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HomeMy WebLinkAbout96-189 f r . RESOLUTION N0. 96-1$9 CERTIFICATION OF MINUTES RELATING TO $2,025,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 1996C Issuer: City of Lakeville, Minnesota Governing Body: City Council Kind, date time and place of meeting: A regular meeting was held November 4, 1996 at 7:00 p.m., at City Hall, Lakeville, Minnesota The officers and members of the Council were present or absent at said meeting, as follows: Present/Absent Duane R. Zaun, Mayor Charlene Friedges, City Clerk Mary Liz Holberg, Member Robert Johnson, Member Lynette Mulvihill, Member Elizabeth L Sindt, Member Documents attached: Excerpt from Minutes of said meeting, including: RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS, AND PROVIDING FOR THE PAYMENT OF $2,025,000, GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 1996C CERTIFICATE I, the undersigned, being the duly qualified and acting City Clerk of the City of Lakeville, Minnesota (the "City"), and in my capacity as such officer having custody of the minutes of meetings of the City Council of the City, hereby certify that attached hereto is a full, true and correct copy of an extract of the minutes of the meeting of the City Council. of the City which was duly called and held on November 4, 1996, insofar as such minutes relate to $2,025,000 General Obligation Improvement Refunding Bonds, Series 1996C, of the City, and that the Resolution included therein is a full, true, and correct copy of a Resolution duly adopted by the City Council at such meeting, at which. meeting a quorum of the City Council was present and acting throughout, and that such Resolution has not since been amended or repealed. WITNESS my hand this day of November, 996. ' Clerk -2- Councilmember sindt introduced the following resolution and moved its adoption, which motion was seconded by Councilmember xolberg RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $2,025,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 1996C BE IT RESOLVED by the City Council of the City of Lakeville, Minnesota (the City), as follows: Section 1. Authorization and Sale. 1.01. Authorization. By resolution duly adopted on October 21, 1996 this Council authorized the sale of the City's $2,C25,000 General Obligation Improvement Refunding Bonds, Series 1996C (the Bonds), the proceeds of which will be used, together with City funds on hand as may be required, to refund in advance of maturity: (a) the 1997 through 2001 maturities of the City's General Obligation Improvement Bonds, Series 1989A, dated December 1, 1989; (b) the 1997 through 2013 maturities of the City's General Obligation Improvement Bonds, Series 1990A, dated November 1, 1990; and (c) the 1997 through 2007 maturities of the City's General Obligation Improvement Refunding Bonds, Series 1991B, dated May 1, 1991 (together, the Refunded Bonds). Said refunding will reduce the required annual debt service payments. 1.02. Sale. The City has.. retained Springsted Incorporated, as independent financial advisers in connection with the sale of the Bonds. Pursuant to Minnesota Statutes, Section 475.60, Subdivision 2, paragraph (9), the requirements as to public sale do not apply to the issuance of the Bonds. A bid has been received from Norwest Investment Services, Inc., in Minneapolis, Minnesota and associates (the "Purchaser"), to purchase the Bonds, when, as and if issued on the further terms and conditions hereinafter set forth, at a price of $2,004,750.00 plus accrued interest on all Bonds to the day of delivery and payment. 1.03. Award. The offer of the Purchaser is hereby accepted and the Mayor and City Clerk are hereby authorized and directed to execute a contract for the sale of the Bonds with the Purchaser. 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. 1.04. Sam. It is hereby determined that: (a) by the issuance of the Bonds the City will realize a substantial interest rate reduction, a gross savings of approximately $186,949.45 and a present value savings (using the yield on the Bonds, computed in accordance with Section 148 of the Internal Revenue Code of 1986, as amended (the Code), as the discount factor) of approximately $117,340.27; and (b) as of the nominal date of the Bonds (November 1, 1996), the sum of (i) the present value of the debt service on the Bonds, computed to their .stated maturity dates, after deducting any premium, using the yield of the Bonds as the discount rate, plus (ii) any expenses of the refunding payable from a source other than the proceeds of the Bonds or investment earnings thereon, is lower by 3.23% (not less than 3%) than the present value of the debt service on the Refunded Bonds, computed to their stated maturity dates, using the yield of the Bonds as the discount rate. Section 2. Bond Terms; Registration; Execution and Delivery. 2.01. Issuance of Bonds. All acts, conditions and things which are 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 valid issuance of the Bonds having been done, now existing, having happened and having been performed, it is now necessary for the City Council to establish the form and terms of the Bonds, to provide security therefor and to issue the Bonds forthwith. 2.02. Maturities• Interest Rates and Denominations. The Bonds shall be originally ,dated as of November 1, 1996, shall be in the denomination of $5,000 each, or any integral multiple thereof, of single maturities, shall mature on February 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 Amount Rate Year Amount Rate 1998 $ 95,000 4.60% 2005 $160,000 4.90% 1999 125,000 4.60 2006 170,000 5.00 2000 130,000 4.60 2007 180,000 5.10 2001 135,000 4.60 2008 185,000 5.20 2002 140,000 4.70 2009 195,000 5.30 2003 150,000 4.70 2010 205,000 5.40. 2004 155,000 4.80 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 2.08 hereof, principal and interest shall be payable in accordance with the operational arrangements of the securities depository. -2- 2.03. Dates and Interest Payment Dates. Upon the initial delivery of the Bonds pursuant to Section 2.07 and upon any subsequent transfer or exchange pursuant to Section 2.05, 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, 1997, to the 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. Interest shall be computed on the basis of a 360 day year composed of twelve 30 day months. 2.04. Redemption. Bonds maturing in 2007 and later years shall be subject to redemption and prepayment at the option of the City, in whole or in part, in such order as the City shall determine and within a maturity by lot as selected by the Registrar (or, if applicable, by the bond depository in accordance with its customary procedures) in multiples of $5,000, on February 1, 2006, and on any date thereafter, at a price equal to the principal amount thereof and aecrued interest to the date of redemption. Prior to the date set for redemption of any Bond prior to its stated maturity date, the Clerk shall cause notice of the call for redemption thereof to be published as required by law and, at least 30 days prior to the designated redemption date, shall cause notice of the call to be mailed by first class mail to the registered owners of any Bonds to be redeemed at their addresses as they appear on the bond register described in Section 2.06 hereof; provided that notice shall be given to any securities depository in accordance with its operational .arrangements. 2.05. Appointment of Initial Registrar. The City hereby appoints First Trust National Association in St. Paul, Minnesota, as the initial bond registrar, transfer agent and paying agent (the Registrar). The Mayor .and the Clerk 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, such corporation shall be 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 thirty day's notice and upon the appointment 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. 2.06. Registration. The effect of registration and the rights and duties of the City and the Registrar with respect thereto shall be as follows: (a) Re ister. The Registrar shall keep at its principal corporate trust office a 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. -3- (b) Transfer of Bonds. Upon surrender for transfer of any 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 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. 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 such interest payment date. (c) Exchange of Bonds. Whenever any Bonds are surrendered by the registered owner for exchange the Registrar shall 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. All Bonds surrendered upon any transfer or exchange shall be promptly canceled by the Registrar and thereafter disposed of as directed by the City. (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 such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Bond and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. (g) Taxes. Fees and Charges. For every transfer or exchange of Bonds, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or ,exchange. -4- (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 such 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 such 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. 2.07. Execution, Authentication and Delivery. 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 all 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 the Bonds shall cease to be such officer before the delivery of any Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. 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 such 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 each Bond shall be conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed and authenticated, the Finance Director shall deliver them to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser shall not be obligated to see to the application of the purchase price. 2.08. Securities Depository. (a) For purposes of this section the following terms shall have the following meanings: _5_ "Beneficial Owner" shall mean, whenever used with res ect to a Bond, P 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 for 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 -6- 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 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 Clerk 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. 2.09. Form of Bonds. The Bonds shall be printed in substantially the following form: -7- UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF LAKEVILLE GENERAL OBLIGATION IMPROVEMENT REFUNDING BOND, SERIES 1996C Rate Maturi Date of Orieina~ 1 Issue USIP November 1, 1996 REGISTERED OWNER: PRINCIPAL AMOUNT: THE CITY OF LAKEVILLE, COUNTY OF DAKOTA, MINNESOTA (the City), acknowledges itself to be indebted and hereby promises to pay to the registered owner named above, or registered assigns, the principal sum specified above on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above, payable on February 1 and August 1 in each year, commencing August 1, 1997, 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, 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 hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by First Trust National Association, in St. Paul, Minnesota, as Bond Registrar, Transfer Agent and Paying Agent (the Registrar), or its designated successor under the Resolution described herein; provided that, so long as the Bonds are registered in the name of a bond depository, or a nominee thereof, principal and interest shall be payable in accordance with the operational arrangements of the securities depository. Interest on this Bond shall be computed on the basis of a 360-day year composed of twelve 30-day months. 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. This Bond is one of an issue in the aggregate principal amount of $2,025,000 issued pursuant to a resolution adopted by the City Council on November 4, 1996 (the Resolution), to provide funds to refund certain outstanding general obligation bonds of the City and is issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota and the City Charter thereunto enabling, including Minnesota Statutes, Chapter 475. The Bonds are -8- issuable only in fully registered form, in denominations of $5,000 or any integral multiple thereof, of single maturities. Bonds having stated maturity dates in 2007 .and later years are each subject to redemption and prepayment at the option of the City, in whole or in part, in such order as the City shall determine and, within a maturity, by lot as selected by the Registrar (or, if applicable, by the bond depository in accordance with its customary procedures) in multiples of $5,000, on February 1, 2006, and on any date thereafter, at a price equal to the principal amount thereof plus interest accrued to the date of redemption. Prior to the date specified for the redemption of any Bond prior to its stated maturity date, the City will cause notice of the call for redemption to be published as required by law, and, at least thirty days prior to the designated redemption date, will cause notice of the call to be mailed by first class mail (or, if applicable, provided in accordance with the operational arrangements of the bond depository) 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. Upon partial redemption of any Bond, a new Bond or Bonds will be delivered to the registered owner without charge, representing the remaining principal amount outstanding. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner's attorney, and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar shall 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 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; that the Bonds are payable from a separate debt redemption fund of the City and from certain special assessments which have been appropriated to such fund; that if necessary for payment of such -9- • principal and interest, ad valorem taxes are required to be levied upon all taxable property in the City, without limitation as to rate or amount; that the issuance of this Bond, together with all other indebtedness of the City outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the City to exceed any constitutional or statutory limitation of indebtedness; and that the opinion printed hereon is a full and correct copy of the legal opinion given by Bond Counsel with reference to the Bonds, dated as of the date of original 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 Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the .City of Lakeville, County of Dakota, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile signatures of the Mayor and City Clerk and has caused this Bond to be dated as of the date set forth below. CITY OF LAKEVILLE, MINNESOTA (Facsimile Signature -City Clerk) (Facsimile Signature -Mayor) CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. Date of Authentication: as Registrar By Authorized Representative [Insert Legal Opinion] -10- 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 applicable laws or regulations: TEN COM as tenants in common UTMA as Custodian for (Gust) (Minor) under Uniform Transfers to Minors Act TEN ENT as tenants by entireties (State) JT TEN --as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: NOTICE: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. 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 bond form] -11- Section 3. Use of Proceeds. The Finance Director is hereby authorized. and directed, simultaneously with the delivery of the Bonds, to (a) deposit proceeds of the Bonds in the amount of $1,982,390.79, together with funds of the City in the amount of $1,526,237.33 in escrow with First Trust National Association, in St. Paul, Minnesota (the Escrow Agent), a banking institution whose deposits are insured by the Federal Deposit Insurance Corporation and whose combined capital and surplus is not less than $500,000, and to invest the funds so deposited in securities authorized for such purpose by Minnesota Statutes, Section 475.67, subdivision 8, maturing on such dates and bearing interest at such rates as are required to provide funds sufficient, with cash retained in the escrow account, to pay all principal and interest to become due on the Refunded Bonds to and including their respective designated redemption dates; (b) expend proceeds of the Bonds in the amount of $22,359.21 and funds of the City in the amount of $934.54 to pay issuance expenses of the Bonds; and (c) deposit proceeds of the Bonds in the amount of $5,273.82 in the Sinking Fund created pursuant to Section 4.01 hereof. The Mayor and Clerk are hereby authorized to enter into an Escrow Agreement with the Escrow Agent establishing the terms and conditions for the escrow account in .accordance with Minnesota Statutes, Section 475.67. Section 4. Securi Provisions. 4.01.. Sinking Fund. The Bonds shall be payable from a separate General Obligation Improvement Refunding Bonds, Series 1996C Sinking Fund (the Sinking Fund) which shall be created and maintained on the books of the City as a separate debt redemption fund until the Bonds, and all interest thereon, are fully paid. There shall be credited to the Sinking Fund (i) the amount specified in Section 3 hereof, (ii) all future receipts of special assessments levied and collected with respect to the improvements financed by the Refunded Bonds; (iii) any ad valorem taxes levied and collected in accordance with Section 4.02 hereof; and (iv) any other funds appropriated by the Council for the payment of the Bonds. 4.02. Pledge of Taxing Powers. For the prompt and full payment of the principal of and interest on the Bonds as such payments respectively become due, the full faith, credit and unlimited taxing powers of the City shall be and are hereby irrevocably pledged. However, the City presently estimates that the collections of special assessments and other amounts as set forth in Section 4.01, will produce amounts not less than 5% in excess of the amounts needed to meet when due the principal and interest payments on the Bonds, and therefore no ad valorem taxes are levied at this time. The taxes shall be irrepealable as long as any of the Bonds are outstanding and unpaid, provided that the City reserves the right and power to reduce the tax levies in accordance with the provisions of Minnesota Statutes, Section 475.61. -12- Section 5. Defeasance. When all of the Bonds have been discharged as provided in this section, all pledges, covenants and other rights granted by this Resolution to the registered owners of the Bonds shall cease. The City may discharge its obligations with respect to any 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; or, 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 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 Registrar on or before that date a sum sufficient for the payment thereof in full; provided that notice of the redemption thereof has been duly given as provided in Section 2.04. The City may also at any time discharge its obligations with respect to any Bonds, 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 and interest to become due thereon to maturity or an earlier designated redemption date. .Section 6. Certification of Proceedings; and Refunded Bonds Call. 6.01. Re istration f Bonds. The Clerk is hereby authorized and directed to file a certified copy of this Resolution with the County Treasurer-Auditor of Dakota County, together with such additional information as the Treasurer- Auditor may require, and to obtain from the Treasurer-Auditor a certificate that the Bonds have been duly entered upon the Treasurer-Auditor's bond register and the tax required by law has been levied. 6.02. Authentication of Transcript. The officers of the City and the County Treasurer-Auditor are hereby authorized and directed to prepare and furnish to the Purchaser and to Dorsey & Whitney LLP, Bond Counsel, 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. 6.03. Official Statement. The Addendum, dated October 10, 1996, to the Official Statement, dated October 7, 1996, and the supplement thereto, relating to the • Bonds prepared and distributed by Springsted Incorporated, the financial consultant -13- for the City, are each hereby approved. Springsted Incorporated is hereby authorized on behalf of the City to prepare and distribute to the Purchaser within seven business days from the date hereof, a supplement to the Official Statement listing the offering price, the interest rates, selling compensation, delivery date, the underwriters and such other information relating to the Bonds required to be included in the Official Statement by Rule 15c2-12 adopted by the Securities and Exchange Commission (the SEC) under the Securities Exchange Act of 1934. The officers of the City are hereby authorized and directed to execute such certificates as may be appropriate concerning the accuracy, completeness and sufficiency of the Official Statement, including the Addendum and supplement. 6.04. Refunded Bonds Call. The Clerk is directed to call for redemption and prepayment the Refunded Bonds at their earliest permissible redemption dates as specified in the Escrow Agreement and to give notice of redemption in accordance with the resolutions authorizing issuance of the Refunded Bonds. Section 7. Tax Covenants: Arbitrage Matters and Continuing Disclosure. 7.01. General Tax Covenant. The City covenants and agrees with the registered owners 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 payable on the Bonds to become subject to taxation under the Code and applicable Treasury Regulations (the Regulations), and covenants to take any and all actions within its powers to ensure that the interest on the Bonds will not become includible in gross income of the recipient under the Code and the Regulations. The City represents and covenants that the proceeds of the Refunded Bonds (or bonds refunded thereby) were used to finance public improvements and facilities owned and maintained by the City and available for use by members of the general public on a substantially equal. basis. The City shall not enter into any lease, use agreement, management agreement, other agreement or contract with any non-governmental person relating to the use of the improvements 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. 7.02. Arbitrage Certification. The Mayor and 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 the provisions of 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. -14- 7.03. 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(f) and applicable Regulations to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes. 7.04. 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 Purchaser and other participating underwriters in the primary offering of the Bonds to comply with amendments to Rule 15c2-12 promulgated by 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. 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, u1 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. -15- (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, 1996, 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, 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 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 Official Statement: City Population Figures; City Property Values; City Indebtedness; City Tax Rates, Levies and Collections; and General Fund Budget Summary, 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 (c) or the SEC. If the document incorporated by reference is a final official statement, it must be available from the Municipal • -16- .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): (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, -17- 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 obligations 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 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: (1) the information described in paragraph (1) 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; (2) the information described in paragraphs (2) and (3) of subsection (b), to the Municipal Securities Rulemaking Board and to the State Depository, if any; and (3) 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 paragraphs (1) or (2) of this -18- subsection (c), as the case may be, 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 (except as provided in paragraph (c)(3) hereof) 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 S 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. -19- a (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. Upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon the resolution was declared duly passed and adopted. -20-