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HomeMy WebLinkAboutResolution 87-37CITY OF COLUMBIA HEIGHTS, MINNESOTA Resolution No. $ ~- 3 ~ RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR $9,090,000 GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS OF 1987, SERIF~ A. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLUMBIA HEIGHTS, MINNESOTA AS FOLLOWS: Section 1. Award of Sale~ Term of Bonds. 1.01. Award of Sale. The City Council (the "Council") of the City of Columbia Heights, Minnesota (the "issuer") hereby awards the sale of $9,090,000 General Obligation Tax Increment Refunding Bonds of 1987, Series A (the "Bonds") to a syndicate headed by The First National Bank of Saint Paul (the "Purchaser") as the bidder offering the lowest net interest cost by its bid to purchase the Bonds at a price of $8,930,925 plus accrued interest to the date of delivery, the Bonds to bear interest at the rates per annum as follows: Year of Interest Year of Interest Maturity Rate Maturity Rate 1991 5.75% 1997 7.00% 1992 6.00 1998 7.10 1993 6.20 1999 7.20 1994 6.40 2000 7.30 1995 6.60 2001 7.40 1996 6.80 2002 7.50 The City Manager of the Issuer is directed to return the good faith checks of the unsuccessful bidders. 1.02. Contract for Sale. The Mayor and the City Manager are hereby authorized and directed to execute a contract for the sale of the Bonds on behalf of the Issuer in accordance with the terms of the accepted bid. The good faith check of the Purchaser shall be retained by the City Manager until the Bonds have been delivered and the purchase price has been paid. 1.03. Maturities. The Issuer shall issue the Bonds in the aggregate principal amount of $9,090,000 dated June 1, 1987 as fully registered bonds. The Bonds shall be in denominations of $5,000 or any integral multiple thereof not exceeding the principal amount of a single maturity, shall be numbered from R-1 upwards in order of issuance, and shall bear interest at the rates set forth above, payable September 1, 1987 and semiannually thereafter on each March i and September 1, and shall mature on March i in the years and amounts as follows: Y ear A mount Ye ar A mount 1991 $525,000 1997 $910,000 1992 640,000 1998 960,000 1993 680,000 1999 930,000 1994 695,000 2000 900,000 1995 820,000 2001 875,000 1996 910,000 2002 245,000 Bonds issued in exchange for Bonds shall be dated as of the date of authentication thereof and shall bear interest from the date to which interest due and payable has been paid in full on the Bonds surrendered, except that Bonds issued upon a transfer or exchange prior to the first interest payment date shall be dated as of June 1, 1987. 1.04. Redemption. All Bonds maturing on or after March 1, 1995, shall be subject to redemption and prior payment in whole or in part in inverse order of maturity and by lot within maturity at the option of the Issuer on March 1, 1994, and any interest payment date thereafter at a price of the principal amount thereof plus accrued interest. Thirty days' prior notice of redemption shall be given by mail to the Registrar and to the registered owners of the Bonds, and notice of redemption will be published in the manner provided by Minnesota Statutes, Chapter 475. Upon notice having been so given, the Bonds or portions of Bonds therein specified shall be due and payable at the stated redemption date and price with accrued interest to the redemption date, and upon funds for such payment being held by or on behalf of the Registrar for such payment on the specified redemption date, interest thereon shall cease to accrue after such redemption date. No defect in the mailed notice of redemption shall affect the validity of the call for redemption of any Bond. 1.05. Registration. The Issuer shall appoint, and shall maintain, a bond registrar, transfer agent and paying agent (the Registrar). The effect of registration and the rights and duties of the Issuer and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its principal corporate trust office a bond register in which the Registrar shall provide 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 any 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 shall 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 such interest payment date. (c) Exchange of Bonds. Whenever any Bond is surrendered by the registered owner for exchange, the Registrar shall 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 duty authorized in writing. (d) Cancellation. All Bonds surrendered upon any transfer or exchange shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Issuer. (e) Improper or Unauthorized Transfer. When any Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Bond or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The Issuer and the Registrar may treat the person in whose name any Bond is at any time registered in the bond register as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Bond and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Issuer upon such Bond to the extent of the sum or sums so paid. (g) Taxes~ Fees and Charges. For every transfer or exchange of Bonds, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated~ Lost~ Stolen or Destroyed Bonds. In case any Bond shall become mutilated or be lost, stolen or destroyed, the Registrar shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond lost, stolen or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond lost, stolen or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Bond was lost, stolen or destroyed, 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, in which both the Issuer and the Registrar shall be named as obligees. All Bonds so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Issuer. If the mutilated, lost, stolen or destroyed Bond has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Bond prior to payment. 1.06. Appointment of Initial Registrar. The Issuer hereby appoints Marquette Bank Minneapolis, as the initial Registrar. The Mayor and the City Manager are authorized to execute and deliver, on behalf of the Issuer, a contract with Marquette Bank Minneapolis, as 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, such corporation shall be authorized to act as successor Registrar. The Issuer agrees to pay the reasonable and customary charges of the Registrar for the services performed. The Issuer reserves the right to remove any Registrar upon thirty (30) days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar shall deliver all cash and Bonds in its possession to the successor Registrar and shall 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 Clerk-Treasurer of the Issuer shall transmit to the Registrar, from the Bond Fund described in Section 5.01 hereof, moneys sufficient, together with moneys, if any, available for the payment of debt service on the Bonds from the Escrow Agreements described below pursuant to the terms thereof, for the payment of all principal and interest then due. 1.07. Manner of Payment. The Bonds shall be payable as to principal upon presentation at the main office of the Registrar. If the stated maturity date for payment of principal of any Bond shall not be a business day, then such payment shall be made on the next succeeding business day with the same force and effect as if made on the stated maturity, and without additional interest accruing thereon for the period after such stated maturity. Interest on each Bond shall be payable by check or draft of the Registrar mailed on the interest payment date or, if the interest payment date is not a business day, then such payment shall be mailed on the first business day following the interest payment date with the same force and effect as if payment were made on the interest payment date, to the person who was the registered holder thereof at the close of business on the 15th day (whether or not a business day) of the calendar month next preceding the interest payment date, at his or her address as it appears on the bond register. For purposes of this resolution "business day" shall mean any day other than a Saturday, Sunday, or other day on which banks in the city in which the principal office of the Registrar is located are authorized to be closed. Section 2. Form of the Bonds. 2.01. The Bonds shall be in substantially the following form, with the necessary variations as to number, CUSIP Number, rate of interest and date of maturity, the blanks to be properly filled in: UNITED STATES OF AMERICA STATE OF MINNESOTA ANOKA COUNTY CITY OF COLUMBIA HEIGHTS No. R- $ GENERAL OBLIGATION TAX INCREMENT REFUNDING BOND OF 1987, SERIES A Nominal Date Rate Maturity of Original Issue CUSIP June t, 1987 The City of Columbia Heights, Minnesota (the "Issuer"), for value received, hereby certifies that it is indebted and hereby promises to pay to or registered assigns, the principal sum of dollars ($ ) on the maturity date specified above, upon the presentation and surrender hereof, and to pay to the registered owner hereof interest on such principal sum at the interest rate specified above from June 1, 1987, or the most recent interest payment date to which interest has been paid or duty provided for as specified below, on March 1 and September I of each year, commencing September 1, 1987, until said principal sum is paid. Principal and the redemption price are payable in lawful money of the United States of America at as Registrar, Transfer Agent and Paying Agent, in Minnesota, or at the offices of such successor agent as the Issuer may designate upon 30 days notice to the registered owners at their registered addresses (the "Registrar"). Interest shall be paid on each March 1 and September I by check or draft mailed by first-class mail, postage prepaid, on the interest payment date, or if the interest payment date is not a Business Day, then on the first Business Day thereafter, to the person in whose name this Bond is registered at the close of business on the 15th day of the month preceding such interest payment date (whether or not a Business Day) at his or her address set forth on the bond register maintained by the Registrar. Any such interest not punctually paid or provided for will be paid to the person in whose name this Bond is registered at the close of business on a special record date established by the Registrar for the payment of such defaulted interest. "Business Day" shall mean any day other than a Saturday, Sunday, or other day when banks located in the city in which the principal office of the Registrar is located are authorized to be closed. Bonds of this Series maturing in the years 1991 through 1994 are not subject to redemption prior to maturity. The Bonds of this series maturing on or after March 1, 1995, are subject to redemption at the option of the Issuer in whole or in part in inverse order of maturity and by lot within a maturity, on March 1, 1994 and any interest payment date thereafter at a price equal to the principal amount thereof and accrued interest. Thirty days' prior notice of redemption will be given by mail to the Registrar and to the registered owners, and notice of redemption will be published in the manner provided by Minnesota Statutes, Chapter 475. No defect in mailed notice will affect the validity of the call for redemption. This Bond is one of a series of }~onds in the aggregate principal amount of Nine Million Ninety Thousand Dollars ($9,090,000), all of like date and tenor except for number, interest rate, denomination, date of maturity and redemption privilege, and is issued for the purpose of providing funds to crossover-refund the outstanding principal amount of the Issuer's General Obligation Tax Increment Bonds of 1985, Series A and its General Obligation Tax Increment Bonds of 1980 (together, the "Prior Issues"), and is issued pursuant to an authorizing resolution (the "Resolution") duly adopted by the Issuer on May 26, 1987, and pursuant to and in full conformity with the City Charter of the Issuer and the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapter 475. The Bonds of this series are payable primarily from the Debt Service Fund of the Issuer established pursuant to a resolution of the Issuer adopted on August 11, 1980, except that prior to the refunding of the Prior Issues, a portion of the debt service on the Bonds will be payable from escrow funds established pursuant to separate Escrow Agreements relating to the Prior Issues dated as of June 1, 1987, between the Issuer and Marquette Bank Minneapolis, in which certain proceeds of the Bonds have been deposited. Ail taxable property within the Issuer is subject to the levy of ad valorem taxes required by law to be levied and extended if needed for this purpose, without limitation of rate or amount. The issuance of this bond does not cause the indebtedness of the Issuer to exceed any constitutional, statutory, or charter limitation thereon. The Bonds of this series 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 one year. As provided in the Resolution, and subject to certain limitations set forth therein, this Bond is transferable upon the books of the Issuer kept for that purpose at the principal office of the Registrar, by the registered owner hereof in person or by such owner's attorney duly authorized in writing, upon surrender of this Bond together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or such owner's duly authorized attorney; and may also be exchanged for Bonds of other authorized denominations. Upon such transfer or exchange and the payment of any tax, fee or governmental charge required to be paid by the Issuer or the Registrar with respect to such transfer, there will be issued in the name of the transferee a new Bond or Bonds of the same aggregate principal amount as the surrendered Bond, bearing interest at the same rate and maturing on the same date. It is hereby Certified and Recited that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed in order to make this Bond a valid and binding general obligation of the Issuer according to its terms, have been done, do exist, have happened and have been performed in due form, time and manner as so required. This Bond shall not be valid or become obligatory for any purpose until the Authentication Certificate hereon shall have been manually signed by a person authorized to sign on behalf of the Registrar. IN WITNESS WHEREOF, the City of Columbia Heights, Minnesota has caused this Bond to be executed with the facsimile signatures of its Mayor and by its City Manager, all as of the Nominal Date of Original Issue specified above. Dated: (Facsimile) City Manager CITY OF COLUMBIA HEIGHTS, MINNESOTA By (Facsimile) Mayor Certificate of Authentication This is one of the Bonds described in the within mentioned Resolution. Bond Registrar By Authorized Signature unto ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers (Please Print or Typewrite Name and Address of Transferee. Include information for all joint owners if the Bonds are held by joint account.) 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: Signature Guaranteed by: Signature(s) must be guaranteed by a commercial bank or trust company or by a brokerage firm having membership in one of the major stock exchanges. Notice: The signature(s) on this assignment must correspond with the name(s) which appear on the face of this Bond in every particular, without alteration or any change whatever. Please Insert Social Security Number or Other Identifying Number of Assignee (Form of Certificate) CERTIFICATE AS TO LEGAL OPINION I, Robert S. Bocwinski, City Manager of the City of Columbia Heights, Minnesota, hereby certify that except for the date line, the above is a full, true and compared copy of the legal opinion of Holmes & Graven, Chartered, of Minneapolis, Minnesota, which was delivered to me upon delivery of the bonds and is now on file in my office. (Facsimile) City Manager Section 3. Execution and Delivery. The Bonds shall be executed on behalf of the Issuer by the signatures of the Mayor and the City Manager of the Issuer, and shall be sealed with the official corporate seal of the Issuer; provided that said signatures and the corporate seal may be printed, engraved, or lithographed facsimiles thereof. In case any officer whose signature, or a facsimile of whose signature, shall appear on the Bonds shall cease to be such officer before the delivery of any Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. Notwithstanding such execution, no Bond shall 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 such 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 each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. When the Bonds have been so executed and authenticated, and upon receipt of the approving legal opinion of Holmes & Graven, Chartered, they shall be delivered by the City Manager to the Purchaser thereof upon payment of the purchase price in accordance with the contract of sale to be made and executed, and the purchaser shall not be obligated to see to the application of the purchase price. Section 4. Refunding of Prior Issue. 4.01. Escrow Agreement. The form of Escrow Agreement proposed to be made and entered into between the Issuer and Marquette Bank Minneapolis, relating to the General Obligation Tax Increment Bonds of 1985, Series A and the General Obligation Tax Increment Bonds of 1980 (the "Prior Issues") is hereby approved and shall be executed on behalf of the Issuer by the Mayor and the City Manager in substantially the form attached hereto as Exhibit A, with such changes therein (including the provision for a separate Escrow Agreement for each of the Prior Issues) not inconsistent with Section 475.67, Minnesota Statutes, or other law, as the officers executing the same may approve, which approval shall be conclusively evidenced by the execution thereof. The Escrow Agreement shall be irrevocable and the Issuer hereby covenants to perform the terms and conditions thereof as long as either of the Prior Issues is outstanding. The Issuer hereby agrees to pay the reasonable charges of the escrow agent for acting as such. Pursuant to Minnesota Statutes, Section 475.67, Subd. 13, and the Escrow Agreement, moneys, including investment earnings, in the escrow fund or funds, will be applied to the payment of a portion of the interest on the Bonds prior to the date when moneys in the escrow fund or funds, are applied to the redemption of the Prior Issues, and will be applied to the redemption of the Prior Issues on the dates set forth in the Escrow Agreement. 4.02. Application of Proceeds. The proceeds of the Bonds are hereby appropriated as follows: (a) an amount sufficient to fund the escrow fund pursuant to the Escrow Agreement (currently estimated to be $8,863,500) shall be deposited in such Escrow Fund and applied in accordance with the Escrow Agreement; and (b) an amount equal to the costs of issuing the Bonds (currently estimated to be $67,000) shall be applied to the payment thereof. 4.03. Verifications. The firm of Price Waterhouse, independent public accountants and consulting actuaries, is hereby authorized and directed to verify that the deposits in the Escrow Fund for the Prior Issue will be sufficient to redeem the Prior Issues as provided in the Escrow Agreement, and to make such calculations as may be necessary for the purpose of determining compliance with Section 148 of the Internal Revenue Code of 1986, as amended (the "Code") and the applicable Treasury Regulations. Section 5. Pro.iect Account~ Rebate Subaccount~ Pledges, Apt~ropriations. 5.01. Project Account. The Issuer's Project Account (the "Project Account") created on the official records of the Issuer by a Resolution of the Issuer adopted on August 11, 1980, shall continue to be held and administered by the Clerk-Treasurer, deposited in one or more banks duly qualified as depositories of funds of the Issuer, separate from all other bank accounts, and invested and reinvested in accordance with resolutions of the Issuer and Minnesota Statutes, Section 475.66, and shall be used only to pay principal and interest and expenses of payment when due on general obligation tax increment bonds of the Issuer made payable therefrom, including the Prior Issues prior to their redemption pursuant to the Escrow Agreement, and including the Bonds to the extent debt service thereon is not payable from the escrow fund established pursuant to the Escrow Agreement, until all such principal and interest and expenses have been fully paid; pr({vided that if any payment falls due when the balance in the Project Account is insufficient to pay it, the deficiency shall be paid out of any other funds of the Issuer available for that purpose, and advances so made may be repaid from the Project Account when a sufficient balance is available therein. 5.02. Rebate Account. (a) There is hereby created an additional subaccount in the Project Account, designated the "Rebate Subaccount". (b) No later than one year following the date of the closing on the Bonds, on each anniversary thereof, and on the date of retirement of the last outstanding Bond, the Issuer shall calculate or cause to be calculated (i) the amount to be transferred to the Rebate Subaccount, if any, necessary to increase the amount in the Rebate Subaccount to the amount of Excess Earnings (as defined below) for the period from the preceding twelve month period to such date of transfer, or (ii) the amount to be transferred from the Rebate Subaccount to the Debt Service Subaccount of the Project Account, if any, necessary to reduce the amount in the Rebate Subaccount to the amount of the Excess Earnings for such period; and the Issuer shall transfer such amount no later than the fifteenth (15th) day of the same month. (c) The Issuer shall pay to the United States of America from monies on deposit in the Rebate Subaccount the Excess Earnings on the fifth anniversary of the date of issuance of the Bonds, and on such date in each fifth year thereafter. (d) Alt amounts in the Rebate Subaccount shall be used and withdrawn by the Issuer as required above solely for the purposes set forth in (b) and (c) above. In the event that the amount in the Rebate Subaccount is for any reason insufficient to pay to the United States the amounts due as calculated in this Section, the Issuer shall transfer to the Rebate Subaccount the amount of such deficiency. (e) Investment earnings on amounts held in the Rebate Subaccount shall be retained in the Rebate Subaccount. (f) For purposes of this resolution, "Excess Earnings" shall mean for any given period (1) the aggregate amount of interest, profits and other income earned in such period from the investment of amounts in the Project Account, and the investment of Bond proceeds in the Escrow Fund,' less (2) the aggregate amount which would have been earned in such period if such investments had been at the yield on the Bonds, calculated pursuant to Section 148 of the Code compounded semiannually, plus (3) investment earnings allocable to the difference between (1) and (2) above. The amount described in clause (1) of this definition shall take into account any gain or loss realized on the disposition of investment securities credited to any such fund or account. On the date or retirement of the last Bond remaining unpaid, the amount described in clause (1) of this definition shall include any unrealized gain or loss as of such date. Excess Earnings shall not include any amount earned on the Debt Service Subaccount if (i) the gross earnings on such account for the bond year is less than $100,000, and (ii) the Debt Service Subaccount is depleted at least once in such bond year except for a carryover amount which does not exceed the greater of one year's earnings on the debt service account or one-twelfth of annual debt service on the Bonds. 5.03. Appropriations. The following sums are hereby appropriated and shall be credited as received to the Debt Service Subaccount of the Project Account: (a) From the proceeds of the Bonds: (i) the accrued interest paid by the Purchaser from the date of issue to the date of delivery thereof; and (ii) the amount of proceeds in excess of $8,926,380 received from the sale of the Bonds. (b) Ail income and gain from investment of the Project Account (to which all loss from such investment shall be charged). (c) All tax increment paid to the Issuer by The Housing and Redevelopment Authority in and for the City of Columbia Heights, Minnesota (the "Authority), pursuant to the Tax Increment Pledge Agreement (the "Pledge Agreement") dated as of August 11, 1980, as the same has been and may be amended. 10 (d) Any sums collected from taxes extended and assessed in connection with the Bonds or the Prior Issues. (e) Investment earnings on the escrow fund established pursuant to the Escrow Agreement to the extent provided therein. 5.04. Pledge of Full Faith and Credit. The full faith and credit and taxing powers of the Issuer are irrevocably pledged for the prompt and full payment of the principal of and interest on the Bonds and such other general obligation indebtedness as may be made payable from the Project Account, as such principal and interest respectively become due. 5.05. Tax Increment Pledge Agreement. In accordance with a Resolution of the Issuer adopted on August 11, 1980, the Issuer has entered into the Pledge Agreement with the Authority. It is in the best interest of the Issuer to amend the Pledge Agreement to expressly refer to the Bonds. Accordingly, the Mayor and the City Manager are hereby authorized to enter into an amendment to the Pledge Agreement adding a specific reference to the Bonds, and the City Manager is directed to cause a fully executed copy of such amendment to be filed with the County Administrator of Anoka County. 5.06. Revenues Sufficient. It is estimated that the revenues pledged for the payment of the Bonds will produce sums in an amount not less than 5% in excess of the amounts needed to meet when due payments of principal of and interest on the Bonds, and accordingly no tax is levied by this Resolution for that purpose. Pursuant to the Pledge Agreement, as amended the Authority will deposit in the Project Account prior to each debt service payment date during the term of the Bonds an amount sufficient to pay principal of, redemption price, if applicable, and interest on the Bonds due on the Bonds on the next succeeding debt service payment date. 5.07. The Clerk-Treasurer of the Issuer is directed to keep on file in his office a tabulation of the dates and amounts of the principal and interest payments to become due and amounts of the principal and interest payments to become due on all bonds payable from the Project Account. Section 6. Defeasance. When all of the Bonds have been discharged as provided in this Section 6, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds shall cease. The Issuer may discharge its obligations with respect to any Bonds which are due on any date by irrevocably depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full; or, if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The Issuer may also discharge its obligations with respect to any prepayable Bonds called for redemption on any date when they are prepayable according to their terms, by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full, provided that notice of the redemption thereof has been duly given as provided in Section 1.04 hereof. The Issuer may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or securities which are general obligations of the United States or securities of United 11 States agencies which are authorized by law to be so deposited, bearing interest payable at such time and at such rates and maturing on such dates as shall be required, without reinvestment, to pay alt principal and interest to become due thereon to maturity or, if notice or redemption as herein required has been duly provided for, to such earlier redemption date. Section 7. Non-Arbitrage Covenants~ Certification of Proceedings; General Covenants. 7.01. Non-Arbitrage Covenants. (a) The Issuer covenants and agrees with the Purchaser and holders of the Bonds that the investments of gross proceeds of the Bonds, including the investment of any revenues pledged to the Bonds which are considered proceeds under the applicable regulations, and accumulated sinking funds, if any, shall be limited as to amount and yield in such manner that the Bonds shall not be arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and applicable Treasury Regulations. On the basis of the existing facts, estimates and circumstances, including the foregoing covenant, the Issuer hereby cert'ifies that it is not expected that the proceeds of the Bonds will be used in such manner as to cause the Bonds to be arbitrage bonds under Section 148 and the applicable Treasury Regulations. The Mayor and the City Manager shall furnish an arbitrage certificate to the Purchaser embracing or based on the foregoing certification at the time of delivery of the Bonds to the Purchaser. (b) The Issuer further eovenants to the United States of America any rebate payments required to be made pursuant to Section 148 of the Code as and at the times provided in Section 5.02 hereof. 7.02. Certification of Proceedings. The staff and officers of the Issuer are hereby authorized and directed to prepare and furnish to the Purchaser and to Holmes & Graven, Chartered, Bond Counsel, certified copies of all proceedings and records of the Issuer, and such other affidavits, certificates and information as may be required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the Issuer as to the facts recited therein. 7.03. General Covenant. The Issuer 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 t954, as in effect immediately prior to the enforcement of the Tax Reform Act of 1986 (the "Act"), and read as including certain provisions of the Act as required by Section 1313(b) thereof, and the applicable Treasury Regulations, and covenants to take any and all actions within its powers to ensure that the interest on the Bonds will not become subject to taxation under the Code and such Treasury Regulations. 7.04. County Auditor Certificate. The City Manager is authorized and directed to certify a copy of this resolution, file the same with the County Auditor 12 of Anoka County and obtain a certifications from such Auditor that the Bonds have been entered upon the bond register maintained by the Auditor. Adopted this 26th day of May, 1957. ~~~ Mayor City Manager 13 ESCROW AGREEMENT $ CITY OF COLUMBIA HEIGHTS, MINNESOTA GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS OF 1987 SERIES A THIS AGREEMENT made this day of June, 1987 by and between the City of Columbia Heights, Minnesota (the "Issuer"), and (the "Escrow Agent"), WITNESSETH: RECITALS A. The Issuer has heretofore duly issued and now has outstanding the bonds described in Exhibit A hereto (hereinafter referred to as the Prior Issues). B. To provide for the refunding of the Prior Issues in accordance with Minnesota Statutes, Section 475.67, the Issuer by resolution (the "Refunding Bond Resolution") duly adopted on May 26, 1987 issued and sold its $ General Obligation Tax Increment Refunding Bonds of 1987, Series A dated June 1, 1987 (the "Refunding Bonds"). The Issuer has directed that $ the purchase price of the Bonds, be deposited with the Escrow Agent, and has caused a described in Exhibit C hereto, in the principal amount of $ (the" ") to be delivered to the Escrow Agent. The Issuer has direr{ed that $ of the proceeds of the Refunding Bonds, together with the shall be irrevocably deposited in the special trust account to be maintained by the Escrow Agent pursuant to the terms of this Escrow Agreement (the "Escrow Fund") for the payment of interest due on the Refunding Bonds on and prior to and for the payment of the then-outstanding principal amounts of the Prior Issues on , and , respectively. $ of the proceeds of the Refunding Bonds shall be paid to the Issuer for deposit in the debt service account maintained by it with respect to the Refunding Bonds, and the remaining $ deposited with the Escrow Agent shall be distributed by the Escrow Agent for the payment of the costs of issuance of the Refunding Bonds set forth in Exhibit D hereof. C. $ of the amount in the Escrow Fund has simultaneously been invested in the United States Treasury Certificates of Indebtedness and Notes --State and Local Government Series all of which, together with the referred to in paragraph B, are described in Exhibit C attached hereto and are hereinafter referred to as the "Acquired Government Obligations". D. The Acquired Government Obligations, together with a cash balance of $ , shall be used to pay a portion of the interest on the Refunding Bonds on and prior to , and to pay the principal of the Prior Issues as hereinafter provided. The Acquired Government Obligations and cash are hereinafter called the "Escrow Deposit." E. The Escrow Agent is a banking corporation with trust powers organized under the laws of the United States whose deposits are insured by the Federal Deposit Insurance Corporation, and whose combined capital and surplus is not less than $500,000. AGREEMENT NOW THEREFORE, in consideration of the premises and of the mutual covenants of the Escrow Agent and the Issuer herein contained, the parties hereto hereby agree as follows: 1. The Issuer hereby (a) irrevocably deposits the Escrow Deposit with the Escrow Agent in trust to secure the payment of a portion of the interest on the Refunding Bonds on each interest payment date to and including , ., and to secure the payment of the principal of and premiums on the Prior Issues on , and ., , respectively, (b) deposits $ to be used to pay the costs of issuance of the Refunding Bonds, and (c) deposits $ to be paid to the Issuer for deposit in the Issuer's debt service account for the Refunding Bonds as set forth in paragraph B hereof. Concurrently with such deposits, the Escrow Agent will acknowledge receipt of the Escrow Deposit and such $ by receipt in the form of Exhibit E attached hereto. 2. The Escrow Agent will collect all interest payable on the Acquired Government Obligations in the Escrow Fund as and when such interest becomes due and payable and will cause the Acquired Government Obligations to be presented for payment and converted into cash on their respective maturity or due dates in accordance with the schedule of cash payments set forth in Exhibit C hereto attached. The Escrow Agent, out of moneys in the Escrow Fund, shall remit (a) to the paying agent for the Refunding Bonds the portion of interest due on the Refunding Bonds specified in Exhibit C attached hereto, on the interest payment dates specified on Exhibit C, and (b) to the paying agents for each of the Prior Issues amounts specified in Exhibit C attached hereto on the dates specified in such Exhibit C, to pay principal of and premium on the Prior Issues on the date on which such Prior Issues shall be called for redemption as provided herein. 3. The Issuer represents and the Escrow Agent acknowledges and agrees, in reliance upon the information furnished Miller & Schroeder Financial, Inc. and verified by , that the Escrow Deposit, if the principal of and interest on the Acquired Government Obligations are paid in accordance with their terms, is sufficient to produce cash in amounts sufficient to enable the Escrow Agent to make the payments with respect to the Refunding Bonds and the Prior Issues as provided in Exhibit C attached hereto. 4. The Issuer shall cause notice of call for redemption of the Prior Issues to be published in the form of Exhibits B-1 and B-2 in accordance with Minnesota Statutes, Section 475.54, Subd. 4, and mailed to the Paying Agents for the Prior Issues not later than ~, 1987. Prior to the redemption dates of the Prior Issues, the Escrow Agent shall take whatever actions are customary in the trade to notify the holders of bonds to be called for redemption and payment prior to their maturity that such bonds have been called for redemption and prepayment as of their respective redemption dates, and shall cause the Notice of Call attached hereto as Exhibits B-1 and B-2 to be published in Commercial West or some other appropriate periodical or newspaper not more than 90 days nor less than 45 days before the redemption date for the corresponding Prior Issue, but failure to give such subsequent notice shall not affect the validity of the call for redemption. 5. The Issuer will not repeal, revoke or amend the Refunding Bond Resolution in any manner which would materially and adversely affect the performance of this Escrow Agreement or payment of the principal of and interest on the outstanding Prior Issues when due. 6. The Escrow Agent understands and agrees that it shall be paid by the Issuer an escrow fee in the amount of $ for all of its services hereunder, which shall be paid from the $ referred to in paragraph I above which is not part of the Escrow Fund. The remainder of such $ shall be applied to the payment of the costs of issuance of the Refunding Bonds as set forth in Exhibit D attached hereto. 7. Ail reasonable fees and expenses charged by paying agents for the Prior Issues, or their successors as such Paying Agents, shall be paid directly by the Issuer. 8. All monies remaining in the Escrow Fund after payment therefrom of all sums required to be paid under this Agreement shall be promptly remitted to the Issuer. 9. The Escrow Agent covenants that it will not reinvest any of the proceeds of the Acquired Government Obligations unless advised in writing by nationally recognized bond counsel for the Issuer that such reinvestment may be made without contravention of the yield restrictions imposed by Section 148 of the Internal Revenue Code of 1986, as amended (the "Code") and the applicable Treasury Regulations (the "Regulations") and administrative interpretations thereunder. The Escrow Agent will from time to time reinvest all or any portion of any outstanding Acquired Government Obligations only at the direction of the Issuer and upon receipt of a schedule of such reinvestments and the opinion of bond counsel for the Issuer that such reinvestment is permitted under Minnesota law and without contravention of the yield restrictions imposed by Section 148 of the Code and the applicable Regulations, and administrative interpretations thereunder, and the opinion of a firm of independent public accountants that such reinvestments will not adversely affect the ability of the Escrow Agent to meet the payments specified in paragraph 2 hereof from the Escrow Fund. 10. For as long as any of the bonds of the Prior Issues are outstanding, annually, on or before February 1 of each year, the Escrow Agent shall prepare and send to the Issuer a statement covering the status of the Escrow Fund as of the preceding December 31, which statement shall set forth the cash and Acquired Government Obligations held by the Escrow Agent, any of such Acquired Government Obligations which have matured and the amounts received by the Escrow Agent by reason of such maturity, the interest earned on any of such Acquired Government Obligations and the interest and/or principal derived therefrom, the amounts of cash paid for the principal of and interest on the Prior Issues as said payments shall become due and payable, and any other transactions of the Escrow Agent pertaining to its duties and obligations as set forth herein. Ail Acquired Government Obligations, moneys and investment income deposited with or received by the Escrow Agent pursuant to this Agreement shall be subject to the trust created by this Agreement, and the Escrow Agent shall be liable for the preservation and safekeeping thereof; provided, however, it shall not be responsible for any depreciation in value of any of the Acquired Government Obligations or for the reinvestment of the same except as herein provided. Such Acquired Government Obligations, moneys and investment income held in the Escrow Fund shall be maintained in a separate trust account wholly segregated from all other funds and securities on deposit with the Escrow Agent. The Escrow Agent shall have no right to set off any amounts or securities in the Escrow Account against any amounts whatsoever which the Issuer may at any time owe the Escrow Agent. 11. The duties and obligations of the Escrow Agent shall be as prescribed by the provisions of this Agreement, the Escrow Agent shall not be liable except for the performance of its duties and obligations as specifically set forth herein and to act in good faith in the performance thereof, and no implied duties or obligations shall be incurred by the Escrow Agent other than those specified herein. 12. This Agreement shall be binding upon and shall inure to the benefit of the Issuer and the Escrow Agent and their respective successors and assigns. In addition, this Agreement shall constitute a third party beneficiary contract fur the benefit of the owners of the Refunding Bonds on and prior to , , and for the benefit of the owners at any time of the Prior Issues as to the principal and premium component of the redemption price thereof. Said third party beneficiaries shall be entitled to enforce performance and observance of the Issuer and the Escrow Agent of the respective agreements and covenants herein contained as fully and completely as if said third party beneficiaries were parties hereto. IN WITNESS WHEREOF, the Issuer and the Escrow Agent have caused this Agreement to be executed in their respective names and the Escrow Agent's corporate seal to be hereunder affixed as hereinafter provided in eight counterparts, each of which shall be deemed an original, and have caused this Agreement to be dated as of the date first written above. CITY OF COLUMBIA HEIGHTS, MINNESOTA (SEAL) By Mayor Attest City Manager (SEAL) By Its EXHIBIT A TO F~CROW AGREEMENT Prior Issues Ae Designation: Date: Maturity: Interest Rates: Redemption: Paying Agent: $8,175,000 General Obligation Tax Increment Bonds, 1980 September 1, 1980 March i in the years and amounts as follows: 1988 $250,000 1996 $700,000 1989 300,000 1997 700,000 1990 350,000 1998 700,000 1991 425,000 1999 700,000 1992 475,000 2000 700,000 1993 525,000 2001 700,000 1994 550,000 2002 100,000 1995 650,000 Series 1988 8.00% 1996 8.10% 1989 8.00 1997 8.25 1990 8.00 1998 8.40 1991 8.00 1999 8.50 1992 8.00 2000 8.60 1993 8.00 2001 8.75 1994 8.00 2002 8.75 1995 8.00 Bonds maturing on or after March 1, 1991 are redeemable on or after March 1, 1990. Norwest Bank Minneapolis, N.A. Designation: Date: Maturity: Interest Rates: Redemption: Paying Agent: $2,100,000 General Obligation Tax Increment Bonds of 1985, Series A September 1, 1985 March I in the years and amounts as follows: 1988 $ 50,000 1996 $150,000 1989 50,000 1997 175,000 1990 50,000 1998 240,000 1991 50,000 1999 240,000 1992 55,000 2000 240,000 1993 55,000 2001 240,000 1994 55,000 2002 250,000 1995 100,000 1988 6.50% 1996 8.40% 1989 7.00 1997 8.60 1990 7.20 1998 8.80 1991 7.40 1999 9.00 1992 7.60 2000 9.00 1993 7.80 2001 9.00 1994 8.00 2002 9.00 1995 8.20 Bonds maturing on or after March 1, 1992 are redeemable on or after March 1, 1991. Marquette Bank, Minneapolis EXHIBIT B-1 TO ESCROW AGREEMENT Notice of Call for Redemption $8,175,000 City of Columbia Heights, Minnesota General Obligation Tax Inerement Bonds, Series 1980 NOTICE IS HEREBY GIVEN that on March 1, 1990, the~ City of Columbia Heights, Minnesota (the "City") will redeem and pay prior to maturity all bonds which mature on or after March 1, 1991, of its issue of $8,175,000 General Obligation Tax Increment Bonds, Series 1980 dated September 1, 1980, at a price equal to the principal amount thereof plus a premium of two percent of the principal amount thereof and plus accrued interest to such redemption date in accordance with the terms of such bonds and as authorized by the resolution of the City providing for their issuance adopted August 11, 1980. The bonds of such issue to be redeemed are bearer bonds numbered through , have stated maturity dates on March I in the follOWing years and bear interest at the following rates: Year Amount Rate Year Amount Rate 1991 $425,000 8.00% 1997 $700,000 8.25% 1992 475,000 8.00 1998 700,000 8.40 1993 525,000 8.00 1999 700,000 8.50 1994 550,000 8.00 2000 700,000 8.60 1995 650,000 8.00 2001 700,000 8.75 1996 700,000 8.10 2002 100,000 8.75 Payment of the principal of and accrued interest on such bonds w/it be made on the aforesaid redemption date at Norwest Bank Minneapolis, N.A., Minneapolis, Minnesota, and interest on all bonds so redeemed will cease as of that date whether or not presented for payment. Dated: (DATE OF PUBLICATION) BY ORDER OF THE CITY OF COLUMBIA HEIGHTS, MINNESOTA EXIilBIT B-2 TO ESCROW AGREEMENT Notice of Call for Redemption $2,100,000 City of Columbia Heights, Minnesota General Obligation Tax Increment Bonds of 1985, Series A NOTICE IS HEREBY GIVEN that on March 1, 1991, the City of Columbia Heights, Minnesota (the "City") will redeem and pay prior to maturity all bonds which mature on or after March 1, 1992, of its issue of $2,100,000 General Obligation Tax Increment Bonds of 1985, Series A dated September 1, 1985, at par and accrued interest to such redemption date in accordance with the terms of such bonds and as authorized by the resolution of the City providing for their issuance adopted September 9, 1985. The bonds of such issue to be redeemed have stated maturity dates on March i in the following years and bear interest at the following rates: Year Amount Rate Year Amount Rate 1992 $ 55,000 7.60% 1998 $240,000 8.80% 1993 55,000 7.80 1999 240,000 9.00 1994 55,000 8.00 2000 240,000 9.00 1995 100,000 8.20 2001 240,000 9.00 1996 150,000 8.40 2002 250,000 9.00 1997 175,000 8.60 Payment of the principal of and accrued interest on such bonds will be made on the aforesaid redemption date at Marquette Bank, Minneapolis, Minneapolis, Minnesota, and interest on all bonds so redeemed will cease as of that date whether or not presented for payment. Dated: (DATE OF PUBLICATION) BY ORDER OF THE CITY OF COLUMBIA HEIGHTS, MINNESOTA EXHIBIT C TO ESCROW AGREEMENT Escrow Deposit, Required Payments Cash: $ Acquired Government Obligations: [ATTACHED] Payments Required as to the Refunding Bonds: [ATTACHED] ,Payments Required as to the General Obligation Tax Increment Bonds~ Series 1980: [ATTACHED] Payments Required as to the General Obligation Tax Increment Bonds of 1985~ Series A: [ATTACHED] 9 EXHIBIT D TO ESCROW AGREEMENT Issuance Costs Fiscal Consultant's Fee (Miller & Schroeder Financial, Inc.) Bond Counsel Fee (Holmes & Graven, Chartered) Financial Services Verification ( Escrow Agent Fee ( Rating Agency Fees (Moody's Investors Service) (Standard & Poor's Corporation) Printing, Publication Paying Agent and Registrar's Fee ( Mail/Copying and Travel County Auditor's Certificate 10 EXHIBIT E TO ESCROW AGREEMENT Receipt I, the undersigned ~, duly qualified and acting , of DO HEREBY CERTIFY AND ACKNOWLEDGE the receipt on the day of June, 1987 of: (a) $ which has simultaneously been invested in United States Treasury Certificates of Indebtedness and Notes - State and Local Government Series as described in Exhibit C to the Escrow Agreement, General Obligation Tax Increment Refunding Bonds of 1987, Series A, City of Columbia Heights, Minnesota (the "City"), by and between and the City (the "Agreement") dated as of May 4, 1987; (b) amount of $ $ A in the aggregate principal having accrued interest in the amount of , as described in Exhibit C to the Agreement; (e) cash in an amount equal to $ the Escrow Fund established pursuant to the Agreement; and for deposit in (d) cash in an amount equal to $ for payment of costs of issuance listed in Exhibit D to the Agreement and cash in an amount equal to $ for deposit as accrued interest on the Refunding Bonds, as provided in the Agreement. this WITNESS my hand as day of June, 1987. of By Its 11 CERTIFICATION OF MINUTES Municipality: Governing body: Meeting: Members present: City of Columbia Heights, Minnesota City Council A meeting of the City Council of the City of Heights, held on the 26th day of May, 1987, at p .m. at 590 40th Avenue Northeast, Columbia Minnesota. Columbia 7:30 Heights, Mayor Nawrocki Councilmembers Paulson, Petkoff, Carlson, Peterson Members absent: None Documents: A copy of a resolution adopted by the City Council of the City of Columbia Heights at said meeting. Certification: I, Robert S. Bocwinski Heights do hereby certify the following: , City Manager of the City of Columbia Attached hereto is a true and correct copy of a resolution on file and of record in the offices of the City of Columbia Heights, which resolution was adopted by the City Council, at the meeting referred to above. Said meeting was a regular meeting of the City Council, was open to the public, and was held at the time and place at which meetings of the City Council are regularly held. Member Carlson moved the adoption of the attached resolution. The motion for adoption of the attached resolution was seconded by Member Peterson . A vote being taken on the motion, the following voted in favor of the resolution: Nawrock], Paulson, Petkoff, Car]son, Peterson and the following voted against the resolution: None Whereupon said resolution was declared duly passed and adopted. The attached resolution is in full force and effect and no action has been taken by the City Council of the City of Columbia Heights which would in any way alter or amend the attached resolution. Witness my hand officially as the City Manager of the City of Columbia Heights, this 26th day of May , 1987.