 am on August 21, 2012 at which time they will be reviewed and the recommendation incorporated into Resolution 2010-2063. Primary Issues to Consider The primary issue is the savings that will be realized with the refunding. Any other significant issues affecting the sale will not be known until after the closing of the bids on August 21, 2012. Supporting Information • Resolution No. 2012-063 • Advance Refunding Escrow Agreement relating to the 2003 HRA Revenue Bonds • Official Statement (previously emailed to each council member) — and on file in the office. Christine M. Harkess, CPA, CGFM Finance Director Financial Impact: $ $1,985,000 Budgeted: Y/N X N Source: Bond Proceeds Related Documents (CIP, ERP, etc.): CIP Notes: EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF HOPKINS, MINNESOTA HELD: August 21, 2012 Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Hopkins, Minnesota, was called and held at the City Hall in Hopkins, Minnesota on Tuesday, the 21st day of August, 2012, at 7:30 p.m. for the purpose, in part. of awarding the sale of the City's general obligation capital improvement plan bonds and directing their execution and delivery. The following members were present: and the following were absent: The Mayor announced that the next order of business was consideration of the proposals which had been received fbr the purchase of the City's General Obligation Capital Improvement Plan Bonds, Series 2012A, in the aggregate principal amount of $1,985,000. The City Manager presented a tabulation of the proposals that had been received in the manner specified in the Terms of Proposal for the Bonds. The proposals are attached hereto as EXHIBIT A. After due consideration of the proposals, Member then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: 409202v1 JAE HP 110-82 RESOLUTION NO. 2012-063 A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2012A, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $1,985,000; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; PROVIDING FOR THEIR PAYMENT; PROVIDING FOR THE ESCROWING AND INVESTMENT OF THE PROCEEDS THEREOF; AND PROVIDING FOR THE REDEMPTION OF BONDS REFUNDED THEREBY 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. Background. (a) The Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota (the "Authority") previously issued its Public Facility Lease Revenue Bonds, Series 2003A (Police Station Improvements) (the "Series 2003A Bonds"), in the original aggregate principal amount of $3,050,000, pursuant to the terms of a Trust Indenture, dated as of June 1, 2003 (the "Indenture"), between the Authority and Bankers Trust Company, as trustee (the "Trustee"). The proceeds of the Series 2003A Bonds were used to finance the renovation of the former fire station and portions of City Hall for an expanded police facility (collectively, the "Facilities") on certain property located in the City (the "Site"). The Series 2003A Bonds maturing on and after February 1, 2015, are subject to redemption, at the option of the City, on February 1, 2014, and any day thereafter, at a price of par, plus accrued interest. (b) The Series 2003A Bonds are secured by lease payments by the City pursuant to a Lease -Purchase Agreement, dated as of June 1, 2003 (the "Lease"), between the Authority, as lessor, and the City, as lessee. Pursuant to Section 8.1 of the Lease, the City has the option to prepay the lease payments due under the Lease and purchase the Site and the Facilities. The City has determined to exercise its option to prepay the Series 2003A Bonds and acquire the Facilities. (c) The City is authorized by Minnesota Statutes, Chapter 475, as amended, specifically Section 475.521 (collectively, 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 acquisition or betterment of public lands, buildings or other improvements for the purpose of a city hall, library, public safety facility and public works facilities (excluding light rail transit or any activity related to it, or a park, road, bridge, administrative building other than a city hall, or land for any of those activities). (d) On July 10, 2012, the City held a public hearing on and adopted the 2012 through 2016 Capital Improvement Plan (the "Plan"), which authorizes the City to acquire the Facilities through the issuance of bonds in the maximum principal amount of $2,000,000, all in accordance with the Act. 409202v1 JAE HPI 10-82 2 (e) No petition requesting a referendum regarding issuance of bonds under the Plan was filed within 30 days after the date of the hearing, and the City is therefore authorized to issue the Bonds under the Act. (f) As required by the Act, the City has determined that: (i) the expected useful life of the projects to be refinanced with the proceeds of the Bonds 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 0.16 percent of the taxable market value of property in the City for taxes payable in 2012. (g) It is necessary and desirable for the reduction of debt service costs that the City issue its General Obligation Capital Improvement Plan Bonds. Series 2012A (the "Bonds"), in the original aggregate principal amount of S 1,985,000, pursuant to the Act, in order to prepay the lease payments and acquire the Facilities from the Authority, thereby effecting a net advance refunding of the Series 2003A Bonds, currently outstanding in the aggregate principal amount of $2,050,000, of which $1,765,000 in principal amount (constituting the 2015 through 20124 maturities) is callable on February 1, 2014 (h) The City is authorized by Section 475.60, subdivision 2(9) of the Act to negotiate the sale of the Bonds, it being determined that the City has retained an independent financial advisor in connection with such sale. The actions of the City staff and the City's financial advisor in negotiating the sale of the Bonds are ratified and confinned in all aspects. 1.02. Award to the Purchaser and Interest Rates. The proposal of (the "Purchaser") to purchase the Bonds is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bonds at a price of S (par amount of $1,985,000, [plus original issue premium of S ] [less original issue discount of $ ,] less underwriter's discount of $ ), plus accrued interest to date of delivery, if any, for Bonds bearing interest as follows: Year Interest Rate Year Interest Rate 2013 % 2019 % 2014 2020 2015 2021 2016 2022 2017 2023 2018 True interest cost: 1.03. Purchase Contract. The sum of $ , being the amount proposed by the Purchaser in excess of $1,960,818, shall be credited to the accounts in the Debt Service Fund hereinafter created or deposited in the Escrow Fund hereinafter created, as determined by the Finance Director of the City in consultation with the City's financial advisor. The Finance Director is directed to retain 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. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 1.04. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the Bonds pursuant to the Act, in the total principal amount of S1.985.000, originally dated September 11, 2012, 409202v1 JAE HP 110-82 in the denomination of $5,000 each or, any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1 in the years and amounts as follows: Year Amount Year Amount 2013 $ 2019 $ 2014 2020 2015 2021 2016 2022 2017 2023 2018 1.05. Optional Redemption. The City may elect on February 1, 2020, and on any day thereafter to prepay Bonds due on or after February 1, 2021. 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: Mandatory Redemption. 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, 2013, to the registered owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day. 2.03. Registration. The City will appoint 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 lg'ster. 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, 409202vl JAE HPI 10-82 4 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 exchan-e of Bonds sufficient to reimburse the Registrar 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 atter the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 409202v JAE HP 110-82 2.04. Appointment of Initial Registrar. The City appoints Bond Trust Services Corporation, Roseville, Minnesota, 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 Finance Director must transmit to the Registrar moneys 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 those 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 a 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 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 Manager 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 EXHIBIT B attached hereto 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. Execution of the Bonds. The Bonds will be printed or typewritten in substantially the form set forth in EXHIBIT B. 3.02. Approving Legal Opinion. 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. The Bonds will be payable from the General Obligation Capital Improvement Plan Bonds, Series 2012A Debt Service Fund (the "Debt Service Fund") hereby created, and the proceeds of the ad valorem taxes (the "Taxes") hereinafter levied are hereby pledged to the Debt Service Fund. The Debt Service Fund shall be administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. There is appropriated to the Debt Service Fund amounts over the minimum purchase price of the Bonds 409202v1 JAE HP 110-82 6 paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03. 4.02. Escrow Fund. Proceeds of the Bonds in the amount of $ shall be deposited in an escrow fund (the "Escrow Fund") to be maintained with U.S. Bank National Association, St. Paul, Minnesota, and said financial institution is hereby designated escrow- agent (the "Escrow Agent") for the Escrow Fund. Such funds will be received by the Escrow Agent and applied to fund the Escrow Fund or to pay costs of issuing the Bonds. Proceeds of the Bonds, less amounts used to pay costs of issuance of the Bonds and less the appropriations made in Section 4.01 hereof, are hereby irrevocably pledged and appropriated to the Escrow Fund, together with all investment earnings thereon. The Escrow Fund 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 Fund, to (i) pay principal of and interest on the Series 2003A Bonds through February 1, 2014 (the "Redemption Date"): and (ii) pay the outstanding principal amount of the Series 2003A Bonds on the Redemption Date. The monies in the Escrow Fund will be used solely for the purposes herein set forth and for no other purpose, except that any surplus in the Escrow Fund may be remitted to the City, all in accordance with the Escrow Agreement (hereafter defined) by and between the City and the Escrow Agent. Any monies remitted to the City upon termination of the Escrow Agreement shall be deposited to the Debt Service Fund. 4.03. 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 pledged. If a payment of principal or interest on the Bonds becomes due when there is not sufficient money in the Debt Service Fund or the Escrow Fund to pay the same, the 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 ad valorem taxes levied by this resolution when collected. 4.04. Pledge of Taxes. For the purpose of paying the principal of and interest on the Bonds, there is levied a direct annual irrepealable ad valorem tax (tile "Taxes") upon all of the taxable property in the City, to be spread upon the tax rolls and collected with and as part of other general taxes of the City. The Taxes will be credited to the Debt Service Fund and will be in the years and amounts as shown in EXHIBIT C attached hereto. 4.05. Certification to Taxpayer Services Division Manager as to Debt Service Fund Amount. It is hereby determined that the estimated collections of 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 is irrepealable until all of the Bonds are paid, provided that at the time the City makes its annual tax levies the Finance Director may certify to the Taxpayer Services Division Manager of Hennepin County, Minnesota, the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the Taxpayer Services Division Manager will thereupon reduce the levy collectible during such year by the amount so certified. 4.06. Registration of Resolution. The City Manager is authorized and directed to file a certified copy of this resolution with the Taxpayer Services Division Manager and to obtain the certificate required by Section 475.63 of the Act. Section 5. Refunding; Findings; Redemption of Refunded Bonds. 5.01. Purpose of Refunding. The City has determined to prepay the lease payments due under the Lease in an amount necessary to pay the principal of and interest on the Series 2003A Bonds through the Redemption Date, which is February 1, 2014, and to pay the outstanding principal amount of the 409202v1 JAE HPI 10-82 Series 2003A Bonds on the Redemption Date. It is hereby found and determined that based upon information presently available from the City's financial advisors, the issuance of the Bonds is consistent with covenants made with the holders of the Series 2003A Bonds and is necessary and desirable both to acquire the Facilities and for the reduction of debt service cost to the City. 5.02. Proceeds Pledged to the Escrow Fund. As of the date of delivery of and payment for the Bonds, proceeds of the Bonds in the amount of $ are hereby pledged and appropriated and will be deposited in the Escrow Fund for the purposes of (i) paying principal of and interest on the Series 2003A Bonds through the Redemption Date; and (ii) redeeming and prepaying all the outstanding principal of the Series 2003A Bonds on the redemption Date. Proceeds of the Bonds in the amount of $ will be deposited in the Escrow Fund to pay the costs of issuance of the Bonds. 5.03. Payment at Maturity or Redemption of Series 2003A Bonds. It is hereby found and determined that the proceeds of the Bonds and funds available and appropriated to the Escrow Fund will be sufficient, together with the permitted earnings on the investment of the Escrow Fund, to pay at maturity or redemption all of the principal of, interest on and redemption premium, if any, on the Series 2003A Bonds. 5.04. Purchase of Securities and Compliance with the Act. Securities purchased from the monies in the Escrow Fund will be limited to securities specified in Section 475.67, subdivision 8 of the Act. Ehlers & Associates, Inc. and/or the Escrow Agent, 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 Fund. Upon the issuance and delivery of the Bonds, the securities so purchased will be deposited in the Escrow Fund established herein and held pursuant to the terms of the Escrow Agreement and this resolution. 5.05. Escrow Agreement. 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 the Advance Refunding Escrow Agreement (the "Escrow Agreement"). The Escrow Agreement is hereby approved in substantially the form on file with the City on the date hereof, with such necessary and appropriate variations, omissions, and insertions as do not materially change the substance thereof, or as the Mayor and City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and City Manager shall be conclusive evidence of such determination. 5.06. Notice of Redemption. The Series 2003A Bonds maturing on February 1, 2015, and thereafter will be redeemed and prepaid on February 1, 2014, in accordance with their terms and in accordance with the terms and conditions set forth in the form of Notice of Call for Redemption attached hereto as EXHIBIT D, which terms and conditions are hereby approved and incorporated herein by reference. The registrar for the Series 2003A Bonds are authorized and directed to send a copy of the Notice of Call for Redemption to each registered holder of the Series 2003A Bonds. 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. 409202vl JAE HPI 10-82 6.02. Other Documents. The Mayor and City Manager are hereby authorized and directed to execute such other documents which are necessary and appropriate to acquire the Facilities. 6.03. Certification as to Official Statement. The Mayor and City Manager are 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 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. 6.04. Other Certificates. The Mayor, City Manager, and Finance Director are hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the City or incumbency of its officers, at the closing the Mayor, the City Manager, and the Finance Director shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation, and the Finance Director shall also execute and deliver a certificate as to payment for and delivery of the Bonds. 6.05. Payment of Costs of Issuance. Costs of issuance of the Bonds will be paid by the Escrow Agent pursuant to the Escrow Agreement. Section 7. Tax Covenant. 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 Internal Revenue Code of 1986, as amended (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 may be 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. Rebate. 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, 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. Oualified Tax -Exempt Oblittations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not "private activity bonds -as defined in Section 141 of the Code. (b) the City designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; 409202v1 JAE HP 110-82 (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2012 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2012 have been designated for purposes of Section 265(b)(3) of the Code. 7.05. 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; Limited Obligation of City. 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, the Registrar and the Paying Agent 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 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, the Registrar and the Paying Agent 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 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 and Paying Agent. 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. 4092020 JAE HPI 10-82 10 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 all 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. 9.01. Execution of Continuing Disclosure Certificate. "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 teens thereof. 9.02. City Compliance xvith 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 is not to 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. Section 10. Defeasance. 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 for the payment thereof in full with interest accrued to the date of such deposit. 409202v1 JAE HPI 10-82 11 The motion for the adoption of the foregoing resolution was duly seconded by Member , and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 409202v1 JAE HPI 10-82 12 Passed and adopted this 21 st day of August, 2012. CITY OF HOPKINS, MINNESOTA Mayor Attest: City Clerk 409202v1 JAE HP 110-82 1 1 EXHIBIT A PROPOSALS Error! Unknown document property name. A-1 EXIIIBIT B FORM OF BOND No. R- UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF HOPKINS GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BOND SERIES 2012A Date of Rate Maturity Original Issue CUSIP February 1, 20 September 11, 2012 Registered Owner: Cede & Co. The, City of Hopkins, Minnesota, a duly organized and existing municipal corporation in Hennepin County, Minnesota (the "City"), acknoNN ledges itself to be indebted and for value received hereby 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, 2013, 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 draft by Bond Trust Services Corporation, Roseville, Minnesota, as Bond 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, 2020, and on any day thereafter to prepay Bonds due on or after February 1, 2021. 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 \a ill determine. If less than all Bonds of a maturity are called for redemption, the City will notify The 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 $1,985,000 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 August 21. 2012 (the "Resolution'"). for the purpose of providing money to acquire certain facilities in the City by prepaying outstanding lease payments under a Lease -Purchase Agreement, dated as of June 1, 2003, between the Housing and Redevelopment Authority in and for the City of Hopkins. Minnesota (the "Authority'") and the City, and to refund certain outstanding lease -revenue obligations of the Authority issued to finance the facilities. The principal hereof and interest hereon are payable in part from ad valorem taxes, as set forth in the Error! Unknown document property name. B-1 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 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. The City Council has designated the issue of Bonds of which this Bond forms a part as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code") relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. 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 Bond 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 Bond 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 Bond 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 Bond Registrar will be affected by any notice to the contrary. 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, charter, or statutory 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 Bond 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: September 11, 2012 (Facsimile) Mayor Error: Unknown document property name. B-2 CITY OF HOPKINS, MINNESOTA (Facsimile) City Manager CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. BOND TRUST SERVICES CORPORATION Authorized Representative ABBREVIATIONS 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: 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 UNIT GIFT MIN ACT Custodian (Oust) (Minor) under Unifonn Gifts or Transfers to Minors Act, State of 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 assiornor'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 Error! Unknown document propertc name. B_ 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, STEMP, 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: (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 Registration Registered Owner Cede & Co. Federal ID #13-2555119 Error! Unknown document property name. B-4 Signature of Officer of Registrar EXHIBIT C TAX LEVY SCHEDULE YEAR * TAX LEVY 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 * Year tax levy collected. Error! Unknown document properh mune. C_ 1 IWI111aMMC NOTICE OF CALL FOR REDEMPTION FOR $3,050,000 Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota Public Facility Lease Revenue Bonds Series 2003A (Police Station Improvements) NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Hopkins, Hennepin County, Minnesota (the "City"), there have been called for redemption and prepayment on February 1, 2014 all outstanding bonds designated as Public Facility Lease Revenue Bonds, Series 2003A (Police Station Improvements), issued by the Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota, dated June 1, 2003, having stated maturity dates of February 1 in the years 2015 through 2024, both inclusive, totaling $1,765,000 in principal amount, and with the following CUSIP numbers: Year of Maturity Amount CUSIP 2015 $145,000 43987T BF9 2016 155,000 43987T BG7 2017 160,000 43987T BH5 2018 165,000 43987T BJ1 2019 170,000 43987T BK8 2020 180,000 43987T BL6 2021 185,000 43987T BM4 2022 195,000 43987T BN2 2023 200,000 43987T BP7 2024 210,000 43987T BQ5 The bonds are being called at a price of par plus accrued interest to February 1, 2014, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of Bankers Trust Company, 453 Seventh Street, Des Moines, Iowa 50309, on or before February 1, 2014. Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2003, the City is required to withhold a specified percentage of the principal amount of the redemption price payable to the holder of any Bonds subject to redemption and prepayment on the Redemption Date, unless the City is provided with the Social Security Number or Federal Employer Identification Number of the holder, properly certified. Submission of a fully executed Request for Taxpayer Identification Number and Certification, Form W-9 (Rev. December 2011), will satisfy the requirements of this paragraph. Error! Unknown document property name. D-1 Dated: BY ORDER OF THE CITY COUNCIL By /s/ Mike Mornson City Manager City of Hopkins, Minnesota Error! Unknown document properth name. D_2 STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) SS. CITY OF HOPKINS ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Hopkins, Hennepin County, Minnesota (the "City"), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on August 21, 2012 with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of the City's General Obligation Capital Improvement Plan Bonds, Series 2012A, in the original aggregate principal amount of $1,985,000. WITNESS My hand officially as such City Clerk and the corporate seal of the City this day of , 2012. City Clerk City of Hopkins, Minnesota (SEAL) Error! Unknown document property name. ADVANCE REFUNDING ESCROW AGREEMENT Relating to: $3,050,000 Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota Public Facility Lease Revenue Bonds Series 2003A (Police Station Improvements) THIS ADVANCE REFUNDING ESCROW AGREEMENT (the "Agreement'), is made this 11"' day of September, 2012, pursuant to Minnesota Statutes, Section 475.67, subdivisions 4 through 12 (the "Act"), and executed by and between the City of Hopkins. Minnesota (the "City"), and U.S. Bank National Association, St. Paul. Minnesota (the "Escro\\ Agent*'): WITNESSETH: That the parties hereto recite and, in consideration of the mutual covenants contained herein, covenant and agree as follows: 1. Pursuant to a Trust Indenture, dated as of June 1. 2003 (the "Indenture"), between the Housing and Redevelopment Authority in and for the City of Hopkins (the "Authority") and Bankers Trust Company, as trustee (the "Trustee*'). the Authority issued its Public Facility Lease Revenue Bonds, Series 2003A (Police Station Improvements) (the "Series 2003A Bonds"). in the original aggregate principal amount of $3,050,000. The proceeds of the Series 2003A Bonds were used to finance the renovation of the former fire station and portions of City Hall in the City of Hopkins, Minnesota (the "City") for an expanded police facility (the "Facilities"). The Facilities and the land upon which it was constructed (the "Site") were leased by the City from the Authority pursuant to a Lease -Purchase Agreement, dated as of June 1. 2003 (the "Lease"). between the Authority. as lessor, and the City. as lessee. The City has determined to exercise its option under the Lease to prepay the lease payments due under the Lease and purchase the Facilities and the Site. The Series 2003A Bonds maturing on and after February 1, 2015, are subject to redemption at the option of the City on February 1, 2014, and any day thereafter at a price of par, plus accrued interest. 2. Pursuant to a resolution adopted by the City Council of the City on August 21, 2012 (the "Resolution"), the City has provided for the issuance of its General Obligation Capital Improvement Plan Bonds, Series 2012A (the *'Bonds'). in the original aggregate principal amount of $1,985,000. A portion of the proceeds of the Bonds will be applied to the defeasance and refunding of the Series 2003A Bonds and will be placed in escrow pursuant to this Agreement to (1) pay when due the principal of and interest on the Series 2003A Bonds through February 1. 2014 (the "Redemption Date"): and (ii) on the Redemption Date pay the principal of and premium, if any, due on the Series 2003A Bonds maturing on and atter February 1, 2015. 3. The City, in accordance with the Resolution, issued and sold the Bonds in the principal amount of $1,985,000 and has received a purchase price for the Bonds of $ (par amount of $1,985,000, [plus original issue premium of S ] [less an original issue discount of $ ,] less underwriter's discount of $ ). plus accrued interest, if any. On the date hereof, the Escrow Agent has received, on behalf of the City, proceeds of the Bonds in the amount of $ . Such funds shall be applied as follows: (i) $ will be deposited in the Escrow Fund established herein for the defeasance and redemption of the Series 2003A Bonds; and (ii) S will be used to pay the costs of issuance, as described in paragraph 4 hereof'. Pursuant to this Agreement, the Escrow Agent will invest funds deposited in 409200v1 JAE HP 110-82 the Escrow Fund in the amount of $ in securities which are general obligations of the United States, securities whose principal and interest payments are guaranteed by the United States (the "Federal Securities"), as described in the schedule which is attached hereto, marked EXHIBIT A and made a part hereof, and $ will remain on deposit in the Escrow Fund in cash. It is understood and agreed that the dates and amounts of payments of principal and interest due on the securities so deposited are as indicated in EXHIBIT B, and that the cash deposited and the principal and interest payments due on such securities are such as to provide the funds required to pay all principal and interest payable on the Series 2003A Bonds, on and prior to their maturity dates, or to the date on which any of the Series 2003A Bonds have been directed to be prepaid, as stated in the Resolution. 4. The Escrow Agent acknowledges receipt of the cash and Federal Securities and agrees that it will hold such cash and Federal Securities in a special escrow account (the "Escrow Fund") created in the name of the City, and will collect and receive on behalf of the City all payments of principal of and interest on such securities and will remit from the Escrow Fund to the paying agents for the Series 2003A Bonds the funds required from time to time for the payment of (i) principal of and interest on the Series 2003A Bonds through February 1, 2014, which is the Redemption Date; and (ii) all outstanding principal of, interest on, and premium, if any, on the Series 2003A Bonds on the Redemption Date. After provision for payment of all remaining Series 2003A Bonds, with interest accrued thereon, the Escrow Agent will remit any remaining funds in the Escrow Fund to the City. The sum of $ deposited to the Escrow Fund shall be used by the Escrow Agent for the payment of the costs of issuance of the Bonds and payments to the City as set forth in EXHIBIT C attached hereto. 5. In order to ensure continuing compliance with the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder (collectively, the "Code"), the Escrow Agent agrees that it will not reinvest any cash received in payment of the principal of and interest on the Federal Securities held in the Escrow Fund. This prohibition on reinvestment shall continue unless and until an opinion is received by the Escrow Agent from nationally recognized bond counsel that reinvestments, as specified in said opinion, may be made in a manner consistent with the Code. Reinvestment, if any, of amounts in the Escrow Fund made pursuant to this paragraph may be made only in direct obligations of the United States of America which mature prior to the next date on which either principal or interest on the Series 2003A Bonds is payable. 6. The Escrow Agent expressly waives any lien upon or claim against the monies and investments in the Escrow Fund. 7. If at any time it shall appear to the Escrow Agent that the money in the Escrow Fund allocable for such use hereunder will not be sufficient to make any payment due to the holders of any of the Series 2003A Bonds, the Escrow Agent shall immediately notify the City. The City thereupon shall forthwith deposit in the Escrow Fund from funds on hand and legally available to it such additional funds as may be required to meet fully the amount to become due and payable. The City acknowledges its obligation to levy ad valorem taxes on all taxable property in the City to the extent required to produce monies necessary for this purpose. The City and Escrow Agent acknowledge receipt of a verification report from Grant Thornton LLP, Minneapolis, Minnesota, certified public accountants, dated September 11, 2012, certifying that such cash and Federal Securities are sufficient to comply with the requirements of the Act. 8. The City will not repeal or amend the Resolution that calls the Series 2003A Bonds for redemption on their Redemption Date. The Escrow Agent shall cause the Notice of Call for Redemption attached hereto as EXHIBIT D to be mailed not less than 30 days prior to the Redemption Date to the registered owners of the Series 2003A Bonds to be redeemed, at their addresses appearing on the bond register, but failure to give such notice shall not affect the validity of the call for redemption. 409200v1 JAEHPI 10-82 2 9. Within thirty (30) days of December 31, 2012, and within thirty (30) days of December 31 of each year thereafter until termination of the Escrow Fund, the Escrow Agent shall submit to the City a report covering all money it shall have received and all payments it shall have made or caused to be made hereunder during the preceding twelve months. Such report shall also list all obligations held in the Escrow Fund and the amount of money on hand in the Escrow Fund on December 31 of each year. 10. It is recognized and agreed that title to the Federal Securities and cash held in the Escrow Fund from time to time shall remain vested in the City but subject always to the prior charge and lien thereon of this Agreement and the use thereof required to be made by this Agreement. The Escrow Agent shall hold all such money and obligations in a special trust fund and account separate and wholly segregated from all other funds and securities of the Escrow Agent, and shall never commingle such money or securities with other money or securities; provided, however, that nothing herein contained shall be construed to require the Escrow Agent to keep the identical monies, or any part thereof, received for the Escrow Fund on hand, but monies of an equal amount (except to the extent such are represented by investments pennitted under this Agreement) shall always be maintained on hand as funds held by the Escrow Agent as trustee, belonging to the City, and a special account shall at all times be maintained on the books of the Escrow Agent, together with such investments. In the event of the Escrow Agent's failure to account for any money or obligations held by it in the Escrow Fund, such money and obligations shall be and remain the property of the City, and if for any reason such money or obligations cannot be identified, all other assets of the Escrow Agent shall be impressed with a trust for the amount thereof, and the City shall be entitled to a preferred claim upon such assets. It is understood and agreed that the responsibility of the Escrow Agent under this Agreement is limited to the safekeeping and segregation of the funds and securities deposited with it in the Escrow Fund, and the collection of and accounting for the principal and interest payable with respect thereto. 11. This Agreement is made by the City for the benefit of the holders of the Series 2003A Bonds, and is not revocable by the City, and the investments and other funds deposited in the Escrow Fund and all income therefrom have been irrevocably appropriated for the payment of the Series 2003A Bonds and interest thereon in accordance with this Agreement. 12. This Agreement shall be binding upon and shall inure to the benefit of the City and the Escrow Agent and their respective successors and assigns. In addition, this Agreement shall constitute a third -party beneficiary contract for the benefit of the holders of the Series 2003A Bonds and said third -party beneficiaries shall be entitled to enforce performance and observance by the City and the Escrow Agent of the respective agreements and covenants herein contained as fully and completely as if said third -party beneficiaries were parties hereto. Any bank into which the Escrow Agent may be merged or with which it may be consolidated or any bank resulting from any meager or consolidation to which it shall be a party or any bank to which it may sell or transfer all or substantially all of its corporate trust business shall, if the City approves, be the successor agent without the execution of any document or the performance of any further act. 13. The Escrow Agent hereby certifies that it is a financial institution whose deposits are insured by the Federal Deposit Insurance Corporation and whose capital and surplus is not less than $500,000. 14. The Escrow Agent may at any time resign and be discharged of its obligations hereunder by giving to the City Manager of the City written notice of such resignation not less than 60 days before the date when the same is to take effect, provided that the Escrow Agent shall return to the City the pro rata portion of its fee which is allocable to the period of time commencing on the effective date of such resignation. Such resignation shall take effect upon the date specified in the notice, or upon the appointment and qualification of a successor prior to that date. In the event of such resignation, a successor shall promptly be appointed by the City, and the City Manager of the City shall immediately give written notice thereof to the predecessor escrow agent and publish the notice in the manner described in this paragraph 14. It" in a proper case, no appointment CdID11QII2lI l 3: 12 I1111M of a successor agent is made within 45 days after the receipt by the City of notice of such resignation, the Escrow Agent or the holder of any Series 2003A Bond may apply to any court of competent jurisdiction to appoint a successor escrow agent, which appointment may be made by the Court after such notice, if any, as the Court may prescribe. Any successor escrow agent appointed hereunder shall execute, acknowledge and deliver to its predecessor escrow agent and to the City a written acceptance of such appointment, and shall thereupon without any further act, deed or conveyance become fully vested with all moneys, properties, duties and obligations of its predecessor, but the predecessor shall nevertheless pay over, transfer, assign and deliver all moneys, securities or other property held by it to the successor escrow agent, shall execute, acknowledge and deliver such instruments of conveyance and do such other things as may reasonably be required to vest and confirm more fully and certainly in the successor escrow agent all right, title and interest in and to any property held by it hereunder. Any bank into which the Escrow Agent may be merged or with which it may be consolidated or any bank resulting from any merger or consolidation to which it shall be a party or any bank to which it may sell or transfer all or substantially all of its corporate trust business shall, if the City approves, be the successor escrow agent without the execution of any document or the performance of any further act. 15. The Escrow Agent acknowledges receipt of the sum of $ as its sole compensation for its services to be performed under this Agreement. 16. The duties and obligations of the Escrow Agent shall be as prescribed by the provisions of this Agreement and the Escrow Agent shall not be liable hereunder except for failure to perform its duties and obligations as specifically set forth herein or to act in good faith in the performance thereof and no implied duties or obligations shall be incurred by the Escrow Agent other than those specified herein. 17. Any notice, authorization, request or demand required or permitted to be given in accordance with the terms of this Agreement shall be in writing and sent by registered or certified mail addressed: If to the City: City of Hopkins 1010 First Street South Hopkins, MN 55343 Attention: City Manager If to the Escrow Agent: U.S. Bank National Association 60 Livingston Avenue, 3rd Floor EP-MN-WS3C Saint Paul, MN 55107 Attention: Corporate Trust Services 18. The exhibits which are part of this Agreement are as follows: EXHIBIT A Federal Securities EXHIBIT B Principal and Interest Payments on Federal Securities EXHIBIT C Costs of Issuance EXHIBIT D Notice of Call for Redemption 409200v1 JAE HP 110-82 4 IN WITNESS WHEREOF the parties hereto have caused Advance Refunding Escrow Agreement to be duly executed by their duly authorized officers. in counterparts, each of which is deemed to be an original agreement, as of the date and year first written above. CITY OF HOPKINS, MINNESOTA By Its Mayor By Its City Manager (Signature Page of City to the Advance Refunding Escrow Agreement) Error! Unknown document properh name. S-1 Execution page of the Escrow Agent to the Refunding Escrow Agreement, dated as of the date and year first written above. U.S. BANK NATIONAL ASSOCIATION By Its Assistant Vice President (Signature Page of the Escrow Agent to the Advance Refunding Escrow Agreement) Error! Unknown document property name. S-2 EXHIBIT A FEDERAL SECURITIES Error! Unknown document propertc name. A-] EXHIBIT B PRINCIPAL AND INTEREST PAYMENTS ON FEDERAL SECURITIES Error! Unknown document property name. B-1 EXHIBIT C COSTS OF ISSUANCE Financial Advisor Bond Counsel Rating Agency Verification Agent Miscellaneous Paying Agent Escrow Agent Total: Error! Unknown document propert. name. C-1 Amount 1W41111.10011 NOTICE OF CALL FOR REDEMPTION FOR $3,050,000 Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota Public Facility Lease Revenue Bonds Series 2003A (Police Station Improvements) NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Hopkins, Hennepin County, Minnesota (the "City"), there have been called for redemption and prepayment on February 1, 2014 all outstanding bonds designated as Public Facility Lease Revenue Bonds, Series 2003A (Police Station Improvements), dated June 1, 2003, issued by the Housing and Redevelopment Authority in and for the City of Hopkins, Minnesota, having stated maturity dates of February 1 in the years 2015 through 2024, both inclusive, totaling $1,765,000 in principal amount, and with the following CUSIP numbers: Year of Maturity Amount CUSIP 2015 $145,000 43987T BF9 2016 155,000 43987T BG7 2017 160,000 43987T BH5 2018 165,000 43987T BJ1 2019 170,000 43987T BK8 2020 180,000 43987T BL6 2021 185,000 43987T BM4 2022 195,000 43987T BN2 2023 200,000 43987T BP7 2024 210,000 43987T BQ5 The bonds are being called at a price of par plus accrued interest to February 1, 2014, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of Bankers Trust Company, 453 Seventh Street, Des Moines, Iowa 50309, on or before February 1, 2014. Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2003, the City is required to withhold a specified percentage of the principal amount of the redemption price payable to the holder of any Bonds subject to redemption and prepayment on the Redemption Date, unless the City is provided with the Social Security Number or Federal Employer Identification Number of the holder, properly certified. Submission of a fully executed Request for Taxpayer Identification Number and Certification, Form W-9 (Rev. December 2011), will satisfy the requirements of this paragraph. Error! Unknown document property name. D -I Dated: BY ORDER OF THE CITY COUNCIL By /s/ Mike Morrison City Manager City of Hopkins, Minnesota Error! Unknown document property name. D -I