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08-003 EDAExtract of Minutes of Meeting of the Shorewood Economic Development Authority, Hennepin County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the Shorewood Economic Development Authority was duly held in the City Hall in the City of Shorewood, Minnesota on Monday, July 28, 2008, commencing at 7:00 P.M. The following members were present: President Lizee, Boardmembers Bailey, Turgeon, Wellens and Woodruff. and the following were absent: None The President announced that the next order of business was consideration of a proposal for the purchase of the Authority's $1,310,000 Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligation). The Acting Executive Director presented the proposal. After due consideration of the proposal, Commissioner Wellens then introduced the following resolution, and moved its adoption: RESOLUTION NO. 08-003 A RESOLUTION AWARDING THE SALE OF $1,310,000 PUBLIC PROJECT LEASE REVENUE BONDS, SERIES 2008A (CITY OF SHOREWOOD, MINNESOTA LEASE OBLIGATION); FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT BE IT RESOLVED By the Board of Commissioners of the Shorewood Economic Development Authority (the "Authority") as follows: Section 1. Sale of Bonds. 1.01. Back rg ound. The City of Shorewood, Minnesota (the "City") is authorized by Minnesota Statutes, Section 465.71, as amended to acquire such items of real and personal property as are needed to carry out its governmental and proprietary functions, and to acquire such real and personal property by entering into lease-purchase agreements. The City has determined that it is necessary for it to acquire pursuant to aLease-Purchase Agreement, dated as of August 1, 2008 (the "Lease"), between the City and the Authority, the Authority's interest in certain real property described in the Lease (the "Site"), together with certain buildings, structures and improvements to be constructed thereon, and certain equipment to be contained therein (the "Facilities"). 1.02. Construction of Facilities. The development of the Site and the Facilities is consistent with and furthers the economic development functions of the Authority, and the Authority is willing to acquire a leasehold interest in the Site pursuant to a Ground Lease, dated as of August 1, 2008 (the "Ground Lease"), between the City and the Authority, and to acquire title to the Facilities and to lease and sell the Site and the Facilities to the City, pursuant to the Lease. To provide funds for the construction of the Facilities, the Authority will issue its $1,310,000 Shorewood Economic Development Authority Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligation) (the "Bonds"). 1.03. Award to the Purchaser and Interest Rates. The proposal of Northland Securities, Inc. (the "Purchaser") to purchase the Bonds is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bonds at a price of $1,274,826.50 plus accrued interest to date of delivery, for Bonds bearing interest as follows: Year of Interest Maturity Rate 2009 2.850% 2010 3.150 2 Term Bonds due December 1, 2012 at 3.50%. Term Bonds due December 1, 2014 at 3.75%. Term Bonds due December 1, 2016 at 4.00%. Term Bonds due December 1, 2018 at 4.20%. Term Bonds due December 1, 2020 at 4.35%. Term Bonds due December 1, 2022 at 4.50%. Term Bonds due December 1, 2024 at 4.60%. Term Bonds due December 1, 2026 at 4.70%. Term Bonds due December 1, 2028 at 4.80%. True interest cost: 4.7639381% 1.04. Purchase Contract. The President and the Acting Executive Director are directed to execute a contract with the Purchaser on behalf of the Authority. 1.05. Terms and Principal Amounts of the Bonds. The Authority will forthwith issue and sell the Bonds pursuant to Minnesota Statutes, Sections 469.091 to 469.1081, as amended (the "Act") in the total principal amount of $1,310,000, originally dated August 1, 2008, 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 December 1 in the years and amounts as follows: Year of Year of Maturity Amount Maturity Amount 2009 $ 25,000 2020 $ 135,000 2010 45,000 2022 145,000 2012 100,000 2024 155,000 2014 105,000 2026 175,000 2016 115,000 2028 190,000 2018 120,000 Term Bonds due December 1, 2012 in the aggregate principal amount of $100,000. Term Bonds due December 1, 2014 in the aggregate principal amount of $105,000. Term Bonds due December 1, 2016 in the aggregate principal amount of $115,000. Term Bonds due December 1, 2018 in the aggregate principal amount of $120,000. Term Bonds due December 1, 2020 in the aggregate principal amount of $135,000. Term Bonds due December 1, 2022 in the aggregate principal amount of $145,000. Term Bonds due December 1, 2024 in the aggregate principal amount of $155,000. Term Bonds due December 1, 2026 in the aggregate principal amount of $175,000. Term Bonds due December 1, 2028 in the aggregate principal amount of $190,000. 1.06. Optional Redemption. Bonds due on or after December 1, 2017 are subject to optional redemption and prepayment on December 1, 2016 and on any date thereafter. Redemption may be in whole or in part and if in part, at the option of the City, so long as the 3 Lease is in effect, and in such. manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the Authority will notify DTC (as defined in Section 7 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. 1.07. Mandatory Redemption. The Bonds maturing on December 1, 2012, are subject to mandatory sinking fund redemption on December 1 of the following years in the following principal amounts: Year Principal Amount 2011 $50,000 2012* 50,000 * Maturity The Bonds maturing on December 1, 2014, are subject to mandatory sinking fund redemption on December 1 of the following years in the following principal amounts: Year Principal Amount 2013 $50,000 2014* 55,000 * Maturity The Bonds maturing on December 1, 2016, are subject to mandatory sinking fund redemption on December 1 of the following years in the following principal amounts: Year Principal Amount 2015 $55,000 2016* 60,000 * Maturity 4 The Bonds maturing on December 1, 2018, are subject to mandatory sinking fund redemption on December 1 of the following years in the following principal amounts: Year 2017 2018* * Maturity Principal Amount $60,000 60,000 The Bonds maturing on December 1, 2020, are subject to mandatory sinking fund redemption on December 1 of the following years in the following principal amounts: Year 2019 2020* * Maturity Principal Amount $65,000 70,000 The Bonds maturing on December 1, 2022, are subject to mandatory sinking fund redemption on December 1 of the following years in the following principal amounts: Year 2021 2022* * Maturity Principal Amount $70,000 75,000 The Bonds maturing on December 1, 2024, are subject to mandatory sinking fund redemption on December 1 of the following years in the following principal amounts: Year 2023 2024* * Maturity Principal Amount $75,000 80,000 5 The Bonds maturing on December 1, 2026, are subject to mandatory sinking fund redemption on December 1 of the following years in the following principal amounts: Year Principal Amount 2025 $85,000 2026* 90,000 * Maturity The Bonds maturing on December 1, 2028, are subject to mandatory sinking fund redemption on December 1 of the following years in the following principal amounts: Year Principal Amount 2027 $95,000 2028* 95,000 * Maturity The Bonds maturing on December 1, 2012, December 1, 2014, December 1, 2016, December 1, 2018, December 1, 2020, December 1, 2022, December 1, 2024, December 1, 2026, and December 1, 2028 are hereinafter referred to as the "Term Bonds." The principal amounts of the Term Bonds subject to mandatory sinking fund redemption on any date may be reduced through earlier optional redemptions, with any partial redemptions of the Term Bonds credited against future mandatory sinking fund redemptions of such Term Bonds in such order as the Authority shall determine. Section 2. Registration and Payment. 2.01. Registered Form. 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 June 1 and December 1 of each year, commencing June 1, 2009, to the registered owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 6 2.03. Registration. The Authority 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 Authority and the Registrar with respect thereto are as follows: (a) Re ig ster. 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 Authority. (e) Improper 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 Authority 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 the registered owner or upon 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 7 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 a 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 of an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the Authority 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 Authority. 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. (i) 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 Re isg tray. The Authority appoints Northland Trust Services, Inc, Minneapolis, Minnesota, as the initial Registrar. The President and the Acting Executive Director are authorized to execute and deliver, on behalf of the Authority, 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 Authority agrees to pay, from Additional Lease Payments paid by the City under the Lease, the reasonable and customary charges of the Registrar for the services performed. The Authority 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. 2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of the Acting Executive Director and executed on behalf of the Authority by the signatures of the President and the Acting Executive Director, provided that all 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 S of any 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 conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed and authenticated, the Authority will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The Authority may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3 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. The Bonds will be printed or typewritten in substantially the following form: UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF SHOREWOOD SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY No. R- Tntere~t R ate Public Project Lease Revenue Bond, Series 2008A Maturity Date of Original Issue CUSIP December 1, 20 Registered Owner: CEDE & CO. Principal Amount: August 1, 2008 The Shorewood Economic Development Authority, a public body corporate and politic and political subdivision of the State of Minnesota (the "Authority"), for value received, hereby 9 promises to pay, but solely from the sources hereinafter described, to the Registered Owner specified above or registered assigns, the principal amount set forth above on the Maturity date specified above, upon the presentation and surrender hereof, and to pay to the Registered Owner hereof interest on such principal amount from such sources at the interest rate specified above from the Date of Original Issue set forth above, or the most recent interest payment date to which interest has been paid or duly provided for as specified below, on June 1 and December 1 of each year, commencing June 1, 2009, until said principal amount is paid. Principal and interest are payable in lawful money of the United States of America at the office of Northland Trust Services, Inc., Minneapolis, Minnesota, or of its successor, as Bond Registrar. Interest shall be paid on each interest payment date by check or draft mailed to the person in whose name this Bond is registered at the close of business on the fifteenth (15th) day of the month immediately preceding such interest payment date (whether or not a business day) at the Owner's address set forth on the registration records maintained by the Bond Registrar. Upon written request to the Bond Registrar, delivered at least fifteen (15) days prior to an interest payment date by a registered Owner of $500,000 or more in aggregate original principal amount of the Bonds, payment of interest may be made by wire transfer to such registered Owner. Any such interest not punctually paid or provided for will cease to be payable on such regular record dates and such defaulted interest may be paid to the person in whose name this Bond is registered at the close of business on a special record date for the payment of such defaulted interest established by the Bond Registrar. It is hereby certified and recited and the Authority has found: that all acts, conditions and things required to be done precedent to and in the issuance of this Bond and the series of which it is a part have been properly done, have happened and have been performed in regular and due time, form and manner as required by law; and that this Bond and the series of which it is a part does not constitute a debt of the Authority within the meaning of any constitutional or statutory limitation. This Bond is issued pursuant to Minnesota Statutes, Sections 469.091 to 469.1081, as amended (the "Act"), and in conformity with the provisions, restrictions and limitations thereof. This Bond does not constitute or give rise to a charge against the general credit or properties or taxing powers of the Authority or the City of Shorewood, Minnesota (the "City") and does not grant to the Owner of this Bond any right to have the Authority or the City levy any taxes or appropriate any funds for the payment of the principal hereof or interest hereon, nor is this Bond a general obligation or a pecuniary liability of the Authority or the City or the individual officers or agents thereof. This Bond does not constitute an indebtedness of the Authority or the City within the meaning of any state constitutional provision or statutory limitation. This Bond and interest hereon are payable solely from Lease Payments to be paid by the City pursuant to a Lease-Purchase Agreement, dated as of August 1, 2008 (the "Lease"), between the Authority and the City, or other moneys held by the Bond Registrar in a fund or account appropriated to the payment of the Bonds of this series under the Bond Resolution adopted by the Authority on July 28, 2008 (the "Resolution"). The Authority's Board of Commissioners 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) 10 of the I1lternal 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. THE OBLIGATION OF THE CITY TO MAKE LEASE PAYMENTS PURSUANT TO THE LEASE IS SUBJECT TO ANN UAL APPROPRIATION BY THE CITY COUNCIL OF THE CITY. IN THE EVENT THE CITY COUNCIL DETERMINES NOT TO APPROPRIATE MONEYS FOR THE PAYMENT OF LEASE PAYMENTS DUE IN A FISCAL YEAR, THE LEASE WILL TERMINATE AT THE END OF THE THEN-CURRENT FISCAL YEAR, AND THE CITY WILL HAVE NO FURTHER OBLIGATION TO MAKE LEASE PAYMENTS PURSUANT TO THE LEASE. This Bond is one of a duly authorized series of special, limited obligation Bonds in an aggregate principal amount of $1,310,000, in denominations of $5,000 or integral multiples thereof not exceeding the principal amount maturing in any year, and numbered from R-1 upwards, and of like tenor and effect except as to serial number, denomination, interest rate, maturity and right of prior redemption, all of which have been authorized by law to be issued and have been issued or are to be issued by the Authority pursuant to the Resolution, to provide financing for the acquisition and construction of the Site and the Facilities described in the Lease. The Bonds are equally and ratably secured by the Resolution and the Lease. Pursuant to a Ground Lease, dated as of August 1, 2008 (the "Ground Lease") between the City and the Authority, the City has leased the Site described in the Lease to the Authority. Reference is hereby made to the Ground Lease, the Lease, the Resolution, and any amendments or supplements thereto .for a description and limitation of the property, revenues and funds pledged and appropriated to the payment of the Bonds, the nature and extent of the security thereby created, the rights of the Owners of the Bonds, the rights, duties and immunities of the Bond Registrar, and the rights, immunities and obligations of the Authority and the City thereunder. Certified copies of the Resolution and executed counterparts of the Ground Lease and the Lease are on file at the office of the Authority. Bonds due on or after December 1, 2017 are subject to optional redemption, at the election of the City, so long as the Lease is in effect, in whole or in part, and if in part in such manner as the City shall determine, on December 1, 2016 and any date thereafter, at a redemption price of par plus accrued interest. Notice of any such redemption shall be given to the registered Owner of each Bond to be redeemed by first class mail, addressed to the Owner's registered address, not later than thirty (30) days prior to the date fixed for redemption. Prior to the date fixed for redemption, funds shall be deposited with the Bond Registrar sufficient to pay the Bonds called and accrued interest thereon. Upon the happening of the above conditions, Bonds thus called shall not bear interest on or after the call date and, except for the purpose of payment from the funds so deposited, shall no longer be protected by the Resolution. This Bond is transferable, as provided in the Resolution, only upon the registration records maintained by the Bond Registrar by the Registered Owner hereof in person or by the 11 Owner's duly authorized attorney, upon surrender of this Bond for transfer at the office of the Bond Registrar, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Bond Registrar duly executed by, the Registered Owner hereof or the Owner's duly authorized attorney, and, upon payment of any tax, fee or other governmental charge required to be paid with respect to such transfer, one or more Bonds of the same maturity, aggregate principal amount and interest rate will be issued to the designated transferee or transferees. The Bonds are issuable only as fully registered bonds without coupons in denominations of $5,000 or any integral multiple thereof not exceeding the principal amount maturing in any year. As provided in the Resolution and subject to certain limitations set forth therein, the Bonds are exchangeable for a like aggregate principal amount of Bonds of the same maturity and interest rate, of different authorized denominations, as requested by the Registered Owner or the Owner's duly authorized attorney upon surrender thereof to the Bond Registrar. In case an Event of Default as defined in the Resolution or the Lease occurs, or in the event ofnon-appropriation under the Lease by the City Council of the City, the principal of this Bond and all other Bonds outstanding may be declared or may become due and payable prior to the stated maturity hereof in the manner and with the effect and subject to the conditions provided in the Resolution, but no Owner of any Bond shall have any right to enforce the provisions of the Resolution, the Lease or the Ground Lease except as provided in the Resolution. With the consent of the Authority and the Bond Registrar, and to the extent permitted by and as provided in the Resolution, the terms and provisions of the Resolution, the Lease and the Ground Lease, or of any instrument supplemental thereto, may be modified or altered by the assent or authority of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding thereunder. This Bond shall not be valid or become obligatory for any purpose until it shall have been authenticated by the execution of the certificate hereon endorsed by the Bond Registrar under the Resolution. (The remainder of this page is intentionally left blank.) 12 IN WITNESS WHEREOF, the Shorewood Economic Development Authority has caused this Bond to be executed in its name by the facsimile signatures of its duly authorized officers, all as of the Date of Original Issue specified above. Date: SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY (Facsimile) President (Facsimile) Acting Executive Director (Form of Bond Registrar's Certificate) This is one of the Bonds described in the within mentioned Resolution. Date: NORTHLAND TRUST SERVICES, INC. Bond Registrar By Authorized Signature 13 IN WITNESS WHEREOF, the Shorewood Economic Development Authority has caused this Bond to be executed in its name by the facsimile signatures of its duly authorized officers, all as of the Date of Original Issue specified above. Date: SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY s ~~~ d e President mg Executive Director (Form of Bond Registrar's Certificate) This is one of the Bonds described in the within mentioned Resolution. Date: NORTHLAND TRUST SERVICES, INC. Bond Registrar By Authorized Signature 13 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (Please Print or Typewrite Name and Address of Transferee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Please Insert Social Security Number or Other Identifying Number of Assignee Notice: The signature to this assignment must correspond with the name as it appears on the face of this Bond in every particular, without alteration or any change whatever. PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Bond Registrar in the name of the person last noted below. Signature of Date of Registration Registered Owner Bond Registrar August , 2008 Cede & Co. Federal ID #13-2555119 3.02. Approving Le ag 1 Opinion. The Acting Executive Director is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which will be complete except as to dating thereof and to cause the opinion to be printed on or accompany each Bond. 14 Section 4. Payment; Security; Pledges and Covenants. 4.01. Debt Service Fund. (a) The Bonds are payable from the Debt Service Fund hereby created, and the Lease Payments payable by the City under the Lease are hereby pledged to the Debt Service Fund. There is also appropriated to the Debt Service Fund $3,115.56, representing the accrued interest paid by the Purchaser upon closing and delivery of the Bonds. So long as there is no Event of Default under the Lease and the City has not terminated the Lease due to nonappropriation, the Debt Service Fund shall be held and administered by the City. (b) Project Fund. The proceeds of the Bonds, less the appropriations made in paragraph (a), will be deposited with the City in a separate project fund to be used solely to defray expenses of the construction of the Facilities. When the Facilities are completed and the cost thereof paid, the project fund is to be closed, and any balance thereon credited to the Debt Service Fund. 4.02. Lease Pa nom. The Authority covenants to apply all Lease Payments received by the Authority from the City pursuant to the Lease to the payment of the principal of and interest on the Bonds. The Bonds shall not constitute or give rise to a charge against the general credit or properties or taxing powers of the Authority or the City and shall not grant to the Owners of the Bonds any right to have the Authority or the City levy any taxes or appropriate any funds for the payment of the principal thereof or interest thereon. The Bonds are not a general obligation or a pecuniary liability of the Authority or the City or the individual officers or agents thereof. The Bonds shall not constitute an indebtedness of the Authority or the City within the meaning of any state constitutional provision or statutory limitation. The Bonds and interest thereon are payable solely from Lease Payments to be paid by the City pursuant to the Lease, or other moneys held by the Bond Registrar in a fund or account appropriated to the payment of the Bonds. The obligation of the City to make Lease Payments pursuant to the Lease is subject to annual appropriation by the City Council of the City. In the event the City Council determines not to appropriate moneys for the payment of Lease Payments due in a fiscal year, the Lease will terminate at the end of the then-current fiscal year, and the City will have no further obligation to make Lease Payments pursuant to the Lease. In case an Event of Default as defined in the Lease occurs, or in the event of non- appropriation by the City Council of the City, the Authority may declare the principal of all Bonds outstanding to be due and payable prior to the stated maturity thereof, and upon such declaration, the principal of all Bonds outstanding shall become due and payable. After such declaration, all moneys received by the Authority and applicable to the Bonds pursuant to the Lease shall be applied to the equal and proportional payment of all Bonds outstanding and claims for interest thereon, without priority of any Bond over another Bond, or of principal over interest or interest over principal. 15 Section 5. Authentication of Transcript. 5.01. Bond Transcript. The officers of the Authority 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 Authority relating to the Bonds and to the financial condition and affairs of the Authority, and such other certificates, affidavits and transcripts as maybe 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, maybe deemed representations of the Authority as to the facts stated therein. 5.02. Official Statement. The President and Acting 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 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. 5.03. Approval of Documents. The Ground Lease and the Lease are hereby approved. The President and the Acting Executive Director are authorized and directed to execute and deliver the Ground Lease and the Lease on behalf of the Authority, substantially in the forms on file, but with all such changes therein as shall be approved 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, the Acting Executive Director and other officers of the Authority are also authorized and directed to execute such other instruments as may be required to give effect to the transactions herein contemplated. 5.04. Payment of Costs of Issuance. The Authority authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses (other than amounts payable to Kennedy & Graven, Chartered as Bond Counsel) to the Registrar on the closing date for further distribution as directed by the Authority's financial adviser, Northland Securities, Inc. Section 6. Tax Covenants. 6.01. Tax-Exempt Obligations. The Authority 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 maybe 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. 16 6.02. No Rebate Required. (a) The Authority 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, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States, if the Bonds (together with other obligations reasonably expected to be issued in calendar year 2008) exceed the small-issuer rebate exception amount of $5,000,000. (b) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the Authority finds, determines and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the Authority (and all subordinate entities of the Authority) 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. 6.03. Not Private Activity Bonds. The Authority 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. 6.04. Qualified Tax-Exempt Obli atg ions. In order to qualify the 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 Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b) the Authority 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 that are not qualified 501(c)(3) bonds) which will be issued by the Authority (and all subordinate entities of the Authority) during calendar year 2008 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the Authority during calendar year 2008 have been designated for purposes of Section 265(b)(3) of the Code. 6.05. 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. 17 Section 7. Book-Entry System; Limited Obligation of Authority. 7.01. DTC. 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 1.03 hereof. Upon initial issuance, the ownership of each 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. 7.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the Authority, 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 Authority, 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 purpose of payment of principal 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 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 Authority's obligations with respect to payment of principal of 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 Authority 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 Authority will promptly deliver a copy of the same to the Registrar and the Paying Agent. '7.03. Representation Letter. The Authority has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the "Representation Letter") which will govern payment of principal of and interest on the Bonds and notices with. respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the Authority with respect to the Bonds will agree to take all action necessary for all representations of the Authority in the Representation Letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 18 7.04. Transfers Outside Book-Entr,~, sue. In the event the Authority, by resolution, 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 Authority will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the Authority 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 Authority and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the Authority will issue and the 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. 7.05. 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 and interest on the Bonds and notices with respect to the Bonds will be made and given, respectively, in the manner provided in DTC's Operational Arrangements, as set forth in the Representation Letter. Section 8. Continuing Disclosure. 8.01. 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. 8.02. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate, executed by the Mayor and the Acting City Administrator of the City and dated the date of issuance and delivery of the Bonds, as originally executed and as it maybe amended from time to time in accordance with the terms thereof. Section 9. 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. 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 full. 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. 19 Adopted this 28th day of July, 2008 by the Board of Commissioners of the Shorewood Economic Development Authority. SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY B Its President ~``s~ ..°°~-.~ ~~ `~ y ~-~ _ cting Executive Director 20 The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Turgeon and upon vote being taken thereon, the following voted in favor thereof: President Lizee, Boardmembers Bailey, Turgeon, Wellens and Woodruff. and the following voted against the same: None. whereupon said resolution was declared duly passed and adopted. 21 STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) SS. CITY OF SHOREWOOD ) I, the undersigned, being the duly qualified and Acting Executive Director of the Shorewood Economic Development Authority, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the Authority held on July 28, 2008 with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of $1,310,000 Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligation) of the Authority. WITNESS My hand officially as such Acting Executive Director and the corporate seal of the Authority this day of , 2008. ctmg Executive Director (SEAL)