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HomeMy WebLinkAboutResolution - 95-100 - Award Sale of $3,275,000 General Obligation Improvement Refunding Bonds, Series 995B - 05/23/1995 CERTIFICATION OF MINUTES RELATING TO $ 3,255,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 1995B Issuer: City of Eden Prairie, Minnesota Governing Body: City Council Kind, date, time and place of meeting: A special meeting held May 23, 1995, at 7:30 o'clock P.M., at the City Hall Members present: Members absent: Documents Attached: Minutes of said meeting (including): RESOLUTION NO.,95- � RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $ 3,255,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 1995B I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the bonds referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of said corporation in my legal custody, from which they have been transcribed; that said documents are a correct and complete transcript of the minutes of a meeting of the governing body of said corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at said meeting, so far as they relate to said bonds; and that said meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above, pursuant to call and notice of such meeting given as required by law. WITNESS my hand officially as such recording officer this day of May, 1995. Ci Finance Director/Clerk #,, It was reported that 8 sealed proposals for the purchase of General Obligation Improvement Refunding Bonds, Series 1995B were received prior to 11:00 o'clock a.m., pursuant to the Official Statement distributed to potential purchasers of the Bonds by Springsted Incorporated, financial consultants to the Issuer. The proposals have been publicly opened, read and tabulated and were found to be as follows: See Attached Councilmember introduced the following resolution and moved its adoption, which motion was seconded by Councilmember RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $ 3,255,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 1995B 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. By Resolution No. 95- duly adopted on May 9, 1995, this Council authorized the sale of its General Obligation Improvement Refunding Bonds, Series 1995B in the approximate principal amount of $1,685,000, subject to adjustment in accordance with the Terms of Proposal approved by Resolution No. 95- (the Bonds), the proceeds of which would be used, together with any additional funds of the Issuer which might be required, to refund in advance of maturity the 1998 through 2004 maturities, aggregating $3,200,000 in principal amount, of the Issuer's outstanding General Obligation Improvement Bonds, Series 1988A, dated December 1, 1988 (the Refunded Bonds), in a "crossover refunding" as defined in Minnesota Statutes, Section 475.67, subd. 13. 1.02. Sale. Pursuant to theTerms of Proposal and the Official Statement prepared on behalf of the Issuer by Springsted Incorporated, sealed proposals for the purchase of the Bonds were received at or before the time specified for receipt of proposals. The proposals have been opened, publicly read and considered and the purchase price, interest rates and net interest cost under the terms of each proposal have been determined. The most favorable proposal received is that of Kemper securities, Inc. of Chicago r Illinois and associates (the Purchaser). In accordance with the Terms of Proposal, it is hereby determined to issue the Bonds in the principal amount of $ 3,255,000 at a price of $ 3,233,418.36 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 $ 224,124 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, as the discount factor) of approximately $ 176,278 ; and (b) as of February 1, 1997 (the Crossover Date), the present value of the debt service on the Bonds, computed to their stated maturity dates, after deducting any premium, is lower by 5.55 % (not less than 3%) than the sum of (i) the present value of the debt service on the Refunded Bonds, computed to their stated maturity dates, plus (ii) any expenses of the refunding payable from a source other than the proceeds of the Bonds or investment earnings thereon, 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 June 1, 1995, shall be in the denomination of$5,000 each, or any integral multiple thereof, shall mature on February 1 in the respective years and amounts stated below, and shall bear interest from date of issue until paid at the respective annual rates set forth opposite such years and amounts, as follows: Year Amount Rate Year Amount Rate 1998 $640,000 4.35% 2002 $400,000 4.75% 1999 580,000 4.45 2003 335,000 4.80 2000 515,000 4.55 2004 330,000 4.80 2001 455,000 4.65 The Bonds shall be issuable only in fully registered form. The interest thereon and, upon surrender of each Bond at the principal office of the Registrar described herein, the principal amount thereof, shall be payable by check or draft issued by the Registrar described herein. -2- 2.03. Dates and Interest Payment Dates. Each Bond shall bear a date of original issue of June 1, 1995. Upon the 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. Interest on the Bonds shall be payable on each February 1 and August 1, commencing February 1, 1996, 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. The Bonds shall not be subject to redemption and prepayment prior to their stated maturity dates. 2.05. Appointment of Initial Registrar. The Issuer 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 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) Register. 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. -3- (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 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 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. (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 Issuer and the Registrar shall be named as obligees. All Bonds so surrendered to the -4- 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. 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 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 had remained in office until delivery. Notwithstanding such execution, no Bond shall be valid or obligatory for any purpose or entitled to any security hereunder 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/Clerk shall deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed and the Purchaser shall not be obligated to see to the application of the purchase price. 2.08. Form of Bonds. The Bonds shall be printed in substantially the following form: [Face of the Bonds] UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF EDEN PRAIRIE GENERAL OBLIGATION IMPROVEMENT REFUNDING BOND, SERIES 1995B Interest Rate Maturity Date Date of Original Issue CUSIP June 1, 1995 REGISTERED OWNER: PRINCIPAL AMOUNT: -5- THE CITY OF EDEN PRAIRIE, COUNTY OF HENNEPIN, MINNESOTA (the Issuer), acknowledges itself to be indebted and hereby promises to pay to the registered owner named above, or registered assigns, the principal amount specified above on the maturity date specified above, without option of prior payment, with interest thereon from the date hereof at the annual rate specified above, payable on February 1 and August 1 in each year, commencing February 1, 1996, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by in as Bond Registrar and Paying Agent, or its designated successor under the Resolution described herein (the Bond 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. Additional provisions of this Bond are contained on the reverse hereof and such provisions shall for all purposes have the same effect as though fully set forth in this place. 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 Bond Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Eden Prairie, County of Hennepin, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile signatures of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth below. Date of Authentication: CITY OF EDEN PRAIRIE MINNESOTA (facsimile signature - City Manager) (facsimile signature - Ma T�or) CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. as Bond Registrar -6- By Authorized Representative [Reverse of the Bonds] This Bond is one of an issue in the aggregate principal amount of $ 3,255,000 issued pursuant to a resolution adopted by the City Council on May 23, 1995 (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, Chapters 429 and 475. The Bonds are issuable only in fully registered form, in denominations of $5,000 or any integral multiple thereof, of single maturities. The Bonds have been designated by the Issuer as "qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the Issuer at the principal office of the Bond Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner's attorney, and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the 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. The Issuer and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the Issuer nor the Bond 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 precedent 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 in regular and due form, time and manner as so required; that the Bonds are payable from a separate debt redemption fund of the Issuer and from special assessments levied upon property specially benefited by the -7- local improvements financed by the Bonds; that, if necessary for payment of principal of and interest on the Bonds, ad valorem taxes are required be levied upon all taxable property in the Issuer without limitation as to rate or amount; that the issuance of this Bond does not cause the indebtedness of the Issuer to exceed any constitutional or statutory limitation; and that the opinion printed hereon is a full, true and correct copy of the legal opinion given by Bond Counsel with reference to the Bonds, dated as of the date of original delivery of the Bonds. [Insert Legal Opinion] 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 Bond Registrar, which requirements include membership or participation in STAMP or such other "signature guaranty program" as may be determined by the Bond 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: -8- Section 3. Use of Proceeds. The Finance Director/Clerk is hereby authorized and directed, simultaneously with the delivery of the Bonds, to deposit the proceeds thereof in the amount of $ 3,205,395.25 in escrow with First Trust National Association , in St. Paul , Minnesota , 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 shall 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 the interest to become due on the Bonds to and including the Crossover Date and to redeem the Refunded Bonds in the principal amount of $3,275,000 on the Crossover Date. The Mayor and Manager are hereby authorized to enter into an escrow agreement with said Bank establishing the terms and conditions for the escrow account in accordance with Minnesota Statutes, Section 475.67. The remaining proceeds of the Bonds in the amount of $ 38,795.78 shall be applied to pay issuance expenses. Section 4. Sinking Fund and Tax Levy. 4.01. Sinking Fund. The Bonds shall be payable from a separate General Obligation Improvement Refunding Bonds, Series 1995B Sinking Fund (the Sinking 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 Sinking 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 $3,275,000 received from maturing investments on the Crossover Date to be used to retire the Refunded Bonds); (ii) all amounts on deposit in the debt service fund maintained for the payment of the Refunded Bonds upon the retirement of the Refunded Bonds and all future collections of special assessments received with respect to the improvements financed or refinanced by 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 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 Issuer shall be and are hereby irrevocably pledged. It is, however, presently estimated that the special assessments and other funds appropriated to the Sinking Fund pursuant to Section 4.01 hereof will provide sums not less than 5% in excess of principal and interest on the Bonds when due, and therefore no tax levy is presently required. 4.03. Sinking Fund Balance Restriction. In order to ensure compliance with the Internal Revenue Code of 1986, as amended (the Code), and applicable -9- Treasury Regulations (the Regulations), the Finance Director/Clerk, upon allocation of any funds to the Sinking Fund, shall ascertain the balance then on hand in the Sinking Fund. If it exceeds the amount of principal and interest on the Bonds to become due and payable through February 1 next following, plus a reasonable carryover equal to 1/12th of the debt service due in the following bond year, the excess shall (unless an opinion is otherwise received from bond counsel) be used to prepay or purchase Bonds, or invested at a yield which does not exceed the yield on the Bonds calculated in accordance with Section 148 of the Code. 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 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 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. Section 6. Tax Covenants and Arbitrage Matters. 6.01. Restrictive Action. 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 Code and 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. The Issuer 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 Issuer and available for use by members of the general public on a substantially equal basis. So long as the Bonds are outstanding, the Issuer will not enter into any lease, use agreement or other agreement or contract respecting said improvements or facilities which would cause the Refunded Bonds or Bonds to be considered "private activity bonds" or "private loan bonds" pursuant to the provisions of Section 141 of the Code. -10- 6.02 Certification. The Mayor and Finance Director/Clerk 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 and setting forth the Issuer's covenants and expectations with respect to the application of Section 148(f)(4) of the Code to the Bonds. 6.03. Oualified Tax-Exempt Obligations. The City Council hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code relating to the disallowance of interest expense for financial institutions, and hereby finds that the reasonably anticipated amount of qualified tax-exempt obligations (within the meaning of Section 265(b)(3) of the Code) which will be issued by the Issuer and all subordinate entities during calendar year 1995 does not exceed $10,000,000. 6.04. 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, unless the Bonds qualify for the exception from the rebate requirement under Section 148(f)(4)(C) of the Code and no "gross proceeds" of the Bonds (other than amounts constituting a "bona fide debt service fund") arise during or after the expenditure of the original proceeds thereof. In furtherance of the foregoing, the Finance Director/Clerk is hereby authorized and directed to execute a Rebate Certificate, in the form prescribed by Bond Counsel, and the Issuer hereby covenants and agrees to observe and perform the covenants and agreements contained therein, unless amended or terminated in accordance with the provisions thereof. Section 7. Redemption of Refunded Bonds and Certification of ProceedipZs. 7.01. Refunded Bonds Call. The Finance Director/Clerk is directed to call for redemption and prepayment the Refunded Bonds at their earliest permissible redemption date (February 1, 1997) and to give notice of redemption in accordance with the resolution authorizing issuance of the Refunded Bonds. 7.02. Registration of Bonds. The Finance Director/Clerk is hereby authorized and directed to file a certified copy of this resolution with the County -11- Auditor of Hennepin County and to obtain from the County Auditor a certificate stating that the Bonds have been entered upon the Auditor's bond register and the tax required by law has been levied. 7.03. 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 and Whitney P.L.L.P., 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 Issuer as to the correctness of all statements contained therein. 7.04. Official Statement. The Official Statement relating to the Bonds, dated May 9 , 1995, prepared and delivered on behalf of the Issuer by Springsted Incorporated, is hereby approved, and the officers of the Issuer are hereby authorized and directed to execute such certificates as may be appropriate concerning the accuracy, completeness and sufficiency thereof. 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. -12- •'"` CERTIFICATION OF MINUTES RELATING TO $ 3,255,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 1995B Issuer: City of Eden Prairie, Minnesota Governing Body: City Council regular Kind, date, time and place of meeting: A spvxM meeting held May 23, 1995, at 7:30 o'clock P.M., at the City Hall Members present: Ronald Case, Patricia Pidcock, Ross Thorfinnson, Jr., Nancy Tyra-Lukens and Mayor Jean Harris Members absent: none Documents Attached: Minutes of said meeting (including): RESOLUTION NO. 95-100 RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $ 3,255,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 1995B I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the bonds referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of said corporation in my legal custody, from which they have been transcribed; that said documents are a correct and complete transcript of the minutes of a meeting of the governing body of said corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at said meeting, so far as they relate to said bonds; and that said meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above, pursuant to call and notice of such meeting given as required by law. WITNESS my hand officially as such recording officer this a3 day of May, 1995. A& Ci inance Director/Clerk Councilmember Piacock introduced the following resolution and moved its adoption, which motion was seconded by Councilmember Tyra-Lukens RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $ 3,255,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 1995B 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. By Resolution No. 95-89 duly adopted on May 9, 1995, this Council authorized the sale of its General Obligation Improvement Refunding Bonds, Series 1995B in the approximate principal amount of $1,685,000, subject to adjustment in accordance with the Terms of Proposal approved by Resolution No. 95-89 (the Bonds), the proceeds of which would be used, together with any additional funds of the Issuer which might be required, to refund in advance of maturity the 1998 through 2004 maturities, aggregating $3,200,000 in principal amount, of the Issuer's outstanding General Obligation Improvement Bonds, Series 1988A, dated December 1, 1988 (the Refunded Bonds), in a "crossover refunding" as defined in Minnesota Statutes, Section 475.67, subd. 13. 1.02. Sale. Pursuant to the Terms of Proposal and the Official Statement prepared on behalf of the Issuer by Springsted Incorporated, sealed proposals for the purchase of the Bonds were received at or before the time specified for receipt of proposals. The proposals have been opened, publicly read and considered and the purchase price, interest rates and net interest cost under the terms of each proposal have been determined. The most favorable proposal received is that of Kemper Securities, Inc. of Chicago r Illinois and associates (the Purchaser). In accordance with the Terms of Proposal, it is hereby determined to issue the Bonds in the principal amount of $ 3,255,000 at a price of $ 3,233,418.36 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. It was reported that 8 sealed proposals for the purchase of General Obligation Improvement Refunding Bonds, Series 1995B were received prior to 11:00 o'clock a.m., pursuant to the Official Statement distributed to potential purchasers of the Bonds by Springsted Incorporated, financial consultants to the Issuer. The proposals have been publicly opened, read and tabulated and were found to be as follows: See Attached 85 E.SEVENTH PLACE,SUITE 100 SAINT PAUL,MN SS101-2143 612-223-3000 FAX:612-223-3002 SPRINGSTED PubUc Fmance $3,275,000* CITY OF EDEN PRAIRIE, MINNESOTA GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS,SERIES 1995B AWARD: KEMPER SECURITIES, INC. SALE: May 23, 1996 Moody's Rating: Al Interest Net Interest True Interest Bidder Rates Price Cost Rate KEMPER SECURITIES, INC. 4.35% 1998 $3,253,285.75 $813,360.92 4.7833% 4.45% 1999 4.55% 2000 4.65% 2001 4.75% 2002 4.80% 2003-2004 FIRSTAR CORPORATION MINNESOTA 4.55% 1998 $3,272,380.00 $825,865.00 4.8385% FIRSTAR BANK MILWAUKEE, N.A. 4.65% 1999 OPPENHEIMER&CO., INC. 4.75% 2000 4.80% 2001 4.90% 2002 4.95% 2003 5.05% 2004 DAIN BOSWORTH INCORPORATED 4.70% 1998-2001 $3,267,256.65 $825,370.02 4.8427% PRINCIPAL FINANCIAL SECURITIES INC. 4.80% 2002 4.90% 2003 5.00% 2004 SMITH BARNEY 4.55% 1998 $3,269,760.00 $828,485.00 4.8563% CRONIN&COMPANY, INCORPORATED 4.65% 1999 4.75% 2000 4.80% 2001 4.90% 2002 4.95% 2003 5.05% 2004 (Continued) SAINT PAUL,MN • MINNEAPOLIS,MN • BROOKFIELD,WI • OVERLAND PARK,KS • WASHINGTON,DC . IOWA CITY,IA Interest Net Interest True Interest Bidder Rates Price Cost Rate DEAN WITTER REYNOLDS 4.40% 1998 $3,253,876.25 $826,950.42 4.8607% INCORPORATED 4.50% 1999 ABN AMRO SECURITIES (USA) INC. 4.60% 2000 PRUDENTIAL SECURITIES, INC. 4.70% 2001 4.80% 2002 4.90% 2003 5.00% 2004 NORWEST INVESTMENT SERVICES, INC. 4.40% 1998 $3,247,162.50 $833,664.17 4.9066% HARRIS TRUST&SAVINGS BANK 4.50% 1999 Juran &Moody, Incorporated 4.60% 2000 -In Association With- 4.70% 2001 PIPER JAFFRAY INC. 4.80% 2002 FBS INVESTMENT SERVICES, INC. 4.90% 2003 5.00% 2004 PAINEWEBBER INCORPORATED 4.45% 1998 $3,252,075.00 $835,821.67 4.9151% 4.55% 1999 4.65% 2000 4.75% 2001 4.85% 2002 4.95% 2003 5.00% 2004 RAYMOND JAMES&ASSOCIATES 4.60% 1998-1999 $3,245,540.95 $843,252.38 4.9673% NIKE SECURITIES 4.70% 2000-2001 WILLIAM R. HOUGH &CO. 4.80% 2002 4.90% 2003 5.00% 2004 REOFFERING SCHEDULE OF THE PURCHASER Rate Year Yield 4.35% 1998 Par 4.45% 1999 Par 4.55% 2000 Par 4.65% 2001 Par 4.75% 2002 Par 4.80% 2003 4.85% 4.80% 2004 4.90% BBI: 5.92% Average Maturity: 5.20 Years Subsequent to bid opening, the issue size was reduced by$20,000. The final maturity schedule on the Series 1995B Bonds is as follows: 1998 $640,000 2001 $455,000 2003 $335,000 1999 $580,000 2002 $400,000 2004 $330,000 2000 $515,000 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 $ 224,124 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, as the discount factor) of approximately $ 176,278 ; and (b) as of February 1, 1997 (the Crossover Date), the present value of the debt service on the Bonds, computed to their stated maturity dates, after deducting any premium, is lower by 5.55 % (not less than 3%) than the sum of (i) the present value of the debt service on the Refunded Bonds, computed to their stated maturity dates, plus (ii) any expenses of the refunding payable from a source other than the proceeds of the Bonds or investment earnings thereon, 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 June 1, 1995, shall be in the denomination of$5,000 each, or any integral multiple thereof, shall mature on February 1 in the respective years and amounts stated below, and shall bear interest from date of issue until paid at the respective annual rates set forth opposite such years and amounts, as follows: Year Amount Rate Year Amount Rate 1998 $640,000 4.35% 2002 $400,000 4.75% 1999 580,000 4.45 2003 335,000 4.80 2000 515,000 4.55 2004 330,000 4.80 2001 455,000 4.65 The Bonds shall be issuable only in fully registered form. The interest thereon and, upon surrender of each Bond at the principal office of the Registrar described herein, the principal amount thereof, shall be payable by check or draft issued by the Registrar described herein. -2- 2.03. Dates and Interest Payment Dates. Each Bond shall bear a date of original issue of June 1, 1995. Upon the 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. Interest on the Bonds shall be payable on each February 1 and August 1, commencing February 1, 1996, 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. The Bonds shall not be subject to redemption and prepayment prior to their stated maturity dates. 2.05. Appointment of Initial Registrar. The Issuer 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 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) Register. 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. -3- (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 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 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. (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 Issuer and the Registrar shall be named as obligees. All Bonds so surrendered to the -4- 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. 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 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 had remained in office until delivery. Notwithstanding such execution, no Bond shall be valid or obligatory for any purpose or entitled to any security hereunder 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/Clerk shall deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed and the Purchaser shall not be obligated to see to the application of the purchase price. 2.08. Form of Bonds. The Bonds shall be printed in substantially the following form: [Face of the Bonds] UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF EDEN PRAIRIE GENERAL OBLIGATION IMPROVEMENT REFUNDING BOND, SERIES 1995B Interest Rate Maturity Date Date of Original Issue CUSIP June 1, 1995 REGISTERED OWNER: PRINCIPAL AMOUNT: -5- THE CITY OF EDEN PRAIRIE, COUNTY OF HENNEPIN, MINNESOTA (the Issuer), acknowledges itself to be indebted and hereby promises to pay to the registered owner named above, or registered assigns, the principal amount specified above on the maturity date specified above, without option of prior payment, with interest thereon from the date hereof at the annual rate specified above, payable on February 1 and August 1 in each year, commencing February 1, 1996, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by in as Bond Registrar and Paying Agent, or its designated successor under the Resolution described herein (the Bond 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. Additional provisions of this Bond are contained on the reverse hereof and such provisions shall for all purposes have the same effect as though fully set forth in this place. 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 Bond Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Eden Prairie, County of Hennepin, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile signatures of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth below. Date of Authentication: CITY OF EDEN PRAIRIE MINNESOTA (facsimile signature - City Manager) (facsimile signature - Maw CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. as Bond Registrar -6- By Authorized Representative [Reverse of the Bonds] This Bond is one of an issue in the aggregate principal amount of $ 3,255,000 issued pursuant to a resolution adopted by the City Council on May 23, 1995 (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, Chapters 429 and 475. The Bonds are issuable only in fully registered form, in denominations of $5,000 or any integral multiple thereof, of single maturities. The Bonds have been designated by the Issuer as "qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the Issuer at the principal office of the Bond Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner's attorney, and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the 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. The Issuer and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the Issuer nor the Bond 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 precedent 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 in regular and due form, time and manner as so required; that the Bonds are payable from a separate debt redemption fund of the Issuer and from special assessments levied upon property specially benefited by the -7- local improvements financed by the Bonds; that, if necessary for payment of principal of and interest on the Bonds, ad valorem taxes are required be levied upon all taxable property in the Issuer without limitation as to rate or amount; that the issuance of this Bond does not cause the indebtedness of the Issuer to exceed any constitutional or statutory limitation; and that the opinion printed hereon is a full, true and correct copy of the legal opinion given by Bond Counsel with reference to the Bonds, dated as of the date of original delivery of the Bonds. [Insert Legal Opinion] 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 Bond Registrar, which requirements include membership or participation in STAMP or such other "signature guaranty program" as may be determined by the Bond 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: -8- Section 3. Use of Proceeds. The Finance Director/Clerk is hereby authorized and directed, simultaneously with the delivery of the Bonds, to deposit the proceeds thereof in the amount of $ 3,205,395.25 in escrow with First Trust National Association , in St. Paul Minnesota 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 shall 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 the interest to become due on the Bonds to and including the Crossover Date and to redeem the Refunded Bonds in the principal amount of $3,275,000 on the Crossover Date. The Mayor and Manager are hereby authorized to enter into an escrow agreement with said Bank establishing the terms and conditions for the escrow account in accordance with Minnesota Statutes, Section 475.67. The remaining proceeds of the Bonds in the amount of $ 38,795.78 shall be applied to pay issuance expenses. Section 4. Sinking Fund and Tax Levy. 4.01. Sinking Fund. The Bonds shall be payable from a separate General Obligation Improvement Refunding Bonds, Series 1995B Sinking Fund (the Sinking 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 Sinking 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 $3,275,000 received from maturing investments on the Crossover Date to be used to retire the Refunded Bonds); (ii) all amounts on deposit in the debt service fund maintained for the payment of the Refunded Bonds upon the retirement of the Refunded Bonds and all future collections of special assessments received with respect to the improvements financed or refinanced by 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 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 Issuer shall be and are hereby irrevocably pledged. It is, however, presently estimated that the special assessments and other funds appropriated to the Sinking Fund pursuant to Section 4.01 hereof will provide sums not less than 5% in excess of principal and interest on the Bonds when due, and therefore no tax levy is presently required. 4.03. Sinking Fund Balance Restriction. In order to ensure compliance with the Internal Revenue Code of 1986, as amended (the Code), and applicable -9- Treasury Regulations (the Regulations), the Finance Director/Clerk, upon allocation of any funds to the Sinking Fund, shall ascertain the balance then on hand in the Sinking Fund. If it exceeds the amount of principal and interest on the Bonds to become due and payable through February 1 next following, plus a reasonable carryover equal to 1/12th of the debt service due in the following bond year, the excess shall (unless an opinion is otherwise received from bond counsel) be used to prepay or purchase Bonds, or invested at a yield which does not exceed the yield on the Bonds calculated in accordance with Section 148 of the Code. 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 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 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. Section 6. Tax Covenants and Arbitrage Matters. 6.01. Restrictive Action. 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 Code and 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. The Issuer 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 Issuer and available for use by members of the general public on a substantially equal basis. So long as the Bonds are outstanding, the Issuer will not enter into any lease, use agreement or other agreement or contract respecting said improvements or facilities which would cause the Refunded Bonds or Bonds to be considered "private activity bonds" or "private loan bonds" pursuant to the provisions of Section 141 of the Code. -10- • 6.02 Certification. The Mayor and Finance Director/Clerk 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 and setting forth the Issuer's covenants and expectations with respect to the application of Section 148(f)(4) of the Code to the Bonds. 6.03., Oualified Tax-Exempt Obligations. The City Council hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code relating to the disallowance of interest expense for financial institutions, and hereby finds that the reasonably anticipated amount of qualified tax-exempt obligations (within the meaning of Section 265(b)(3) of the Code) which will be issued by the Issuer and all subordinate entities during calendar year 1995 does not exceed $10,000,000. 6.04. 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, unless the Bonds qualify for the exception from the rebate requirement under Section 148(f)(4)(C) of the Code and no "gross proceeds" of the Bonds (other than amounts constituting a "bona fide debt service fund") arise during or after the expenditure of the original proceeds thereof. In furtherance of the foregoing, the Finance Director/Clerk is hereby authorized and directed to execute a Rebate Certificate, in the form prescribed by Bond Counsel, and the Issuer hereby covenants and agrees to observe and perform the covenants and agreements contained therein, unless amended or terminated in accordance with the provisions thereof. Section 7. Redemption of Refunded Bonds and Certification of Proceedings. 7.01. Refunded Bonds Call. The Finance Director/Clerk is directed to call for redemption and prepayment the Refunded Bonds at their earliest permissible redemption date (February 1, 1997) and to give notice of redemption in accordance with the resolution authorizing issuance of the Refunded Bonds. 7.02. Registration of Bonds. The Finance Director/Clerk is hereby authorized and directed to file a certified copy of this resolution with the County -11- • Auditor of Hennepin County and to obtain from the County Auditor a certificate stating that the Bonds have been entered upon the Auditor's bond register and the tax required by law has been levied. 7.03. 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 and Whitney P.L.L.P., 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 Issuer as to the correctness of all statements contained therein. 7.04. Official Statement. The Official Statement relating to the Bonds, dated May 9 , 1995, prepared and delivered on behalf of the Issuer by Springsted Incorporated, is hereby approved, and the officers of the Issuer are hereby authorized and directed to execute such certificates as may be appropriate concerning the accuracy, completeness and sufficiency thereof. Upon vote being taken thereon, the following voted in favor thereof: Case, Pidcock, Thorfinnson, Jr., Tyra-Lukens and Mayor Harris and the following voted against the same: none whereupon the resolution was declared duly passed and adopted. -12-