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HomeMy WebLinkAbout99-063 `y CERTIFICATION OF MINUTES RELATING TO GROSS REVENUE RECREATION FACILITY BONDS, SERIES 1999 Issuer: City of Lakeville, Minnesota Governing Body: City Council Kind, date, time and place of meeting: A regular meeting held on March 15, 1999, at 7:00 o'clock P.M. at the City Hall in Lakeville, Minnesota. Members present: Luick, Mulvihill, Ryan, and Sindt Members absent: zaun Documents Attached: Minutes of said meeting (including): RESOLUTION NO. 99-63 RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING • THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF GROSS REVENUE RECREATION FACILITY BONDS, SERIES 1999 I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the bonds referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of said corporation in my legal custody, from which they have been transcribed; that said documents are a correct and complete transcript of the minutes of a meeting of the governing body of said corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at said meeting, so far as they relate to said bonds; and that said meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above, pursuant to call and notice of such meeting given as required by law. WITNESS my hand officially as such recording officer on March 15, 1999. City Clerk It was reported that sealed proposals for the purchase of Gross Revenue Recreation Facility Bonds, Series 1999, were received prior to 11:00 o'clock a.m., pursuant to the Preliminary Official Statement distributed to potential purchasers of the Bonds by Juran & Moody, a division of Miller, Johnson & Kuehn, Incorporated, financial consultants to the City. The proposals have been publicly opened, read and tabulated and were found to be as follows: See Attached s i • Member xyan introduced the following resolution and moved its adoption, which motion was seconded by Member Luick RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF GROSS REVENUE RECREATION FACILITY BONDS, SERIES 1999 BE IT RESOLVED by the City Council of the City of Lakeville, Minnesota (the City),. as follows: ' SECTION 1. RECITALS. 1.1. 1992 Lease. By Resolution No. 92-4, duly adopted by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Lakeville, Minnesota (the Authority), on August 17, 1992 (the 1992 Resolution), the Authority issued its $1,375,000 Ice Arena Lease Revenue Bonds, Series 1992, dated as of September 1, 1992 (the 1992 Bonds), the proceeds of which were used to develop an approximately 40,000 square foot ice arena facility (the Arena) in the City. The Arena was constructed on land provided by Independent School District No. 194, Minnesota, owned by the Authority and leased by the Authority to the City pursuant to a Lease Purchase .Agreement, dated October 4, 1993 between the Authority and the City (the 1.992 Lease). 1.2. 1997 Bonds. By Resolution No. 97-268, duly adopted by the City Council on December 1, 1997 (the 1997 Resolution), the Council determined that it was necessary and in the best interests of the City and its residents for the City to issue $1,135,000 General Obligation Ice Arena Bonds, Series 1997B, dated as of December 1, 1997 (the 1997 Bonds), the proceeds of which were used or will be used to expand the Arena by the construction of a second sheet of ice and related improvements. The Arena, as so expanded and improved, is hereinafter referred to as the Ice Arena Complex. 1.3. Recreation Pro ram. The City has. established and is operating a program of public recreation and playgrounds (the Recreation Program), under and pursuant to Minnesota Statutes, Sections 471.15 to 471.191 (the Act). 1.4. Issuance of Bonds. By a resolution duly adopted by the Council on February 16, 1999, the Council .determined it is necessary and in the best interests of the City and its residents to issue its Gross Revenue Recreation Facility Bonds, Series 1999, in the approximate principal amount of $1,250,000 (the Bonds), the proceeds of which would be used, together with any additional funds of the City which might be required, to (i) advance refund the August 1, 1999 through August 1, 2012 maturities, aggregating $1,170,000 in principal amount, of the 1992 Bonds (the Refunded Bonds) and (ii) finance additional improvements to the Arena (the Project). The Bonds shall be secured by a first lien on and pledge of, and shall be payable solely from, all Gross Revenues of the Ice Arena Complex, as defined in Section 4.1, which are pledged and appropriated to the Gross Revenue Bond Account of the City's Ice Arena Account, in accordance with and subject to the further terms, conditions and covenants set forth in this Resolution. The Bonds are not general obligations of the City and the full faith and credit and taxing powers of the City are not pledged for payment of the principal of and interest on the Bonds. No person shall ever have the right to compel the levy of any ad valorem taxes or the use of any moneys of the City, except the Gross Revenues and other moneys specifically pledged to the Gross Revenue Bond Account of its Ice Arena Revenue Account, to pay such principal and interest, as provided in Section 4 hereof. SECTION 2. AUTHORIZATION AND SALE. 2,1. Sale of Bonds. Pursuant to the Official Notice of Sale prepared on behalf of the City by Juran & Moody, a division of Miller, Johnson & Kuehn, Incorporated, sealed proposals for the purchase of the Bonds were received at or before the time specified for receipt of proposals. The proposals have been opened, publicly read and considered and the purchase price, interest rates and net interest cost under the terms of each proposal have been determined. The most favorable proposal received is that of Dougherty Summit Securities LLC, of Minneapolis, Minnesota and associates (the Purchaser). In accordance with the Official Notice of Sale, it is hereby determined to issue the Bonds in the principal amount of $1,250,000 at a price of $1,228,750.00 plus accrued interest, and upon the further terms and conditions set forth herein. 2.2. Aw .The sale of the Bonds is hereby awarded to the Purchaser and the Mayor and Clerk are hereby authorized and directed to execute a contract on behalf of the City for the sale of the Bonds in accordance with the terms of the proposal. The good faith deposit of the • Purchaser shall be retained and deposited by the City until the Bonds have been delivered, and shall be deducted from the purchase price paid at settlement. SECTION 3. BOND TERMS: REGISTRATION: EXECUTION AND DELIVERY. 3.1. Maturities: Interest Rates: Denominations: Payment. The Bonds shall be originally dated as of April 1, 1999, shall be in the denomination of $5,000 each, or any integral multiple thereof, shall mature on August 1 in the respective years and amounts stated below, and shall bear interest from date of issue until paid or duly called for redemption at the respective annual rates set forth opposite such years and amounts, as follows: Year Amoun Rate Year Amount Rate 1999 $40,000 3.50% 2006 $50,000 4.70% 2000 50,000 4.00 2007 50,000 4.80 2001 25,000 4.15 2008 55,000 4.90 2002 30,000 4.30 2009 65,000 5.00 2003 30,000 4.40 2017 435,000 5.30 2004 40,000 4.50 2019 335,000 5.40 2005 45,000 4.50 -2- The Bonds shall be issuable only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof shall be payable by check or draft issued by the Registrar described herein; provided that, so long as the Bonds are registered in the name of a securities depository, or a nominee thereof, in accordance with Section 3.8 hereof, principal and interest shall be payable in accordance with the operational arrangements of the securities depository. 3.3. Dates and Interest Payment Dates. Upon initial delivery of the Bonds pursuant to Section 3.7 and upon any subsequent transfer or exchange pursuant to Section 3.6, the date of authentication shall be noted on each Bond so delivered, exchanged or transferred. Interest on the Bonds shall be payable on each February 1 and August 1, commencing August 1, 1999, each such date being referred to herein as an Interest Payment Date, to the persons in whose names the Bonds are registered on the Bond Register, as hereinafter defined, at the Registrar's close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date, whether or not such day is a business day. 3.4. Redemption. Optional. Bonds maturing in 2007 and later years shall be subject to redemption at the option of the City, in whole or in part, in inverse order of maturity dates and, if less than all of the Bonds of a single maturity date are to be redeemed, by lot or other method as selected by the Registrar (or, if applicable, by the bond depository in accordance with its customary procedures), in integral multiples of $5,000, on August 1, 2006, and on any Interest Payment Date thereafter, at a price equal to 100% of the principal amount thereof and accrued interest to the date of redemption. At least 30 days before the date specified for redemption of any Bond the City Clerk shall cause notice of redemption to be published if and as required by law, and mailed by first class mail, postage prepaid, to the Registrar and to the Holders, as hereinafter defined, of all Bonds to be redeemed at their addresses as they appear on the Bond Register; provided that notice shall be given to any securities depository in accordance with its operational arrangements. No defect in or failure to give such notice of redemption shall affect the validity of proceedings for the redemption of any Bond not affected by such defect or failure. The notice of redemption shall state the redemption date, the redemption price, the place where the Bonds are to be surrendered for payment of the redemption price, which shall be an office of the Registrar, and that on the redemption date the redemption price will be due and payable and that interest thereon shall cease to accrue from and after such date. Mandatory Bonds maturing on August 1, 2017 and 2019, shall be subject to mandatory redemption prior to maturity pursuant to the sinking fund requirements of this Section 2.4 at a redemption price equal to the stated principal amount thereof plus interest accrued thereon to the redemption date, without premium. The Registrar shall select for redemption, by lot or other manner deemed fair, on August 1 in each of the following years the following stated principal amounts of such Bonds: -3- Term Bonds maturing_Au ust 1, 2017 Y~ Principal Amount 2015 $13 5,000 2016 145,000 The remaining $155,000 stated principal amount of such Bonds shall be paid at maturity on August 1, 2017. Term Bonds maturing August 1.2019 Year Principal Amount 2018 $165,000 The remaining $170,000 stated principal amount of such Bonds shall be paid at maturity on August 1, 2019. If less than such amount of Term Bonds is outstanding on any such Sinking Fund Payment Date, an amount equal to the aggregate principal amount of all Term Bonds then Outstanding shall be redeemed. If Term Bonds are redeemed at the option of the City pursuant to this section, the Term Bonds so optionally redeemed may, at the option of the City, be applied as a credit against any subsequent mandatory sinking fund payment with respect to Term Bonds otherwise to be redeemed thereby, such credit to be equal to the principal amount of such Term Bonds redeemed pursuant to this section, provided that the City shall have delivered to the Registrar not less than forty-five (45) days before such Sinking Fund Payment Date a written statement of its election to apply such Term Bonds as such a credit. In such case, the Registrar shall reduce the amount of Term Bonds to be redeemed on the Sinking Fund Payment Date specified in such written statement by the principal amount of Term Bonds so redeemed pursuant to this section. Notice of redemption shall be given as provided in the preceding paragraph. 3.5. Anointment of Re i~strar. The City hereby appoints the Finance Director of the City of Lakeville, in Lakeville, Minnesota, as the initial bond registrar, transfer agent and paying agent (the Registrar). The City reserves the right to remove the Registrar, effective upon not less than thirty (30) days' written notice and upon the appointment and acceptance of a successor Registrar, in which event the predecessor Registrar shall deliver all cash and Bonds in its possession to the successor Registrar and shall deliver the Bond Register to the successor Registrar. 3.6. Registration. The effect of registration and the rights and duties of the City and the Registrar with respect thereto shall be as follows: -4- (a) Re ig ster. The Registrar shall keep at its office a register (the Bond Register) in which the Registrar shall provide for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. The term "Holder" or "Bondholder" as used herein shall mean the person (whether a natural person, corporation, association, partnership, trust, governmental unit, or other legal entity) in whose name a Bond is registered in the Bond Register. (b) Transfer of Bonds. Upon surrender for transfer of any Bond duly endorsed by the Holder thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the Holder thereof or by an attorney duly authorized by the Holder in writing, the Registrar shall 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. (c) Exchange of Bonds. At the option of the Holder of any Bond in a denomination greater than $5,000, such Bond may be exchanged for other Bonds of authorized denominations, of the same maturity and a like aggregate principal amount, upon surrender of the Bond to be exchanged at the office of the Registrar. Whenever any Bonds are so surrendered for exchange the City shall execute and the Registrar shall authenticate and deliver the Bonds which the Bondholder making the exchange is entitled to receive. (d) Cancellation. All Bonds surrendered for payment, transfer or exchange shall be promptly canceled by the Registrar and thereafter disposed of. The Registrar shall furnish the City at least once each year a certificate setting forth the principal amounts and numbers of Bonds canceled and destroyed. (e) Improper or Unauthorized Transfer. When any Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar shall 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 any Bond is at any time registered in the Bond Register as the absolute owner of the Bond, whether the Bond shall be overdue or not, for the purpose of receiving payment of or on account of, the principal of and (subject to Section 2.3) interest on the Bond and for all other purposes; and all payments made to or upon the order of such Holder shall be valid and effectual to satisfy and discharge the liability upon Bond to the extent of the sum or sums so paid. (g) TaxesS Fees and Charges. No service charge shall be made for any transfer or exchange of Bonds, but the Registrar may require payment of a sum sufficient to pay any -5- tax, fee or other governmental charge required to be paid with respect to any transfer or exchange. (h) Mutilated. Lost. Stolen or Destroyed Bonds. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such 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 of an appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both the City and the Registrar shall be named as obligees. All Bonds so surrendered to the Registrar shall be canceled by it and evidence of such cancellation shall 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 shall not be necessary to issue a new Bond prior to payment. (i) Authenticating Agent. The Registrar is hereby designated authenticating agent for the Bonds, within the meaning of Minnesota Statutes, Section 475.55, Subdivision 1, as amended. (j) Valid Obligations. All Bonds issued upon any transfer or exchange of Bonds shall be the valid obligations of the City, evidencing the same debt, and entitled to the same benefits under this Resolution as the Bonds surrendered upon such transfer or exchange. 3.7. Execution, Authentication and DeliverX. The Bonds shall be prepared under the direction of the Clerk and shall be executed on behalf of the City by the signatures of the Mayor and the Clerk, provided that the signatures may be printed, engraved or lithographed facsimiles of the originals. In case any officer whose signature or a facsimile of whose signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until the date of delivery of such Bond. Notwithstanding such execution, no Bond shall 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, substantially in the form provided in Section 3.9, has been executed by the manual signature of the Registrar, The executed certificate of authentication on any Bond shall be conclusive evidence that it has been duly authenticated and delivered under this Resolution. When the Bonds have been prepared, executed and authenticated, the Clerk shall deliver them to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore executed, and the Purchaser shall not be obligated to see to the application of the purchase price. -6- 3.8. Securities Depositor,..y. (a) For purposes of this section the following terms. shall ` have the following meanings: "Beneficial Owner" shall mean, whenever used with respect to a Bond, the person in whose name such Bond is recorded as the beneficial owner of such Bond by a Participant on the records of such Participant, or such person's subrogee. "Cede & Co." shall mean Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to the Bonds. "DTC" shall mean The Depository Trust Company of New York, New York. "Participant" shall mean any broker-dealer, bank or other financial institution far which DTC holds Bonds as securities depository. "Representation Letter" shall mean the Representation Letter pursuant to which the City agrees to comply with DTC's Operational Arrangements. (b) The Bonds shall be initially issued as separately authenticated fully registered bonds, and one Bond shall be issued in the principal amount of each stated maturity of the Bonds. Upon initial issuance, the ownership of such Bonds shall be registered in the bond register in the name of Cede & Co., as nominee of DTC. The Registrar and the City may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for the purposes of payment of the principal of or interest on the Bonds, selecting the Bonds or portions thereof to be redeemed, if any, giving any notice permitted or required to be given to registered owners of Bonds under this resolution, registering the transfer of Bonds, and for all other purposes whatsoever; and neither the Registrar nor the City shall be affected by any notice to the contrary. Neither the Registrar nor the City shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in the Bonds under or through DTC or any Participant, or any other person which is not shown on the bond register as being a registered owner of any Bonds, with respect to the accuracy of any records maintained by DTC or any Participant, with respect to the payment by DTC or any Participant of any amount with respect to the principal of or interest on the Bonds, with respect to any notice which is permitted or required to be given to owners of Bonds under this resolution, with respect to the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of the Bonds, or with respect to any consent given or other action taken by DTC as registered owner of the Bonds. So long as .any Bond is registered in the name of Cede & Co., as nominee of DTC, the Registrar shall pay all principal of and interest on such Bond, and shall give all notices with respect to such Bond, only to Cede & Co. in accordance with DTC's Operational Arrangements, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than DTC shall receive an authenticated Bond for each separate stated maturity evidencing the obligation of the City to make payments of principal and interest. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a -7- new nominee in place of Cede & Co., the Bonds will be transferable to such new nominee in accordance with paragraph (e) hereof. (c) In the event the City determines that it is in the best interest of the Beneficial Owners that they be able to obtain Bonds in the form of bond certificates, the City may notify DTC and the Registrar, whereupon DTC shall notify the Participants of the availability through DTC of Bonds in the form of certificates. In such event, the Bonds will be transferable in accordance with paragraph (e) hereof. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and the Registrar and discharging its responsibilities with respect thereto under applicable law. In such event the Bonds will be transferable in accordance with paragraph (e) hereof. (d) The execution and delivery of the Representation Letter to DTC by the Mayor or City Clerk, if not previously filed with DTC, is hereby authorized and directed. (e) In the event that any transfer or exchange of Bonds is permitted under paragraph (b) or (c) hereof, such transfer or exchange shall be accomplished upon receipt by the Registrar of the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee in accordance with the provisions of this resolution. In the event Bonds in the form of certificates are issued to owners other than Cede & Co., its successor as nominee for DTC as owner of all the Bonds, or another securities depository as owner of all the Bonds, the provisions of this resolution shall also apply to all matters relating thereto, including, without limitation, the printing of such Bonds in the form of bond certificates and the method of payment of principal of and interest on such Bonds in the form of bond certificates. 3.9. Form of Bonds. The Bonds shall be prepared in substantially the following form: -8- UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF LAKEVILLE GROSS REVENUE RECREATION FACILITY BOND, SERIES 1999 Interest Rate Maturity Date Date of Original Issue CUSIP No. April 1, 1999 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: THE CITY OF LAKEVILLE, DAKOTA COUNTY, MINNESOTA (the City), acknowledges itself to be indebted and for value received hereby promises to pay to the registered owner named above, or registered assigns, but solely from the Gross Revenues pledged to the Gross Revenue Bond Account of its Ice Arena Revenue Account, the principal sum specified above on the maturity date specified above, and to pay interest thereon (computed on the basis of a 360 day year composed to twelve 30 day months) from such Gross Revenues from the date hereof at the annual rate specified above, payable on February 1 and August 1 in each year, commencing August 1, 1999, to the person in whose name this Bond is registered at the close of business on the 15th day (whether or not a business day) of the month immediately preceding the payment date, all subject to the provisions referred to herein with respect to the redemption of the principal of this Bond before maturity. The interest hereon and, upon presentation and surrender of this Bond, the principal hereof, are payable in lawful money of the United States of America by .check or draft issued by the Finance Director, City of Lakeville, Minnesota, as bond registrar and paying agent (the Registrar), or its designated successor under the Resolution described herein. This Bond is one of an issue in the aggregate principal amount of $1,250,000, issued pursuant to a resolution duly adopted by the City Council on March 15, 1999 (the Resolution), to finance improvements to the ice arena complex and to refund certain outstanding ice arena lease revenue bonds previously issued by the Housing and Redevelopment Authority of the City and is issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota thereunto enabling, including Minnesota Statues, Sections 471.15 to 471.191 and Chapter 475. The Bonds are issuable only in fully registered form, in denominations of $5,000 or any multiple thereof, of single maturities. The Bonds are not a general obligation of the City, and the City's full faith and credit and taxing powers are not pledged for the payment of the principal of or interest on the Bonds. No person has the right to compel the levy of any ad valorem taxes or the use of any moneys of the City, other than the Gross Revenues and other moneys specifically pledged and appropriated to -9- i the Gross Revenue Bond Account of its Ice Arena Revenue Account, to pay such principal and interest. Bonds having stated maturity dates in the years 2007 and thereafter are each subject to redemption at the option of the City, in whole or in part, in inverse order of maturity dates and, if less than all Bonds of a single maturity date are to be redeemed, by lot or other method as selected by the Registrar, in multiples of $5,000, on August 1, 2006, and on any Interest Payment Date thereafter, at a price equal to 100% of the principal amount thereof plus interest accrued to the date of redemption. At least 30 days before to the date specified for the redemption of any Bond the City will cause notice of redemption to be published if and to the extent required by law, and to be mailed by first class mail to the registered owner of any Bond to be redeemed at the owner's address as it appears on the Bond Register maintained by the Registrar, but no defect in or failure to give such notice of redemption shall affect the validity of proceedings for the redemption of any Bond not affected by such defect or failure. Upon surrender to the Registrar of any Bond which has been redeemed in part, a new Bond or Bonds will be delivered to the owner without charge, representing the unredeemed portion of the principal of the Bond so surrendered. Bonds maturing in the years 2017 and 2019 shall be subject to mandatory sinking fund redemption prior to maturity, on the dates and in the amounts specified in the Resolution, at a redemption price equal to the stated principal amount thereof to be redeemed plus interest accrued thereon to the redemption date, without premium. The Registrar (or, if applicable, the bond depository) shall select the specific Bonds to be redeemed by lot or other manner deemed fair. The Bonds have been designated by the City as "qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the Bond Register maintained by the Registrar at its office, upon surrender of this Bond for transfer. at such office, duly endorsed 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 designated transferee or transferees, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date. The Registrar may require payment of a sum sufficient to pay any tax, fee or governmental charge required to be paid with respect to any 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 shall be affected by any notice to the contrary. -10- Notwithstanding any other provisions of this Bond, so long as this Bond is registered in the name of Cede & Co., as nominee of The Depository Trust Company, or in the name of any other nominee of The Depository Trust Company or other securities depository, the Registrar shall pay all principal of and interest on this Bond, and shall give all notices with respect to this Bond, only to Cede & Co. or other nominee in accordance with the operational arrangements of The Depository Trust Company or other securities depository as agreed to by the City. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed precedent to and in the issuance of this Bond in order to make it a valid and binding special obligation of the City according to its terms, have been done, do exist, have happened and have been performed as so required; that in the Resolution the City has covenanted and agreed with the holders of the Bonds that, until all Bonds are fully paid or discharged as provided in the Resolution, there will be maintained on the official books and records of the City a separate and special Ice Arena Revenue Account to which there will be credited as received all Gross Revenues derived from the operation and use of the Ice Arena Complex (as defined in the Resolution), and there will be maintained therein a Gross Revenue Bond Account to which there is irrevocably pledged and appropriated and required to be transferred from the Ice Arena Revenue Account monthly, as a first lien and charge on ail such Gross Revenues, an amount thereof equal to one sixth of the amount of interest coming due in the next six months, and one twelfth of the amount of principal coming due in the next twelve • months, on all bonds, including the Bonds, payable from said Gross Revenue Bond Account; that reasonable rates and charges for all services and commodities furnished and made available by and through and for the use of the Ice Arena Complex will be established, maintained and revised when necessary and will be imposed and collected in accordance with schedules such that the Gross Revenues derived therefrom in each year will be sufficient to enable the City to make the required deposits in the Gross Revenue Bond Account; and that the Gross Revenues received in excess of such requirements, together with any other legally available moneys, will be sufficient to pay promptly as incurred all current, reasonable and necessary costs of the operation and maintenance of the Ice Arena Complex; that the City will provide for such moneys as may be needed, together with such excess Gross Revenues, to pay all costs of operating and maintaining the Ice Arena Complex; that except as provided in the Resolution, no other obligations payable from such Gross Revenues and the Gross Revenue Bond Account shall be incurred or issued unless expressly made subordinate to said pledge and appropriation; that the Resolution contains other covenants for the security of all bonds payable from the Gross Revenue Bond Account, including the Bonds, which will be promptly and fully performed as covenanted therein; that the issuance of the Bonds does not cause the indebtedness of the City to exceed any constitutional or statutory limitation; and that the opinion printed hereon is a full, true and correct copy of the legal opinion given by Bond Counsel with reference to the Bonds, dated as of the date of original issuance and delivery of the Bonds. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon shall have been executed by the manual signature of the Registrar. -ll- IN WITNESS WHEREOF, the City has caused this Bond to be executed on its behalf by .the signatures of its Mayor and City Clerk. CITY OF LAKEVILLE, MINNESOTA (Facsimile signature- City Clerk) (Facsimile signature-Mayor) CERTIFICATE OF AUTHENTICATION This is one of the Bonds referred to in the Resolution mentioned within. Date: FINANCE DIRECTOR, CITY OF LAKEVILLE, MINNESOTA, Registrar By [Insert legal opinion] The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to the applicable laws or regulations; TEN COM - as tenants in common UTMA as Custodian for (Gust) (Minor) TEN ENT - as tenants by the entireties under Uniform Transfers to Minors Act (State) JT TEN as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used. 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 enlargement or any change whatsoever. -12- • Signature Guaranteed: Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in STAMP or such other "signature guaranty program" as may be determined by the Registrar in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: [End of form of Bond] SECTION 4. SECURITY PROVISIONS AND USE OF BOND PROCEEDS. 4.1. Use of Proceeds of the Bonds. From the proceeds of the Bonds, the City shall deposit the accrued interest into the Gross Revenue Bond Account established pursuant to Section 4.4 hereof, shall deposit the sum of $26, 484.54 into the Capital Expenditures Account established pursuant to Section 4.3 hereof, and shall transmit the sum of $ 1, 202.621.63 to the Authority to be used with certain other funds of the Authority to defease the Refunded Bonds in accordance with that certain Escrow Agreement, dated as of April 1, 1999, between the Authority and U.S. Bank Trust National Association, in St. Paul, Minnesota, as Escrow Agent. 4.2. Ice Arena Revenue Account. There is hereby established, and so long as any bonds payable from the Gross Revenue Bond Account established in Section 4.4 are Outstanding, the City shall maintain or cause to be maintained on the official books and records of the City, an Ice Arena Revenue Account and the accounts therein described in Sections 4.3 through 4.6, showing all receipts and disbursements of moneys herein pledged and/or appropriated to the Ice Arena Revenue Account, and all other financial matters pertaining to the Ice Arena Complex. From and after the issuance of the Bonds all Gross Revenues of the Ice Arena Complex shall be credited as received to the Ice Arena Revenue Account, and shall be held and invested therein, transferred to other accounts of the Ice Arena Revenue Account, and disbursed and expended as provided in this Section 4. "Gross Revenues" means all income and revenue of any nature derived from the operation or use of the Ice Arena Complex or any part thereof, including all amounts received with respect to services provided or commodities furnished by the Ice Arena Complex and all investment income on moneys held in the Ice Arena Revenue Account, the Gross Revenue Bond Account, the Operating Account and the Surplus Account, and including Net Gaming Revenues received by the City from Lakeville Hockey Boosters, Inc. for deposit into the Gross Revenue Bond Account pursuant to the provisions of the Revised and Restated Gaming Revenue Agreement referred to in Section 11 hereof. Gross Revenues shall not include bond proceeds, investment income or moneys held in the Capital Expenditures Account, or condemnation, property insurance or sale proceeds. -13- 4.3. Capital Expenditures Account. There shall be a Capital Expenditures Account which shall be used to record the receipt .and disbursement of Bond proceeds and any other moneys appropriated for the payment of expenditures which, under generally accepted accounting principles, constitute capital costs necessarily incurred for the acquisition and betterment of the Ice Arena Complex, including but not limited to the cost of land, easements, improvements to land, buildings, structures and capital equipment, and the cost of all architectural, engineering, legal and other professional services, costs of issuing any bonds and interest to accrue on bonds issued to finance such acquisition and betterment prior to the receipt of the revenues therefrom, and other costs reasonably necessary and incidental thereto. Such expenditures may be made directly or may be reimbursed to the person or entity which has paid them, including the City. From the proceeds of the Bonds, there shall be credited to the Capital Expenditures Account the sum of $ 26.484.54 which shall be used to pay the costs of the Project and the costs of issuance of the Bonds. Upon payment of all capital expenditures of the Project and costs of issuance of the Bonds, any moneys remaining in the Capital Expenditures Account shall be transferred to the Gross Revenue Bond Account. 4.4. Gross Revenue Bond Account. So long as any bonds payable from the Gross Revenue Bond Account are Outstanding, to the Gross Revenue Bond Account there is irrevocably pledged and appropriated, and shall be credited on or before the tenth day of each month, an amount of the Gross Revenues on hand in the Ice Arena Revenue Account equal to one-sixth of the amount of interest to become due in the next six months, and one-twelfth of the amount of principal to become due in the next twelve months, on all then Outstanding bonds payable from the Gross Revenue Bond Account, including the Bonds; provided that such transfers may be reduced by the amount of any investment income actually received in the Gross Revenue Bond Account, by the amount of any excess bond proceeds transferred to the Gross Revenue Bond Account from the Capital Expenditures Account and by amounts received from Lakeville Hockey Boosters, Inc. for deposit into the Gross Revenue Bond Account pursuant to the provisions of the Revised and Restated Gaming Revenue Agreement referred to in Section i 1 hereof. This requirement is cumulative, and if the full amount required cannot be transferred in any month, the deficiency shall be made up from the next Gross Revenues received in the Ice Arena Revenue Account. The Gross Revenue Bond Account shall be used only to pay the principal of and interest on bonds made payable therefrom, including the Bonds, when due. The balance on hand in said Account on each interest payment date will be used, first, to pay pro rata the interest then due on all such bonds and, second, to pay the principal of the matured bonds in order of their maturity dates, pro rata with respect to bonds maturing on the same date. With respect to all bonds payable from the Gross Revenue Bond Account, "Outstanding" means all bonds theretofore issued pursuant to and secured by this Resolution except: (a) bonds paid and canceled by the City or delivered to the City for cancellation; (b) bonds which have been discharged as provided in Section 8; and (c) bonds in exchange for or in lieu of which other bonds have been issued as provided in Section 3.6. 4.5. Operating Account. To the Operating Account there shall be credited each month such amount of the Gross Revenues remaining in the Ice Arena Revenue Account, after the transfer required by Section 4.4 has been made, as is needed to pay, promptly when due, all -14- • expenses which under generally accepted accounting principles constitute current, reasonable and necessary costs of the operation, administration and maintenance of the Ice Arena Complex, exclusive of depreciation, amortization and interest costs. To the Operating Account will also be credited, so far as needed, any additional funds other than Gross Revenues which are appropriated by the City Council for payment of such expenses. The City covenants and agrees that upon the occurrence of a deficiency in the Operating Account which cannot be restored forthwith from the Surplus Account or other available City funds appropriated by the City Council for this purpose, it will include in its next annual budget an amount sufficient to restore such deficiency and shall appropriate such amount to the Operating Account. For this purpose, the City may levy a tax as authorized by Minnesota Statutes, Section 471.191, Subd. 2. 4.6. Surplus Account. To the Surplus Account there may be transferred such amount of the Gross Revenues on hand in the Gross Revenue Account as are not needed to meet the requirements of the Gross Revenue $ond Account and the Operating Account. Moneys on hand in the Account shall always be available and used first to restore any deficiency in the Accounts established in Sections 4.4 and 4.5, but moneys on hand in the Account which are not needed for this purpose may be expended for the payment of principal and interest on the Bonds set forth in Section 1.2 and then for any other lawful purpose specified by resolution of the City Council. 4.7. Deposit and Investment of Funds. All Bond proceeds and Gross Revenues on hand in the foregoing Accounts shall be deposited or invested in accordance with Minnesota Statutes, Chapter 118A. All securities so purchased shall mature at or before the time when it is estimated that the proceeds thereof will be needed for the purposes of the Account from which funds are withdrawn for the purchase. All income, gain and loss on such investments will be credited or charged, as the case may be, to the Account from which the investment was made. SECTION 5. ADDITIONAL COVENANTS. 5.1. General Covenant. The City hereby covenants and agrees with the holders from time to time of all bonds payable from the Gross Revenue Bond Account that, unless otherwise provided in the resolution authorizing their issuance, until all such bonds are fully paid or discharged as provided herein, it will fully and promptly perform and do all acts and things provided for in this Resolution, including those acts and things provided for in this Section. 5.2. Rate Covenant. The City will establish and maintain charges, fees and rentals for all service, commodities and benefits of whatsoever nature furnished and made available by the Ice Arena Complex to all individuals, organizations and others, in accordance with schedules such that the Gross Revenues derived therefrom in each Fiscal Year of the City (January 1 to December 31) (the Fiscal Year), together with any additional funds legally appropriated by the City to the Ice Arena Revenue Account, will at all times be sufficient to meet the requirements of the Gross Revenue Bond Account and the Operating Account for such Fiscal Year. • 5.3. Ownership and Operation. The City will continue its ownership and operation of the Arena, and will cause it to be maintained in good and efficient operating condition, free from all -15- e, . i liens on the revenues or the physical properties thereof, and will not sell or otherwise dispose of any capital assets of the Ice Arena Complex except at their fair market value and will use the proceeds of any such sale or disposition to procure other capital assets of equal usefulness for the purposes of the Arena, or to pay and redeem or discharge bonds payable from the Gross Revenue Bond Account. The City will at all times after issuance of the Bonds employ a manager for the operation of the Ice Arena Complex which has experience in operating like facilities. 5.4. Books and Records. The City will cause proper and adequate books of record and account to be maintained, reflecting all receipts and disbursements and all accrued claims and expenses in connection with the operation and maintenance of the Ice Arena Complex, and the payment of obligations incurred therefor, and will cause them to be audited with respect to each Fiscal Year by a certified public accountant, and will furnish the report of each such audit without cost to the initial purchaser of each series of bonds payable from the Gross Revenue Bond Account issued under the provisions hereof, and will make the report available, upon request, to the holder of any bond payable from the Gross Revenue Bond Account who may request a copy. 5.5. Insurance. The City will procure and keep in force at all times insurance on all buildings, structures, improvements, and equipment constituting at any time a part of the Ice Arena Complex, exclusive of foundations and excavations, of such types, in such amounts and against such perils as like properties are customarily insured by prudent owners thereof, and will maintain public liability insurance at all times in amounts not less than the amounts in excess of which the City is immune from tort liability under the laws of the State of Minnesota, for all acts and omissions of its officers and employees concerned with the operation and maintenance of the Ice Arena Complex, and will procure and keep in force surety company bonds covering all officers and employees handling Ice Arena Complex funds, in amounts sufficient to cover at all times the funds in their hands. In the event of loss or damage compensated by any such insurance or bonds, or by a condemnation award, the proceeds thereof will be used to repair and restore the damage compensated. Insurance proceeds or condemnation proceeds not needed for this purpose shall be used in the same manner as provided for sale proceeds under Section 5.3. SECTION 6. ADDITIONAL BONDS. 6.1. Parity Lien Bonds. So long as any Bonds are Outstanding, the City will not issue any Additional Bonds payable on a parity with the Bonds then Outstanding from the Gross Revenue Bond Account except in accordance with the following conditions: (a) Additional Bonds may be issued if there is filed with the City: (1) A certificate of a certified public accountant or firm of certified public accountants, or municipal financial advisor or firm of municipal financial advisors, selected by the City (a Financial Advisor), stating that the Income Available for Debt Service (being, for any period, the excess of Gross Revenues over operating expenses (not including interest, amortization and depreciation)) for the Ice Arena Complex for -16- each of the two most recent Fiscal Years preceding the date of delivery of the certificate was not less than 125% of the maximum principal and interest requirements {including the requirements for the Additional Bonds proposed to be issued) for any future Fiscal Year during the term of all Bonds then Outstanding; or (2) (A) A certificate of a Financial Advisor stating that the Income Available for Debt Service for each of the two Fiscal Years next preceding the date of delivery of the certificate was not less than 125% of the maximum principal and interest requirements (excluding the Additional Bonds proposed to be issued) for any future Fiscal Year during the term of all Bonds then Outstanding; and (B) a certificate of a Financial Advisor to the effect that the estimated Income Available for Debt Service for each of the next two succeeding Fiscal Years or, if such Additional Bonds are being issued in connection with the financing of improvements to the Ice Arena Complex, the two Fiscal Years succeeding the projected completion date of such improvements, is not less than 12S% ofthe maximum principal and interest requirements (including the Additional Bonds proposed to be issued) for any future Fiscal Year during the term of all Bonds then Outstanding; provided that such certificate shall include forecast statements of revenues and expenses for each of such two Fiscal Years (which may be in summary form) and a statement of the relevant assumptions upon which such forecasted statements are based. (b) Notwithstanding the foregoing requirements, Additional Bonds may be issued for the purpose of completing the Project, in a principal amount not to exceed $150,000, without compliance with the requirements of subsection (a). (c) Additional Bonds may be issued for the purpose of refunding (whether in advance or otherwise, including without limitation refunding through the issuance of crossover refunding bonds) any series of Outstanding Bonds, or portion thereof, if prior to the issuance thereof a certificate of a Financial Advisor is delivered to the City stating that, taking into account the issuance of the proposed Additional Bonds and the application of the proceeds thereof and any other funds available to be applied to such refunding, the principal and interest requirements during the remaining term of all Bonds then Outstanding and not to be redeemed or defeased in connection with the refunding will not be increased by more than 10%. 6.2. Subordinate Lien Bonds. The City may issue bonds payable only from the Surplus Account, and from Gross Revenues transferred thereto after the requirements of Sections 4.4 and 4.5 are met and subordinate to the pledge and appropriation of such Gross Revenues for the purposes of Sections 4.4 and 4.5, on such terms and conditions as it deems appropriate. SECTION 7. BONDHOLDER'S RIGHTS. No holder of any Bond issued and secured under the provisions hereof will have the right to institute any proceeding, judicial or otherwise, for the enforcement of the covenants herein contained, without the written concurrence of the holders of not less than 25% in aggregate principal amount of the bonds which are at such time Outstanding • and payable from the Gross Revenue Bond Account, but the holders of this amount of bonds -17- may, either at law or in equity, by suit, action or other proceeding, protect and enforce the rights of all holders of such bonds and compel the performance of any and all of the covenants required herein to be performed by the City and its officers and agents, including but not limited to the establishment and maintenance of charges and fees and the collection and proper segregation of revenues and the use thereof. The holders of a majority in principal amount of such Outstanding bonds will have the right to direct the time, method and place of conducting any proceeding for any remedy available to such holders or the exercise of any power conferred upon them, and the right to waive a default in the performance of any such covenant, and its consequences, except a default in the payment of the principal of or interest on any such bonds when due. However, nothing herein will impair the absolute and unconditional right of the holder of each such bond to receive payment of the principal thereof and interest thereon as such principal and interest respectively become due, from the Gross Revenues and other sources pledged and appropriated for the payment thereof, and to institute suit for the enforcement of any such payment. SECTION 8. DEFEASANCE. When all bonds made payable from the Gross Revenue Bond Account have been discharged as provided in this section, all pledges, covenants and other rights granted by this Resolution to the holders of the Bonds shall cease. The City may discharge its obligations with respect to Bonds which are due on any date by depositing with the paying agent for such bonds on or before that date a sum sufficient for the payment thereof in full; or, if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the paying agent a sum sufficient for the payment thereof in full with interest accrued from the due date to the date of such deposit. The City may also discharge its obligations with respect to any prepayable Bonds called for redemption on any date when they are prepayable according to their terms, by depositing with the paying agent on or before that date an amount equal to the principal, interest and redemption premium, if any, which are then due, provided that notice of such redemption has been duly given as provided herein. The City may also at any time discharge its obligations with respect to any Bonds payable from the Gross Revenue Bond Account, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or securities which are authorized by law to be so deposited, bearing interest payable at such time and at such rates and maturing or callable at the holder's option on such dates as shall be required to pay all principal, interest and redemption premiums to become due thereon to maturity or an earlier designated redemption date. SECTION 9. MATTERS RELATING TO TAX EXEMPTION AND CONTINUING DISCLOSURE. 9.1. General Tax Covenant;,._.Leases Management Contracts and Similar Agreements. The City 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 that would cause interest on the Bonds to become includable in gross income of the recipient under the Internal Revenue Code of 1986, as amended (the Code) and applicable Treasury Regulations (the Regulations), and agrees to take any and all actions within its powers to ensure that the interest on the Bonds will not • become includable in gross income of the recipient under the Code and the Regulations. The -18- • City shall not enter into any lease, management contract, use agreement, capacity agreement or other agreement with any non-governmental person relating to the use of the Ice Arena Complex or security for the payment of the Bonds which might cause the Bonds to be considered "private activity bonds" or "private loan bonds" pursuant to Section 141 of the Code, and shall obtain an opinion of bond counsel prior to entering into any such contract or agreement to the effect that entering into the contract or agreement will not cause the interest payable on any Outstanding bonds payable from the Gross Revenue Bond Account to be included in gross income for federal income tax purposes. 9.2. Certification. The Mayor and City Clerk, being the officers of the City charged with the responsibility for issuing the Bonds pursuant to this Resolution, are authorized and directed to execute and deliver to the Purchaser a certificate in accordance with Section 148 of the Code, and applicable Regulations, stating the facts, estimates and circumstances in existence on the date of issue and delivery of the Bonds which make it reasonable to expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of the Code and Regulations. 9.3. Arbitrage Rebate. The City acknowledges that the Bonds are subject to the rebate requirements of Section 148(f) of the Code. The City covenants and agrees to retain such records, make such determinations, file such reports and documents and pay such amounts at such times as are required under said Section 148(fj and applicable Regulations to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes. 9.4. Oualified Tax-Exempt Obli atg ions. The City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code relating to the disallowance of interest expense for financial institutions, and hereby finds that the reasonably anticipated amount of qualified tax-exempt obligations (within the meaning of Section 265(b)(3) of the Code) which will be issued by the City and all subordinate entities during calendar year 1999 does not exceed $10,000,000. 9.5. Reimbursement. The City certifies that the proceeds of the Bonds will not be used by the City to reimburse itself for any expenditure with respect to the Project which the City paid or will have paid more than 60 days prior to the issuance of the Bonds unless, with respect to such prior expenditures, the City shall have made a declaration of official intent which complies with the provisions of Section 1.150-2 of the Regulations; provided that a declaration of official intent shall not be required (i) with respect to certain de minimis expenditures, if any, with respect to the Project meeting the requirements of Section 1.150-2(f)(1) of the Regulations, or (ii) with respect to "preliminary expenditures" for the Project as defined in Section 1.150-2(f)(Z) of the Regulations, including engineering or architectural expenses and similar preparatory expenses, which in the aggregate do not exceed 20% of the "issue price" of the Bonds. 9.6. Continuing Disclosure. (a) Purpose and Beneficiaries. To provide for the public availability of certain information relating to the Bonds and the security therefor and to permit the original Purchaser and other participating underwriters in the primary offering of the Bonds -19- to comply with amendments to Rule 15c2-12 promulgated by the Securities and Exchange Commission (the SEC) under the Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12), relating to continuing disclosure (as in effect and interpreted from time to time, the Rule), which will enhance the marketability of the Bonds, the City hereby makes the following covenants and agreements for the benefit of the Owners (as hereinafter defined) from time to time of the outstanding Bonds. The City is the only "obligated person" in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made. The City has complied in all material respects with any undertaking previously entered into by it under the Rule. If the City fails to comply with any provisions of this section, any person aggrieved thereby, including the Owners of any outstanding Bonds, may take whatever action at law or in equity may appear necessary or appropriate to enforce performance and observance of any agreement or covenant contained in this section, including an action for a writ of mandamus or specific performance. Direct, indirect, consequential and punitive damages shall not be recoverable for any default hereunder to the extent permitted by law. Notwithstanding anything to the contrary contained herein, in no event shall a default under this section constitute a default under the Bonds or under any other provision of this resolution. As used in this section, "Owner" or "Bondowner" means, in respect of a Bond, the registered owner or owners thereof appearing in the bond register maintained by the Registrar or any "Beneficial Owner" (as hereinafter defined) thereof, if such Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used herein, "Beneficial Owner" means, in respect of a Bond, any person or entity which (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds through nominees, depositories or other intermediaries), or (ii) is treated as the owner of the Bond for federal income tax purposes. (b) Information To Be Disclosed. The City will provide, in the manner set forth in subsection (c) hereof, either directly or indirectly through an agent designated by the City, the following information at the following times: (1) on or before 365 days after the end of each fiscal year of the City, commencing with the fiscal year ending December 31, 1998, the following financial information and operating data in respect of the City (the Disclosure Information): (A) the audited financial statements of the City for such fiscal year, accompanied by the audit report and opinion of the accountant or government auditor relating thereto, as permitted or required by the laws of the State of Minnesota, containing balance sheets as of the end of such fiscal year and a statement of operations, changes in fund balances and cash flows for the fiscal year then ended, showing in comparative form such figures for the preceding fiscal year of the City, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under Minnesota -20- • law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with such generally accepted accounting principles for reasons beyond the reasonable control of the City, noting the discrepancies therefrom and the effect thereof, and certified as to accuracy and completeness in all material respects by the fiscal officer of the City; and (B) To the extent not included in the financial statements referred to in paragraph (A) hereof, the information for such fiscal year or for the period most recently available of the type contained in the Preliminary Official Statement (i) under the headings "Tax Base," "Area," "Population," "Employee Pension Program," "Residential Development," "Building Permits," "Ten Largest Taxpayers" and "Commercial/Industrial Development," in the Section entitled "The City of Lakeville-General Information" and (ii) under all the headings in the Section entitled "The City ofLakeville-Economic and Financial Information," which information may be unaudited. Notwithstanding the foregoing paragraph, if the audited financial statements are not available by the date specified, the City shall provide on or before such date unaudited financial statements in the format required for the audited financial statements as part of • the Disclosure Information and, within 10 days after the receipt thereof, the City shall provide the audited financial statements. Any or all of the Disclosure Information may be incorporated by reference, if it is updated as required hereby, from other documents, including official statements, which have been submitted to each of the repositories hereinafter referred to under subsection (b) or the SEC. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The City shall clearly identify in the Disclosure Information each document so incorporated by reference. If any part of the Disclosure Information can no longer be generated because the operations of the City have materially changed or been discontinued, such Disclosure Information need no longer be provided if the City includes in the Disclosure Information a statement to such effect; provided, however, if such operations have been replaced by other City operations in respect of which data is not included in the Disclosure Information and the City determines that certain specified data regarding such replacement operations would be a Material Fact (as defined in paragraph (2) hereof), then, from and after such determination, the Disclosure Information shall include such additional specified data regarding the replacement operations. If the Disclosure Information is changed or this section is amended as permitted by this paragraph (b)(1) or subsection (d), then the City shall include in the next Disclosure Information to be delivered hereunder, to the extent necessary, an explanation of the reasons for the amendment and the effect of any change in the type of financial information or operating data provided. (2) In a timely manner, notice of the occurrence of any of the following events which is a Material Fact (as hereinafter defined): -21- (A) Principal and interest payment delinquencies; (B) Non-payment related defaults; (C) Unscheduled draws on debt service reserves reflecting financial difficulties; (D) Unscheduled draws on credit enhancements reflecting financial difficulties; (E) Substitution of credit or liquidity providers, or their failure to perform; (F) Adverse tax opinions or events affecting the tax-exempt status of the security; (G) Modifications to rights of security holders; (H) Bond calls; (I) Defeasances; (J) Release, substitution, or sale of property securing repayment of the securities; and (K) Rating changes. As used herein, a "Material Fact" is a fact as to which a substantial likelihood exists that a reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a Bond or, if not disclosed, would significantly alter the total information otherwise available to an investor from the Official Statement, information disclosed hereunder or information generally available to the public. Notwithstanding the foregoing sentence, a • "Material Fact" is also an event that would be deemed "material" for purposes of the purchase, holding or sale of a Bond within the meaning of applicable federal securities laws, as interpreted at the time of discovery of the occurrence of the event. (3) In a timely manner, notice of the occurrence of any of the following events or conditions: (A) the failure of the City to provide the Disclosure Information required under paragraph (b)(1) at the time specified thereunder; (B) the amendment or supplementing of this section pursuant to subsection (d), together with a copy of such amendment or supplement and any explanation provided by the City under subsection (d)(2); (C) the termination of the Bonds of the City under this section pursuant to subsection (d); (D) any change in the accounting principles pursuant to which the financial statements constituting a portion of the Disclosure Information or the audited financial statements, if any, furnished pursuant to subsection (b)(2) or (3) are prepared; and (E) any change in the fiscal year of the City. (c) Manner of Disclosure. The City agrees to make available the information described in subsection (b) to the following entities by telecopy, overnight delivery, mail or other means, as appropriate: -22- • (1) the information described in paragraphs (1), (2) and (3) of subsection. (b), to each then nationally recognized municipal securities information repository under the Rule and to any state information depository then designated or operated by the State of Minnesota as contemplated by the Rule (the State Depository), if any; and (2) the information described in subsection (b), to any rating agency then maintaining a rating of the Bonds at the request of the City and, at the expense of such Bondowner, to any Bondowner who requests in writing such information, at the time of transmission under paragraph (1) of this subsection (c), or, if such information is transmitted with a subsequent time of release, at the time such information is to be released. (d) Term: Amendments; Interpretation. (1) The covenants of the City in this section shall remain in effect so long as any Bonds are outstanding. Notwithstanding the preceding sentence, however, the obligations of the City under this section shall terminate and be without further effect as of any date on which the City delivers to the Registrar an opinion of Bond Counsel to the effect that, because of legislative action or final judicial or administrative actions or proceedings, the failure of the City to comply with the requirements of this section will not cause participating underwriters in the primary offering of the Bonds to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory thereof. (2) This section (and the form and requirements of the Disclosure Information) may be amended or supplemented by the City from time to time, without notice to or the consent of the Owners of any Bonds, by a resolution of this Council filed in the office of the recording officer of the City accompanied by an opinion of Bond Counsel, who may rely on certificates of the City and others and the opinion may be subject to customary qualifications, to the effect that: (i) such amendment or supplement (a) is made in connection with a change in circumstances that arises from a change in law or regulation or a change in the identity, nature or status of the City or the type of operations conducted by the City, or (b) is required by, or better complies with, the provisions of paragraph (b)(5) of the Rule; (ii) this section as so amended or supplemented would have complied with the requirements of paragraph (b)(5) of the Rule at the time of the primary offering of the Bonds, giving effect to any. change in circumstances applicable under clause (i)(a) and assuming that the Rule as in effect and interpreted at the time of the amendment or supplement was in effect at the time of the primary offering; and (iii) such amendment or supplement does not materially impair the interests of the Bondowners under the Rule. If the Disclosure Information is so amended, the City agrees to provide, contemporaneously with the effectiveness of such amendment, an explanation of the reasons for the amendment and the effect, if any, of the change in the type of financial • information or operating data being provided hereunder. -23- (3) This section is entered into to comply with the continuing disclosure provisions of the Rule and should be construed so as to satisfy the requirements of paragraph (b)(5) of the Rule. SECTION 10. AUTHENTICATION OF TRANSCRIPT. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to Dorsey & Whitney LLP, the attorneys rendering an opinion as to the legality thereof, certified copies of all proceedings and records relating to the Bonds and such other affidavits, certificates and information as may be required to show the facts relating to the legality and marketability of the Bonds, as the same appear from the books and records in their custody and control or as otherwise known to them, and all such certified copies, affidavits and certificates, including any heretofore furnished, shall be deemed representations of the City as to the correctness of all statements contained therein. SECTION 11. Execution of Certain Documents. In connection with the issuance of the Bonds the Mayor and City Clerk are authorized and directed to execute, on behalf of the City, that certain Operating and Management Agreement and that certain Revised and Restated Gaming Revenue Agreement, substantially in the form attached to the Memorandum of Understanding (Ames Arena II), dated as of November 16 , 199$, and any other documents necessary or desirable to carry out the transactions described in said Memorandum. • Upon vote being taken thereon, the following voted in favor thereof: Luick, Mulvihill, Ryan, and Sindt and the following voted against the same: None whereupon the resolution was declared duly passed and adopted. -24- EXHIBIT A • DOUGHERTY SUMMIT SECiJRTTIES LLC 3.50% - 1999 4.00% - 2000 4.15% - 2001 4.30% - 2002 4.40% - 2003 4.50% - 2004 4.60% - 2005 4.70% - 2006 4.80% - 2007 4.90% - 2008 5.00% - 2009 5.30% - 2015/2017* 5.40% - 2018/2019* PURCHASE PRICE: $.1,228,750.00 $915,104.17 (5.3698%) CRONIN & CO., INC. 5.00% - 1999/2007 5.10% - 2008 5.20% - 2009 5.50% - 2015/2019* PURCHASE PRICE: $1,227,512.20 $947,461.13 (5.5596%) • *TERMED BONDS