HomeMy WebLinkAboutResolution - 2003-15 - $1,445,000 General Obligation Refunding Bonds, Series 2003C (Refunding of 1994A Bonds) - 01/21/2003 CITY OF EDEN PR AIRIRE
HENNEPIN COUNTY,NIINNESOTA
RESOLUTION 2003-15
RESOLUTION PRESCRIBING THE FORM AND DETAILS
AND PROVIDING FOR THE PAYMENT OF$1,445,000
GENERAL OBLIGATION REFUNDING BONDS, SERIES
2003C
BE IT RESOLVED by the City Council of the City of Eden Prairie,Minnesota
(the Issuer), as follows:
Section 1. Authorization and Sale.
1.01. Authorization. This Council hereby determines that it is in the best
interests of the City to issue its General Obligation Refunding Bonds, Series 2003C (the Bonds)
in the approximate principal amount of$1,445,000, subject to adjustment in accordance with the
Terms of Proposal. The Issuer believes that a substantial debt service savings can be achieved
by the issuance and sale of the Bonds. The proceeds of the Bonds will be used,together with
funds on hand as may be required, to refund on February 1, 2004,the 2005 through 2014
maturities, aggregating$1,390,000 in principal amount, of the $1,950,000 General Obligation
Open Space Bonds, Series 1994A, dated August 1, 1994 (the Refunded Bonds).
1.02. Sale. Pursuant to the Terms of Proposal and the Official Statement
prepared on behalf of the Issuer by Northland Securities, Inc., 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 RBC Dain Rauscher of Minneapolis,Minnesota and associates (the
Purchaser). In accordance with the Terms of Proposal,it is hereby determined to issue the Bonds
in the principal amount of$1,445,000 at a price of$1,435,753.75 plus accrued interest, and upon
the further terms and conditions set forth herein.
1.03. Award. The sale of the Bonds is hereby awarded to the Purchaser and the
Mayor and City Manager are hereby authorized and directed to execute a contract on behalf of
the Issuer 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 Issuer until the Bonds have been
delivered, and shall be deducted from the purchase price paid at settlement.
1.04. Savings. It is hereby determined that:
(a) by the issuance of the Bonds the Issuer will realize a substantial interest rate
reduction, a gross savings of approximately$151,846.25 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
$138,036.00; and
(b) as of February 1,2004(the Crossover Date), 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 8.69 % (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, Denominations and Payment. The Bonds shall
be originally dated as of February 1, 2003, shall be in denominations of$5,000 or any integral
multiple thereof, of single maturities, shall mature on February 1 in the years and amounts stated
below, and shall bear interest from date of issue until paid or duly called for redemption at the
annual rates set forth opposite such years and amounts, as follows:
Year Amount Rate Year Amount Rate
2005 $ 95,000 2.00 % 2010 $150,000 3.2 %
2006 110,000 2.00 2011 165,000 3.50
2007 115,000 2.25 2012 170,000 3.65
2008 125,000 2.75 2013 185,000 3.80
2009 135,000 3.00 2014 195,000 3.90
[REVISE MATURITY SCHEDULE FOR ANY TERM BONDS]
For the purpose of complying with the provisions of Minnesota Statutes, Section 475.54,
subdivision 1,the maturities of the Bonds shall be combined with the non-refunded maturities of
the Refunded Bonds. 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.
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2.03. Dates and Interest Payment Dates. Upon initial delivery of the Bonds
pursuant to Section 2.07 and upon any subsequent transfer or exchange pursuant to Section 2.06,
the date of authentication shall be noted on each Bond so delivered, exchanged or transferred.
The interest on the Bonds shall be payable on February 1 and August 1, commencing August 1,
2003,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.
2.04. Redemption. Bonds maturing in 2011 and later years shall be subject to
redemption and prepayment at the option of the Issuer, in whole or in part, in such order as the
Issuer 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, 2010, and on any date thereafter, at a price equal to the principal amount thereof and
accrued interest to the date of redemption. The City Clerk shall cause notice of the call for
redemption thereof to be published as required by law and, at least thirty days prior to the
designated redemption date, shall cause notice of the call for redemption 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 but no defect in or failure to give
such mailed notice of redemption shall affect the validity of proceedings for the redemption of
any Bond not affected by such defect or failure;provided that notice shall be given to any
securities depository in accordance with its operational arrangements. Official notice of
redemption having been given as aforesaid,the Bonds or portions of Bonds so to be redeemed
shall, on the redemption date,become due and payable at the redemption price therein specified,
and from and after such date(unless the Issuer shall default in the payment of the redemption
price) such Bonds or portions of Bonds shall cease to bear interest. 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.
[COMPLETE THE FOLLOWING PROVISIONS IF THERE ARE TERM BONDS-
ADD ADDITIONAL PROVISIONS IF THERE ARE MORE THAN TWO TERM BONDS]
[Bonds maturing on February 1,20 and 20 (the Term Bonds) shall be subject to
mandatory redemption prior to maturity pursuant to the sinking fund requirements of this Section
2.04 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 February 1 in each of the following years the following
stated principal amounts of such Bonds:
Year Principal Amount
The remaining$ stated principal amount of such Bonds shall be paid at
maturity on February 1, 20
Year Principal Amount
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The remaining$ stated principal amount of such Bonds shall be paid at
maturity on February 1, 20
Notice of redemption shall be given as provided in the preceding paragraph.]
2.05. Appointment of Initial Re i�stray. The Issuer hereby appoints U S Bank
National Association,in St.Paul,Minnesota, as the initial bond registrar, transfer agent and
paying agent (the Registrar). The Mayor and the Manager are authorized to execute and deliver,
on behalf of the Issuer, 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 Issuer agrees to pay the reasonable and customary charges of the
Registrar for the services performed. The Issuer reserves the right to remove the Registrar upon
thirty(30) days 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
Issuer 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.
(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.
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(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 Issuer.
(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 Issuer 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 interest on the Bond and for all other
purposes; and all payments made to any registered owner or upon the owner's order shall
be valid and effectual to satisfy and discharge the liability upon Bond to the extent of the
sum or sums so paid.
(g) Taxes,Fees and Charges. For every transfer or exchange of Bonds (except
for an exchange upon a partial redemption of a Bond), 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.
(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 Issuer 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 Issuer. 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 Manager and shall be executed on behalf of the Issuer by the signatures
of the Mayor and the Manager,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 the Bonds shall cease to be such officer before the delivery of
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any Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes,
the same as if he 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 the Bond has been duly executed by
the manual signature of an authorized representative of the Registrar. Certificates of
authentication on different Bonds need not be signed by the same representative. The executed
certificate of authentication on each Bond shall be conclusive evidence that it has been
authenticated and delivered under this Resolution. When the Bonds have been prepared,
executed and authenticated,the Manager 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.
2.08. Securities De ositorX. (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 for
which DTC holds Bonds as securities depository.
"Representation Letter"shall mean the Representation Letter pursuant to which
the Issuer 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 Issuer 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 Issuer shall be affected by any notice to
the contrary. Neither the Registrar nor the Issuer 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
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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 Issuer'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 Issuer 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 Issuer 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 Issuer
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 Issuer 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 Manager 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 prepared in substantially the following
form:
UNITED STATES OF AMERICA
STATE OF MINNESOTA
HENNEPIN COUNTY
CITY OF EDEN PRAIRIE
GENERAL OBLIGATION REFUNDING BOND, SERIES 2003C
Interest Rate Maturity Date Date of Original Issue CUSIP No.
February 1,20_ February 1, 2003
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REGISTERED OWNER: CEDE&CO.
PRINCIPAL AMOUNT: THOUSAND DOLLARS
The City of Eden Prairie, County of Hennepin, State of Minnesota(the Issuer)
acknowledges itself to be indebted and for value received hereby promises to pay the principal
amount 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, 2003,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 prior to its stated maturity. Interest hereon shall be computed on the basis
of a 360-day year composed of twelve 30-day months. 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 , in ,Minnesota, as
Bond Registrar and Paying Agent, or its designated successor under the Resolution described
herein(the Registrar). 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 Issuer have been
and are hereby irrevocably pledged.
This Bond is one of an issue in the aggregate principal amount of$1,445,000 issued
pursuant to a resolution adopted by the City Council on January 21, 2003 (the Resolution),to
provide funds to refund certain outstanding general obligation Bonds of the Issuer and is issued
pursuant to and in full conformity with the Constitution and laws of the State of Minnesota
thereunto enabling, including Minnesota Statutes, Chapter 475. The Bonds are 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 2011 and later years are each subject to redemption
and prepayment at the option of the Issuer, in whole or in part, in such order as the Issuer 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, 2010, and on any date thereafter, at a price equal to the principal amount thereof plus
interest accrued to the date of redemption. The Issuer 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 thereof 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,but no defect in or failure to give such mailed notice of
redemption shall affect the validity of proceedings for the redemption of any Bond not affected
by such defect or failure. Official notice of redemption having been given as aforesaid, the
Bonds or portions of Bonds so to be redeemed shall, on the redemption date,become due and
payable at the redemption price therein specified, and from and after such date (unless the Issuer
shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease
to bear interest. 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.
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[COMPLETE THE FOLLOWING PROVISIONS IF THERE ARE TERM BONDS-
ADD ADDITIONAL PROVISIONS IF THERE ARE MORE THAN TWO TERM BONDS]
[Bonds maturing in the year 20 and 20 shall be subject to mandatory
redemption, at a redemption price equal to their principal amount plus interest accrued thereon to
the redemption date,without premium, on February 1 in each of the years shown below, in an
amount equal to the following principal amounts:
Term Bonds Maturing in 20-- Term Bonds Maturingin•n 20--
Sinking Fund Aggregate Sinking Fund Aggregate
Payment Date Principal Amount Payment Date Principal Amount
Notice of redemption shall be given as provided in the preceding paragraph.]
As provided in the Resolution and subject to certain limitations set forth therein,this
Bond is transferable upon the books of the Issuer 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
Issuer 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.
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 Issuer.
The Issuer 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 Issuer 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 Issuer 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 Issuer and from certain investment earnings
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on the proceeds of the Bonds and ad valorem taxes on all taxable property in the Issuer,which
will be collectible in the years and in amounts sufficient to produce sums not less than five
percent in excess of the principal of and interest on the Bonds when due and that the Issuer has
appropriated such investment earnings and taxes to its General Obligation Refunding Bonds,
Series 2003C Bond Fund for the payment of such principal and interest;that if necessary for
payment of such principal and interest, additional ad valorem taxes are required to be levied
upon all taxable property in the Issuer,without limitation as to rate or amount; that the issuance
of this Bond,together with all other indebtedness of the Issuer outstanding on the date hereof and
on the date of its actual issuance and delivery, does not cause the indebtedness of the Issuer to
exceed any constitutional or statutory limitation of indebtedness; 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 Registrar by manual signature of one of its authorized representatives.
IN WITNESS WHEREOF, the Issuer,by its City Council, has caused this Bond to be
executed on its behalf by the facsimile signatures of the Mayor and Manager and has caused this
Bond to be dated as of the date set forth below.
CITY OF EDEN PRAIRIE,MINNESOTA
(facsimile signature Managers (facsimile signature Maya,
CERTIFICATE OF AUTHENTICATION
Dated
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
as Registrar
By
Authorized Representative
[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.....................
(Cust) (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.
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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 the Bond form]
Section 3. Use of Proceeds. Upon payment for the Bonds by the Purchaser, the
Finance Director shall deposit and apply the proceeds of the Bonds as follows: (a)
$1,438,033.25 shall be deposited in escrow with US Bank 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,the funds so deposited, together with funds of the Issuer in such amount as may be
required, to be invested 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 interest to become
due on the Refunding Bonds to and including the Crossover Date and to pay and redeem the
outstanding principal of the Refunded Bonds on the Crossover Date; (b) $17,020.00 shall be used
to pay issuance expenses of the Bonds; and(c) $1,421,013.25 shall be deposited in the Bond
Fund created pursuant to Section 4.01 hereof. The Mayor and Manager 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. Bond Fund and Tax Levy.
4.01. General Obligation Refunding Bonds, Series 2003C Bond Fund. The
Bonds shall be payable from a separate General Obligation Refunding Bonds, Series 2003C
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Bond Fund(the Bond Fund)which shall be created and maintained on the books of the Issuer as
a separate debt redemption fund until the Bonds, and all interest thereon, are fully paid. There
shall be credited to the Bond Fund(i) all receipts of principal and interest on the investments
held in the escrow account established in Section 3 to and including the Crossover Date(other
than the sum of$1,390,000 received from maturing investments on the Crossover Date to be
used to retire the Refunded Bonds); (ii) all amounts on deposit in the Bond Fund maintained for
the payment of the Refunded Bonds upon the retirement of the Refunded Bonds; (iii) any ad
valorem taxes collected in accordance with the provisions of Section 4.02 hereof; and(iv) any
other funds appropriated by the City Council for the payment of the Bonds.
There are hereby established two accounts in the Bond Fund, designated as the
Debt Service Account and the Surplus Account. During each Bond Year(i.e., each twelve-
month period commencing on February 2 and ending on the following February 1), as monies
are received into the Bond Fund,the Finance Director shall first deposit such monies into the
Debt Service Account until an amount has been appropriated thereto sufficient to pay all
principal and interest due on the Bonds through the end of the Bond Year. All subsequent
monies received in the Bond Fund during the Bond Year shall be appropriated to the Surplus
Account. If at any time the amount on hand in the Debt Service Account is insufficient for the
payment of principal and interest then due, the Finance Director shall transfer to the Debt Service
Account amounts on hand in the Surplus Account to the extent necessary to cure such deficiency.
Investment earnings (and losses) on amounts from time to time held in the Debt Service Account
and Surplus Account shall be credited or charged to said accounts.
If the aggregate balance in the Bond Fund is at any time insufficient to pay all
interest and principal then due on all Bonds payable therefrom,the payment shall be made from
any fund of the Issuer which is available for that purpose, subject to reimbursement from the
Surplus Account in the Bond Fund when the balance therein is sufficient, and the City Council
covenants and agrees that it will each year levy a sufficient amount of ad valorem taxes to take
care of any accumulated or anticipated deficiency,which levy is not subject to any constitutional
or statutory limitation.
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 Issuer hereby
irrevocably pledges its full faith, credit and unlimited taxing powers. In order to produce
aggregate amounts which,together with the collections of 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, ad valorem taxes are hereby levied on all
taxable property in the Issuer. The taxes will be levied and collected in the following years and
amounts:
Levy Years Collection Years Amount
2003-2012 2004-2013 (see attached levy computation)
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 Issuer may discharge its obligations with respect to any
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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 Issuer 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
redemption thereof has been duly given as provided in Section 2.04. The Issuer 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 earlier designated redemption date.
Section 6. Tax Covenants; Arbitrage Matters and Continuing Disclosure.
6.01. General Tax Covenant. The Issuer covenants and agrees with the registered
owners 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 actions 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 covenants 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.
6.02. Certification. The Mayor and Finance Director being the officers of the
Issuer 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.
6.03. Arbitrage Rebate. The Issuer acknowledges that the Bonds are subject to
the rebate requirements of Section 148(f) of the Code. The Issuer 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.
6.04. 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 Issuer
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 Issuer is the only
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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 Issuer has
complied in all material respects with any undertaking previously entered into by it under the
Rule. If the Issuer 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(b) is treated as the owner of the Bond for federal income tax purposes.
(b) Information To Be Disclosed. The Issuer will provide, in the manner set forth in subsection
(c)hereof, either directly or indirectly through an agent designated by the Issuer, the following
information at the following times:
(1) on or before 365 days after the end of each fiscal year of the Issuer, commencing with
the fiscal year ending December 31, 2003, the following financial information and
operating data in respect of the Issuer(the Disclosure Information):
(A) the audited financial statements of the Issuer 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 Issuer,
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
Issuer,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
Issuer; 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 under headings: Issuer
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Property Values; Issuer Indebtedness; and Issuer Tax Rates, Levies and
Collections.
Notwithstanding the foregoing paragraph, if the audited financial statements are not available by
the date specified,the Issuer 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 Issuer 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 Securities Rulemaking Board. The Issuer 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 Issuer have materially
changed or been discontinued, such Disclosure Information need no longer be provided if the
Issuer includes in the Disclosure Information a statement to such effect;provided,however, if
such operations have been replaced by other Issuer operations in respect of which data is not
included in the Disclosure Information and the Issuer 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 Issuer 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,information disclosed hereunder or information generally
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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 Issuer 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 Issuer under subsection(d)(2);
(C) the termination of the obligations of the Issuer 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 Issuer.
(c) Manner of Disclosure. The Issuer 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 Issuer 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 subsection(c), as the case may be,
or, if such infonmation 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 Issuer in this section shall remain in effect so long as any
Bonds are Outstanding. Notwithstanding the preceding sentence, however,the
obligations of the Issuer under this section shall terminate and be without further
effect as of any date on which the Issuer delivers to the Registrar an opinion of Bond
Counsel to the effect that,because of legislative action or final judicial or
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administrative actions or proceedings,the failure of the Issuer 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 Issuer 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 Issuer
accompanied by an opinion of Bond Counsel,who may rely on certificates of the
Issuer 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 Issuer or the type of operations conducted by the
Issuer, 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 Issuer 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.
(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 7. Certification of Proceedings and Redemption of Refunded Bonds.
7.01. Registration of Bonds. The Finance Director is hereby authorized and
directed to file a certified copy of this resolution with the County Auditor of Hennepin County
and obtain a certificate that the Bonds have been duly entered upon the County Auditor's bond
register and the tax required by law has been levied.
7.02. Authentication of Transcript. The officers of the Issuer and the County
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
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copies, affidavits and certificates, including any heretofore furnished, shall be deemed
representations of the Issuer as to the correctness of all statements contained therein.
7.03. Official Statement. The Official Statement relating to the Bonds, dated
January 4, 2003,prepared and distributed by Northland Securities, Inc.,the financial consultant
for the Issuer, is hereby approved. Northland Securities, Inc. is hereby authorized on behalf of
the Issuer 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 SEC under the
Securities Exchange Act of 1934. The officers of the Issuer are hereby authorized and directed
to execute such certificates as may be appropriate concerning the accuracy, completeness and
sufficiency of the Official Statement.
7.04. Redemption of Refunded Bonds. The Finance Director is hereby directed
to advise Wells Fargo Bank Minnesota,N.A., in Minneapolis,Minnesota, as successor to
Norwest Bank Minnesota,N.A.,Minneapolis,Minnesota,paying agent for the Refunded Bonds,
to call the Refunded Bonds for redemption and prepayment on their earliest permissible
redemption date(February 1, 2004) and to give notice of redemption in accordance with the
resolution authorizing issuance of the Refunded Bonds.
ADOPTED by the City Council of the City of Eden Prairie on this 21"day of January,2003.
Ron Case,Acting Mayor
ATTEST:
Kathleen Porta, City Clerk
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