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HomeMy WebLinkAbout98-160 - ADMIN Resolution - City Council - 1998/11/16RESOLUTION NO. 98-987— 160 RESOLUTION ACCEPTING PROPOSAL ON SALE OF APPROXIMATELY $4,305,000 GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 1998, AND PROVIDING FOR THEIR ISSUANCE WHEREAS, the City Manager has presented proposals received for the sale of approximately $4,305,000 General Obligation Tax Increment Bonds, Series 1998 (the "Bonds"), of the City of St. Louis Park, Hennepin County, Minnesota (the "City"); and WHEREAS, it is necessary and expedient to issue the Bonds pursuant to Minnesota Statutes, Chapters 469 and 475, particularly Section 475.67, to refund in a current refunding the outstanding principal amount scheduled for payment after March 1, 1999, of the City's $6,500,000 Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985 (the "1985 Prior Bonds"), and $2,100,000 General Obligation Tax Increment Bonds, Series 1987-B ( the "1987 Prior Bonds, with the 1985 Prior Bonds the "Prior Bonds"); and WHEREAS, the 1985 Prior Bonds mature on February 1, 2006, were issued in the aggregate principal amount of $6,500,000 and are outstanding in the principal amount of $3,870,000, of which $3,485,000 (the "1985 Refunded Bonds") are not scheduled for mandatory redemption in 1999 and are being called on or before February 1, 1999, at par plus accrued interest; and WHEREAS, the 1987 Prior Bonds mature on March 1, 2002, were issued in the aggregate principal amount of $2,100,000 and are outstanding in the principal amount of $975,000, of which $750,000 (the "1987 Refunded Bonds") are not scheduled for mandatory redemption in 1999 and are being consensually redeemed on or before March 1, 1999, at par plus accrued interest; and WHEREAS, the refunding of the 1985 Prior Bonds is consistent with covenants made with the holders thereof, and is necessary and desirable for the reduction of debt service cost to the City and for the fixing of interest rates that have been variable; and WHEREAS, the 1987 Prior Bonds are not by their terms prepayable at this time but consent to their refunding can be obtained, and the refunding of the 1987 Prior Bonds is necessary and desirable for the reduction of debt service cost to the City and for the fixing of interest rates that have been variable; and WHEREAS, the 1985 Prior Bonds financed public improvements, specifically parking facilities and related 998248 2 3 improvements (the "1985 Project"), by The Housing and Redevelopment Authority in and for the City of St. Louis Park, Minnesota (the "HRA"), within and for the benefit of the HRA's Excelsior Boulevard Redevelopment District and Project (the "Excelsior Boulevard Tax Increment District"); and WHEREAS, the 1987 Prior Bonds financed certain land acquisition and public improvements (the "1987 Project") within the City's Development District No. 3 (the "Trunk Highway Tax Increment District"); and WHEREAS, the control, authority and operation of both the Excelsior Boulevard Tax Increment District and Trunk Highway Tax Increment District has been transferred to the St. Louis Park Economic Development Authority (the "EDA") pursuant to Minnesota Statutes, Section 469.094; and WHEREAS, collectively the 1985 Refunded Bonds and 1987 Refunded Bonds are the "Refunded Bonds", the 1985 Project and 1987 Project are the "Projects", and the Excelsior Boulevard Tax Increment District and Trunk Highway Tax Increment District are the "Tax Increment Districts"; and WHEREAS, the tax increments from the Trunk Highway Tax Increment District may not be used to finance the 1985 Project or to pay the portion of the Bonds which refunds the 1985 Prior Bonds, unless otherwise permitted by law, and tax increments from the Excelsior Boulevard Tax Increment District may not be used to finance the 1987 Project or to pay the portion of the Bonds which refunds the 1987 Prior Bonds, unless otherwise permitted by law; and WHEREAS, based on the uses of the proceeds of the Bonds, 82.29% of the debt service on Bonds is the portion thereof which finances the 1985 Project and is to be paid from tax increments of the Excelsior Boulevard Tax Increment District, and 17.71% is the portion thereof which finances the 1987 Project and is to be paid from tax increments of the Trunk Highway Tax Increment District; and WHEREAS, there are other outstanding bonds of the City and EDA to which tax increments of the Tax Increment Districts are pledged, on a parity of lien with the pledge of tax increments to the Bonds made in this resolution; and WHEREAS, in the Terms of Proposal for the Bonds the City reserved the right to increase or decrease the issue size from the proposed $4,305,000 in increments of $5,000 in any maturity, and to adjust the purchase price proportionately; and WHEREAS, the City has heretofore issued registered obligations in certificated form, and incurs substantial costs 998248 2 4 associated with their printing and issuance, and substantial continuing transaction costs relating to their payment, transfer and exchange; and WHEREAS, the City has determined that significant savings in transaction costs will result from issuing bonds in "global book -entry form", by which bonds are issued in certificated form in large denominations, registered on the books of the City in the name of a depository or its nominee, and held in safekeeping and immobilized by such depository, and such depository as part of the computerized national securities clearance and settlement system (the "National System") registers transfers of ownership interests in the bonds by making computerized book entries on its own books and distributes payments on the bonds to its Participants shown on its books as the owners of such interests; and such Participants and other banks, brokers and dealers participating in the National System will do likewise (not as agents of the City) if not the beneficial owners of the bonds; and WHEREAS, "Participants" means those financial insti- tutions for whom the Depository effects book -entry transfers and pledges of securities deposited and immobilized with the Depository; and WHEREAS, The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York, or any of its successors or successors to its functions hereunder (the "Depository"), will act as such depository with respect to the Bonds except as set forth below, and the City has heretofore entered into a blanket letter of representations (the "Letter of Representations") setting forth various matters relating to the Depository and its role with respect to the Bonds; and WHEREAS, the City will deliver the Bonds in the form of one certificate per maturity, each representing the entire principal amount of the Bonds due on a particular maturity date (each a "Global Certificate"), which single certificate per maturity may be transferred on the City's bond register as required by the Uniform Commercial Code, but not exchanged for smaller denominations unless the City determines to issue Replacement Bonds as provided below; and WHEREAS, the City will be able to replace the Depository or under certain circumstances to abandon the "global book -entry form" by permitting the Global Certificates to be exchanged for smaller denominations typical of ordinary bonds registered on the City's bond register; and "Replacement Bonds" means the certificates representing the Bonds so authenticated and delivered by the Bond Registrar pursuant to paragraphs 6 and 12 hereof; and 998248 2 5 WHEREAS, "Holder" as used herein means the person in whose name a Bond is registered on the registration books of the City maintained by the registrar appointed as provided in paragraph 8 (the "Bond Registrar"); and WHEREAS, Rule 15c2-12 of the Securities and Exchange Commission prohibits "participating underwriters" from purchasing or selling the Bonds unless the City undertakes to provide certain continuing disclosure with respect to the Bonds; and WHEREAS, pursuant to Minnesota Statutes, Section 475.60, Subdivision 2(9), public sale requirements do not apply to the Bonds if the City retains an independent financial advisor and determines to sell the Bonds by private negotiation, and the City has instead authorized a competitive sale without publication of notice thereof as a form of private negotiation; and WHEREAS, proposals for the Bonds have been solicited by Ehlers & Associates, Inc., pursuant to an Official Statement and Terms of Proposal therein: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota, as follows: 1. Acceptance of Proposal. The proposal of Piper Jaffray, Inc. (the "Purchaser"), to purchase approximately $4,305,000 General Obligation Tax Increment Bonds, Series 1998, of the City (the "Bonds", or individually a "Bond"), in accordance with the Terms of Proposal, at the rates of interest set forth hereinafter, and to pay for the Bonds the sum of $4,285,377.98, is hereby found, determined and declared to be the most favorable proposal received and is hereby accepted for the Bonds in the "adjusted amount" set forth below, and the Bonds are hereby awarded to the Purchaser. The Finance Director is directed to retain the deposit of the Purchaser and to forthwith return to the others making proposals their good faith checks or drafts. The adjusted purchase price for the actual $4,290,000 of the Bonds is $4,270,446.35. 2. Title; Original Issue Date; Denominations; Maturities. The Bonds shall be titled "General Obligation Tax Increment Bonds, Series 1998", shall be dated December 9, 1998, as the date of original issue, and shall be issued forthwith as fully registered bonds. The Bonds shall be numbered from R-1 upward. Global Certificates shall each be in the denomination of the entire principal amount maturing on a single date. Replacement Bonds, if issued as provided in paragraph 6, shall be in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Bonds shall mature on February 1 in the years and amounts as follows: 998248 2 6 Year 2000 2001 2002 2003 Amount $675,000 700,000 725,000 500,000 Year 2004 2005 2006 Amount $530,000 570,000 590,000 Such maturities, compared to the Terms of Proposal for the Bonds, reflect decreases in the following years and amounts: 2004 $5,000 and 2006 $10,000. 3. Purpose; Findings. The Bonds (together with other available funds, if any, appropriated in paragraph 22 hereof) shall provide funds for a current refunding of the Refunded Bonds (the "Refunding"). The proceeds of the Bonds shall be deposited and used as provided in paragraph 17. The total cost of the Refunding, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. It is hereby found, determined and declared that the Refunding of each of the Refunded Bonds is necessary or desirable for the reduction of debt service cost to the City and for the fixing of interest rates that have been variable. The Bonds will not be outstanding longer than the reasonable life expectancy of the Projects. 4. Interest. The Bonds shall bear interest payable semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"), commencing August 1, 1999, calculated on the basis of a 360 -day year of twelve 30 -day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturity Interest Maturity Interest Year Rate Year Rate 2000 2001 2002 2003 3.450 3.50 3.60 3.65 2004 2005 2006 3.75% 3.80 3.90 5. Description of the Global Certificates and Global Book -Entry System. Upon their original issuance the Bonds will be issued in the form of a single Global Certificate for each maturity, deposited with the Depository by the Purchaser and immobilized as provided in paragraph 6. No beneficial owners of interests in the Bonds will receive certificates representing their respective interests in the Bonds except as provided in paragraph 6. Except as so provided, during the term of the Bonds, beneficial ownership (and subsequent transfers of beneficial ownership) of interests in the Global Certificates will be reflected by book entries made on the records of the 998248 2 7 r f 1 Depository and its Participants and other banks, brokers, and dealers participating in the National System. The Depository's book entries of beneficial ownership interests are authorized to be in increments of $5,000 of principal of the Bonds, but not smaller increments, despite the larger authorized denominations of the Global Certificates. Payment of principal of, premium, if any, and interest on the Global Certificates will be made to the Bond Registrar as paying agent, and in turn by the Bond Registrar to the Depository or its nominee as registered owner of the Global Certificates, and the Depository according to the laws and rules governing it will receive and forward payments on behalf of the beneficial owners of the Global Certificates. Payment of principal of, premium, if any, and interest on a Global Certificate may in the City's discretion be made by such other method of transferring funds as may be requested by the Holder of a Global Certificate. 6. Immobilization of Global Certificates by the Depository; Successor Depository; Replacement Bonds. Pursuant to the request of the Purchaser to the Depository, immediately upon the original delivery of the Bonds the Purchaser will deposit the Global Certificates representing all of the Bonds with the Depository. The Global Certificates shall be in typewritten form or otherwise as acceptable to the Depository, shall be registered in the name of the Depository or its nominee and shall be held immobilized from circulation at the offices of the Depository on behalf of the Purchaser and subsequent bondowners. The Depository or its nominee will be the sole holder of record of the Global Certificates and no investor or other party purchasing, selling or otherwise transferring ownership of interests in any Bond is to receive, hold or deliver any bond 'certificates so long as the Depository holds the Global Certificates immobilized from circulation, except as provided below in this paragraph and in paragraph 12. Certificates evidencing the Bonds may not after their original delivery be transferred or exchanged except: (i) Upon registration of transfer of ownership of a Global Certificate, as provided in paragraph 12, (ii) To any successor of the Depository (or its nominee) or any substitute depository (a "substitute depository") designated pursuant to clause (iii) of this subparagraph, provided that any successor of the Depository or any substitute depository must be both a "clearing corporation" as defined in the Minnesota Uniform Commercial Code at Minnesota Statutes, Section 336.8-102, and a qualified and registered "clearing agency" as provided in Section 17A of the Securities Exchange Act of 1934, as amended, 998248 2 8 r t 1 (iii) To a substitute depository designated by and acceptable to the City upon (a) the determination by the Depository that the Bonds shall no longer be eligible for its depository services or (b) a determination by the City that the Depository is no longer able to carry out its functions, provided that any substitute depository must be qualified to act as such, as provided in clause (ii) of this subparagraph, or (iv) To those persons to whom transfer is requested in written transfer instructions in the event that: (a) the Depository shall resign or discontinue its services for the Bonds and the City is unable to locate a substitute depository within two (2) months following the resignation or determination of non - eligibility, or (b) upon a determination by the City in its sole discretion that (1) the continuation of the book -entry system described herein, which precludes the issuance of certificates (other than Global Certificates) to any Holder other than the Depository (or its nominee), might adversely affect the interest of the beneficial owners of the Bonds, or (2) that it is in the best interest of the beneficial owners of the Bonds that they be able to obtain certificated bonds, in either of which events the City shall notify Holders of its determination and of the availability of certificates (the "Replacement Bonds") to Holders requesting the same and the registration, transfer and exchange of such Bonds will be conducted as provided in paragraphs 9B and 12 hereof. In the event of a succession of the Depository as may be authorized by this paragraph, the Bond Registrar upon presentation of Global Certificates shall register their transfer to the substitute or successor depository, and the substitute or successor depository shall be treated as the Depository for all purposes and functions under this resolution. The Letter of Representations shall not apply to a substitute or successor depository unless the City and the substitute or successor depository so agree, and a similar agreement may be entered into. 7. No Redemption. The Bonds shall not be subject to redemption and prepayment prior to their maturity. 998248 2 9 r i 8. Bond Registrar. The Finance Director of the City is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed. A successor Bond Registrar shall be an officer of the City or a bank or trust company eligible for designation as bond registrar pursuant to Minnesota Statutes, Chapter 475, and may be appointed pursuant to any contract the City and such successor Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Bonds shall be paid to the Holders (or record holders) of the Bonds in the manner set forth in the forms of Bond and paragraph 14 of this resolution. 9. Forms of Bond. The Bonds shall be in the form of Global Certificates unless and until Replacement Bonds are made available as provided in paragraph 6. Each form of bond may contain such additional or different terms and provisions as to the form of payment, record date, notices and other matters as are consistent with the Letter of Representations and approved by the City Attorney or bond counsel. A. Global Certificates. The Global Certificates, together with the Certificate of Registration, the form of Assignment and the registration information thereon, shall be in substantially the following form and may be typewritten rather than printed: 998248 2 10 R - UNITED STATES OF AMERICA STATE OF MINNESOTA HENNEPIN COUNTY CITY OF ST. LOUIS PARK GENERAL OBLIGATION TAX INCREMENT BOND, SERIES 1998 INTEREST MATURITY DATE OF RATE DATE ORIGINAL ISSUE CUSIP February 1, REGISTERED OWNER: December 9, 1998 PRINCIPAL AMOUNT: DOLLARS KNOW ALL PERSONS BY THESE PRESENTS that the City of St. Louis Park, Hennepin County, Minnesota (the "Issuer" or "City"), certifies that it is indebted and for value received promises to pay to the registered owner specified above or on the certificate of registration below, or registered assigns, in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, without option of earlier redemption, and to pay interest thereon semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"), commencing August 1, 1999, at the rate per annum specified above (calculated on the basis of a 360 -day year of twelve 30 -day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable in same-day funds by 2:30 p.m., Eastern time, upon presentation and surrender hereof at the principal office of in , Minnesota (the "Bond Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each Interest Payment Date in same-day funds by 2:30 p.m., Eastern time, to the person in whose name this Bond is registered (the "Holder" or "Bondholder") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Interest payments shall be received by the Holder no later than 2:30 p.m., Eastern time; and principal and premium payments shall be received by the Holder no later than 2:30 p.m., Eastern time, if the Bond is surrendered for payment enough in advance to 998248 2 11 permit payment to be made by such time. Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. Date of Payment Not Business Day. If the date for payment of the principal of, premium, if any, or interest on this Bond shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the City of New York, New York, or the city where the principal office of the Bond Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment. No Redemption. The Bonds of this issue (the "Bonds") are not subject to redemption and prepayment prior to their maturity. Issuance; Purpose; General Obligation. This Bond is one of an issue in the total principal amount of $4,290,000, all of like date of original issue and tenor, except as to number, maturity, interest rate, and denomination, which Bond has been issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota and the home rule charter of the Issuer, and pursuant to a resolution adopted by the City Council of the Issuer on November 16, 1998 (the "Resolution"), for the purpose of providing funds, together with any contributions of the Issuer, sufficient for the current refunding of the Issuer's Variable Rate Demand General Obligation Bonds, Series 1985, and General Obligation Tax Increment Bonds, Series 1987-B. This Bond is payable out of the Debt Service Account of the Tax Increment Bonds, Series 1998, Fund of the Issuer, to which account have been pledged tax increments received from two tax increment districts in the City. This Bond constitutes a general obligation of the Issuer, and to provide moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the Issuer have been and are hereby irrevocably pledged. Denominations; Exchange; Resolution. The Bonds are issuable originally only as Global Certificates in the denomination of the entire principal amount of the issue maturing 998248 2 12 on a single date. Global Certificates are not exchangeable for fully registered bonds of smaller denominations. Replacement Bonds, if made available as provided below, are issuable solely as fully registered bonds in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered Bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Replacement Bonds. Replacement Bonds may be issued by the Issuer in the event that: (a) the Depository shall resign or discontinue its services for the Bonds, and only if the Issuer is unable to locate a substitute depository within two (2) months following the resignation or determination of non - eligibility, or (b) upon a determination by the Issuer in its sole discretion (1) that the continuation of the book -entry system described in the Resolution, which precludes the issuance of certificates (other than Global Certificates) to any Holder other than the Depository (or its nominee), might adversely affect the interest of the beneficial owners of the Bonds, or (2) that it is in the best interest of the beneficial owners of the Bonds that they be able to obtain certificated bonds. Transfer. This Bond shall be registered in the name of the payee on the books of the Issuer by presenting this Bond for registration to the Bond Registrar, who will endorse his, her or its name and note the date of registration opposite the name of the payee in the certificate of registration attached hereto. Thereafter this Bond may be transferred by delivery with an assignment duly executed by the Holder or his, her or its legal representatives, and the Issuer and Bond Registrar may treat the Holder as the person exclusively entitled to exercise all the rights and powers of an owner until this Bond is presented with such assignment for registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted hereon by the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with, or notice to, the Bond Registrar. Transfer of this Bond may, at the direction and expense of the Issuer, be subject to certain other restrictions if required to qualify this Bond as 998248 2 13 r 1 being "in registered form" within the meaning of Section 149(a) of the federal Internal Revenue Code of 1986, as amended. Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Registered Owner. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Bond Registrar. Oualified Tax -Exempt Obligations. The Bonds have been designated by the Issuer as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the federal Internal Revenue Code of 1986, as amended. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law; and that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and on the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory or home rule charter limitation of indebtedness. 998248 2 14 r f 1 IN WITNESS WHEREOF, the City of St. Louis Park, Hennepin County, Minnesota, by its City Council has caused this Bond to be executed on its behalf by the photocopied facsimile signatures of its Mayor and of its City Manager. Date of Registration: Registrable by: BOND REGISTRAR'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. Bond Registrar By Authorized Signature Payable at: CITY OF ST. LOUIS PARK, HENNEPIN COUNTY, MINNESOTA x x x Mayor x x x City Manager General Obligation Tax Increment Bond, Series 1998, No. R- 998248 2 15 r r 1 CERTIFICATE OF REGISTRATION The transfer of ownership of the principal amount of the attached Bond may be made only by the registered owner or his, her or its legal representative last noted below. DATE OF SIGNATURE OF REGISTRATION REGISTERED OWNER BOND REGISTRAR 998248 2 16 1 1 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for 998248 2 (Cust) under the (State) (Minor) Uniform Transfers to Minors Act Additional abbreviations may also be used though not in the above list. 17 r f 1 ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the attached Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: Signature Guaranteed: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the attached Bond in every particular, without alteration or any change whatever. Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17Ad-15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: 998248 2 (Include information for all joint owners if the Bond is held by joint account.) 18 1 up 1 B. Replacement Bonds. If the City has notified Holders that Replacement Bonds have been made available as provided in paragraph 6, then for every Bond thereafter transferred or exchanged (including an exchange to reflect the partial prepayment of a Global Certificate not previously exchanged for Replacement Bonds) the Bond Registrar shall deliver a certificate in the form of the Replacement Bond rather than the Global Certificate, but the Holder of a Global Certificate shall not otherwise be required to exchange the Global Certificate for one or more Replacement Bonds since the City recognizes that some beneficial owners may prefer the convenience of the Depository's registered ownership of the Bonds even though the entire issue is no longer required to be in global book -entry form. The Replacement Bonds, together with the Bond Registrar's Certificate of Authentication, the form of Assignment and the registration information thereon, shall be in substantially the following form: 998248 2 • 19 R - UNITED STATES OF AMERICA STATE OF MINNESOTA HENNEPIN COUNTY CITY OF ST. LOUIS PARK GENERAL OBLIGATION TAX INCREMENT BOND, SERIES 1998 INTEREST MATURITY DATE OF RATE DATE ORIGINAL ISSUE CUSIP REGISTERED OWNER: December 9, 1998 PRINCIPAL AMOUNT: DOLLARS KNOW ALL PERSONS BY THESE PRESENTS that the City of St. Louis Park, Hennepin County, Minnesota (the "Issuer" or "City"), certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns, in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, without option of earlier redemption, and to pay interest thereon semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"), commencing August 1, 1999, at the rate per annum specified above (calculated on the basis of a 360 -day year of twelve 30 -day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of , in (the "Bond Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Holder" or "Bondholder") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for 998248 2 20 1 r 1 payment of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE. IT IS HEREBY CERTIFIED AND RECITED that all- acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law; and that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and on the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory or home rule charter limitation of indebtedness. IN WITNESS WHEREOF, the City of St. Louis Park, Hennepin County, Minnesota, by its City Council has caused this Bond to be executed on its behalf by the original or facsimile signatures of its Mayor and of its City Manager. 998248 2 21 Date of Registration: Registrable by: Payable at: BOND REGISTRAR'S CITY OF ST. LOUIS PARK, CERTIFICATE OF HENNEPIN COUNTY, MINNESOTA AUTHENTICATION This Bond is one of the Bonds described in the X X X Resolution mentioned Mayor within. Bond Registrar By Authorized Signature 998248 2 X x x City Manager 22 ON REVERSE OF BOND Date of Payment Not Business Day. If the date for payment of the principal of, premium, if any, or interest on this Bond shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the City of New York, New York, or the city where the principal office of the Bond Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment. No Redemption. The Bonds of this issue (the "Bonds") are not subject to redemption and prepayment prior to their maturity. Issuance; Purpose; General Obligation. This Bond is one of an issue in the total principal amount of $4,290,000, all of like date of original issue and tenor, except as to number, maturity, interest rate, and denomination, which Bond has been issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota and the home rule charter of the Issuer, and pursuant to a resolution adopted by the City Council of the Issuer on November 16, 1998 (the "Resolution"), for the purpose of providing funds, together with any contributions of the Issuer, sufficient for the current refunding of the Issuer's Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985, and General Obligation Tax Increment Bonds, Series 1987-A. This Bond is payable out of the Debt Service Account of the Tax Increment Bonds, Series 1998, Fund of the Issuer, to which account have been pledged tax increments received from two tax increment districts in the City. This Bond constitutes a general obligation of the Issuer, and to provide moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the Issuer have been and are hereby irrevocably pledged. Denominations; Exchange; Resolution. The Bonds are issuable solely as fully registered bonds in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered Bonds of other authorized denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. 998248 2 23 r Transfer. This Bond is transferable by the Holder in person or by his, her or its attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with, or notice to, the Bond Registrar. Thereupon the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an authorized denomination or denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Registered Owner. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided on the reverse side hereof with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Bond Registrar. Oualified Tax -Exempt Obligations. The Bonds have been designated by the Issuer as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the federal Internal Revenue Code of 1986, as amended. 998248 2 24 r f 1 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for 998248 2 (Cust) (Minor) under the Uniform Transfers to Minors Act (State) Additional abbreviations may also be used though not in the above list. 25 r f 1 ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: Signature Guaranteed: 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 any change whatever. Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17Ad-15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: 998248 2 (Include information for all joint owners if the Bond is held by joint account.) 26 r IP 1 10. Execution. The Bonds shall be executed on behalf of the City by the signatures of its Mayor and its City Manager and be sealed with the seal of the City; provided, however, that the seal of the City may be a printed or photocopied facsimile; and provided further that either of such signatures may be printed or photocopied facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the event of disability or resignation or other absence of any such officer, the Bonds may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In case any such officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. 11. Authentication; Date of Registration. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless a Certificate of Authentication on such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. Certificates of Authentication on different Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the Certificate of Authentication on the Bond and by inserting as the date of registration in the space provided the date on which the Bond is authenticated. For purposes of delivering the original Global Certificates to the Purchaser, the Bond Registrar shall insert as the date of registration the date of original issue, which date is December 9, 1998. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. 12. Registration; Transfer; Exchange. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. A Global Certificate shall be registered in the name of the payee on the books of the Bond Registrar by presenting the Global Certificate for registration to the Bond Registrar, who will endorse his or her name and note the date of registration opposite the name of the payee in the certificate of registration 998248 2 27 r f i on the Global Certificate. Thereafter a Global Certificate may be transferred by delivery with an assignment duly executed by the Holder or his, her or its legal representative, and the City and Bond Registrar may treat the Holder as the person exclusively entitled to exercise all the rights and powers of an owner ,until a Global Certificate is presented with such assignment for registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted thereon by the Bond Registrar, all subject to the terms and conditions provided in this resolution and to reasonable regulations of the City contained in any agreement with, or notice to, the Bond Registrar. Transfer of a Global Certificate may, at the direction and expense of the City, be subject to other restrictions if required to qualify the Global Certificates as being "in registered form" within the meaning of Section 149(a) of the federal Internal Revenue Code of 1986, as amended. If a Global Certificate is to be exchanged for one or more Replacement Bonds, all of the principal amount of the Global Certificate shall be so exchanged. Upon surrender for transfer of any Replacement Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration (as provided in paragraph 11) of, and deliver, in the name of the designated transferee or transferees, one or more new Replacement Bonds of any authorized denomination or denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no bond may be registered in blank or in the name of "bearer" or similar designation. At the option of the Holder of a Replacement Bond, Replacement Bonds may be exchanged for Replacement Bonds of any authorized denomination or denominations of a like aggregate principal amount and stated maturity, upon surrender of the Replacement Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Replacement Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Replacement Bonds which the Holder making the exchange is entitled to receive. Global Certificates may not be exchanged for Global Certificates of smaller denominations. 998248 2 28 1 1 All Bonds surrendered upon any exchange or transfer provided for in this resolution shall be promptly cancelled by the Bond Registrar and thereafter disposed of as directed by the City. All Bonds delivered in exchange for or upon transfer of Bonds shall be valid general obligations of the City evidencing the same debt, and entitled to the same benefits under this resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the Holder thereof or his, her or its attorney duly authorized in writing. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with, or notice to, the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. 13. Rights Upon Transfer or Exchange. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 14. Interest Payment; Record Date. Interest on any Global Certificate shall be paid as provided in the first paragraph thereof, and interest on any Replacement Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered (the "Holder") on the registration books of the City maintained by the Bond Registrar, and in each case at the address appearing thereon at the close of business on the fifteenth (15th) day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar 998248 2 29 r io 1 to the Holders not less than ten (10) days prior to the Special Record Date. 15. Holders; Treatment of Registered Owner; Consent of Holders. (A) For the purposes of all actions, consents and other matters affecting Holders of the Bonds, other than payments, redemptions, and purchases, the City may (but shall not be obligated to) treat as the Holder of a Bond the beneficial owner of the Bond instead of the person in whose name the Bond is registered. For that purpose, the City may ascertain the identity of the beneficial owner of the Bond by such means as the Bond Registrar in its sole discretion deems appropriate, including but not limited to a certificate from the person in whose name the Bond is registered identifying such beneficial owner. (B) The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in paragraph 14 above) on, such Bond and for all other purposes whatsoever whether or not such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. (C) Any consent, request, direction, approval, objection or other instrument to be signed and executed by the Holders may be in any number of concurrent writings of similar tenor and must be signed or executed by such Holders in person or by agent appointed in writing. Proof of the execution of any such consent, request, direction, approval, objection or other instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this resolution, and shall be conclusive in favor of the City with regard to any action taken by it under such request or other instrument, namely: (1) The fact and date of the execution by any person of any such writing may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such writing acknowledged before him or her the execution thereof, or by an affidavit of any witness to such execution. 998248 2 30 (2) Subject to the provisions of subparagraph (A) above, the fact of the ownership by any person of Bonds and the amounts and numbers of such Bonds, and the date of the holding of the same, may be proved by reference to the bond register. 16. Delivery; Application of Proceeds. The Global Certificates when so prepared and executed shall be delivered by the Finance Director to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 17. Fund and Account. There is hereby created a special account to be designated the "Tax Increment Bonds, Series 1998, Fund" (the "Fund") to be administered and maintained by the Treasurer as a bookkeeping account separate and apart from all other accounts maintained in the official financial records of the City. The Fund shall be maintained in the manner herein specified until all of the Bonds, and interest thereon, have been fully paid. There shall be established and maintained in the Fund the following two (2) separate accounts, to which shall be credited and debited all income and disbursements of the Fund as hereinafter set forth. In such records there shall be established and maintained accounts of the Fund for the purposes and in the amounts as follows: a. A "Refunding Account", to which shall be credited the proceeds of the sale of the Bonds, less accrued interest received thereon, and less any amount paid for the Bonds in excess of $4,272,712, plus any amounts appropriated in paragraph 22. From the Refunding Account there shall be paid all costs and expenses of the Refunding and, on the redemption date or dates of the Refunded Bonds, the principal of, and interest on, the Refunded Bonds, and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65; and the moneys in the Refunding Account shall be used for no other purpose except as otherwise provided by law; and provided further that if upon completion of the Refunding there shall remain any unexpended balance in the Refunding Account, the balance shall be transferred to the Debt Service Account. b. A "Debt Service Account", to which shall be irrevocably appropriated, pledged and credited: (1) accrued interest paid by the Purchaser of the Bonds and amounts paid for the Bonds in excess of $4,272,712; (2) after payment of the Prior Bonds, any balance remaining in the debt service accounts created for the Prior Bonds; (3) collections of tax increments derived from the Excelsior Boulevard Tax Increment District in an amount sufficient to pay 82.29% of the debt service on the Bonds, but no more than 82.29% unless otherwise permitted by law, provided that tax 998248 2 31 increments of the Excelsior Boulevard Tax Increment District in excess of such amounts may be used otherwise as provided by law; (4) collections of tax increments derived from the Trunk Highway Tax Increment District in an amount sufficient to pay 17.710 of the debt service on the Bonds, but no more than 17.710 unless otherwise permitted by law, provided that tax increments of the Trunk Highway Tax Increment District in excess of such amounts may be used otherwise as provided by law; (5) all collections of taxes which may hereafter be levied for the payment of the principal of, and interest on, the Bonds; (6) all funds remaining in the Refunding Account after completion of the Refunding and payment of the costs thereof; (7) all investment earnings on moneys held in the Debt Service Account; and (8) any other moneys which are properly available and are appropriated by the City Council to the Debt Service Account. The moneys in said account shall be used only to pay or prepay the principal of, and interest on, the Bonds and any other general obligation bonds hereafter issued and made payable from said account. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued, and (2) in addition to the above in an amount not greater than the lesser of five percent (5%) of the sale proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Refunding Account or Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the bonds payable therefrom) in excess of amounts which under then -applicable federal arbitrage regulations may be invested without regard as to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. In addition, the proceeds of the Bonds and money in the Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumen- tality thereof if and to the extent that such investment would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the federal Internal Revenue Code of 1986, as amended (the "Code"). 18. Tax Increments. The tax increments derived from the Tax Increment Districts are hereby pledged to the payment of the Bonds, and the interest thereon, to the extent provided in paragraph 19, but solely to the extent required to meet, with other pledged sources, one hundred five percent (105%) of the principal and interest requirements of the Bonds. The County 998248 2 32 Auditor of Hennepin County has heretofore certified the original tax capacity of real property within the Tax Increment Districts. Under the provisions of Minnesota Statutes, Section 469.177, the County Auditor will include only the original tax capacity (subject to such subsequent adjustment as may be required by law) in the valuation upon which he or she computes the rate of all state, county, city, school district and other taxes, but will extend the rates so determined against the entire tax capacity of such real property. The County Treasurer will remit to the EDA as tax increment that portion of the taxes paid each year on real property in the Tax Increment Districts which represents the taxes on captured tax capacity (being tax capacity of the property less said original tax capacity). The pledge and appropriation of tax increments herein to the Bonds shall be on a parity of lien with all pledges and appropriations of tax increments of the Tax Increment Districts heretofore made. With respect to the Bonds and tax increments of the Tax Increment Districts, promptly upon the receipt from the EDA of an installment of tax increments from Hennepin County which has been derived from the Tax Increment Districts, the City shall cause such amounts to be deposited into the Debt Service Account as follows: (i) with respect to installments of tax increments received from each February 1 through the next succeeding July 31, as the case may be, there shall be deposited to the Debt Service Account that portion of tax increments received as shall, together with amounts then on deposit in the Debt Service Account, equal at least the interest due on the next August 1 and one-half of the principal amount of the Bonds due on the next February 1; and (ii) with respect to installments of tax increments received from each August 1 to the next succeeding January 31, there shall be deposited to the Debt Service Account that portion of the tax increments received as shall, together with amounts then on deposit in the Debt Service Account, equal at least the interest due on the next February 1 and the principal amount of the Bonds payable on the next February 1. Tax Increments received from the Tax Increment Districts shall also be paid to the City for bonds other than the Bonds as provided in other resolutions of the City. The estimated collection of such tax increments exceeds twenty percent (2090 of the principal and interest to become due on the Bonds within the meaning of Minnesota Statutes, Section 475.58. The increments of the Tax Increment Districts may be pledged to other purposes by the City or EDA, as appropriate. The priority of such pledges may be superior, subordinate, or on a parity with the pledge made in this resolution, such priority to be determined at the time thereof. 998248 2 33 Notwithstanding any provision herein to the contrary, the City reserves the right to terminate or reduce the tax increments herein pledged to the payment of the Bonds and interest thereon to the extent and in the manner permitted by law so long as such action does not preclude the City from paying when due the debt service on the Bonds or otherwise impair the City's full faith and credit pledge, and to apply to other lawful purposes the tax increments herein pledged to the payment of the Bonds and interest thereon to the extent and in the manner permitted by law. 19. Limited Use of Tax Increments. The proceeds of Bonds are used 82.29% to refund the 1985 Prior Bonds and 17.71% to refund the 1987 Prior Bonds, allocated based on the principal amounts of the Prior Bonds refunded with proceeds of the Bonds. Tax increments from the Excelsior Boulevard Tax Increment District shall pay 82.29%, but no more than 82.29% unless otherwise permitted by law, of the debt service on the Bonds, representing the portion which finances the 1985 Project. Tax Increments from the Trunk Highway Tax Increment District shall pay 17.71%, but no more than 17.71% unless otherwise permitted by law, of the debt service on the Bonds, representing the portion which finances the 1987 Project. 20. Coverage Test; Excess Tax Increments. It is hereby found, determined and declared that the tax increments are such that if collected in full they, together with estimated collections of other revenues herein pledged for the payment of the Bonds, will produce at least five percent (5%) in excess of the amount needed to meet when due the principal and interest payments on the Bonds. Annually at the time taxes are required to be levied, the City shall estimate the sufficiency of the Debt Service Account. In the event that it is anticipated that the aggregate amount in (or to be timely received in) the Debt Service Account will not be sufficient to pay the principal and interest on the Bonds to become due in the next eighteen (18) months, the City shall levy an ad valorem tax in such amount as is necessary, with other sources, to pay the principal and interest due on the Bonds during such period. Tax increments in excess of the debt service on the Bonds may be devoted to any proper purpose. Nothing contained herein shall be deemed to preclude the City from making further pledges and appropriations of the tax increments for the payment of other or additional obligations of the City, provided that it has first been determined by the City Council that estimated tax increments will be sufficient, in addition to all other sources, for the payment of the Bonds and such additional obligations, and any such pledge and appropriation of said tax increments may be made superior or 998248 2 34 subordinate to, or on a parity with, the pledge and appropriation herein. 21. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City shall be and are hereby irrevocably pledged. If the tax increments appropriated and pledged to the payment of principal and interest on the Bonds, together with other funds irrevocably appropriated to the Debt Service Account, shall at any time be insufficient to pay such principal and interest when due, the City covenants and agrees to levy, without limitation as to rate or amount, an ad valorem tax upon all taxable property in the City sufficient to pay such principal and interest as they become due. If the balance in the Fund (as defined in paragraph 17 hereof) is ever insufficient to pay all principal and interest then due on the Bonds, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, including the general fund of the City, and such other funds may be reimbursed with or without interest from the Fund when a sufficient balance is available therein. 22. Appropriation to Refunding Account or for Issuance Expenses. There is hereby appropriated to the Refunding Account or for the payment of the expenses of issuing the Bonds $-0- from the City's General Fund, or such greater or lesser amounts as shall be necessary, with proceeds of the Bonds, to fully fund the Refunding Account to achieve its purposes and to fully pay expenses of issuing the Bonds. 23. Securities. The Finance Director, or anyone designated by the Finance Director to act in her behalf, is hereby authorized and directed to purchase securities for the Refunding Account, including any appropriate United States Treasury Securities, State and Local Government Series ("SLGS"), from the proceeds of the Bonds in accordance with the provisions of this resolution, and to execute all documents (including the appropriate subscription form) which may be required to effect a purchase of SLGS in accordance with the applicable U.S. Treasury Regulations. 24. Redemption of Refunded Bonds; Notice of Redemption. The Refunded Bonds shall be paid on such date or dates as the Finance Director shall determine within ninety (90) days of the issuance of the Bonds, at par and interest accrued to the date or dates of prepayment. The Mayor, City Manager and Finance Director and other officials of the City are hereby authorized and directed to take such action and sign such documents as may be necessary to cause the Prior Bonds to be redeemed. Notice of Call for Redemption shall be given by the Finance Director to the trustees for the Refunded Bonds, who shall mail notice of redemption of such issue. The Finance 998248 2 35 Director is hereby authorized, together with Ehlers & Associates, Inc., and Briggs and Morgan, Professional Association, to negotiate and obtain an agreement to prepay the 1987 Prior Bonds within ninety (90) days of the closing of the sale of the Bonds. The Notice of Call for Redemption of the 1985 Refunded Bonds shall be in substantially the form attached to this resolution as Exhibit A, and the Notice of Call for Redemption of the 1987 Refunded Bonds may be in substantially the form attached to this resolution as Exhibit A. 25. Termination of Contracts Relating to Prior Bonds. The City Manager shall take such actions and make such payments as shall be necessary to terminate contracts relating to (1) the 1985 Prior Bonds, including the Trust Indenture with First Trust Company, Inc. (now U.S. Bank Trust National Association), Standby Bond Purchase Agreement with The Sumitomo Bank, Limited, Chicago Branch, Tender Agent Agreement with J. Henry Schroeder Bank & Trust Company of New York, and Remarketing Agreement with Miller & Schroeder Financial, Inc. (now with Norwest Investment Services, Inc.), and to (2) the 1987 Prior Bonds, including the Trust Indenture with First Trust Company, Inc., Standby Bond Purchase Agreement with The Sumitomo Bank, Limited, Chicago Branch, Tender Agent Agreement with First Trust Company, Inc., and Remarketing Agreement with Miller & Schroeder Financial, Inc. (now with Norwest Investment Services, Inc.). 26. Certificate of Registration. The City Clerk is hereby directed to file a certified copy of this resolution with the County Auditor of Hennepin County, together with such other information as the County Auditor shall require, and to obtain the County Auditor's certificate that the Bonds have been entered in the County Auditor's Bond Register. 27. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 28. Negative Covenants as to Use of Proceeds and Projects. The City hereby covenants not to use the proceeds of the Bonds or to use the Projects, or to cause or permit them to be used, or to enter into any deferred payment arrangements for the cost of the Projects, in such a manner as to cause the Bonds 998248 2 36 to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. The City reasonably expects that no actions will be taken over the term of the Bonds that would cause them to be private activity bonds, and the average term of the Bonds is not longer than reasonably necessary for the governmental purpose of the issue. The City hereby covenants not to use the proceeds of the Bonds in such a manner as to cause the Bonds to be "hedge bonds" within the meaning of Section 149(g) of the Code. 29. Tax -Exempt Status of the Bonds; Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States. If any elections are available now or hereafter with respect to arbitrage or rebate matters relating to the Bonds, the Mayor, City Manager, Finance Director, City Clerk and Treasurer, or any of them, are hereby authorized and directed to make such elections as they deem necessary, appropriate or desirable in connection with the Bonds, and all such elections shall be, and shall be deemed and treated as, elections of the City. 30. Designation of Qualified Tax -Exempt Obligations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City hereby makes the following factual statements and representations: (a) the Bonds are issued after August 7, 1986; (b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (c) the City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (d) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all entities treated as one issuer with the City, and all subordinate entities whose obligations are treated as issued by the City) during this calendar year 1998 will not exceed $10,000,000; 998248 2 37 (e) not more than $10,000,000 of obligations issued by the City during this calendar year 1998 have been designated for purposes of Section 265(b)(3) of the Code; (f) the aggregate face amount of the Bonds does not exceed $10,000,000; and (g) the Bonds are issued to refund, and not to "advance refund" within the meaning of Section 149(d) (5) of the Code, an obligation, and shall not be taken into account under the $10,000,000 issuance limit to the extent the amount of the Bonds does not exceed the outstanding amount of the refunded bonds. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 31. Tax Increment Pledge Agreement. The City hereby approves the Tax Increment Pledge Agreement substantially in the form presented to the City Council, to be dated as of its date of execution in 1998, and hereby authorizes the Mayor and City Manager to execute the Tax Increment Pledge Agreement on behalf of the City, with such additions and modifications as those officers may deem desirable or necessary as evidenced by their execution thereof. The Tax Increment Pledge Agreement in the form executed is hereby incorporated by reference and made a part of this resolution. 32. Letter of Representations. The Letter of Representations for the Bonds is hereby confirmed to be the Blanket Issuer Letter of Representations dated October 18, 1995, by the City and received and accepted by The Depository Trust Company. So long as The Depository Trust Company is the Depository or it or its nominee is the Holder of any Global Certificate, the City shall comply with the provisions of the Letter of Representations, as it may be amended or supplemented by the City from time to time with the agreement or consent of The Depository Trust Company. 33. Negotiated Sale. The City has retained Ehlers & Associates, Inc., as an independent financial advisor, and the City has heretofore determined, and hereby determines, to sell the Bonds by private negotiation, all as provided by Minnesota Statutes, Section 475.60, Subdivision 2(9). 34. Official Statement. Proposals for the Bonds were solicited by Ehlers & Associates, Inc., acting on behalf of the City. The use by Ehlers & Associates, Inc., of the Official Statement, and the terms and conditions of the Bonds and the sale set forth therein, are hereby approved and ratified. 998248 2 38 1 4 1 1 f 1 35. Continuing Disclosure. The City is an obligated person with respect to the Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2-12 (the "Rule"), promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking") hereinafter described, to: A. Provide or cause to be provided to each nationally recognized municipal securities information repository ("NRMSIR") and to the appropriate state information depository ("SID"), if any, for the State of Minnesota, in each case as designated by the Commission in accordance with the Rule, certain annual financial information and operating data in accordance with the Undertaking. The City reserves the right to modify from time to time the terms of the Undertaking as provided therein. B. Provide or cause to be provided, in a timely manner, to (i) each nationally recognized municipal securities information repository ("NRMSIR") or to the Municipal Securities Rulemaking Board ("MSRB") and (ii) the SID, notice of the occurrence of certain material events with respect to the Bonds in accordance with the Undertaking. C. Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the MSRB and (ii) the SID, notice of a failure by the City to provide the annual financial information with respect to the City described in the Undertaking. The City agrees that its covenants pursuant to the Rule set forth in this paragraph 35 and in the Undertaking are intended to be for the benefit of the Holders of the Bonds and shall be enforceable on behalf of such Holders; provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants. The Mayor and City Manager or any other officers of the City authorized to act in their stead (the "Officers"), are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the City Council, subject to such modifications thereof or additions thereto as are (i) consistent with the requirements under the Rule, (ii) required by the Purchaser, and (iii) acceptable to the Officers. 36. Supplemental Resolution. Prior resolutions of the City governing the use of tax increments of the Tax Increment 998248 2 39 r 1 Districts are hereby supplemented to the extent necessary to give effect to the provisions of paragraph 17 of this resolution. 37. Severability. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution. 38. Headings. Headings in this resolution are included for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. 39. Effective Date. This resolution shall become effective immediately upon its passage. Attest: C. Y Clerk Reviewed for Administration: CityMaan t /:0!3°Pe— g 998248 2 Adopted by the City Council November 16, 1998 'e ;4 Mayor 40