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13-012CITY OF SHOREWOOD RESOLUTION NO. 13 -012 A RESOLUTIONT AWARDING THE SALE OF GENERAL OBLIGATION WATER REVENUE REFUNDING BONDS, SERIES 2013A, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $2,260,000; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; PROVIDING FOR THEIR PAYMENT; PROVIDING FOR THE ESCROWING AND INVESTMENT OF A PORTION OF THE PROCEEDS THEREOF; AND PROVIDING FOR THE REDEMPTION OF BONDS REFUNDED THEREBY BE IT RESOLVED By the City Council of the City of Shorewood, Hennepin County, Minnesota (the "City") as follows: Section 1. Findings; Sale of Bonds. 1.01. Authorization of Sale of Bonds. Pursuant to a resolution adopted by the City Council of the City on January 14, 2013 (the "Authorizing Resolution "), the City Council gave preliminary approval to the issuance of the City's General Obligation Water Revenue Refunding Bonds, Series 2013A (the "Bonds "). The Bonds will be issued pursuant to the terms of Minnesota Statutes, Chapters 444 and 475, as amended, specifically, Section 475.67, subdivisions 3 and 13 (collectively, the "Acf'), in order to (i) achieve the current refunding of the City's General Obligation Water Revenue Bonds, Series 2005A (the "Series 2005A Bonds "), dated June 1, 2005, and issued in the original aggregate principal amount of $1,525,000, of which $1,035,000 in principal amount will be called for redemption on March 6, 2013; and (ii) achieve the advance crossover refunding of the City's General Obligation Water Revenue Bonds, Series 2006A (the "Series 2006A Bonds "), dated November 1, 2006, and issued in the original aggregate principal amount of $1,450,000, of which $1,160,000 in principal amount (constituting the 2016 through 2022 maturities thereof) will be called for redemption on January 1, 2014. Proceeds of the Series 2005A Bonds and the Series 2006A Bonds (together, the "Refunded Bonds ") were used to finance the construction of various improvements to the City's water system (collectively, the "Improvements "). 1.01 Award to the Purchaser and Interest Rates. The proposal of United Bankers' Bank, Bloomington, Minnesota (the "Purchaser ") to purchase the Bonds of the City is determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds price of $2,250,960 (par amount of $2,260,000, less underwriter's discount of $9,040), plus accrued interest to date of delivery, if any, for Bonds bearing interest as follows: Year Interest Rate Year Interest Rate 2014 0.250% 2019 0.950% 2015 0.350 2020 1.150 2016 0.500 2021 1.300 2017 0.600 2022 1.450 2018 0.750 Net interest cost: 1.1183303% 1.03. Purchase Contract. The sum of $11,300, being the amount proposed by the Purchaser in excess of $2,239,660, shall be credited to the Debt Service Fund hereinafter created, the Current 4176890 MNI SH230 -52 B -1 Refunding Fund hereinafter created, or the Escrow Fund hereinafter created unless the funds are determined to be deposited in another fund by action of the Finance Director of the City in consultation with the City's financial advisor. The Finance Director is directed to deposit the good faith check of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful proposers forthwith. The Mayor and City Administrator are directed to execute a contract with the Purchaser on behalf of the City. 1.04. Terms and Principal Amount of Bonds. The City will forthwith issue and sell the Bonds pursuant to the Act in the original aggregate principal amount of $2,260,000, originally dated March 1, 2013, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R -1, upward, bearing interest as above set forth, and maturing serially on January 1 in the years and amounts as follows: Year Amount Year Amount 2014 $100,000 2015 260,000 2016 265,000 2017 265,000 2018 270,000 2019 $270,000 2020 275,000 2021 275,000 2022 280,000 (a) $1,065,000 in principal amount of the Bonds (the "Series 2005A Refunding Bonds ") maturing in the amounts and on the dates set forth below are being used to redeem and prepay the outstanding maturities of the Series 2005A Bonds: Year Amount Year Amount 2016 160,000 2020 2014 $100,000 2019 $105,000 2015 100,000 2020 110,000 2016 105,000 2021 110,000 2017 100,000 2022 230,000 2018 105,000 (b) The remainder of the Bonds in "Series 2006A Refunding Bonds ") maturing in the being used to refund in advance of maturity and through 2022 maturities of the Series 2006A Bonds: Year Amount the principal amount of $1,195,000 (the amounts and on the dates set forth below are at their redemption date the outstanding 2016 Year Amount 2015 $160,000 2019 $165,000 2016 160,000 2020 165,000 2017 165,000 2021 165,000 2018 165,000 2022 50,000 1.05. Optional Redemption. The City may elect on January 1, 2018, and on any day thereafter to prepay Bonds due on or after January 1, 2019. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify DTC (as defined in Section 8 hereof) of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. 4176890 MNI SR230 -52 B -2 Section 2. Registration and Payment. 2.01. Registered Forni. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates: Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on January 1 and July 1 of each year, commencing January 1, 2014, to the registered owners of record as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Resister. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Imnroper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon 4176890 MNI SIU30 -52 B-3 the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. G) Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04. Appointment of Initial Registrar. The City appoints Northland Trust Services, Inc., Minneapolis, Minnesota, as the initial Registrar. The Mayor and the City Administrator are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the City Administrator must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of the City Administrator and executed on behalf of the City by the signatures of the Mayor and the City Administrator, provided that those signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is 4176890 MNl SH230 -52 B -4 conclusive evidence that it has been authenticated and delivered under this resolution. When the Bonds have been so prepared, executed and authenticated, the City Administrator will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sate heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in EXHIBIT B attached hereto, with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 3. Form of Bond. 3.01. Execution of the Bonds. The Bonds will be printed or typewritten in substantially the form attached hereto as EXHIBIT B. 3.02. Approving Legal Opinion. The City Administrator is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond. Section 4. Bonds: Security: Covenants: Escrow 4.01. Debt Service Fund (a) For the convenience and proper administration of the moneys to be borrowed and repaid on the Bonds, and to provide adequate and specific security for the Purchaser and holders from time to time of the Bonds, there is hereby created a special fund to be designated the General Obligation Water Revenue Refunding Bonds, Series 2013A Debt Service Fund (the "Debt Service Fund") to be administered and maintained by the Fiance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Debt Service Fund will be maintained in the manner herein specified until all of the Refunded Bonds have been paid and until all of the Bonds and the interest thereon have been fully paid. (b) The City will continue to operate and maintain its Water Fund to which will be credited all gross revenues of the water system of the City and out of which will be paid all normal and reasonable expenses of current operations of the water system. Any balance therein will be deemed net revenues (the "Net Revenues ") and will be transferred from time to time to the Debt Service Fund as set forth herein. To the Debt Service Fund there is hereby pledged and irrevocably appropriated and there will be credited: (i) with respect to the Series 2005A Refunding Bonds, Net Revenues of the water system to be used solely to pay principal of and interest on the Series 2005A Refunding Bonds; (ii) with respect to the Series 2006A Refunding Bonds, any balance remitted to the City upon the termination of the Escrow Agreement (as defined herein); (iii) with respect to the Series 2006A Refunding Bonds, Net Revenues of the water system and 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 Section 475.61 of the Act for the payment of the principal of and interest on the Series 2006A Refunding Bonds after January 1, 2014; (iv) any amount over the minimum purchase price paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03 hereof; (v) a pro rata share of the accrued interest paid by the Purchaser upon the closing and delivery of the Bonds and attributable to the Series 2005A Refunding Bonds, if any; (vi) all investment earnings on funds in the Debt Service Fund; and (vii) any and all other 4P6890 MNI SH230 -52 B -5 moneys which are properly available and are appropriated by the City Council to the Debt Service Fund. The amount of any surplus remaining in the Debt Service Fund when the Bonds and interest thereon are paid will be used as provided in Section 475.61, subdivision 4 of the Act. There will always be retained in the Debt Service Fund a sufficient amount to pay principal of and interest on all the Bonds, and the Finance Director must report any current or anticipated deficiency in the Debt Service Fund to the City Council. (c) The debt service fund heretofore established for the Series 2005A Bonds pursuant to the resolution authorizing the issuance and sale of the Series 2005A Bonds (the "Series 2005A Bonds Resolution ") is hereby terminated, and all monies therein are hereby transferred to the Debt Service Fund herein created. The debt service fluid heretofore established for the Series 2006A Bonds pursuant to the resolution authorizing the issuance and sale of the Series 2006A Bonds (the "Series 2006A Bonds Resolution ") shall be terminated on January 1, 2014, following the redemption of the Series 2006A Bonds, and all monies therein are hereby transferred to the Debt Service Fund. 4.02. Current Refunding Fund. Proceeds of the Series 2005A Refunding Bonds, less the appropriations made in Section 4.01 hereof and less costs of issuance of $17,494.75, will be deposited in a separate fiend (the "Current Refunding Fund') to be used solely to redeem and prepay the Series 2005A Bonds. Any balance remaining in the Current Refunding Fund after the redemption of the Series 2005A Bonds shall be deposited in the Debt Service Fund herein created. 4.03. Escrow Fund. A portion of the proceeds of the Bonds in the amount of $1,205,393.75 (including $137.81 in accrued interest) will be deposited in a separate fund (the "Escrow Fund ") maintained by Northland Trust Services, Inc., Minneapolis, Minnesota, acting as escrow agent (the "Escrow Agent'). Such funds will be received by the Escrow Agent and applied to fund the Escrow Fund or to pay costs of issuing the Bonds. Proceeds of the Series 2006A Refunding Bonds not used to pay costs of issuance on the Bonds are hereby irrevocably pledged and appropriated to the Escrow Fund, together with all investment earnings thereon. The Escrow Fund will be held in a non- interest - bearing cash account, the amount deposited therein being sufficient to (i) pay when due the interest to accrue on the Series 2006A Refunding Bonds to and including January 1, 2014 (the "Series 2006A Bonds Redemption Date "); and (ii) pay on the Series 2006A Bonds Redemption Date the principal amount of the Series 2006A Bonds then outstanding. The Escrow Fund will be irrevocably appropriated to the payment of the principal of and interest on the Series 2006A Bonds until the proceeds of the Series 2006A Refunding Bonds therein are applied to prepayment of the Series 2006A Bonds. The moneys in the Escrow Fund will be used solely for the purposes herein set forth and for no other purpose, except that any surplus in the Escrow Fund may be remitted to the City, all in accordance with the Escrow Agreement by and between the City and the Escrow Agent. Any moneys remitted to the City upon termination of the Escrow Agreement will be deposited in the Debt Service Fund. 4.04. Prior Resolution Pledges. The pledges and covenants of the City made by the Series 2005A Bonds Resolution and the Series 2006A Bonds Resolution (together, the "Prior Resolutions ") relating to the ownership, protection of and other particulars governing the operation and financial management of the water system of the City and the Improvements thereto are restated and confirmed in all respects. The provisions of the Prior Resolutions are hereby supplemented to the extent necessary to give full effect to the provisions hereof. 4.05. 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 will be and are hereby irrevocably pledged. If the balance in the Escrow Fund or Debt Service Fund is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of monies in the general fund of the City which are available for such 4176890 MNI S1230-52 B -6 purpose, and such general fund may be reimbursed with or without interest from the Escrow Fund or Debt Service Fund when a sufficient balance is available therein. 4.06. Debt Coverage. It is hereby determined that the estimated collection of Net Revenues of the water system for the payment of principal of and interest on the Bonds will produce at least five percent in excess of the amount needed to meet, when due, the principal and interest payments on the Series 2005A Bonds and the principal and interest payments on the Series 2006A Bonds maturing after the Series 2006A Bonds Redemption Date; therefore, no tax levy is needed at this time. 4.07. Filing of Resolution. The Deputy City Clerk is authorized and directed to file a certified copy of this resolution with the Taxpayer Services Division Manager of Hennepin County, Minnesota, and to obtain the certificate required by Section 475.63 of the Act. Section 5. Refunding; Findings: Redemption of Refunded Bonds. 5.01. Purpose of Refunding. The outstanding maturities of the Series 2005A Bonds will be called for redemption on March 6, 2013 in the amount of $1,035,000. The outstanding 2016 through 2022 maturities of the Series 2006A Bonds will be called for redemption on January 1, 2014, in the amount of $1,160,000. It is hereby found and determined that based upon information presently available from the City's financial advisor, the issuance of the Bonds, a portion of which will be used to redeem and prepay the Refunded Bonds, is consistent with covenants made with the holders of the Refunded Bonds. 5.02. Findings. It is hereby found and determined that based upon information presently available from the City's financial advisors, the issuance of the Bonds will result in a reduction of debt service cost to the City on the Series 2006A Bonds, such that the present value of such debt service or interest cost savings (the "Reduction ") is at least 3.00% of the debt service on the Series 2006A Bonds. The Reduction, after the inclusion of all authorized expenses of refunding in the computation of the effective interest rate on the Bonds, is adequate to authorize the issuance of the Bonds as provided by Section 475.67, subdivisions 12 and 13 of the Act. 5.03. Notices of Call for Redemption. The Series 2005A Bonds maturing on January 1, 2014, and thereafter will be redeemed and prepaid on the Series 2005A Bonds Redemption Date in accordance with their terms and in accordance with the terms and conditions set forth in the form of Notice of Call for Redemption attached hereto as EXHIBIT C -1, which terms and conditions are hereby approved and incorporated herein by reference. The Series 2006A Bonds maturing on .January 1, 2016, and thereafter will be redeemed and prepaid on the Series 2006A Bonds Redemption Date in accordance with their terms and in accordance with the terms and conditions set forth in the form of Notice of Call for Redemption attached hereto as EXHIBIT C -2, which terms and conditions are hereby approved and incorporated herein by reference. The registrars for the Refunded Bonds are authorized and directed to send a copy of the respective Notice of Call for Redemption to each registered holder of the Refunded Bonds. 5.04. Escrow Agreement. On or prior to the delivery of the Bonds, the Mayor and the City Administrator are hereby authorized and directed to execute on behalf of the City an escrow agreement (the "Escrow Agreement") with the Escrow Agent in substantially the form now on file with the City Administrator. All essential terms and conditions of the Escrow Agreement including payment by the City of reasonable charges for the services of the Escrow Agent, are 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. 4176890 MN1 SH230 -52 B -7 Section 6. Authentication of Transcr ut. 6.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, may be deemed representations of the City as to the facts stated therein. 6.02. Certification as to Official Statement. The Mayor, City Administrator, and Finance Director are hereby authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. 6.03. Other Certificates. The Mayor, City Administrator, and Finance Director are hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the City or incumbency of its officers, at the closing the Mayor, the City Administrator, and the Finance Director shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation, and the Finance Director shall also execute and deliver a certificate as to payment for and delivery of the Bonds. 6.04. Payment of Costs of Issuance. Costs of issuance of the Bonds will be paid by the Escrow Agent pursuant to the Escrow Agreement. Section 7. Tax Covenants. 7.01. Tax - Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code "), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 7.02. No Rebate Required. (a) The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments and limitations on amounts invested at a yield greater than the yield on the Bonds. (b) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements with respect to the Series 2005ARefunding Bonds, the City finds, determines and declares that: 4176890 MNr SH230 -52 B -8 G) each of the Series 2005A Bonds was issued as part of an issue which was treated as meeting the rebate requirements by reason of the exception for governmental units issuing $5,000,000 or less of bonds; (ii) the average maturity of the Series 2005A Refunding Bonds does not exceed the remaining average maturity of the Series 2005A Bonds; and (iii) no maturity of the Series 2005A Refunding Bonds has a maturity date which is later than the date which is 30 years after the date the Series 2005A Bonds were issued. (c) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements with respect to the Series 2006A Refunding Bonds, the City finds, determines and declares that the aggregate face amount of all tax - exempt bonds (other than private activity bonds) issued by the City (and all subordinate entities of the City) during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code. Furthermore: G) each of the Series 2006A Bonds was issued as part of an issue which was treated as meeting the rebate requirements by reason of the exception for governmental units issuing $5,000,000 or less of bonds; (ii) the average maturity of the Series 2006A Refunding Bonds does not exceed the remaining average maturity of the Series 2006A Bonds; and (iii) no maturity of the Series 2006A Refunding Bonds has a maturity date which is later than the date which is 30 years after the date the Series 2006A Bonds were issued. 7.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, 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. 7.04. 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 makes the following factual statements and representations: (a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b) the City hereby designates the Bonds as "qualified tax- exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax- exempt obligations (other than private activity bonds which are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2013 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2013 have been designated for purposes of Section 265(b)(3) of the Code. 7.05. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. 4176890 TOM S11230 -52 B -9 Section 8. Book -Entry System; Limited Obligation of City. 8.01. The Depository Trust Company. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.04 hereof. Upon initial issuance, the ownership of each such Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns ( "DTC "). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 8.02. 11 . With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the "Participants ") or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the propose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Administrator of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede & Co." will refer to such new nominee of DTC; and upon receipt of such a notice, the City Administrator will promptly deliver a copy of the same to the Registrar and Paying Agent. 8.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Leiter of Representations (the "Representation Letter") which shall govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 8.04. Transfers Outside Book -Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the 4176890 MNI SH230 -52 B -10 Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 8.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and notices with respect to the Bond will be made and given, respectively in the manner provided in DTC's Operational Arrangements, as set forth in the Representation Letter. Section 9. Continuing Disclosure. 9.01. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and City Administrator and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. 9.02. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. Section 10. Defeasance. When all Bonds and all interest thereon have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in fall. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. 4176890 MNI SH230 -52 B -11 EXHIBIT A PROPOSALS NORTHLAND SEC UTRITII S TABULATION OF BIDS CITY OF SHOREW'00D.M.I-N—NESOTA $2,�60000' GENERAL 013LIGATIONIYA]E R P-EVENIT-JE REFITNDLNG BONDS.SERIES 201 A .A:R`ARD DATE OF SALE MOODYS UINDERLYIS9G PATDX, BIDDER, P-URCFLg ,sr- PRICE UNITED BANKERS' BANK MONDAY, IAIh UARY 28, 2.01 .3 All TRUE I-\=,EST INTFRE T COST COST (Tics UMITED BANKERS' BANK $2-261c, 010 C10 S7-;, 1119,002% Bloomimo NIN FTN CAPITAL NLAR= •$1,19, ls 0c, S, z, 1141697?% Me=Ius- TIN ROBERT W. BAIRD S CO --K $2',! 3 61 Mumeapulis, NIN P1PER!AFFPAY Slli 689 DS 121199212 S1 ROSC. INC S -s 6�J s T 09 1321963P� M,nonlolz e Falls- WI STIFELT,71CYLAUS&C'0 7c 1,' 5812'7% MmGuc, —IN TE\C .,_.3G 96 1 M�594V,� Vimplus- TN Pwamoumfeducedfrom S`270,000ms"'60M0 31 xv3 tine adtnsaecfr TIC n 1 11771'6% '11. Offt,e 45 Sowh 7,L Szxee S ve2W MNL.,an h , 5540' Offic, T,,U Fw I -S00451-29r Off,,, F.515661 61l, 417689v3 MNI SH230-52 B-12 FORM OF BOND No. R- UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF SHOREWOOD GENERAL OBLIGATION WATER REVENUE REFUNDING BOND SERIES 2013A Date of Rate Maturity Oriainal Issue CUSIP _% January 1, 20 March 1, 2013 Registered Owner: Cede & Co. The City of Shorewood, Minnesota, a duly organized and existing municipal corporation in Hennepin County, Minnesota (the "City "), acknowledges itself to be indebted and for value received promises to pay to the Registered Owner specified above or registered assigns, the principal sum of $ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above, payable January 1 and July 1 in each year, commencing January 1, 2014, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by Northland Trust Services, Inc., Minneapolis, Minnesota as Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City may elect on January 1, 2018, and on any day thereafter to prepay Bonds due on or after January 1, 2019. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify The Depository Trust Company ( "DTC ") of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. This Bond is one of an issue in the aggregate principal amount of $2,260,000 all of like original issue date and tenor, except as to number, maturity date, and interest rate, all issued pursuant to a resolution adopted by the City Council on January 28, 2013 (the "Resolution "), for the purpose of providing money to refund the outstanding principal amount of certain general obligation bonds of the City and to refund in advance of maturity on January 1, 2014, a portion of certain general obligation bonds of the City, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapters 444 and 475, specifically Section 475.67, subdivisions 3 and 13. The principal and interest is payable primarily from net revenues of the water system of the City, and a portion of the interest 4176890 MNI SH230 -52 B -13 hereon is payable through January 1, 2014 out of an escrow fund held by an escrow agent and a debt service fund, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy ad valorem taxes on all taxable property in the City in the event of any deficiency in net revenues of the water system, which taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. The City Council has designated the issue of Bonds of which this Bond forms a part as "qualified tax - exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code ") relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. IT IS HEREBY CERTIFIED AND RECITED That in and by the Resolution, the City has covenanted and agreed that it will continue to own and operate the water plant and system free from competition by other like municipal utilities; that adequate insurance on said plant and system and suitable fidelity bonds on employees will be carried; that proper and adequate books of account will be kept showing all receipts and disbursements relating to the Water Fund, into which it will pay all of the gross revenues from the water plant and system; that it will also create and maintain a General Obligation Water Revenue Refunding Bonds, Series 2013A Debt Service Fund, into which it will pay, out of the net revenues from the water system a sum sufficient to pay principal hereof and interest thereon when due; and that it will provide, by ad valorem tax levies, for any deficiency in required net revenues of the water system of the City. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional or statutory limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Registrar by manual signature of one of its authorized representatives. 4176890 MNI SH230 -52 B -14 IN WITNESS WHEREOF, the City of Shorewood, Hennepin County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Administrator and has caused this Bond to be dated as of the date set forth below. Dated: March 1, 2013 CITY OF SHOREWOOD, MINNESOTA (Facsimile) (Facsimile) Mayor City Administrator CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. NORTHLAND TRUST SERVICES, INC. By Its Authorized Officer ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will 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 entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT Custodian (Gust) (Minor) under Uniform Gifts or Transfers to Minors Act, State of Additional abbreviations may also be used though not in the above list. 4176890 MNI SH230 -52 B -15 ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ( "STAMP "), the Stock Exchange Medallion Program ( "SEMP "), the New York Stock Exchange, Inc. Medallion Signatures Program ( "MSP ") or other such "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee 4176890 MM SH230 -52 B -16 PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Date of Registration Registered Owner Cede & Co. Federal ID #13- 2555119 4t7689v3 MNI SH230 -52 B_17 Signature of Officer of Registrar EXHIBIT C -1 NOTICE OF CALL FOR REDEMPTION OF SERIES 2005A BONDS $1,525,000 CITY OF SHOREWOOD, MINNESOTA GENERAL OBLIGATION WATER REVENUE BONDS SERIES 2005A NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Shorewood, Hennepin County, Minnesota (the "City "), there have been called for redemption and prepayment on March 6, 2013 all outstanding bonds of the City designated as General Obligation Water Revenue Bonds, Series 2005A, dated June 1, 2005, having stated maturity dates of January 1 in the years 2014 through 2025, both inclusive, totaling $1,035,000 in principal amount, and with the following CUSIP numbers: Year of Maturity Amount CUSIP Number 2014 $ 70,000 825227 JM4 2015 70,000 825227 JN2 2016 75,000 825227 JP7 2017 75,000 825227 JQ5 2018 80,000 825227JR3 2019 85,000 825227JS1 2020 85,000 825227JT9 2021 90,000 825227 JU6 2022 95,000 825227 JV4 2025 310,000 825227 JY8 The bonds are being called at a price of par plus accrued interest to March 6, 2013, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of Northland Trust Services, Inc., 45 South Seventh Street, Suite 2000, Minneapolis, Minnesota 55402, on or before March 6, 2013. Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2003, the City is required to withhold a specified percentage of the principal amount of the redemption price payable to the holder of any Bonds subject to redemption and prepayment on the Redemption Date, unless the City is provided with the Social Security Number or Federal Employer Identification Number of the holder, properly certified. Submission of a fully executed Request for Taxpayer Identification Number and Certification, Form W -9 (Rev. December 2011), will satisfy the requirements of this paragraph. Dated: BY ORDER OF THE CITY COUNCIL By /s/ William S. Joynes City Administrator City of Shorewood, Minnesota 4176890 MINI S11230 -52 C -2_1 EXHIBIT C -2 NOTICE OF CALL FOR REDEMPTION OF SERIES 2006A BONDS $1,450,000 CITY OF SHOREWOOD, MINNESOTA GENERAL OBLIGATION WATER REVENUE BONDS SERIES 2006A NOTICE IS FIEREBY GIVEN that, by order of the City Council of the City of Shorewood, Hennepin County, Minnesota (the "City "), there have been called for redemption and prepayment on January 1, 2014 all outstanding bonds of the City designated as General Obligation Water Revenue Bonds, Series 2006A, dated November 1, 2006, having stated maturity dates of January I in the years 2016 through 2022, both inclusive, totaling $1,160,000 in principal amount, and with the following CUSIP numbers: Year of Maturity Amount CUSIP Number 2016 $255,000 825227 KD2 2018 280,000 825227 KF7 2020 300,000 825227 K113 2022 325,000 825227 KK6 The bonds are being called at a price of par plus accrued interest to January 1, 2014, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of Northland Trust Services, Inc., 45 South Seventh Street, Suite 2000, Minneapolis, Minnesota 55402, on or before January 1, 2014. Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2003, the City is required to withhold a specified percentage of the principal amount of the redemption price payable to the holder of any Bonds subject to redemption and prepayment on the Redemption Date, unless the City is provided with the Social Security Number or Federal Employer Identification Number of the holder, properly certified. Submission of a fully executed Request for Taxpayer Identification Number and Certification, Form W -9 (Rev. December 2011), will satisfy the requirements of this paragraph. Dated: BY ORDER OF THE CITY COUNCIL By /s/ William S. Jovnes City Administrator City of Shorewood, Minnesota 4176890 MNI SH230 -52 C -2 -2 STATE OF MINNESOTA COUNTY OF HENNEPIN CERTIFICATE OF TAXPAYER SERVICES DIVISION MANAGER AS TO REGISTRATION WHERE NO AD VALOREM TAX LEVY I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota, hereby certify that a certified copy of a resolution adopted by the governing body of the City of Shorewood, Minnesota (the "City "), on January 28, 2013, relating to the City's General Obligation Water Revenue Refunding Bonds, Series 2013A, in the original aggregate principal amount of $2,260,000, dated March 1, 2013, has been filed in my office and said bonds have been entered on the register of obligations in my office. WITNESS My hand and official seal this day of , 2013. Taxpayer Services Division Manager Hennepin County, Minnesota (SEAL) Deputy County Auditor 417689v3 MNI SH230 -52