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EDA Res 15-004SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 15 -004 RESOLUTION RATIFYING THE SALE OF PUBLIC SAFETY FIRE FACILITY LEASE REVENUE REFUNDING BONDS, SERIES 2016C (CITY OF DEEPHAVEN, MINNESOTA LEASE OBLIGATION); AND PROVIDING FOR THE REDEMPTION OF BONDS REFUNDED THEREBY BE IT RESOLVED By the Board of Commissioners (the "Board ") of the Shorewood Economic Development Authority (the "Authority ") as follows: Section 1. Background; Authorization. (a) The City of Deephaven, Minnesota (the "City ") is authorized by Minnesota Statutes, Section 465.71, as amended, to acquire real and personal property under lease - purchase agreements. (b) The Excelsior Fire District (the "District ") leases certain property from the City pursuant to the Ground Lease (East Side), dated as of September 1, 2002 (the "Original Ground Lease "), as amended by a First Amendment to Ground Lease (East Side), dated as of January 1, 2007 (the "First Amendment to Ground Lease "). The Authority has agreed with the District that pursuant to the Subground Lease (East Side), dated as of September 1, 2002 (the "Original Subground Lease "), as amended by a First amendment to Subground Lease (East Side), dated as of January 1, 2007 (the "First Amendment to Subground Lease "), the Authority will acquire certain property from the District. The Authority will lease such property, together with certain buildings, structures or improvements now or hereafter located thereon (the "Fire Facilities "), to the City pursuant to a Lease Purchase Agreement (East Side), dated as of September 1, 2002 (the "Original Lease "), as amended by a First Amendment to Lease Purchase Agreement (East Side), dated as January 1, 2007 (the "First Amendment to Lease "). (c) With the Authority's consent, the City has entered into a Sublease Purchase Agreement (East Side), dated as of September 1, 2002 (the "Sublease "), with the District, pursuant to which the District undertakes the City's obligations under the Lease (hereinafter defined). (d) Pursuant to a Trust Indenture, dated as of September 1, 2002 (the "Original Indenture "), between the Authority and U.S. Bank National Association, as trustee (the "Trustee "), as supplemented by a First Supplemental Trust Indenture, dated as of January 1, 2007 (the "First Supplemental Indenture "), the Authority issued its Public Safety Fire Facility Lease Crossover Refunding Revenue Bonds, Series 2007C (City of Deephaven, Minnesota Lease Obligation) (the "Series 2007C Bonds "), in the original aggregate principal amount of $1,585,000. Proceeds of the Series 2007C Bonds were used to achieve the advance crossover refunding of the Authority's Public Safety Fire Facility Lease Revenue Bonds, Series 2002C (City of Deephaven, Minnesota Lease Obligation) (the "Series 2002C Bonds "), issued in the original aggregate principal amount of $2,060,000. Proceeds of the Series 2002C Bonds financed a portion of the cost of the acquisition, construction, and equipping of the Fire Facilities, Error! Unknown document property name. 3 (e) The Authority has determined to redeem and prepay the outstanding Series 2007C Bonds through the issuance of its Public Safety Fire Facility Lease Revenue Refunding Bonds, Series 20160 (City of Deephaven, Minnesota Lease Obligation) (the "Series 2016C Bonds "), in the original aggregate principal amount of $875,000. (f) The Series 2016C Bonds will be issued under the terms of a Second Supplemental Trust Indenture, dated as of January 1, 2016 (the "Second Supplemental Indenture," and collectively with the Original Indenture and the First Supplemental Indenture, the "Indenture "), between the Authority and the Trustee, as Additional Bonds pursuant to the Indenture. (g) In connection with the issuance of the Series 2016C Bonds, the Authority will (i) enter into a Second Amendment to Subground Lease (East Side), dated as of January 1, 2016 (the "Second Amendment to Subground Lease," and collectively with the Original Subground Lease and the First Amendment to Subground Lease, the "Subground Lease "), with the District; and (ii) enter into a Second Amendment to Lease Purchase Agreement (East Side), dated as of January 1, 2016 (the "Second Amendment to Lease," and collectively with the Original Lease and the First Amendment to Lease, the "Lease "), with the City. (h) Pursuant to an Assignment and Security Agreement, dated as of September 1, 2002 (the "Original Assignment "), between the Authority and the Trustee, as modified by a First Supplemental Assignment and Security Agreement, dated as of January 1, 2007 (the "First Supplemental Assignment "), and a Second Supplemental Assignment and Security Agreement, dated as of January 1, 2016 (the "Second Supplemental Assignment," and collectively with the Original Assignment and the First Supplemental Assignment, the "Assignment"), the Authority will assign to the Trustee all of the Authority's right, title and interest in and to the Subground Lease Lease, the Lease, and the Lease Payments to be made by the City under the Lease (the "Lease Payments "), other than certain rights to indemnification and payment of expenses, as security for the Series 2016C Bonds. (i) Forms of the Second Amendment to Subground Lease, the Second Amendment to Lease, the Third Supplemental Indenture, and the Third Supplemental Assignment have been prepared and submitted to the Authority and are on file with the Authority. 0) On October 26, 2015, the Board authorized Authority staff and consultants to negotiate the sale of the Series 2016C Bonds, subject to ratification by the Board. Section 2. Sale of Series 2016C Bonds. 2.01. Award to the Purchaser and Interest Rates. The proposal of Northland Securities, Inc., Minneapolis, Minnesota (the "Purchaser "), to purchase the Series 20160 Bonds is hereby found and determined to be a reasonable offer, and the Board hereby ratifies the actions of Authority staff and consultants in accepting the Purchaser's proposal, said proposal being to purchase the Series 2016C Bonds at a price of $882,618.55 (par amount of $875,000.00, plus original issue premium of $15,406.05, less underwriter's discount of $7,787.50), plus accrued interest to date of delivery, if any, for Series 20160 Bonds bearing interest as follows: Error! Unknown document property name. 4 Year Interest Rate Year Interest Rate 2017 2.000% 2020 2.000% 2018 2.000 2021 2.000 2019 2.000 2022 2.000 2.02. Purchase Contract. The actions of the President and the Executive Director to execute a contract with the Purchaser on behalf of the Authority are hereby ratified and approved. 2.02. Tenns and Principal Amounts of the Series 2016C Bonds. The Authority will forthwith issue and sell the Series 2016C Bonds in the total principal amount of $875,000, originally dated January 7, 2016, 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 February 1, in the years and amounts as follows: Year Amount 2017 $140,000 2018 140,000 2019 145,000 2.03. Redemption. Year Amount 2020 $145,000 2021 150,000 2022 155,000 (a) Optional Redemption. The Series 20160 Bonds are not subject to optional redemption prior to maturity. (b) Extraordinary Redemption. The Series 2016C Bonds are subject to extraordinary redemption, at the option of the Authority, on any business day, in whole or in part, at a redemption price equal to par plus accrued interest to the redemption date, upon the happening of certain events of damage to or destruction or condemnation of the Site or the Fire Facilities or change of law rendering the Lease unenforceable or impossible of performance, as more fully described in the Indenture and the Lease. 2.04. Execution, Authentication and Delivery. The Series 2016C Bonds, substantially in the form provided in the Indenture, will be prepared under the direction of the Authority staff and executed on behalf of the Authority by the signatures of the President and the Executive Director, provided that all signatures may be printed, engraved or lithographed facsimiles of the originals. Notwithstanding such execution, a Series 20160 Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this resolution or the Indenture unless and until a certificate of authentication on the Series 2016C Bond has been duly executed by the manual signature of an authorized representative of the Trustee. When the Series 2016C Bonds have been so prepared, executed and authenticated, the Authority will deliver the same to The Depository Trust Company, New York, New York, on behalf of the Purchaser, upon payment of the purchase price, and the Purchaser is not obligated to see to the application of the purchase price. Section 3. Approval and Execution of Documents. The Second Amendment to Subground Lease, the Second Amendment to Lease, the Second Supplemental Indenture, and the Second Supplemental Assignment are hereby approved. The President and the Executive Director are authorized and directed to execute and deliver the Second Amendment to Subground Lease, the Second Amendment to Lease, the Second Supplemental Indenture, and the Second Supplemental Assignment on behalf of the Authority, substantially in the forms now on file, but with all such changes therein as shall be approved Error! Unknown document property name. by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. Copies of all of the transaction documents shall be delivered, filed and recorded as provided therein. The President and the Executive Director are also authorized and directed to execute such other instruments as may be required to give effect to the transactions herein contemplated. Section 4. Payment; Security; edges and Covenants. The Series 2016C Bonds are payable solely from the Lease Payments to be made by the City under the Lease and by the District under the Sublease and from other moneys realized by the Trustee after default or termination of the Lease by the City, as provided therein. No property or funds of the Authority, other than the property pledged pursuant to the Indenture and assigned to the Trustee pursuant to the Assignment, is pledged to the payment of the Series 2016C Bonds. Section 5. Refunding, Findings; Redemption of Series 2007C Bonds. 5.01. Reduction of Debt Service Cost. It is hereby found and determined that based upon information presently available from the Authority's municipal advisor, the issuance of the Series 2016C Bonds is necessary and desirable for the reduction of debt service cost to the Authority, the City, and the District. 5.03. Redemption of Series 2007C Bonds. The Series 2007C Bonds maturing on February 1, 2017 and thereafter will be redeemed and prepaid on February 15, 2016. The Series 2007C Bonds will be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in EXHIBIT A attached hereto. The Trustee, as trustee for the Series 2007C Bonds, is authorized and directed to send a copy of the Notice of Call for Redemption to each registered holder of the Series 2007C Bonds. Section 6. Authentication of Transcript; Issuance Costs. 6.01. Authority Proceedings and Records. The officers of the Authority are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Series 2016C Bonds, certified copies of proceedings and records of the Authority relating to the Series 2016C Bonds 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 Series 2016C Bonds and such instruments, including any heretofore furnished, may be deemed representations of the Authority as to the facts stated therein. 6.02. Certification as to Official Statement, The President and the Executive Director are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Series 2016C 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 President and the Executive 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 Series 2016C Bonds or the organization of the Authority or incumbency of its officers, at the closing the President and the Executive Director shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation, and the Executive Director shall also execute and deliver a certificate as to payment for and delivery of the Series 2016C Bonds. Error! Unknown document property name. Section 7. Tax Covenants. 7.01. Tax - Exempt Bonds, The Authority covenants and agrees with the holders from time to time of the Series 2016C 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 Series 2016C 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 Series 2016C Bonds. 7.02. Rebate. The Authority will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Series 2016C Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield. on the Series 2016C Bonds. 7.03. Not Private Activity Bonds. The Authority further covenants not to use the proceeds of the Series 2016C Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Series 2016C 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 Series 2016C Bonds as "qualified tax - exempt obligations" within the meaning of Section 265(b)(3) of the Code, the Authority makes the following factual statements and representations: (a) the Series 2016C Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b) the Authority hereby designates the Series 2016C 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 any private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the Authority (and all subordinate entities of the City) during calendar year 2016 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the Authority during calendar year 2016 have been designated for purposes of Section 265(b)(3) of the Code. 7.05. Procedural Requirements. The Authority 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. Error! Unknown document property name. Approved by the Board of Commissioners of the Shorewood Economic Development Authority this 14th day of December, 2015. Pre c+fff- Error! Unknown document property name. EXHIBIT A NOTICE OF CALL FOR REDEMPTION $1,585,000 SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY PUBLIC SAFETY FIRE FACILITY LEASE REVENUE CROSSOVER REFUNDING BONDS SERIES 2007C (CITY OF DEEPHAVEN, MINNESOTA LEASE OBLIGATION) NOTICE IS HEREBY GIVEN that, by order of the Board of Commissioners of the Shorewood Economic Development Authority (the "Authority "), there have been called for redemption and prepayment on February 15, 2016 all outstanding bonds of the Authority designated as the Public Safety Fire Facility Lease Revenue Crossover Refunding Bonds, Series 2007C (City of Deephaven, Minnesota Lease Obligation) (the "Bonds "), dated as of January 1, 2007, having stated maturity dates of February 1 in the years 2017 through 2022, both inclusive, totaling $830,000 in principal amount, and with the following CUSIP numbers: Year of Maturity Amount CUSIP 2017 $125,000 825228 DX4 2018 130,000 825228 DY2 2019 135,000 825228 DZ9 2020 140,000 825228 EA3 2021 145,000 825228 EB1 2022 155,000 825228 EC9 The Bonds are being called at a price of par plus accrued interest to February 15, 2016, 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 the Trustee in the City of Saint Paul, Minnesota, at the following address, on or before February 15, 2016: U.S. Bank National Association Corporate Trust Operations, 3rd Floor P.O. Box 64111 St. Paul, MN 55164 -0111 If by hand or overnight: U.S. Bank National Association 60 Livingston Avenue EP- MN -WS3C Bond Drop Window, 1St Floor St. Paul, MN 55107 Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2009, the Trustee 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 Trustee 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 BOARD OF COMMISSIONERS OF THE SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY By /s/ Bill Joynes Executive Director Shorewood Economic Development Authority Error! UnIcnown- document property name. 10