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10-41EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL CITY OF OTSEGO, MINNESOTA HELD: October 25, 2010 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 October 25, 2010, at 6:30 o'clock P.M., for the purpose, in part, of authorizing the issuance and awarding the sale of $22,305,000 General Obligation Water and Sewer Revenue Refunding Bonds, Series 2010C. The following members were present: and the following were absent: Member Schroeder introduced the following resolution and moved its adoption: RESOLUTION NO. 2010-41 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $22,305,000 GENERAL OBLIGATION WATER AND SEWER REVENUE REFUNDING BONDS, SERIES 2010C AND PLEDGING NET REVENUES FOR THE PAYMENT 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"), 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 4. November 9, 2009 (the "Prior 2009 Resolution" and, together with the Prior 2003 Resolution, the Prior 2005 Resolution, and the Prior 2006 Resolution, the "Prior Resolutions"), the City provided for the payment of (i) $1,415,000 aggregate principal amount of the Prior 2003 Bonds which matured or would have matured on December 1, 2009, through and including December 1, 2011, on said dates and further provided that the City 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; (ii) $2,255,000 aggregate principal amount of the Prior 2005 Bonds which matured or would have matured on December 1, 2009, through and including December 1, 2013, on said dates and further provided that the City 27sa272vi continue to be responsible for payment of $6,680,000 aggregate principal amount of the Prior 2005 Bonds which matures on December 1, 2014 through 2024, inclusive, on said dates; and (iii) $1,715,000 aggregate principal amount of the Prior 2006 Bonds which matured or would have matured on December 1, 2009, through and including December 1, 2013, on said dates and further provided that the City continue to be responsible for payment of $6,660,000 aggregate principal amount of the Prior 2006 Bonds which matures on December 1, 2014 through 2026, inclusive, on said dates; and was necessary and desirable to restructure the debt service cost to the City and because the revenues pledged by the Prior Resolutions for repayment of the Prior Bonds were insufficient to pay all principal and interest due or about to become due on the Prior Bonds; and B. WHEREAS, due to the fact the revenues pledged by the Prior Resolutions for repayment of the Prior Bonds continue to be insufficient to pay all principal and interest due or about to become due on the Prior Bonds, the City Council deems it desirable and in the best interest of the City to issue $22,305,000 General Obligation Water and Sewer Revenue Refunding Bonds, Series 2010C (the 'Bonds"), pursuant to Minnesota Statutes, Chapter 475.67, subdivision 13, to provide funds for crossover refundings: (i) on December 1, 2011 (the "2011 Crossover Date"), at a price of par plus accrued interest, of $7,860,000 aggregate principal amount of the Prior 2003 Bonds which mature on December 1, 2012 through 2023, inclusive (the "Refunded 2003 Bonds"), in accordance with the Prior 2003 Resolution; (ii) on the 2011 Crossover Date, at a price of par plus accrued interest, of $6,860,000 aggregate principal amount of the Prior 2005 Bonds which mature on December 1, 2014 through 2024, inclusive (the "Refunded 2005 Bonds"), in accordance with the Prior 2005 Resolution; and (iii) on December 1, 2012 (the "2012 Crossover Date" and, together with the 2011 Crossover Date, the "Crossover Dates"), at a price of par plus accrued interest, of $6,660,000 aggregate principal amount of the Prior 2006 Bonds which mature on December 1, 2014 through 2026, inclusive (the "Refunded 2006 Bonds" and, together with the Refunded 2003 Bonds and the Refunded 2005 Bonds, the "Refunded Bonds"); and C. WHEREAS, the refunding of the Refunded Bonds is consistent with the covenants made with the holders of the Prior Bonds pursuant to the Prior Resolutions; and D. 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 net revenues of the System are the Prior Bonds; and E. WHEREAS, pursuant to the provisions of Minnesota Statues, Section 475.60, Subdivision 2(5), the public sale requirements do not apply to the Bonds and the City is authorized to sell the Bonds by private negotiation in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9); and F. 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: 0 27sa2nvi 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 $ , plus accrued interest to the settlement date, is hereby accepted and the acting Administrator and Finance Director are hereby authorized and directed to execute a contract with the Purchaser on behalf of the City. 2. Bond Terms. (a) Original Issue Date, Denominations; Maturities; Term Bond Option. The Bonds shall be dated November 1, 2010, as the date of original issue, 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 Year Amount 2016 $2,180,000 2022 $2,580,000 2017 2,230,000 2023 2,680,000 2018 2,290,000 2024 1,585,000 2019 2,350,000 2025 730,000 2020 2,425,000 2026 755,000 2021 2,500,000 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 Entry Only 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 N 27sa272vi 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 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 and 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, 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 4 2758272vl 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 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. (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 Onl S stem. 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. 5 2758272vl (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; RefundingFindings. indings. The Bonds 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, 2011, 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 Year Interest Rate 2016 2017 2018 2019 2020 2021 Maturity Year Interest Rate 2022 2023 2024 2025 2026 5. Redemption. All Bonds maturing on December 1, 2021 and thereafter, shall be subject to redemption and prepayment at the option of the City on December 1, 2020, 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 date fixed for redemption. 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 2758272v1 Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. 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 Re isg tray. 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. 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: VA 2758272vl UNITED STATES OF AMERICA STATE OF MINNESOTA WRIGHT COUNTY CITY OF OTSEGO GENERAL OBLIGATION WATER AND SEWER REVENUE REFUNDING BOND, SERIES 2010C Interest Rate Maturity Date Date of Original Issue CUSIP % December 1, November 1, 2010 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, in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, unless called for prepayment, and to pay interest thereon semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date"), commencing June 1, 2011, 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. 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 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. Until termination of the book -entry only system 27582720 pursuant to the Resolution, Bonds may only be registered in the name of the Depository or its Nominee. Optional Redemption. The Bonds of this issue (the "Bonds") maturing on December 1, 2021 and thereafter, are subject to redemption and prepayment at the option of the Issuer on December 1, 2020, 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 Holder of the Bonds at least thirty days prior to the date fixed for redemption. 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 such Bond, without service charge, a new Bond or Bonds of the same series having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance; Purpose; General Obligation. This Bond is one of an issue in the total principal amount of $22,305,000, all of like date of original issue and tenor, except as to number, maturity, interest rate, redemption provision and denomination, 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 October 25, 2010 (the "Resolution"), for the purpose of providing money for a crossover refunding of certain outstanding general obligation bonds of the Issuer. This Bond is 7 27ss2nvi payable out of the Escrow Account and the General Obligation Water and Sewer Revenue Refunding Bonds, Series 2010C 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 by 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 Obligations. 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. 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 10 27ss272vi charges for the service, use and availability of and connection to its municipal water system and its municipal sewer system (the "System") at the times and in amounts necessary to produce net revenues adequate, together with all other sources 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, 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 LE 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 11 a7ssa7avi 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 Transfers to Minors Act (State) 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.) 12 27ss272vl PREPAYMENT SCHEDULE This Bond has been prepaid in part on the date(s) and in the amount(s) as follows: AUTHORIZED SIGNATURE DATE AMOUNT OF HOLDER 13 27ss272vl 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 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 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, 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 November 1, 2010. 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. 14 27sa272vi 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 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 to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 15. Funds and Accounts. There is hereby created a special fund to be designated the "General Obligation Water and Sewer Revenue Refunding Bonds, Series 2010C Fund" (the "Fund") to be administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. 15 The Fund shall be maintained in the manner herein specified until all of the Bonds shall have been fully paid. The Operation and Maintenance Accounts heretofore established by the City under the Prior Resolutions for the operation of the System 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 and are referred to as "net revenues" until the Bonds have been paid. There shall be maintained in the Fund the following separate accounts to which shall be credited and debited all net revenues of the System as hereinafter set forth. The Finance Director 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 and maintained accounts of the Fund for the purposes as follows: (a) Escrow Account. The Escrow Account shall be maintained as an escrow account with Northland Trust Services, Inc. (the "Escrow Agent") in Minneapolis, Minnesota, which is a suitable financial institution within or without the State. $ in proceeds of the sale of the Bonds shall be received by the Escrow Agent and applied to fund the Escrow Account or to pay costs of issuing the Bonds. Proceeds of the Bonds less proceeds used to pay costs of issuance and any proceeds returned to the City are hereby irrevocably pledged and appropriated to the Escrow Account, together with all investment earnings thereon. 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, (i) to pay when due the interest to accrue on the Bonds to and including the Crossover Dates; and (ii) to pay when called for redemption on Crossover Dates, the principal amount of the Prior Bonds. The Escrow Account shall be irrevocable appropriated to the payment of (i) all interest on the Bonds to and including Crossover Dates; and (ii) the principal of the Prior Bonds due by reason of their call for redemption on Crossover Dates. 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 agreement (the 'Escrow Agreement") by and between the City and Escrow Agent, a form of which agreement is on file in the office of the Clerk. Any moneys remitted to the City pursuant to the Escrow Agreement shall be deposited in the Debt Service Account. (b) Debt Service Account. To the Debt Service Account there is hereby pledged and irrevocably appropriated and there shall be credited: (i) after the Crossover Dates, the net revenues of the System not otherwise pledged and applied to the payment of other obligations of the City, in an amount, 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; (ii) all collections of all taxes which may be levied for the payment of the Bonds and interest thereon; (iii) any sums remitted to the City pursuant to the Escrow Agreement; (iv) any funds remaining after Crossover Dates in the Debt Service Accounts established by the Prior Resolutions for the Prior Bonds after the same have been paid and discharged; (v) all investment earnings on funds in the Debt Service Account; and (vi) 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 the Minnesota Statutes, Section 475.61, Subdivision 4. 16 a75sa7avi The moneys in the Debt Service Account shall be used solely to pay the principal of and interest on the Bonds or any other bonds hereafter issued and made payable from the Fund. 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 (i) fora reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued, and (ii) 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 Fund (or any other City account which will be used to pay principal and interest to become due on the Bonds) in excess of amounts which under the applicable federal arbitrage regulations may be invested without regard as to yield shall not be invested in excess of the applicable yield restrictions imposed by the 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 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 federal Internal Revenue Code of 1986, as amended (the "Code"). 16. Coverage Test; Pledge of Net Revenues and Excess 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 a sum at least five percent in excess thereof, and the net revenues of the System are hereby pledged 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. As used herein the term net revenues means the gross revenues derived by the City from the operation of the System, including all charges for service, use, availability, and connection to the System, and all monies received from the sale of any facilities or equipment of the System or any by-products thereof, less all normal, reasonable, or current costs of owning, operating, and maintaining the System. Excess net revenues of the System in excess of those required for the foregoing may be used for any proper purpose. 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. 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, together with the ad valorem taxes herein levied 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. 17 27582rzvi 18. Excess Net Revenues. Net revenues of the System in excess of those required for the foregoing may be used for any proper purpose. 19. Additional Revenue Bonds. 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. 20. General Obligation Pledge. For the prompt and full payment of the principal of 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 balance in the Escrow Account or Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds payable therefrom, the deficiency shall be promptly paid out of any other accounts of the City which are available for such purpose, and such other funds may be reimbursed without interest from the Escrow Account or Debt Service Account when a sufficient balance is available therein. 21. 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 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. 22. Certificate of Registration. A certified copy of this resolution shall be filed in the office of the County Auditor of Wright County, Minnesota, together with such other information as the County Auditor shall require and the County Auditor shall issue a certificate that the Bonds have been entered in the County Auditor's Bond Register. 23. 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 to: 18 z75aa7avi (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 City Clerk, 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. 24. 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. 25. Official Statement. The Official Statement relating to the Bonds prepared and distributed by the Purchaser is hereby approved and the officers of the City are authorized in connection with the delivery of the Bonds to sign such certificates as may be necessary with respect to the completeness and accuracy of the Official Statement. 26. Negative Covenant as to Use of Proceeds and Projects. The City hereby covenants not to use the proceeds of the Bonds or to use the projects financed by the Prior Bonds, 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 to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 27. Tax -Exempt Status of the Bonds, Rebate. The City is subject to the rebate requirement imposed by Section 148(f) of the Code by reason of issuing (together with all subordinate entities thereof, and all entities treated as one issuer with the City) more than IVI 27ss272v1 $5,000,000 of tax-exempt governmental obligations during this calendar year as provided in Section 148(f)(4)(D) of the Code and Section 1.148-8 of the Regulations. 28. Designation as 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 2010 will not exceed $30,000,000; (e) not more than $30,000,000 of obligations issued by the City during this calendar year 2010 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. 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. 29. Escrow Agreement. On or prior to the delivery of the Bonds the Mayor and Clerk 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. 30. Securities; Escrow Agent. Securities purchased from moneys in the Escrow Account 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 finds and determines that the Escrow Agent is a suitable financial institution to act as escrow agent. 31. Redemption of Refunded Bonds. 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 the 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 the 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. 20 2758272v1 32. Purchase of SLGS or Open Market Securities. The Escrow Agent, as agent for the City, 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 from the proceeds of the Bonds and, to the extent necessary, other available Rinds, all in accordance with the provisions of this resolution and the 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. 33. Prior Bonds; Security. 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. 34. Supplemental Resolution. The Prior Resolutions are hereby supplemented to the extent necessary to give effect to the provisions hereof. 35. 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. 36. 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 Darkenwald and, after a full discussion thereof and upon a vote being taken thereon, the following voted in favor thereof. Mayor Stockamp; Councilmembers: Schroeder, Darkenwald, Heidner and Scharber. and the following voted against the same: None Whereupon the resolution was declared duly passed and adopted. 21 275s272vl STATE OF MINNESOTA COUNTY OF WRIGHT CITY OF OTSEGO I, the undersigned, being the duly qualified and acting Clerk 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 providing for the issuance and sale of $22,305,000 General Obligation Water and Sewer Revenue Refunding Bonds, Series 2010C. WITNESS my hand on October 25, 2010. 22 2758272vl J��—ry-) �M� - Clerk ESCROW AGREEMENT GENERAL OBLIGATION WATER AND SEWER REVENUE REFUNDING BONDS, SERIES 2010C AND GENERAL OBLIGATION WATER AND SEWER REVENUE BONDS, SERIES 2003B AND GENERAL OBLIGATION SEWER REVENUE BONDS, SERIES 2005A AND GENERAL OBLIGATION WATER AND SEWER REVENUE BONDS, SERIES 2006A CITY OF OTSEGO, MINNESOTA THIS ESCROW AGREEMENT made as of November 1, 2010, by and between Northland Trust Services, Inc., in Minneapolis, Minnesota (the 'Escrow Agent"), and the City of Otsego, Wright County, Minnesota (the "City"), WITNESSETH THAT: A. WHEREAS, pursuant to a resolution adopted on May 27, 2003, the City has heretofore issued, and now has outstanding $7,860,000 principal amount of General Obligation Water and Sewer Revenue Bonds, Series 2003B, dated June 1, 2003 (the "Outstanding Prior 2003 Bonds"), payable on December 1 in the years and amounts as follows: Outstanding Prior 2003 Bonds Year Amount Year Amount 2012 $505,000 2017 $ 630,000 2013 530,000 2020 2,075,000 2014 550,000 2021 760,000 2015 575,000 2022 795,000 2016 600,000 2023 840,000 The Outstanding Prior 2003 Bonds maturing or subject to mandatory redemption on and after December 1, 2012, in the principal amount of $7,860,000, may be redeemed and prepaid on December 1, 2011, and on any date thereafter, at par plus accrued interest; and B. WHEREAS, pursuant to a resolution adopted on April 25, 2005, the City has heretofore issued, and now has outstanding $6,860,000 principal amount of General Obligation Sewer Revenue Bonds, Series 2005A, dated May 1, 2005 (the "Outstanding Prior 2005 Bonds"), payable on December 1 in the years and amounts as follows: 27ss272v1 Outstanding Prior 2005 Bonds Year Amount Year Amount 2014 $ 505,000 2020 $645,000 2016 1,070,000 2021 670,000 2017 565,000 2022 700,000 2018 590,000 2023 735,000 2019 615,000 2024 765,000 The Outstanding Prior 2005 Bonds maturing or subject to mandatory redemption on and after December 1, 2014, in the principal amount of $6,860,000, may be redeemed and prepaid on December 1, 2011, and on any date thereafter, at par plus accrued interest; and C. WHEREAS, pursuant to a resolution adopted on August 28, 2006, the City has heretofore issued, and now has outstanding $6,660,000 principal amount of General Obligation Water and Sewer Revenue Bonds, Series 2006A, dated September 1, 2006 (the "Outstanding Prior 2006 Bonds"), payable on December 1 in the years and amounts as follows: Outstanding Prior 2006 Bonds Year Amount Year Amount 2014 $385,000 2019 $ 480,000 2015 405,000 2020 505,000 2016 420,000 2021 530,000 2017 435,000 2023 1,135,000 2018 460,000 2026 1,905,000 The Outstanding Prior 2006 Bonds maturing or subject to mandatory redemption on and after December 1, 2014, in the principal amount of $6,660,000, may be redeemed and prepaid on December 1, 2012, and on any date thereafter, at par plus accrued interest; and D. WHEREAS, by the terms of a resolution adopted on October 25, 2010 (the "Refunding Resolution"), the City has called for the redemption and prepayment on December 1, 2011 (the "2011 Crossover Date"), $7,860,000 in principal amount of the Outstanding Prior 2003 Bonds maturing or subject to mandatory redemption on and after December 1, 2012 (the "Refunded 2003 Bonds") pursuant to a Notice of Call for Redemption attached hereto as Exhibit A; and E. WHEREAS, by the terms of the Refunding Resolution the City has called for the redemption and prepayment on the 2011 Crossover Date, $6,860,000 in principal amount of the Outstanding Prior 2005 Bonds maturing or subject to mandatory redemption on and after December 1, 2014 (the "Refunded 2005 Bonds") pursuant to a Notice of Call for Redemption attached hereto as Exhibit B; and 2 27ss272vi F. WHEREAS, by the terms of the Refunding Resolution the City has called for the redemption and prepayment on December 1, 2012 (the "2012 Crossover Date" and, together with the 2011 Crossover Date, the "Crossover Dates"), $6,660,000 in principal amount of the Outstanding Prior 2006 Bonds maturing or subject to mandatory redemption on and after December 1, 2014 (the "Refunded 2006 Bonds" and, together with the Refunded 2003 Bonds and the Refunded 2005 Bonds, the "Refunded Bonds") pursuant to a Notice of Call for Redemption attached hereto as Exhibit C; and G. WHEREAS, to provide for (i) the refunding of the Refunded Bonds by the payment of the principal only thereof on the Crossover Dates and (ii) the payment of interest due on the Refunding Bonds defined below through and including the Crossover Dates, all in accordance with Minnesota Statutes, Section 475.67, including but not limited to Subdivision 13 thereof, the City has pursuant to the Refunding Resolution authorized the issuance of $22,305,000 General Obligation Water and Sewer Revenue Refunding Bonds, Series 2010C, dated November 1, 2010, as the date of original issue (the "Refunding Bonds"); and H. WHEREAS, under the terms of the Refunding Resolution $ of Refunding Bonds proceeds and $ of other available Issuer funds (the "Escrow Account") shall be held and invested in accordance with the terms and conditions of this Escrow Agreement as follows: $ shall simultaneously be invested in securities (the "Initial Escrowed Obligations") as described in the report of Grant Thornton LLP, dated November 1, 2010, attached hereto as Exhibit F (the "Accountant's Report"), which Initial Escrowed Obligations, together with the balance of cash in the amount of $ , shall be used to refund the Refunded Bonds (by payment of the principal only thereof on the Crossover Dates) and to pay interest on the Refunding Bonds through the Crossover Dates. The Initial Escrowed Obligations (or evidence of the investment therein and constructive receipt thereof) and cash are herein called the "Escrow Deposit", provided that the term "Escrow Deposit" may include due bills reflecting Escrowed Obligations not received by the delivery of and payment for the Refunding Bonds (the "Bond Closing") so long as such due bills are secured by the deposit of comparable securities identified as "Substitute Securities" in the Accountant's Report, or by a cashier's check in an amount equal to either the principal and interest due on the Escrowed Obligations so due or any deficiency in principal or interest due on the Substitute Securities (the Initial Escrowed Obligations, said Substitute Securities and any other investments made hereunder, are referred to collectively as the "Escrowed Obligations"); and I. WHEREAS, it is desirable and appropriate that $ of Refunding Bond proceeds and $ of available City funds to be used to pay issuance expenses be paid by the Escrow Agent for disbursement in accordance with the schedule of disbursements (the "Issuance Expenses") set forth in Exhibit D attached hereto and incorporated herein by reference; and NOW, THEREFORE, in consideration of the premises and of the respective agreements on the part of the Escrow Agent and City herein contained, the parties hereto hereby agree as follows: 1. Deposits. The City agrees upon delivery of and payment for the Refunding Bonds at the Bond Closing to forthwith irrevocably deposit with the Escrow Agent the Escrow Deposit, 3 2758272vl as an appropriation of the Escrowed Obligations and all payments of principal and interest thereon, in trust with the Escrow Agent for the security of the holders and owners of the Refunded Bonds and Refunding Bonds. The City further agrees upon the Bond Closing to deposit with the Escrow Agent $ in Refunding Bond proceeds and $ in available City funds and the City authorizes the Escrow Agent (and the Escrow Agent agrees) to disburse the moneys to pay Issuance Expenses. The City further authorizes the Escrow Agent to disburse $ in Refunding Bond proceeds received on Bond Closing and any other residual funds in the Escrow Account to the City for deposit in the Debt Service Account. 2. Acknowledgment of Deposit. Receipt of the Escrow Deposit and Refunding Bonds proceeds to pay Issuance Expenses shall be acknowledged on behalf of the Escrow Agent at the Bond Closing by execution of an Acknowledgment in the form attached hereto as Exhibit E by a duly authorized officer of the Escrow Agent. 3. Compensation; Waiver of Lien. The Escrow Agent hereby acknowledges receipt of the sum of $1,500.00 as and for its full compensation for services to be performed by it as agent under this Agreement. There will be no future billings for services rendered by the Escrow Agent. The Escrow Agent expressly waives any lien upon or claim against the moneys and investments in the Escrow Account. 4. Collection and Remittance; Payment of Principal on Refunded Bonds and Interest on Refunding Bonds; Substitute Securities. The Escrow Agent will collect all remittances of interest on the Escrowed Obligations in the Escrow Account as and when such interest becomes due and payable. The Escrow Agent will cause such Escrowed Obligations to be presented for payment and converted into cash on their respective maturity or due dates in accordance with the schedule of cash payments included in the Accountant's Report, and will remit from the Escrow Account (a) to the paying agent for the Refunding Bonds, the funds required from time to time for the payment when due, on each interest payment date, on or prior to the Crossover Dates for interest on the Refunding Bonds and (b) to the paying agent for the Refunded Bonds, the funds required for the payment when called for redemption on the Crossover Dates, the principal of the Refunded Bonds. If the delivery of any Escrowed Obligations is secured at the Bond Closing by Substitute Securities and/or a cashier's check as hereinabove provided and delivery of the Initial Escrowed Obligations is not made within thirty days after the Bond Closing, the Escrow Agent shall in accordance with the terms of such security arrangement substitute the Substitute Securities and/or cashier's check for the Initial Escrowed Obligations to assure that such schedule of cash payments can be complied with. 5. Sufficiency of Escrow Deposit, Further Deposits. In reliance upon the Accountant's Report, the City represents, and the Escrow Agent acknowledges, that the Escrow Deposit, if the principal of and interest on the Initial Escrowed Obligations are paid in accordance with their terms, is sufficient to produce cash in such amounts to enable the Escrow Agent to make full and timely payments as provided in paragraph 4. If at any time it shall appear to the Escrow Agent that the money in the Escrow Account allocable for such use hereunder will' not be sufficient to make any payment due to the holders of any of the Refunding Bonds or Refunded Bonds, the Escrow Agent shall immediately notify the City. The City thereupon shall forthwith deposit in the Escrow Account from funds on hand and legally available such 4 27582'72vl additional funds as may be required to meet fully the amount to become due and payable and, if necessary, levy for such purpose an ad valorem property tax on all real property in the City subject to taxation without limitation as to rate or amount. Included in the Accountant's Report is a statement that such cash and Escrowed Obligations are sufficient to comply with the requirements set forth in paragraph 4. 6. No Repeal of Refunding Resolution. The City will not repeal, revoke or amend the Refunding Resolution calling the Refunded Bonds for redemption on the Crossover Dates, in accordance with the Notices of Call for Redemption attached hereto as Exhibits A, B and C. 7. Notices of Call for Redemption. The Escrow Agent shall cause the Notices of Call for Redemption attached hereto as Exhibits A, B and C to be given to the paying agents for the Refunded Bonds (if other than the Escrow Agent), by first class mail (postage prepaid) not more than sixty days and not less than thirty days prior to the dates fixed for redemption and therefore to the registered owner of each Refunded Bonds at the address shown on the registration books kept by the registrar for the Refunded Bonds; 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. 8. Title to Moneys, Trust, Remission of Remaining Moneys. It is recognized that title to the Escrowed Obligations and money held in the Escrow Account from time to time shall remain vested in the City but subject always to the prior charge and lien thereon of this Escrow Agreement and the use thereof required to be made by the provisions of this Escrow Agreement. The Escrow Agent shall hold all such money and obligations in a special trust fund and account (herein the "Escrow Account") separate and wholly segregated from all other funds and securities of the Escrow Agent or deposited with the Escrow Agent, and shall never commingle such money or securities with other money or securities, provided that nothing herein contained shall be construed as requiring the Escrow Agent to keep the identical moneys, or any part thereof, received for the Escrow Account, on hand, but moneys of an equal amount, except to the extent such are investments permitted under this Escrow Agreement, shall always be maintained on hand as funds held by the Escrow Agent as trustee, belonging to the City, and a special account thereof evidencing such fact shall at all times be maintained on the books of the Escrow Agent, together with such investments. In the event of the Escrow Agent's failure to account for any money or obligations held by it in the Escrow Account, such money and obligations shall be and remain the property of the City, and if for any reason such money or obligations cannot be identified, all other assets of the Escrow Agent shall be impressed with a trust for the amount thereof and the City shall be entitled to a preferred claim upon such assets. All moneys remaining in the Escrow Account after payment therefrom of all sums required to be paid under this Agreement shall be promptly remitted to the City. 9. Sale and/or Reinvestment. The Escrow Agent may sell and/or reinvest all or a part of the Escrowed Obligations, or the proceeds thereof in (a) direct, non -callable United States obligations or obligations unconditionally guaranteed by the United States government, (b) any governmental bond which bears the highest or next highest rating of Moody's Investor's Services, Standard and Poor's Corporation, or a similarly nationally recognized rating agency, or (c) an investment contract with a bank or insurance company meeting the requirements of Minnesota Statutes, Section 118A.05, Subd. 5, if and only if (i) such sales and/or reinvestment is approved 5 27582720 by the City and otherwise permitted by the laws of Minnesota; (ii) an opinion of a certified public accounting firm is first obtained to the effect that such sale and/or reinvestment will not prevent the Escrow Agent from making all of the payments to the paying agent for the Refunded Bonds and the paying agent for the Refunding Bonds as required in paragraph 4; and (iii) an opinion of nationally recognized bond counsel or tax counsel recognized as having an expertise in the area of tax exempt bonds is first obtained to the effect that such sale and/or reinvestment will not cause the interest on the Refunded Bonds or Refunding Bonds to become includible in the gross income of the owners thereof for federal income tax purposes. Any excess funds created in the Escrow Fund as a result of such sale and/or reinvestment (i.e. funds not required to pay when due, principal of and interest on the respective series of Refunded Bonds and the interest on the Refunding Bonds, as shown on the certified public accountants' opinion required in subsection 9 (ii)) shall be withdrawn from the Escrow Fund and paid by the Escrow Agent to the City, free of any lien of this Escrow Agreement, within ten business days of receipt of the City's written request to withdraw such excess funds. 10. Annual Statement. For as long as any of the Refunded Bonds are outstanding, in January of each year until termination of this Escrow Agreement, commencing January 1, 2011, the Escrow Agent shall render a statement for the preceding year to the City, which statement shall set forth the cash on hand and Escrowed Obligations which have matured and the amounts received by the Escrow Agent by reason of such maturity, the interest earned on any of such Escrowed Obligations, a list of any investments or reinvestments made by the Escrow Agent in other Escrowed Obligations and the interest and/or principal derived therefrom, the amounts of cash paid for the interest on the Refunding Bonds and principal and premium, if any, on the Refunded Bonds as said payments became due and payable, and any other transactions of the Escrow Agent pertaining to its duties and obligations as set forth herein. 11. Trust; Safekeeping. All Escrowed Obligations, moneys and investment income deposited with or received by the Escrow Agent pursuant to this Escrow Agreement shall be subject to the trust created by this Escrow Agreement, and the Escrow Agent shall be liable for the preservation and safekeeping thereof; provided, however, that it shall not be responsible for any depreciation in value of any of the Escrowed Obligations or for the reinvestment of the same except as herein provided. 12. Duties, Obligations and Liabilities. The duties and obligations of the Escrow Agent shall be as prescribed by the provisions of this Escrow Agreement, and the Escrow Agent shall not be liable hereunder except for failure to perform its duties and obligations as specifically set forth herein or to act in good faith in the performance thereof, and no implied duties or obligations shall be incurred by the Escrow Agent other than those specified herein. The Escrow Agent may consult with counsel of its choice, and except as provided in paragraphs 9 and 10, the opinion of such counsel shall be full and complete authorization and protection with respect to any action taken or not taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel. 13. Resignation; Successor. The Escrow Agent may at any time resign and be discharged of its obligations hereunder by giving to the Clerk of the City written notice of such resignation and by refunding to the City a pro rata portion of the escrow fee set forth in 6 27ss272vi paragraph 3, not less than sixty days before the date when the same is to take effect. Such resignation shall take effect upon the appointment and qualification of a successor agent. In the event of receipt of notice of such resignation, a successor shall promptly be appointed by the City, and the Clerk of the City shall immediately give written notice thereof to the predecessor agent. If in a proper case no appointment of a successor agent is made within forty-five days after the receipt by the City of notice of such resignation, the Escrow Agent or the holders of a majority in aggregate principal amount of the Refunded Bonds, by an instrument or concurrent instruments in writing signed by such holders, or by their attorney in fact duly authorized, may appoint a successor Escrow Agent. Any successor agent appointed hereunder shall execute, acknowledge and deliver to its predecessor agent and to the Clerk of the City a written acceptance of such appointment, and shall thereupon without any further act, deed or conveyance become fully vested with all moneys, properties, duties and obligations of its predecessor, but the predecessor shall nevertheless pay over, transfer, assign and deliver all moneys, securities or other property held by it to the successor agent, shall execute, acknowledge and deliver such instruments of conveyance and do such other things as may reasonably be required to vest and confirm more fully and certainly in the successor agent all right, title and interest in and to the property held by it hereunder. Any bank into which the Escrow Agent may be merged or with which it may be consolidated or any bank resulting from any merger or consolidation to which it shall be a party or any bank to which it may sell or transfer all or substantially all of its corporate trust business shall, if the City approves, be the successor agent without the execution of any document or the performance of any further act. 14. Successors and Assigns; Beneficiaries. This Escrow Agreement shall be irrevocable and binding upon and shall inure to the benefit of the City and the Escrow Agent and their respective successors and assigns. In addition, this Escrow Agreement shall constitute a third party beneficiary contract for the benefit of the holders at any time of the Refunded Bonds and the Refunding Bonds. Said third party beneficiaries shall be entitled to enforce performance and observance by the City and the Escrow Agent of the respective agreements and covenants herein contained as fully and completely as if said third parry beneficiaries were parties hereto. 15. Supplemental Agreements. For any one or more of the following purposes, the City and Escrow Agent may enter into any supplemental agreements to this Escrow Agreement as shall not adversely affect the rights of the holder or holders of the Refunded Bonds or Refunding Bonds and as shall not be inconsistent with the terms and provisions of this Escrow Agreement, without the consent of or notice to the holder or holders of the Refunded Bonds or Refunding Bonds: (a) To cure any ambiguity or formal defect or omission in this Escrow Agreement; (b) To grant to, or confer upon, the Escrow Agent for the benefit of the holder or holders of the Refunded Bonds or Refunding Bonds any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holder or holders; and (c) To provide additional funds, securities or properties under this Escrow Agreement. 7 2758272vl 16. Consent Otherwise to Amendments. Except as expressly provided in paragraph 15, this Escrow Agreement may not be repealed, revoked, altered or amended without the unanimous written consent of the City and the holder or holders of the Refunded Bonds and Refunding Bonds and the written consent of the Escrow Agent. 17. Headings. Headings in this Escrow Agreement are for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. 8 27ss272vl IN WITNESS WHEREOF, the City and Escrow Agent have caused this Escrow Agreement to be executed in their respective names and have caused this Escrow Agreement to be dated as of the date above first written. CITY OF OTSEGO, MINNESOTA By Its Mayor By Its Clerk 9 NORTHLAND TRUST SERVICES, INC. Its Chief Operating Officer/Cashier 10 27sa272vl EXHIBIT A NOTICE OF CALL FOR REDEMPTION GENERAL OBLIGATION WATER AND SEWER REVENUE BONDS, SERIES 2003B CITY OF OTSEGO, WRIGHT COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that by order of the City Council of the City of Otsego, Wright County, Minnesota, there have been called for redemption and prepayment on December 1, 2011 those outstanding bonds of the City designated as General Obligation Water and Sewer Revenue Bonds, Series 2003B, dated June 1, 2003, having stated maturity dates or subject to mandatory redemption in the years 2012 through 2023, and totaling $7,860,000 in principal amount and having CUSIP numbers listed below: Year CUSIP Number* 2012 689146 EKO 2013 689146 EL8 2014 689146 EM6 2015 689146 EN4 2016 689146 EP9 2017 689146 EQ7 2020 689146 ETI 2021 689146 EU8 2022 689146 EV6 2023 689146 EW4 The bonds are being called at a price of par plus accrued interest to December 1, 2011, on which date all interest on the bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at U.S. Bank National Association, Attention: Paying Agent Services, 60 Livingston Avenue, St. Paul, Minnesota 55107. Dated: October 25, 2010 BY ORDER OF THE CITY COUNCIL /s/ Tami M. Loff, Clerk *The City shall not be responsible for the selection of or use of the CUSIP numbers, nor is any representation made as to their correctness indicated in the notice. They are included solely for the convenience of the holders. A-1 2758272v1 EXHIBIT B NOTICE OF CALL FOR REDEMPTION GENERAL OBLIGATION SEWER REVENUE BONDS, SERIES 2005A CITY OF OTSEGO, WRIGHT COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that by order of the City Council of the City of Otsego, Wright County, Minnesota, there have been called for redemption and prepayment on December 1, 2011 those outstanding bonds of the City designated as General Obligation Sewer Revenue Bonds, Series 2005A, dated May 1, 2005, having stated maturity dates or subject to mandatory redemption in the years 2014 through 2024, and totaling $6,860,000 in principal amount and having CUSIP numbers listed below: Year CUSIP Number* 2014 689146 FX1 2016 689146 FZ6 2017 689146 GAO 2018 689146 GB8 2019 689146 GC6 2020 689146 GD4 2021 689146 GE2 2022 689146 GF9 2023 689146 GG7 2024 689146 GH5 The bonds are being called at a price of par plus accrued interest to December 1, 2011, on which date all interest on the bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at Northland Trust Services, Inc., Suite 2000, 45 South 7th Street, Minneapolis, MN 55402-1625. Dated: October 25, 2010 BY ORDER OF THE CITY COUNCIL /s/ Tami M. Loff. Clerk *The City shall not be responsible for the selection of or use of the CUSIP numbers, nor is any representation made as to their correctness indicated in the notice. They are included solely for the convenience of the holders. In 2758272vi EXHIBIT C NOTICE OF CALL FOR REDEMPTION GENERAL OBLIGATION WATER AND SEWER REVENUE BONDS, SERIES 2006A CITY OF OTSEGO, WRIGHT COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that by order of the City Council of the City of Otsego, Wright County, Minnesota, there have been called for redemption and prepayment on December 1, 2012 those outstanding bonds of the City designated as General Obligation Water and Sewer Revenue Bonds, Series 2006A, dated September 1, 2006, having stated maturity dates or subject to mandatory redemption in the years 2014 through 2026, and totaling $6,660,000 in principal amount and having CUSIP numbers listed below: Year CUSIP Number* 2014 689146 HM3 2015 689146 HN1 2016 689146 HP6 2017 689146 HQ4 2018 689146 HR2 2019 689146 HSO 2020 689146 HT8 2021 689146 HU5 2023 689146 HW1 2026 689146 HZ4 The bonds are being called at a price of par plus accrued interest to December 1, 2012, on which date all interest on the bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at Northland Trust Services, Inc., Suite 2000, 45 South 7th Street, Minneapolis, MN 55402-1625. Dated: October 25, 2010 BY ORDER OF THE CITY COUNCIL /s/ Tami M. Loff, Clerk *The City shall not be responsible for the selection of or use of the CUSIP numbers, nor is any representation made as to their correctness indicated in the notice. They are included solely for the convenience of the holders. C-1 2758272v1 EXHIBIT D ISSUANCE EXPENSES D-1 2758272v1 EXHIBIT E ACKNOWLEDGMENT I, being duly authorized to execute this acknowledgment on behalf of Northland Trust Services, Inc., as Escrow Agent, do hereby acknowledge that the City of Otsego, Minnesota (the "City"), has this date irrevocably deposited with the Escrow Agent in trust for the security of the holders and owners of the City's outstanding General Obligation Water and Sewer Revenue Bonds, Series 2003B, dated June 1, 2003, General Obligation Sewer Revenue Bonds, Series 2005A, dated May 1, 2005, General Obligation Water and Sewer Revenue Bonds, Series 2006A, dated September 1, 2006 and General Obligation Water and Sewer Revenue Refunding Bonds, Series 2010C, dated November 1, 2010, that certain Escrow Deposit required to be deposited with the Escrow Agent at the Bond Closing in accordance with the Escrow Agreement, dated November 1, 2010, by and between the Escrow Agent and the City; and the City has in addition deposited $ to pay the Issuance Expenses set forth on Exhibit D to the Escrow Agreement. Dated: November 18, 2010. 27ss272vl NORTHLAND TRUST SERVICES, INC. :A E-1 Its Chief Operating Officer/Cashier EXHIBIT F ACCOUNTANT'S REPORT [to be supplied by Grant Thornton LLP] F-1 2758272vl