09-44EXTRACT OF MINUTES OF A MEETING
OF THE CITY COUNCIL
CITY OF OTSEGO, MINNESOTA
HELD: November 9, 2009
Pursuant to due call, a regular or special meeting of the City Council of the City of
Otsego, Wright County, Minnesota, was duly held at the City Hall on November 9, 2009, at 6:30
P.M., for the purpose, in part, of authorizing the issuance and awarding the sale of $6,360,000
General Obligation Water and Sewer Revenue Refunding Bonds, Series 2009A.
The following members were present: Jessica Stockamp, Tom Darkenwald, Vern Heider,
Dan Scharber
and the following were absent: None
Member Heidner introduced the following resolution and moved its adoption:
RESOLUTION NO. 2009-44
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $6,360,000 GENERAL
OBLIGATION WATER AND SEWER REVENUE REFUNDING BONDS, SERIES 2009A,
PLEDGING NET REVENUES FOR THE SECURITY THEREOF
A. WHEREAS, the City of Otsego, Minnesota (the "City"), by resolution duly
adopted on:
1. May 27, 2003 (the "Prior 2003 Resolution"), authorized the issuance and sale of
$11,370,000 original principal amount of General Obligation Water and Sewer Revenue Bonds,
Series 2003B, dated June 1, 2003 (the "Prior 2003 Bonds"); and
2. April 25, 2005 (the "Prior 2005 Resolution"), authorized the issuance and sale of
$10,855,000 original principal amount of General Obligation Sewer Revenue Bonds, Series
2005A, dated May 1, 2005 (the "Prior 2005 Bonds"); and
3. August 28, 2006 (the "Prior 2006 Resolution" and, together with the Prior 2003
Resolution and the Prior 2005 Resolution, the "Prior Resolutions"), authorized the issuance and
sale of $8,875,000 original principal amount of General Obligation Water and Sewer Revenue
Bonds, Series 2006A, dated September 1, 2006 (the "Prior 2006 Bonds" and, together with the
Prior 2003 Bonds and the Prior 2005 Bonds, the "Prior Bonds"); and
B. WHEREAS, (a) a portion of the proceeds of the Bonds (as defined below) will be
used for the payment from the Payment Account (as defined below) of $455,000 principal
amount of the Prior 2003 Bonds which matures on December 1, 2009, on said date; (b) a portion
of the proceeds of the Bonds will be used for the payment or prepayment from the Escrow
Account (as defined below) of (i) $470,000 principal amount of the Prior 2003 Bonds which
matures on December 1, 2010, on said date; and (ii) $490,000 principal amount of the Prior 2003
Bonds which matures on December 1, 2011, on said date, as provided in the Prior 2003
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Resolution, (collectively, the "Refunded 2003 Bonds"); and (c) the refunding of the Refunded
2003 Bonds is consistent with the covenants made with the holders of the Prior 2003 Bonds and
is necessary and desirable to restructure the debt service cost to the City and because revenues
for payment of the Refunded 2003 Bonds are not sufficient to pay all principal and interest due
or about to become due thereon; and
C. WHEREAS, the City shall continue to be responsible for payment of $7,860,000
aggregate principal amount of the Prior 2003 Bonds which matures on December 1, 2012
through 2023, inclusive, on said dates, and such payments are also consistent with the covenants
made with the holders of the Prior 2003 Bonds; and
D. WHEREAS, (a) a portion of the proceeds of the Bonds will be used for the
payment from the Payment Account of $420,000 principal amount of the Prior 2005 Bonds
which matures on December 1, 2009, on said date; (b) a portion of the proceeds of the Bonds
will be used for the payment or prepayment from the Escrow Account of (i) $435,000 principal
amount of the Prior 2005 Bonds which matures on December 1, 2010, on said date; (ii) $450,000
principal amount of the Prior 2005 Bonds which matures on December 1, 2011, on said date; and
(iii) $950,000 aggregate principal amount of the Prior 2005 Bonds which matures on December
1, 2012 and 2013 and is callable on December 1, 2011, as provided in the Prior 2005 Resolution,
(collectively, the "Refunded 2005 Bonds"); and (c) the refunding of the Refunded 2005 Bonds is
consistent with the covenants made with the holders of the Prior 2005 Bonds and is necessary
and desirable to restructure the debt service cost to the City and because revenues for payment of
the Refunded 2005 Bonds are not sufficient to pay all principal and interest due or about to
become due thereon; and
E. WHEREAS, the City shall continue to be responsible for payment of $6,860,000
aggregate principal amount of the Prior 2005 Bonds which matures on December 1, 2014
through 2024, inclusive, on said dates, and such payments are also consistent with the covenants
made with the holders of the Prior 2005 Bonds; and
F. WHEREAS, (a) a portion of the proceeds of the Bonds will be used for the
payment from the Payment Account of $315,000 principal amount of the Prior 2006 Bonds
which matures on December 1, 2009, on said date; (b) a portion of the proceeds of the Bonds
will be used for the payment or prepayment from the Escrow Account of (i) $330,000 principal
amount of the Prior 2006 Bonds which matures on December 1, 2010, on said date; (ii) $345,000
principal amount of the Prior 2006 Bonds which matures on December 1, 2011, on said date; (iii)
$355,000 principal amount of the Prior 2006 Bonds which matures on December 1, 2012, on said
date; and (iv) $370,000 principal amount of the Prior 2006 Bonds which matures on December 1,
2013 and is callable on December 1, 2012, as provided in the Prior 2006 Resolution,
(collectively, the "Refunded 2006 Bonds"); and (c) the refunding of the Refunded 2006 Bonds is
consistent with the covenants made with the holders of the Prior 2006 Bonds and is necessary
and desirable to restructure the debt service cost to the City and because revenues for payment of
the Refunded 2006 Bonds are not sufficient to pay all principal and interest due or about to
become due thereon; and
G. WHEREAS, the City shall continue to be responsible for payment of $6,660,000
aggregate principal amount of the Prior 2006 Bonds which matures on December 1, 2014
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through 2026, inclusive, on said dates, and such payments are also consistent with the covenants
made with the holders of the Prior 2006 Bonds; and
H. WHEREAS, the City Council has heretofore determined and declared that it is
necessary and expedient to issue $6,360,000 General Obligation Water and Sewer Revenue
Refunding Bonds, Series 2009A (the "Bonds" or individually a "Bond"), pursuant to Minnesota
Statutes, Chapter 475, to provide funds for a partial net cash advance refunding, on December 1,
2009 (the "Refunding") of the Refunded 2003 Bonds, the Refunded 2005 Bonds and the
Refunded 2006 Bonds (together, the "Refunded Bonds") in accordance with the Prior
Resolutions; and
I. WHEREAS, the City owns and operates a municipal water system and a
municipal sewer system as a combined revenue producing public utility (the "System") and the
only outstanding bonds that are payable from the System are the Prior Bonds excluding the
Refunded Bonds (the "Outstanding Bonds"); and
J. WHEREAS, the City has retained David Drown Associates, in Minneapolis,
Minnesota, as its independent financial advisor for the sale of the Bonds and was therefore
authorized to sell the Bonds by private negotiation in accordance with Minnesota Statutes,
Section 475.60, Subdivision 2(9); and
K. WHEREAS, it is in the best interests of the City that the Bonds be issued in book -
entry form as hereinafter provided; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Otsego,
Minnesota, as follows:
1. Acceptance of Offer. The offer of Northland Securities, Inc. (the "Purchaser"), to
purchase the Bonds in accordance with the terms and at the rates of interest hereinafter set forth,
and to pay therefor the sum of $6,158,434.20, plus interest accrued to settlement, is hereby
accepted.
2. Bond Terms.
(a) Original Issue Date,• Denominations-, Maturities: Term Bond Option. The Bonds
shall be dated December 1, 2009, as the date of original issue and shall be issued forthwith on or
after such date in fully registered form, shall be numbered from R-1 upward in the denomination
of $5,000 each or in any integral multiple thereof of a single maturity (the "Authorized
Denominations") and shall mature on December 1 in the years and amounts as follows:
Year Amount
2024
$ 750,000
2025
1,575,000
2026
1,635,000
2027
2,400,000
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As may be requested by the Purchaser, one or more term Bonds may be issued having
mandatory sinking fund redemption and final maturity amounts conforming to the foregoing
principal repayment schedule, and corresponding additions may be made to the provisions of the
applicable Bond(s).
(b) Book EntaOWy System. 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 its
successors to its functions hereunder (the "Depository") will act as securities depository for the
Bonds, and to this end:
(i) The Bonds shall be initially issued and, so long as they remain in book entry form
only (the "Book Entry Only Period"), shall at all times be in the form of a separate
single fully registered Bond for each maturity of the Bonds; and for purposes of
complying with this requirement under paragraphs 5 and 10 Authorized
Denominations for any Bond shall be deemed to be limited during the Book Entry
Only Period to the outstanding principal amount of that Bond.
(ii) Upon initial issuance, ownership of the Bonds shall be registered in a bond
register maintained by the Bond Registrar (as hereinafter defined) in the name of
CEDE & CO., as the nominee (it or any nominee of the existing or a successor
Depository, the "Nominee").
(iii) With respect to the Bonds neither the City nor the Bond Registrar shall have any
responsibility or obligation to any broker, dealer, bank, or any other financial
institution for which the Depository holds Bonds as securities depository (the
"Participant") or the person for which a Participant holds an interest in the Bonds
shown on the books and records of the Participant (the "Beneficial Owner").
Without limiting the immediately preceding sentence, neither the City, nor the
Bond Registrar, shall have any such responsibility or obligation with respect to
(A) the accuracy of the records of the Depository, the Nominee or any Participant
with respect to any ownership interest in the Bonds, or (B) the delivery to any
Participant, any Owner or any other person, other than the Depository, of any
notice with respect to the Bonds, including any notice of redemption, or (C) the
payment to any Participant, any Beneficial Owner or any other person, other than
the Depository, of any amount with respect to the principal of or premium, if any,
or interest on the Bonds, or (D) the consent given or other action taken by the
Depository as the Registered Holder of any Bonds (the "Holder"). For purposes
of securing the vote or consent of any Holder under this Resolution, the City may,
however, rely upon an omnibus proxy under which the Depository assigns its
consenting or voting rights to certain Participants to whose accounts the Bonds
are credited on the record date identified in a listing attached to the omnibus
proxy.
(iv) The City and the Bond Registrar may treat as and deem the Depository to be the
absolute owner of the Bonds for the purpose of payment of the principal of and
premium, if any, and interest on the Bonds, for the purpose of giving notices of
redemption and other matters with respect to the Bonds, for the purpose of
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obtaining any consent or other action to be taken by Holders for the purpose of
registering transfers with respect to such Bonds, and for all purpose whatsoever.
The Bond Registrar, as paying agent hereunder, shall pay all principal of and
premium, if any, and interest on the Bonds only to the Holder or the Holders of
the Bonds as shown on the bond register, and all such payments shall be valid and
effective to fully satisfy and discharge the City's obligations with respect to the
principal of and premium, if any, and interest on the Bonds to the extent of the
sum or sums so paid.
(v) Upon delivery by the Depository to the Bond Registrar of written notice to the
effect that the Depository has determined to substitute a new Nominee in place of
the existing Nominee, and subject to the transfer provisions in paragraph 10
hereof, references to the Nominee hereunder shall refer to such new Nominee.
(vi) So long as any Bond is registered in the name of a Nominee, all payments with
respect to the principal of and premium, if any, and interest on such Bond and all
notices with respect to such Bond shall be made and given, respectively, by the
Bond Registrar or City, as the case may be, to the Depository as provided in the
Letter of Representations to the Depository required by the Depository as a
condition to its acting as book -entry Depository for the Bonds (said Letter of
Representations, together with any replacement thereof or amendment or
substitute thereto, including any standard procedures or policies referenced
therein or applicable thereto respecting the procedures and other matters relating
to the Depository's role as book -entry Depository for the Bonds, collectively
hereinafter referred to as the "Letter of Representations").
(vii) All transfers of beneficial ownership interests in each Bond issued in book -entry
form shall be limited in principal amount to Authorized Denominations and shall
be effected by procedures by the Depository with the Participants for recording
and transferring the ownership of beneficial interests in such Bonds.
(viii) In connection with any notice or other communication to be provided to the
Holders pursuant to this Resolution by the City or Bond Registrar with respect to
any consent or other action to be taken by Holders, the Depository shall consider
the date of receipt of notice requesting such consent or other action as the record
date for such consent or other action; provided, that the City or the Bond Registrar
may establish a special record date for such consent or other action. The City or
the Bond Registrar shall, to the extent possible, give the Depository notice of such
special record date not less than 15 calendar days in advance of such special
record date to the extent possible.
(ix) Any successor Bond Registrar in its written acceptance of its duties under this
Resolution and any paying agency/bond registrar agreement, shall agree to take
any actions necessary from time to time to comply with the requirements of the
Letter of Representations.
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(x) In the case of a partial prepayment of a Bond, the Holder may, in lieu of
surrendering the Bonds for a Bond of a lesser denomination as provided in
paragraph 5, make a notation of the reduction in principal amount on the panel
provided on the Bond stating the amount so redeemed.
(c) Termination of Book -Entry OWy System. Discontinuance of a particular
Depository's services and termination of the book -entry only system may be effected as follows:
(i) The Depository may determine to discontinue providing its services with respect
to the Bonds at any time by giving written notice to the City and discharging its
responsibilities with respect thereto under applicable law. The City may
terminate the services of the Depository with respect to the Bond if it determines
that the Depository is no longer able to carry out its functions as securities
depository or the continuation of the system of book -entry transfers through the
Depository is not in the best interests of the City or the Beneficial Owners.
(ii) Upon termination of the services of the Depository as provided in the preceding
paragraph, and if no substitute securities depository is willing to undertake the
functions of the Depository hereunder can be found which, in the opinion of the
City, is willing and able to assume such functions upon reasonable or customary
terms, or if the City determines that it is in the best interests of the City or the
Beneficial Owners of the Bond that the Beneficial Owners be able to obtain
certificates for the Bonds, the Bonds shall no longer be registered as being
registered in the bond register in the name of the Nominee, but may be registered
in whatever name or names the Holder of the Bonds shall designate at that time,
in accordance with paragraph 10. To the extent that the Beneficial Owners are
designated as the transferee by the Holders, in accordance with paragraph 10, the
Bonds will be delivered to the Beneficial Owners.
(iii) Nothing in this subparagraph (d) shall limit or restrict the provisions of paragraph
10.
(d) Letter of Representations. The provisions in the Letter of Representations are
incorporated herein by reference and made a part of the resolution, and if and to the extent any
such provisions are inconsistent with the other provisions of this resolution, the provisions in the
Letter of Representations shall control.
3. Purpose. The Bonds (together with other available funds, if any, appropriated in
paragraph 15) shall provide funds to finance the Refunding. It is hereby found, determined and
declared that the Refunding is pursuant to Minnesota Statutes, Section 475.67 and, as a result of
the Refunding, the average life of the maturities is extended by at least three years.
4. Interest. The Bonds shall bear interest payable semiannually on June 1 and
December 1 of each year (each, an "Interest Payment Date"), commencing June 1, 2010,
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:
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Maturi , Year Interest Rate
2024
4.000%
2025
4.100
2026
4.100
2027
4.125
5. Redemption. All Bonds maturing on December 1, 2024 and thereafter, shall be
subject to redemption and prepayment at the option of the City on December 1, 2019, and on any
date thereafter at a price of par plus accrued interest. Redemption may be in whole or in part of
the Bonds subject to prepayment. If redemption is in part, the maturities and the principal
amounts within each maturity to be redeemed shall be determined by the City; and if only part of
the Bonds having a common maturity date are called for prepayment, the specific Bonds to be
prepaid shall be chosen by lot by the Bond Registrar. Bonds or portions thereof called for
redemption shall be due and payable on the redemption date, and interest thereon shall cease to
accrue from and after the redemption date. Mailed notice of redemption shall be given to the
paying agent and to each affected registered holder of the Bonds at least thirty days prior to the
stated redemption date.
Prior to the date on which any Bond or Bonds are directed by the City to be redeemed in
advance of maturity, the City will cause notice of the call thereof for redemption identifying the
Bonds to be redeemed to be mailed to the Bond Registrar and all Bondholders, at the addresses
shown on the Bond Register. All Bonds so called for redemption will cease to bear interest on
the specified redemption date, provided funds for their redemption have been duly deposited.
To effect a partial redemption of Bonds having a common maturity date, the Bond
Registrar prior to giving notice of redemption shall assign to each Bond having a common
maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The
Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in
its discretion, from the numbers so assigned to such Bonds, as many numbers as, at $5,000 for
each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be
redeemed shall be the Bonds to which were assigned numbers so selected; provided, however,
that only so much of the principal amount of each such Bond of a denomination of more than
$5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If
a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the
City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the
City and Bond Registrar duly executed by the Holder thereof or the Holder's attorney duly
authorized in writing) and the City shall execute (if necessary) and the Bond Registrar shall
authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds
having the same stated maturity and interest rate and of any Authorized Denomination or
Denominations, as requested by the Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond so surrendered.
6. Bond Registrar. Northland Trust Services, Inc., in Minneapolis, Minnesota, 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, all
pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith.
2421753x1 7
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 registered holders (or
record holders) of the Bonds in the manner set forth in the form of Bond and paragraph 12.
7. Form of Bond. The 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:
IM
UNITED STATES OF AMERICA
STATE OF MINNESOTA
WRIGHT COUNTY
CITY OF OTSEGO
GENERAL OBLIGATION WATER AND SEWER REVENUE
REFUNDING BOND, SERIES 2009A
Interest Rate Matun, Date Date of Ori ' Issue CUSIP
December 1, December 1, 2009
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
The City of Otsego, Wright County, Minnesota (the "Issuer"), certifies that it is indebted
and for value received promises to pay to the registered owner specified above, or registered
assigns, unless called for earlier redemption, in the manner hereinafter set forth, the principal
amount specified above, on the maturity date specified above, and to pay interest thereon
semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"),
commencing June 1, 2010, 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 Northland Trust Services, Inc., in Minneapolis, Minnesota (the "Bond
Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer
(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
2421753x2 8
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. So long as this Bond is registered in the name of the Depository or its Nominee as
provided in the Resolution hereinafter described, and as those terms are defined therein, payment
of principal of, premium, if any, and interest on this Bond and notice with respect thereto shall be
made as provided in the Letter of Representations, as defined in the Resolution, and surrender of
this Bond shall not be required for payment of the redemption price upon a partial redemption of
this Bond. Until termination of the book -entry only system pursuant to the Resolution, Bonds
may only be registered in the name of the Depository or its Nominee.
Optional Redemption. All Bonds of this issue (the "Bonds") maturing on December 1,
2024, and thereafter, are subject to redemption and prepayment at the option of the Issuer on
December 1, 2019, and on any date thereafter at a price of par plus accrued interest. Redemption
may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the
maturities and the principal amounts within each maturity to be redeemed shall be determined by
the Issuer; and if only part of the Bonds having a common maturity date are called for
prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar.
Bonds or portions thereof called for redemption shall be due and payable on the redemption date,
and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of
redemption shall be given to the paying agent and to each affected Holder of the Bonds at least
thirty days prior to the stated redemption date.
Prior to the date on which any Bond or Bonds are directed by the Issuer to be redeemed
in advance of maturity, the Issuer will cause notice of the call thereof for redemption identifying
the Bonds to be redeemed to be mailed to the Bond Registrar and all Bondholders, at the
addresses shown on the Bond Register. All Bonds so called for redemption will cease to bear
interest on the specified redemption date, provided funds for their redemption have been duly
deposited.
Selection of Bonds for Redemption; Partial Redemption. To effect a partial redemption
of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond having a
common maturity date a distinctive number for each $5,000 of the principal amount of such
Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall
deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at
$5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The
Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided,
however, that only so much of the principal amount of such Bond of a denomination of more
than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so
selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar
(with, if the Issuer or Bond Registrar so requires, a written instrument of transfer in form
satisfactory to the Issuer and Bond Registrar duly executed by the Holder thereof or the Holder's
attorney duly authorized in writing) and the Issuer shall execute (if necessary) and the Bond
Registrar shall authenticate and deliver to the Holder of the Bond, without service charge, a new
Bond or Bonds having the same stated maturity and interest rate and of any Authorized
Denomination or Denominations, as requested by the Holder, in aggregate principal amount
equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered.
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Issuance; Purpose; General Obligation. This Bond is one of an issue in the total principal
amount of $6,360,000, all of like date of original issue and tenor, except as to number, maturity,
interest rate, denomination and redemption privilege, issued pursuant to and in full conformity
with the Constitution and laws of the State of Minnesota and pursuant to a resolution adopted by
the City Council on November 9, 2009 (the "Resolution"), for the purpose of providing money
for an advance refunding of certain outstanding bonds of the Issuer. This Bond is payable out of
the General Obligation Water and Sewer Revenue Refunding Bonds, Series 2009A Fund of the
Issuer. 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 in fully registered
form in Authorized Denominations (as defined in the Resolution) 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.
Transfer. This Bond is transferable by the Holder in person or the Holder's 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 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 Owners. 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 herein 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.
Qualified Tax Exempt Obli ate. The Bonds have been designated by the Issuer as
"qualified tax exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue
Code of 1986, as amended.
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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; that the
Issuer has covenanted and agreed with the Holders of the Bonds that it will impose and collect
charges for the service, use and availability of its municipal water and sewer utility system (the
"System") at the times and in amounts necessary to produce net revenues, together with other
sums pledged to the payment of the Bonds adequate to pay all principal and interest when due on
the Bonds; and that the Issuer will levy a direct, annual, irrepealable ad valorem tax upon all of
the taxable property of the Issuer, without limitation as to rate or amount, for the years and in
amounts sufficient to pay the principal and interest on the Bonds as they respectively become
due, if the net revenues from the System, and any other sums irrevocably appropriated to the
Debt Service Account are insufficient therefor; and that this Bond, together with all other debts
of the Issuer outstanding on the date of original issue hereof and the date of its issuance and
delivery to the original purchaser, does not exceed any constitutional or statutory limitation of
indebtedness.
IN WITNESS WHEREOF, the City of Otsego, Wright County, Minnesota, by its City
Council has caused this Bond to be executed on its behalf by the facsimile signatures of its
Mayor and its Clerk -Treasurer, the corporate seal of the Issuer having been intentionally omitted
as permitted by law.
Date of Registration:
BOND REGISTRAR'S
CERTIFICATE OF
AUTHENTICATION
This Bond is one of the
Bonds described in the
Resolution mentioned
within.
NORTHLAND TRUST SERVICES
INC.,
Minneapolis, Minnesota,
Bond Registrar
By:
Authorized Signature
Registrable by: NORTHLAND TRUST
SERVICES INC.
Payable at: NORTHLAND TRUST
SERVICES INC.
CITY OF OTSEGO,
WRIGHT COUNTY, MINNESOTA
/s/ Facsimile
Mayor
/s/ Facsimile
Clerk -Treasurer
2421753x2 11
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
(Cust) (Minor)
under the Uniform
(State)
Transfers to Minors Act
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond
and 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: 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 Guaranteed:
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 240.17 Ad -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:
(Include information for all joint owners if the Bond is held by joint account.)
2421753x1 12
PREPAYMENT SCHEDULE
This Bond has been prepaid in part on the date(s) and in the amount(s) as follows:
Date Amount Authorized signature of Holder
2421753v2 13
8. Execution. The Bonds shall be in typewritten form, shall be executed on behalf of
the City by the signatures of its Mayor and Clerk -Treasurer and be sealed with the seal of the
City; provided, as permitted by law, both signatures may be photocopied facsimiles and the
corporate seal has been omitted. In the event of disability or resignation or other absence of
either officer, the Bonds may be signed by the manual or facsimile signature of the officer who
may act on behalf of the absent or disabled officer. In case either 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, the signature or facsimile shall nevertheless be valid and sufficient for all
purposes, the same as if the officer had remained in office until delivery.
9. Authentication. 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
the 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, except that for purposes of delivering the original Bonds to the
Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue of
December 1, 2009. The Certificate of Authentication so executed on each Bond shall be
conclusive evidence that it has been authenticated and delivered under this resolution.
10. 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.
Upon surrender for transfer of any 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 9) of, and deliver, in the name of the designated transferee
or transferees, one or more new 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, Bonds may be exchanged for Bonds of any Authorized
Denomination or Denominations of a like aggregate principal amount and stated maturity, upon
surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever
any 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 Bonds which the
Holder making the exchange is entitled to receive.
All Bonds surrendered upon any exchange or transfer provided for in this resolution shall
be promptly canceled by the Bond Registrar and thereafter disposed of as directed by the City.
2421753x2 14
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 the Holder's 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 the Bond Registrar, including regulations which permit the Bond Registrar to
close its transfer books between record dates and payment dates. The Clerk -Treasurer is hereby
authorized to negotiate and execute the terms of said agreement.
11. 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.
12. Interest Payment: Record Date. Interest on any 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 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 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 to the Holders not less than ten days prior to the
Special Record Date.
13. Treatment of Registered Owner. 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 12) 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.
14. Delivery; Application of Proceeds. The Bonds when so prepared and executed
shall be delivered by the Clerk -Treasurer to the Purchaser upon receipt of the purchase price, and
the Purchaser shall not be obliged to see to the proper application thereof.
15. Fund and Accounts. There is hereby established a special fund to be designated
"General Obligation Water and Sewer Revenue Refunding Bonds, Series 2009A Fund" (the
"Fund") to be administered and maintained by the Clerk -Treasurer as a bookkeeping account
separate and apart from all other funds maintained in the official financial records of the City.
2421753x2 15
The Fund shall be maintained in the manner herein specified until all of the Bonds and the
interest thereon have been fully paid. The Operation and Maintenance Accounts heretofore
established by the City shall continue to be maintained in the manner heretofore provided by the
City. All moneys remaining after paying or providing for the items set forth in the resolution
establishing the Operation and Maintenance Accounts shall constitute or are referred to as "net
revenues" until the Bonds and the Outstanding Bonds have been paid. There shall be maintained
in the Fund the following separate accounts to which shall be credited and debited all income and
disbursements of the System as hereinafter set forth. The Clerk -Treasurer of the City and all
officials and employees concerned therewith shall establish and maintain financial records of the
receipts and disbursements of the System in accordance with this resolution. In such records
there shall be established accounts or accounts shall continue to be maintained as the case may
be, of the Fund for the purposes and in the amounts as follows:
(a) Payment Account. Bond proceeds in the amount of $1,712,958.13 shall be
deposited in the Payment Account. The December 1, 2009 maturities of the Prior Bonds shall be
paid from the Payment Account. On December 1, 2009, the Paying Agents for the Prior Bonds
with December 1, 2009 maturities shall transfer Bond proceeds in the amount of (1) $622,796.25
to the holders of the Prior 2003 Bonds; (2) $603,278.13 to the holders of the Prior 2005 Bonds;
and (3) $486,883.75 to the holders of the Prior 2006 Bonds. The sums are sufficient, together
with other funds on deposit in debt service funds for the Prior Bonds, to pay the principal and
interest due on the Prior Bonds on December 1, 2009. Any monies remaining in the Payment
Account after the payment of the December 1, 2009 maturities of the Prior Bonds shall be
transferred to the Debt Service Account.
(b) Escrow Account. The Escrow Account shall be maintained with Northland Trust
Services, Inc., as the Escrow Agent (the "Escrow Agent"). $4,445,476.07 of Bond proceeds shall
be deposited with the Escrow Agent and applied to fund the Escrow Account or to pay costs of
issuance of the Bonds. $4,414,013.62 of Bond proceeds, together with all investment earnings
thereon plus other available municipal funds (estimated to be $0.00) required to adequately fund
the Escrow Account for the purposes set forth herein, are hereby pledged and appropriated and
shall be credited to the Escrow Account. The Escrow Account shall be invested in securities
maturing or callable at the option of the holder on such dates and bearing interest at such rates as
shall be required to provide sufficient funds, together with any cash or other funds retained in the
Escrow Account, to pay when due the accrued interest on each outstanding Refunded Bond to its
maturity or to the date on which it is called for redemption as herein provided and to pay the
principal amount of each Refunded Bond at maturity or on the date on which it has been called
for redemption and to pay any premium required for redemption on such date. The moneys in
the Escrow Account shall be used solely for the purposes herein set forth and for no other
purpose, except that any surplus in the Escrow Account may be remitted to the City, all in
accordance with an Escrow Agreement (the "Escrow Agreement") by and between the City and
the Escrow Agent. A form of the Escrow Agreement is on file in the office of the Clerk -
Treasurer,' Any moneys remitted to the City pursuant to the Escrow Agreement shall be
deposited in the Debt Service Account.
(c) Debt Service Account. There are hereby irrevocably appropriated and pledged to,
and there shall be credited to, the Debt Service Account: (1) the net revenues of the System not
otherwise pledged and applied to the payment of other obligations of the City, in an amount,
2421753x2 16
together with other funds which may herein or hereafter from time to time be irrevocably
appropriated to the account sufficient to meet the requirements of Minnesota Statutes, Section
475.61 for the payment of the principal and interest of the Bonds; (2) all accrued interest
received upon delivery of the Bonds; (3) any sums remitted to the City pursuant to the Escrow
Account; (4) any collections of all taxes which may hereafter be levied in the event that the net
revenues and other funds herein pledged to the payment of the principal and interest on the
Bonds are insufficient therefor; (5) all funds remaining in the Payment Account after payment of
the December 1, 2009 maturities of the Prior Bonds; (6) all investment earnings on funds held in
the Debt Service Account; and (7) any and all other moneys which are properly available and are
appropriated by the governing body of the City to the Debt Service Account. The amount of any
surplus remaining in the Debt Service Account when the Bonds and interest thereon are paid
shall be used consistent with Minnesota Statutes, Section 475.61, Subdivision 4.
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 of the 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 Operation and
Maintenance Accounts 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 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. 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 instrumentality 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
Internal Revenue Code of 1986, as amended (the "Code").
16. Sufficiency of Net Revenues. It is hereby found, determined and declared that the
net revenues of the System are sufficient in amount to pay when due the principal of and interest
on the Bonds and the Outstanding Bonds and a sum at least five percent in excess thereof, and
the net revenues of the System are hereby pledged on a parity lien with the Outstanding Bonds
for the payment of the Bonds and shall be applied for that purpose, but solely to the extent
required to meet the principal and interest requirements of the Bonds as the same become due.
Nothing contained herein shall be deemed to preclude the City from making further pledges and
appropriations of the net revenues of the System for the payment of other or additional
obligations of the City, provided that it has first been determined by the City Council that the
estimated net revenues of the System 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
the net revenues may be made superior or subordinate to, or on a parity with the pledge and
appropriation herein.
17. Excess Net Revenues. Net revenues in excess of those required for the foregoing
may be used for any proper purpose.
2421753v2 17
18. Covenant to Maintain Rates and Charges. In accordance with Minnesota Statutes,
Section 444.075, the City hereby covenants and agrees with the Holders of the Bonds that it will
impose and collect charges for the service, use, availability and connection to the System at the
times and in the amounts required to produce net revenues adequate to pay all principal and
interest when due on the Bonds. Minnesota Statutes, Section 444.075, Subdivision 2, provides
as follows: "Real estate tax revenues should be used only, and then on a temporary basis, to pay
general or special obligations when the other revenues are insufficient to meet the obligations."
19. Continuing Disclosure. The City is the sole 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:
(a) Provide or cause to be provided to the Municipal Securities Rulemaking Board
(the "MSRB") by filing at www.emma.msrb.org 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 the MSRB 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 the MSRB notice of a
failure by the City to provide the annual financial information with respect to the City described
in the Undertaking.
(d) The City agrees that its covenants pursuant to the Rule set forth in this paragraph
and in the Undertaking is 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 Clerk -Treasurer of the City, or any other officer of the City authorized to
act in their place (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 of the Bonds, and (iii) acceptable to the Officers.
20. Defeasance. When all Bonds have been discharged as provided in this paragraph,
all pledges, covenants and other rights granted by this resolution to the registered holders of the
Bonds shall, to the extent permitted by law, cease. The City may discharge its obligations with
respect to any Bonds which are due on any date by irrevocably depositing with the Bond
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 Bond
Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such
deposit. The City may also discharge its obligations with respect to any prepayable Bonds called
2421753x2 18
for redemption on any date when they are prepayable according to their terms, by depositing
with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full,
provided that notice of redemption thereof has been duly given. The City may also at any time
discharge its obligations with respect to any Bonds, subject to the provisions of law now or
hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a
suitable banking institution qualified by law as an escrow agent for this purpose, cash or
securities described in Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest
payable at such times and at such rates and maturing on such dates as shall be required, without
regard to sale and/or reinvestment, to pay all amounts to become due thereon to maturity or, if
notice of redemption as herein required has been duly provided for, to such earlier redemption
date.
21. General Obligation Pledgee,. 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 net revenues of the
System appropriated and pledged to the payment of principal and interest on the Bonds, together
with other funds irrevocably appropriated to the Debt Service Account herein established, 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 it becomes due. If the balance
in the Debt Service Account is ever insufficient to pay all principal and interest then due on the
Bonds and any other bonds payable therefrom, the deficiency shall be promptly paid out of any
other funds of the City which are available for such purpose, and such other funds may be
reimbursed with or without interest from the Debt Service Account when a sufficient balance is
available therein.
22. Certificate of Registration. The Clerk -Treasurer is hereby directed to file a
certified copy of this resolution with the County Auditor of Wright County, Minnesota, together
with such other information as the Auditor shall require, and to obtain the County Auditor's
certificate that the Bonds have been entered in the County Auditor's Bond Register.
23. 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.
24. Negative Covenant as to Use of Bond Proceeds and Project. The City hereby
covenants not to use the proceeds of the Bonds or to use the Project, or to cause or permit them
to be used, or to enter into any deferred payment arrangements for the cost of the Project, in such
a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103
and 141 through 150 of the Code.
2421753x2 19
25. 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
(i) requirements relating to temporary periods for investments, (ii) limitations on amounts
invested at a yield greater than the yield on the Bonds, and (iii) the rebate of excess investment
earnings to the United States. The Mayor, the Clerk -Treasurer or either one of them, are hereby
authorized and directed to make such elections as to arbitrage and rebate matters relating to the
Bonds 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.
26. Qualified Tax -Exempt Obliag tions. 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, and between February 17, 2009 and
January 1, 2011;
(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 2009 will
not exceed $30,000,000;
(e) not more than $30,000,000 of obligations issued by the City during this calendar
year 2009 have been designated for purposes of Section 265(b)(3) of the Code; and
(f) the aggregate face amount of the Bonds does not exceed $30,000,000.
27. Refunding Requirements.
(a) Until retirement of the Prior Bonds, all provisions theretofore made for the
security thereof shall be observed by the City and all of its officers and agents.
(b) On or prior to the delivery of the Bonds, the Mayor and Clerk -Treasurer shall, and
are hereby authorized and directed to, execute on behalf of the City, the Escrow Agreement. The
Escrow Agreement is hereby approved and adopted and made a part of this resolution and the
City covenants that it will promptly enforce all provisions thereof in the event of default
thereunder by the Escrow Agent.
(c) Securities purchased from moneys in the Escrow Accounts shall be limited to
securities set forth in Minnesota Statutes, Section 475.67, Subdivision 8, and any amendments or
supplements thereto. Securities purchased from the Escrow Account shall be purchased
simultaneously with the delivery of the Bonds. The City has investigated the facts and hereby
2421753x2 20
finds and determines that the Escrow Agent is a suitable financial institution to act as an escrow
agent.
(d) The Refunded Bonds shall be redeemed and prepaid in accordance with the terms
and conditions set forth in the Notices of Call for Redemption substantially in the forms attached
to Escrow Agreement, which terms and conditions are hereby approved and incorporated herein
by reference. The Notices of Call for Redemption shall be given pursuant to Escrow Agreement.
Failure to give notice by mail to any registered owner, or any defect therein, will not affect the
validity of any proceedings for the redemption of the Refunded Bonds.
-(e) The Escrow Agent is hereby authorized and directed to purchase on behalf of the
City and in its name the appropriate United States Treasury Securities, State and Local
Government Series, and/or open market securities as provided in paragraph 15(b), from the
proceeds of the Bonds and, to the extent necessary, other available funds, all in accordance with
the provisions of this resolution and Escrow Agreement and to execute all such documents
(including the appropriate subscription form) required to effect such purchase in accordance with
the applicable U.S. Treasury Regulations.
28. Supplemental Resolution. The Prior Resolutions are hereby supplemented to the
extent necessary to give effect to the provisions of this resolution.
29. 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.
30. 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.
The motion for the adoption of the foregoing resolution was duly seconded by member
Stockamp and, after a full discussion thereof and upon a vote being taken thereon, the following
voted in favor thereof Stockamp, Darkenwald, Heidner, Scharber
and the following voted against the same: None
Whereupon the resolution was declared duly passed and adopted.
2421753x2 21
STATE OF MINNESOTA
COUNTY OF WRIGHT
CITY OF OTSEGO
I, the undersigned, being the duly qualified and acting Clerk -Treasurer of the City of
Otsego, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing
extract of minutes with the original thereof on file in my office, and that the same is a full, true
and complete transcript of the minutes of a meeting of the City Council, duly called and held on
the date therein indicated, insofar as such minutes relate to authorizing the issuance and
awarding the sale of $6,360,000 General Obligation Water and Sewer Revenue Refunding
Bonds, Series 2009A.
WITNESS my hand on November 9, 2009.
VINE1,11 "iovvfflomfj►�
Clerk -Treasurer U-
242175312 22