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Home My WebLink About15-072 Bond Resolution 2015A EXTRACTOFMINUTESOFAMEETING CITYCOUNCILOFTHE CITYOFPRIORLAKE,MINNESOTA HELD:April27,2015 Pursuanttoduecall,aregularorspecialmeetingoftheCityCounciloftheCityofPrior Lake,ScottCounty,Minnesota,wasdulyheldattheCityHallonApril27,2015,at7:00P.M., forthepurpose,inpart,ofauthorizingtheissuanceandawardingthesaleof$10,000,000 GeneralObligationBonds,Series2015A. Thefollowingmemberswerepresent:MayorHedbergandCouncilorsMcGuire, Keeney,MortonandThompson. andthefollowingwereabsent:None. MemberThompsonintroducedthefollowingresolutionandmoveditsadoption: RESOLUTIONNO.15-072 RESOLUTIONPROVIDINGFORTHEISSUANCEANDSALEOF$10,000,000GENERAL OBLIGATIONBONDS,SERIES2015A,PLEDGINGFORTHESECURITY THEREOFNETREVENUESANDSPECIALASSESSMENTS ANDLEVYINGATAXFORTHEPAYMENTTHEREOF A.WHEREAS,theCityCounciloftheCityofPriorLake,Minnesota(the"City"), hasheretoforedeterminedanddeclaredthatitisnecessaryandexpedienttoissue$10,000,000 GeneralObligationBonds,Series2015A(the"Bonds"orindividuallya"Bond"),pursuantto(i) MinnesotaStatutes,Chapter475and429,tofinancetheconstructionofvariouspublic improvementswithintheCity(the"Improvements”),intheamountof$4,640,000(the "ImprovementPortionoftheBonds")and(ii)MinnesotaStatutes,Section475.67tofinancea partialcrossoverrefundingonDecember15,2017(the"CrossoverDate")oftheCity's $8,500,000originalprincipalamountofGeneralObligationWaterTreatmentPlantRevenue Bonds,Series2007A,datedMay15,2007(the"Series2007ABonds"),whichmature,orare subjecttomandatoryredemption,onandafterDecember15,2023(the"PriorBonds")inthe amountof$5,360,000(the"RefundingPortionoftheBonds");and B.WHEREAS,theImprovementsandalltheircomponentshavebeenorderedprior tothedatehereof,afterahearingthereonforwhichnoticewasgivendescribingthe Improvementsoralltheircomponentsbygeneralnature,estimatedcost,andareatobeassessed; and C.WHEREAS,theCityownsandoperatesamunicipalwatersystem(the"System") asaseparaterevenueproducingpublicutilityandotherthanthePriorBonds,thereareno outstandingobligationsoftheCity,theinterestandprincipalofwhichwouldconstituteaprior lienuponthenetrevenuesoftheSystem;and D.WHEREAS,$5,160,000aggregateprincipalamountofthePriorBondswillbe calledontheCrossoverDate(the"RefundedBonds"),atapriceofparplusaccruedinterest,as 6999877v3 providedintheresolutionoftheCityCounciladoptedonApril30,2007,authorizingthe issuanceofthePriorBonds(the"PriorResolution");and E.WHEREAS,theRefundingoftheRefundedBondsisconsistentwithcovenants madewiththeholdersthereof,andisnecessaryanddesirableforthereductionofdebtservice costtotheCity;and F.WHEREAS,$2,350,000aggregateprincipalamountoftheSeries2007ABonds (the"OutstandingBonds")maturingintheyears2015through2022shallbepaidinaccordance withthePriorResolutionandassuchisconsistentwiththecovenantsmadewiththeholders thereof;and G.WHEREAS,theCityhasretainedBlueRoseCapitalAdvisors,Inc.,in Minneapolis,Minnesota,asitsindependentfinancialadvisorforthesaleoftheBondsandwas thereforeauthorizedtoselltheBondsbyprivatenegotiationinaccordancewithMinnesota Statutes,Section475.60,Subdivision2(9);and H.WHEREAS,itisinthebestinterestsoftheCitythattheBondsbeissuedinbook- entryformashereinafterprovided;and NOW,THEREFORE,BEITRESOLVEDbytheCounciloftheCityofPriorLake, Minnesota,asfollows: 1.AcceptanceofOffer.TheofferofNorthlandSecurities,Inc.(the"Purchaser"),to purchasetheBondsinaccordancewiththetermsandattheratesofinteresthereinaftersetforth, andtopaythereforthesumof$10,159,786.50,plusinterestaccruedtosettlement,ishereby accepted. 2.BondTerms. (a)OriginalIssueDate;Denominations;Maturities;TermBondOption.TheBonds shallbedatedMay1,2015,asthedateoforiginalissueandshallbeissuedforthwithonorafter suchdateinfullyregisteredform,shallbenumberedfromR-1upwardinthedenominationof $5,000eachorinanyintegralmultiplethereofofasinglematurity(the"Authorized Denominations")andshallmatureonDecember15intheyearsandamountsasfollows: YearAmountYearAmount 2018$75,0002025$1,290,000 201975,00020261,140,000 202075,00020271,105,000 202175,00020281,120,000 202275,00020291,190,000 2023885,00020301,185,000 20241,070,0002031640,000 AsmayberequestedbythePurchaser,oneormoretermBondsmaybeissuedhaving mandatorysinkingfundredemptionandfinalmaturityamountsconformingtotheforegoing 2 6999877v3 principalrepaymentschedule,andcorrespondingadditionsmaybemadetotheprovisionsofthe applicableBond(s). (b)Allocation.TheImprovementPortionoftheBonds,beingtheaggregateprincipal amountof$4,640,000,maturingineachoftheyearsandamountshereinaftersetforth,isissued tofinancetheImprovements.TheRefundingPortionofthebonds,beingtheaggregateprincipal amountof$5,360,000,maturingineachoftheyearsandamountshereinaftersetforthisissued tofinancetheRefunding: ImprovementRefunding YearPortionPortionTotalAmount 2018$75,000$75,000 201975,00075,000 202075,00075,000 202175,00075,000 202275,00075,000 2023$405,000480,000885,000 2024575,000495,0001,070,000 2025775,000515,0001,290,000 2026610,000530,0001,140,000 2027555,000550,0001,105,000 2028550,000570,0001,120,000 2029600,000590,0001,190,000 2030570,000615,0001,185,000 2031640,000640,000 IfBondsareprepaid,theprepaymentsshallbeallocatedtotheportionsofdebtservice (andhenceallocatedtothepaymentofBondstreatedasrelatingtoaparticularportionofdebt service)asprovidedinthisparagraph.Ifthesourceofprepaymentmoneysisthegeneralfundof theCity,orothergenerallyavailablesource,theprepaymentmaybeallocatedtoanyofthe portionsofdebtserviceinsuchamountsastheCityshalldetermine.Ifthesourceofa prepaymentisspecialassessmentspledgedtoandtaxesleviedfortheImprovements,the prepaymentshallbeallocatedtotheImprovementPortionofdebtservice.Ifthesourceof prepaymentsisexcessnetrevenuesoftheSystempledgedforthePriorBonds,theprepayment shallbeallocatedtotheRefundingPortionoftheBonds. ForthepurposeofcomplyingwithMinnesotaStatutes,Section475.54,Subdivision1, thematurityschedulefortheBondshasbeencombinedwiththematurityscheduleoftheCity's outstandingTaxableGeneralObligationBonds,Series2015B,aspermittedbyMinnesota Statutes,Section475.54,Subdivision2. (c)BookEntryOnlySystem.TheDepositoryTrustCompany,alimitedpurpose trustcompanyorganizedunderthelawsoftheStateofNewYorkoranyofitssuccessorsorits successorstoitsfunctionshereunder(the"Depository")willactassecuritiesdepositoryforthe Bonds,andtothisend: 3 6999877v3 (i)TheBondsshallbeinitiallyissuedand,solongastheyremaininbookentryform only(the"BookEntryOnlyPeriod"),shallatalltimesbeintheformofaseparate singlefullyregisteredBondforeachmaturityoftheBonds;andforpurposesof complyingwiththisrequirementunderparagraphs5and10Authorized DenominationsforanyBondshallbedeemedtobelimitedduringtheBookEntry OnlyPeriodtotheoutstandingprincipalamountofthatBond. (ii)Uponinitialissuance,ownershipoftheBondsshallberegisteredinabond registermaintainedbytheBondRegistrar(ashereinafterdefined)inthenameof CEDE&CO.,asthenominee(itoranynomineeoftheexistingorasuccessor Depository,the"Nominee"). (iii)WithrespecttotheBondsneithertheCitynortheBondRegistrarshallhaveany responsibilityorobligationtoanybroker,dealer,bank,oranyotherfinancial institutionforwhichtheDepositoryholdsBondsassecuritiesdepository(the "Participant")orthepersonforwhichaParticipantholdsaninterestintheBonds shownonthebooksandrecordsoftheParticipant(the"BeneficialOwner"). Withoutlimitingtheimmediatelyprecedingsentence,neithertheCity,northe BondRegistrar,shallhaveanysuchresponsibilityorobligationwithrespectto (A)theaccuracyoftherecordsoftheDepository,theNomineeoranyParticipant withrespecttoanyownershipinterestintheBonds,or(B)thedeliverytoany Participant,anyOwneroranyotherperson,otherthantheDepository,ofany noticewithrespecttotheBonds,includinganynoticeofredemption,or(C)the paymenttoanyParticipant,anyBeneficialOwneroranyotherperson,otherthan theDepository,ofanyamountwithrespecttotheprincipaloforpremium,ifany, orinterestontheBonds,or(D)theconsentgivenorotheractiontakenbythe DepositoryastheRegisteredHolderofanyBonds(the"Holder").Forpurposes ofsecuringthevoteorconsentofanyHolderunderthisResolution,theCitymay, however,relyuponanomnibusproxyunderwhichtheDepositoryassignsits consentingorvotingrightstocertainParticipantstowhoseaccountstheBonds arecreditedontherecorddateidentifiedinalistingattachedtotheomnibus proxy. (iv)TheCityandtheBondRegistrarmaytreatasanddeemtheDepositorytobethe absoluteowneroftheBondsforthepurposeofpaymentoftheprincipalofand premium,ifany,andinterestontheBonds,forthepurposeofgivingnoticesof redemptionandothermatterswithrespecttotheBonds,forthepurposeof obtaininganyconsentorotheractiontobetakenbyHoldersforthepurposeof registeringtransferswithrespecttosuchBonds,andforallpurposewhatsoever. TheBondRegistrar,aspayingagenthereunder,shallpayallprincipalofand premium,ifany,andinterestontheBondsonlytotheHolderortheHoldersof theBondsasshownonthebondregister,andallsuchpaymentsshallbevalidand effectivetofullysatisfyanddischargetheCity'sobligationswithrespecttothe principalofandpremium,ifany,andinterestontheBondstotheextentofthe sumorsumssopaid. (v)UpondeliverybytheDepositorytotheBondRegistrarofwrittennoticetothe effectthattheDepositoryhasdeterminedtosubstituteanewNomineeinplaceof 4 6999877v3 theexistingNominee,andsubjecttothetransferprovisionsinparagraph10 hereof,referencestotheNomineehereundershallrefertosuchnewNominee. (vi)SolongasanyBondisregisteredinthenameofaNominee,allpaymentswith respecttotheprincipalofandpremium,ifany,andinterestonsuchBondandall noticeswithrespecttosuchBondshallbemadeandgiven,respectively,bythe BondRegistrarorCity,asthecasemaybe,totheDepositoryasprovidedinthe LetterofRepresentationstotheDepositoryrequiredbytheDepositoryasa conditiontoitsactingasbook-entryDepositoryfortheBonds(saidLetterof Representations,togetherwithanyreplacementthereoforamendmentor substitutethereto,includinganystandardproceduresorpoliciesreferenced thereinorapplicabletheretorespectingtheproceduresandothermattersrelating totheDepository'sroleasbook-entryDepositoryfortheBonds,collectively hereinafterreferredtoasthe"LetterofRepresentations"). (vii)AlltransfersofbeneficialownershipinterestsineachBondissuedinbook-entry formshallbelimitedinprincipalamounttoAuthorizedDenominationsandshall beeffectedbyproceduresbytheDepositorywiththeParticipantsforrecording andtransferringtheownershipofbeneficialinterestsinsuchBonds. (viii)Inconnectionwithanynoticeorothercommunicationtobeprovidedtothe HolderspursuanttothisResolutionbytheCityorBondRegistrarwithrespectto anyconsentorotheractiontobetakenbyHolders,theDepositoryshallconsider thedateofreceiptofnoticerequestingsuchconsentorotheractionastherecord dateforsuchconsentorotheraction;provided,thattheCityortheBondRegistrar mayestablishaspecialrecorddateforsuchconsentorotheraction.TheCityor theBondRegistrarshall,totheextentpossible,givetheDepositorynoticeofsuch specialrecorddatenotlessthanfifteencalendardaysinadvanceofsuchspecial recorddatetotheextentpossible. (ix)AnysuccessorBondRegistrarinitswrittenacceptanceofitsdutiesunderthis Resolutionandanypayingagency/bondregistraragreement,shallagreetotake anyactionsnecessaryfromtimetotimetocomplywiththerequirementsofthe LetterofRepresentations. (x)InthecaseofapartialprepaymentofaBond,theHoldermay,inlieuof surrenderingtheBondsforaBondofalesserdenominationasprovidedin paragraph5,makeanotationofthereductioninprincipalamountonthepanel providedontheBondstatingtheamountsoredeemed. (d)TerminationofBook-EntryOnlySystem.Discontinuanceofaparticular Depository'sservicesandterminationofthebook-entryonlysystemmaybeeffectedasfollows: (i)TheDepositorymaydeterminetodiscontinueprovidingitsserviceswithrespect totheBondsatanytimebygivingwrittennoticetotheCityanddischargingits responsibilitieswithrespecttheretounderapplicablelaw.TheCitymay terminatetheservicesoftheDepositorywithrespecttotheBondifitdetermines thattheDepositoryisnolongerabletocarryoutitsfunctionsassecurities 5 6999877v3 depositoryorthecontinuationofthesystemofbook-entrytransfersthroughthe DepositoryisnotinthebestinterestsoftheCityortheBeneficialOwners. (ii)UponterminationoftheservicesoftheDepositoryasprovidedinthepreceding paragraph,andifnosubstitutesecuritiesdepositoryiswillingtoundertakethe functionsoftheDepositoryhereundercanbefoundwhich,intheopinionofthe City,iswillingandabletoassumesuchfunctionsuponreasonableorcustomary terms,oriftheCitydeterminesthatitisinthebestinterestsoftheCityorthe BeneficialOwnersoftheBondthattheBeneficialOwnersbeabletoobtain certificatesfortheBonds,theBondsshallnolongerberegisteredasbeing registeredinthebondregisterinthenameoftheNominee,butmayberegistered inwhatevernameornamestheHolderoftheBondsshalldesignateatthattime, inaccordancewithparagraph10.TotheextentthattheBeneficialOwnersare designatedasthetransfereebytheHolders,inaccordancewithparagraph10,the BondswillbedeliveredtotheBeneficialOwners. (iii)Nothinginthissubparagraph(d)shalllimitorrestricttheprovisionsofparagraph 10. (e)LetterofRepresentations.TheprovisionsintheLetterofRepresentationsare incorporatedhereinbyreferenceandmadeapartoftheresolution,andifandtotheextentany suchprovisionsareinconsistentwiththeotherprovisionsofthisresolution,theprovisionsinthe LetterofRepresentationsshallcontrol. 3.Purpose;RefundingFindings.TheImprovementPortionoftheBondsshall providefundstofinancetheconstructionoftheImprovements(the“Project”).Thetotalcostof theProject,whichshallincludeallcostsenumeratedinMinnesotaStatutes,Section475.65,is estimatedtobeatleastequaltotheamountoftheImprovementPortionoftheBonds.TheCity covenantsthatitshalldoallthingsandperformallactsrequiredofittoassurethatworkonthe Projectproceedswithduediligencetocompletionandthatanyandallpermitsandstudies requiredunderlawfortheProjectareobtained.TheCitycovenantsthatitshalldoallthingsand performallactsrequiredofittoassurethatworkontheProjectproceedswithduediligenceto completionandthatanyandallpermitsandstudiesrequiredunderlawfortheProjectare obtained. TheRefundingPortionoftheBondsshallprovidefundsforacrossoverrefundingofthe RefundedBonds(the"Refunding").Itisherebyfound,determinedanddeclaredthatthe RefundingispursuanttoMinnesotaStatutes,Section475.67,Subdivision13,andasofthe CrossoverDate,shallresultinareductionofthepresentvalueofthedollaramountofthedebt servicetotheCityfromatotaldollaramountof$6,373,411.96forthePriorBondstoatotal dollaramountof$5,847,390.18fortheRefundingPortionoftheBonds,computedinaccordance withtheprovisionsofMinnesotaStatutes,Section475.67,Subdivision12,andaccordinglythe dollaramountofsuchpresentvalueofthedebtservicefortheRefundingPortionoftheBondsis lowerbyatleastthreepercentthanthedollaramountofsuchpresentvalueofthedebtservice forthePriorBonds,asrequiredinMinnesotaStatutes,Section475.67,Subdivision12. 4.Interest.TheBondsshallbearinterestpayablesemiannuallyonJune15and December15ofeachyear(each,an"InterestPaymentDate"),commencingDecember15,2015, 6 6999877v3 calculatedonthebasisofa360-dayyearoftwelve30-daymonths,attherespectiveratesper annumsetforthoppositethematurityyearsasfollows: MaturityYearInterestRateMaturityYearInterestRate 20181.00%20252.00% 20191.0020262.50 20201.5020272.50 20211.5020283.00 20221.5020293.00 20232.0020303.00 20242.0020313.00 5.Redemption.AllBondsmaturingonDecember15,2023andthereafter,shallbe subjecttoredemptionandprepaymentattheoptionoftheCityonDecember15,2022,andon anydatethereafteratapriceofparplusaccruedinterest.Redemptionmaybeinwholeorinpart oftheBondssubjecttoprepayment.Ifredemptionisinpart,thematuritiesandtheprincipal amountswithineachmaturitytoberedeemedshallbedeterminedbytheCity;andifonlypartof theBondshavingacommonmaturitydatearecalledforprepayment,thespecificBondstobe prepaidshallbechosenbylotbytheBondRegistrar.Bondsorportionsthereofcalledfor redemptionshallbedueandpayableontheredemptiondate,andinterestthereonshallceaseto accruefromandaftertheredemptiondate.Mailednoticeofredemptionshallbegiventothe payingagentandtoeachaffectedregisteredholderoftheBondsthirtydayspriortothedate fixedforredemption. ToeffectapartialredemptionofBondshavingacommonmaturitydate,theBond RegistrarpriortogivingnoticeofredemptionshallassigntoeachBondhavingacommon maturitydateadistinctivenumberforeach$5,000oftheprincipalamountofsuchBond.The BondRegistrarshallthenselectbylot,usingsuchmethodofselectionasitshalldeemproperin itsdiscretion,fromthenumberssoassignedtosuchBonds,asmanynumbersas,at$5,000for eachnumber,shallequaltheprincipalamountofsuchBondstoberedeemed.TheBondstobe redeemedshallbetheBondstowhichwereassignednumberssoselected;provided,however, thatonlysomuchoftheprincipalamountofeachsuchBondofadenominationofmorethan $5,000shallberedeemedasshallequal$5,000foreachnumberassignedtoitandsoselected.If aBondistoberedeemedonlyinpart,itshallbesurrenderedtotheBondRegistrar(with,ifthe CityorBondRegistrarsorequires,awritteninstrumentoftransferinformsatisfactorytothe CityandBondRegistrardulyexecutedbytheHolderthereofortheHolder'sattorneyduly authorizedinwriting)andtheCityshallexecute(ifnecessary)andtheBondRegistrarshall authenticateanddelivertotheHolderoftheBond,withoutservicecharge,anewBondorBonds havingthesamestatedmaturityandinterestrateandofanyAuthorizedDenominationor Denominations,asrequestedbytheHolder,inaggregateprincipalamountequaltoandin exchangefortheunredeemedportionoftheprincipaloftheBondsosurrendered. 6.BondRegistrar.NorthlandTrustServices,Inc.,inMinneapolis,Minnesota,is appointedtoactasbondregistrarandtransferagentwithrespecttotheBonds(the"Bond Registrar"),andshalldosounlessanduntilasuccessorBondRegistrarisdulyappointed,all pursuanttoanycontracttheCityandBondRegistrarshallexecutewhichisconsistentherewith. TheBondRegistrarshallalsoserveaspayingagentunlessanduntilasuccessor-payingagentis 7 6999877v3 dulyappointed.PrincipalandinterestontheBondsshallbepaidtotheregisteredholders(or recordholders)oftheBondsinthemannersetforthintheformofBondandparagraph12. 7.FormofBond.TheBonds,togetherwiththeBondRegistrar'sCertificateof Authentication,theformofAssignmentandtheregistrationinformationthereon,shallbein substantiallythefollowingform: UNITEDSTATESOFAMERICA STATEOFMINNESOTA SCOTTCOUNTY CITYOFPRIORLAKE R-_______$_________ GENERALOBLIGATIONBOND,SERIES2015A InterestRateMaturityDateDateofOriginalIssueCUSIP ________%December15,May1,2015 REGISTEREDOWNER:CEDE&CO. PRINCIPALAMOUNT: TheCityofPriorLake,ScottCounty,Minnesota(the"Issuer"),certifiesthatitis indebtedandforvaluereceivedpromisestopaytotheregisteredownerspecifiedabove,or registeredassigns,unlesscalledforearlierredemption,inthemannerhereinaftersetforth,the principalamountspecifiedabove,onthematuritydatespecifiedabove,andtopayinterest thereonsemiannuallyonJune15andDecember15ofeachyear(each,an"InterestPayment Date"),commencingDecember15,2015,attherateperannumspecifiedabove(calculatedon thebasisofa360-dayyearoftwelve30-daymonths)untiltheprincipalsumispaidorhasbeen providedfor.ThisBondwillbearinterestfromthemostrecentInterestPaymentDatetowhich interesthasbeenpaidor,ifnointeresthasbeenpaid,fromthedateoforiginalissuehereof.The principalofandpremium,ifany,onthisBondarepayableuponpresentationandsurrender hereofattheprincipalofficeofNorthlandTrustServices,Inc.,inMinneapolis,Minnesota(the "BondRegistrar"),actingaspayingagent,oranysuccessorpayingagentdulyappointedbythe Issuer.InterestonthisBondwillbepaidoneachInterestPaymentDatebycheckordraftmailed tothepersoninwhosenamethisBondisregistered(the"Holder"or"Bondholder")onthe registrationbooksoftheIssuermaintainedbytheBondRegistrarandattheaddressappearing thereonatthecloseofbusinessonthefirstdayofthecalendarmonthofsuchInterestPayment Date(the"RegularRecordDate").Anyinterestnotsotimelypaidshallceasetobepayableto thepersonwhoistheHolderhereofasoftheRegularRecordDate,andshallbepayabletothe personwhoistheHolderhereofatthecloseofbusinessonadate(the"SpecialRecordDate") fixedbytheBondRegistrarwhenevermoneybecomesavailableforpaymentofthedefaulted interest.NoticeoftheSpecialRecordDateshallbegiventoBondholdersnotlessthantendays priortotheSpecialRecordDate.Theprincipalofandpremium,ifany,andinterestonthisBond arepayableinlawfulmoneyoftheUnitedStatesofAmerica.SolongasthisBondisregistered inthenameoftheDepositoryoritsNomineeasprovidedintheResolutionhereinafterdescribed, 8 6999877v3 andasthosetermsaredefinedtherein,paymentofprincipalof,premium,ifany,andintereston thisBondandnoticewithrespecttheretoshallbemadeasprovidedintheLetterof Representations,asdefinedintheResolution,andsurrenderofthisBondshallnotberequired forpaymentoftheredemptionpriceuponapartialredemptionofthisBond.Untilterminationof thebook-entryonlysystempursuanttotheResolution,Bondsmayonlyberegisteredinthe nameoftheDepositoryoritsNominee. PriortothedateonwhichanyBondorBondsaredirectedbytheIssuertoberedeemed inadvanceofmaturity,theIssuerwillcausenoticeofthecallthereofforredemptionidentifying theBondstoberedeemedtobemailedtotheBondRegistrarandallBondholders,atthe addressesshownontheBondRegister.AllBondssocalledforredemptionwillceasetobear interestonthespecifiedredemptiondate,providedfundsfortheirredemptionhavebeenduly deposited. OptionalRedemption.AllBondsofthisissue(the"Bonds")maturingonDecember15, 2023,andthereafter,aresubjecttoredemptionandprepaymentattheoptionoftheIssueron December15,2022,andonanydatethereafteratapriceofparplusaccruedinterest. RedemptionmaybeinwholeorinpartoftheBondssubjecttoprepayment.Ifredemptionisin part,thematuritiesandtheprincipalamountswithineachmaturitytoberedeemedshallbe determinedbytheIssuer;andifonlypartoftheBondshavingacommonmaturitydatearecalled forprepayment,thespecificBondstobeprepaidshallbechosenbylotbytheBondRegistrar. Bondsorportionsthereofcalledforredemptionshallbedueandpayableontheredemptiondate, andinterestthereonshallceasetoaccruefromandaftertheredemptiondate.Mailednoticeof redemptionshallbegiventothepayingagentandtoeachaffectedregisteredholderoftheBonds atleastthirtydayspriortothedatefixedforredemption. SelectionofBondsforRedemption;PartialRedemption.Toeffectapartialredemption ofBondshavingacommonmaturitydate,theBondRegistrarshallassigntoeachBondhavinga commonmaturitydateadistinctivenumberforeach$5,000oftheprincipalamountofsuch Bond.TheBondRegistrarshallthenselectbylot,usingsuchmethodofselectionasitshall deemproperinitsdiscretion,fromthenumbersassignedtotheBonds,asmanynumbersas,at $5,000foreachnumber,shallequaltheprincipalamountofsuchBondstoberedeemed.The BondstoberedeemedshallbetheBondstowhichwereassignednumberssoselected;provided, however,thatonlysomuchoftheprincipalamountofsuchBondofadenominationofmore than$5,000shallberedeemedasshallequal$5,000foreachnumberassignedtoitandso selected.IfaBondistoberedeemedonlyinpart,itshallbesurrenderedtotheBondRegistrar (with,iftheIssuerorBondRegistrarsorequires,awritteninstrumentoftransferinform satisfactorytotheIssuerandBondRegistrardulyexecutedbytheHolderthereofortheHolder's attorneydulyauthorizedinwriting)andtheIssuershallexecute(ifnecessary)andtheBond RegistrarshallauthenticateanddelivertotheHolderoftheBond,withoutservicecharge,anew BondorBondshavingthesamestatedmaturityandinterestrateandofanyAuthorized DenominationorDenominations,asrequestedbytheHolder,inaggregateprincipalamount equaltoandinexchangefortheunredeemedportionoftheprincipaloftheBondsosurrendered. Issuance;Purpose;GeneralObligation.ThisBondisoneofanissueinthetotalprincipal amountof$10,000,000,alloflikedateoforiginalissueandtenor,exceptastonumber,maturity, interestrate,denominationandredemptionprivilege,issuedpursuanttoandinfullconformity withtheConstitutionandlawsoftheStateofMinnesotaandpursuanttoaresolutionadoptedby 9 6999877v3 theCityCouncilonApril27,2015(the"Resolution"),forthepurposeofprovidingmoneyto financetheconstructionofvariouspublicimprovementswithinthejurisdictionoftheIssuerand forapartialcrossoverrefundingonDecember15,2017,oftheIssuer'soutstandingGeneral ObligationWaterTreatmentPlantRevenueBonds,Series2007A,datedMay15,2007,which matureoraresubjecttomandatoryredemptiononandafterDecember15,2023.ThisBondis payableoutoftheGeneralObligationBonds,Series2015AFundoftheIssuer.ThisBond constitutesageneralobligationoftheIssuer,andtoprovidemoneysforthepromptandfull paymentofitsprincipal,premium,ifany,andinterestwhenthesamebecomedue,thefullfaith andcreditandtaxingpowersoftheIssuerhavebeenandareherebyirrevocablypledged. Denominations;Exchange;Resolution.TheBondsareissuablesolelyinfullyregistered forminAuthorizedDenominations(asdefinedintheResolution)andareexchangeableforfully registeredBondsofotherAuthorizedDenominationsinequalaggregateprincipalamountsatthe officeoftheBondRegistrar,butonlyinthemannerandsubjecttothelimitationsprovidedinthe Resolution.ReferenceisherebymadetotheResolutionforadescriptionoftherightsandduties oftheBondRegistrar.CopiesoftheResolutionareonfileintheofficeoftheBondRegistrar. Transfer.ThisBondistransferablebytheHolderinpersonortheHolder'sattorneyduly authorizedinwritingattheofficeoftheBondRegistraruponpresentationandsurrenderhereof totheBondRegistrar,allsubjecttothetermsandconditionsprovidedintheResolutionandto reasonableregulationsoftheIssuercontainedinanyagreementwiththeBondRegistrar. ThereupontheIssuershallexecuteandtheBondRegistrarshallauthenticateanddeliver,in exchangeforthisBond,oneormorenewfullyregisteredBondsinthenameofthetransferee (butnotregisteredinblankorto"bearer"orsimilardesignation),ofanAuthorized DenominationorDenominations,inaggregateprincipalamountequaltotheprincipalamountof thisBond,ofthesamematurityandbearinginterestatthesamerate. FeesuponTransferorLoss.TheBondRegistrarmayrequirepaymentofasum sufficienttocoveranytaxorothergovernmentalchargepayableinconnectionwiththetransfer orexchangeofthisBondandanylegalorunusualcostsregardingtransfersandlostBonds. TreatmentofRegisteredOwners.TheIssuerandBondRegistrarmaytreatthepersonin whosenamethisBondisregisteredastheownerhereofforthepurposeofreceivingpaymentas hereinprovided(exceptasotherwiseprovidedhereinwithrespecttotheRecordDate)andforall otherpurposes,whetherornotthisBondshallbeoverdue,andneithertheIssuernortheBond Registrarshallbeaffectedbynoticetothecontrary. Authentication.ThisBondshallnotbevalidorbecomeobligatoryforanypurposeorbe entitledtoanysecurityunlesstheCertificateofAuthenticationhereonshallhavebeenexecuted bytheBondRegistrar. QualifiedTax-ExemptObligation.ThisBondhasbeendesignatedbytheIssuerasa "qualifiedtax-exemptobligation"forpurposesofSection265(b)(3)oftheInternalRevenue Codeof1986,asamended. ITISHEREBYCERTIFIEDANDRECITEDthatallacts,conditionsandthings requiredbytheConstitutionandlawsoftheStateofMinnesotatobedone,tohappenandtobe performed,precedenttoandintheissuanceofthisBond,havebeendone,havehappenedand 10 6999877v3 havebeenperformed,inregularanddueform,timeandmannerasrequiredbylaw;thatthe IssuerhascovenantedandagreedwiththeHoldersoftheRefundingPortionoftheBondsthatit willimposeandcollectchargesfortheservice,useandavailabilityofthewatersystem(the "System")atthetimesandinamountsnecessarytoproducenetrevenues,togetherwithother sumspledgedtothepaymentoftheRefundingPortionoftheBonds,adequatetopayall principalandinterestwhendueontheRefundingPortionoftheBonds;andthattheIssuerwill levyadirect,annual,irrepealableadvaloremtaxuponallofthetaxablepropertyoftheIssuer, withoutlimitationastorateoramount,fortheyearsandinamountssufficienttopaythe principalandinterestontheRefundingPortionoftheBondsastheyrespectivelybecomedue,if thenetrevenuesfromtheSystem,andanyothersumsirrevocablyappropriatedtotheDebt ServiceAccountareinsufficienttherefor;andthatthisBond,togetherwithallotherdebtsofthe Issueroutstandingonthedateoforiginalissuehereofandthedateofitsissuanceanddeliveryto theoriginalpurchaser,doesnotexceedanyconstitutionalorstatutorylimitationofindebtedness. INWITNESSWHEREOF,theCityofPriorLake,ScottCounty,Minnesota,byitsCity CouncilhascausedthisBondtobeexecutedonitsbehalfbythefacsimilesignaturesofits MayoranditsCityManager,thecorporatesealoftheIssuerhavingbeenintentionallyomittedas permittedbylaw. DateofRegistration:Registrableby:NORTHLANDTRUSTSERVICES, INC. Payableat:NORTHLANDTRUSTSERVICES, BONDREGISTRAR'S INC. CERTIFICATEOF AUTHENTICATION CITYOFPRIORLAKE, SCOTTCOUNTY,MINNESOTA ThisBondisoneoftheBonds describedintheResolution mentionedwithin. /s/Facsimile NORTHLANDTRUST Mayor SERVICES,INC. Minneapolis,Minnesota BondRegistrar /s/Facsimile CityManager By: AuthorizedSignature 11 6999877v3 ABBREVIATIONS Thefollowingabbreviations,whenusedintheinscriptiononthefaceofthisBond,shall beconstruedasthoughtheywerewrittenoutinfullaccordingtoapplicablelawsorregulations: TENCOM-astenantsincommon TENENT-astenantsbytheentireties JTTEN-asjointtenantswithrightofsurvivorshipandnotastenantsincommon UTMA-___________ascustodianfor______________ (Cust)(Minor) underthe_____________________Uniform (State) TransferstoMinorsAct Additionalabbreviationsmayalsobeusedthoughnotintheabovelist. ___________________________________________________________ ASSIGNMENT Forvaluereceived,theundersignedherebysells,assignsandtransfersunto ________________________________________________________________thewithinBond anddoesherebyirrevocablyconstituteandappoint_________________attorneytotransferthe Bondonthebookskeptfortheregistrationthereof,withfullpowerofsubstitutioninthe premises. Dated:___________________________________________________ Notice:Theassignor'ssignaturetothisassignmentmustcorrespond withthenameasitappearsuponthefaceofthewithin Bondineveryparticular,withoutalterationoranychange whatever. SignatureGuaranteed: ___________________________ Signature(s)mustbeguaranteedbyanationalbankortrustcompanyorbyabrokeragefirm havingamembershipinoneofthemajorstockexchangesoranyother"EligibleGuarantor Institution"asdefinedin17CFR240.17Ad-15(a)(2). TheBondRegistrarwillnoteffecttransferofthisBondunlesstheinformation concerningthetransfereerequestedbelowisprovided. NameandAddress:________________________________________ ________________________________________ ________________________________________ (IncludeinformationforalljointownersiftheBondisheldbyjointaccount.) 12 6999877v3 PREPAYMENTSCHEDULE ThisBondhasbeenprepaidinpartonthedate(s)andintheamount(s)asfollows: DateAmountAuthorizedsignatureofHolder 13 6999877v3 8.Execution.TheBondsshallbeintypewrittenform,shallbeexecutedonbehalfof theCitybythesignaturesofitsMayorandCityManagerandbesealedwiththesealoftheCity; provided,aspermittedbylaw,bothsignaturesmaybephotocopiedfacsimilesandthecorporate sealhasbeenomitted.Intheeventofdisabilityorresignationorotherabsenceofeitherofficer, theBondsmaybesignedbythemanualorfacsimilesignatureoftheofficerwhomayacton behalfoftheabsentordisabledofficer.Incaseeitherofficerwhosesignatureorfacsimileof whosesignatureshallappearontheBondsshallceasetobesuchofficerbeforethedeliveryof theBonds,thesignatureorfacsimileshallneverthelessbevalidandsufficientforallpurposes, thesameasiftheofficerhadremainedinofficeuntildelivery. 9.Authentication.NoBondshallbevalidorobligatoryforanypurposeorbe entitledtoanysecurityorbenefitunderthisresolutionunlessaCertificateofAuthenticationon suchBond,substantiallyintheformhereinabovesetforth,shallhavebeendulyexecutedbyan authorizedrepresentativeoftheBondRegistrar.CertificatesofAuthenticationondifferent Bondsneednotbesignedbythesameperson.TheBondRegistrarshallauthenticatethe signaturesofofficersoftheCityoneachBondbyexecutionoftheCertificateofAuthentication ontheBondandbyinsertingasthedateofregistrationinthespaceprovidedthedateonwhich theBondisauthenticated,exceptthatforpurposesofdeliveringtheoriginalBondstothe Purchaser,theBondRegistrarshallinsertasadateofregistrationthedateoforiginalissueof May1,2015.TheCertificateofAuthenticationsoexecutedoneachBondshallbeconclusive evidencethatithasbeenauthenticatedanddeliveredunderthisresolution. 10.Registration;Transfer;Exchange.TheCitywillcausetobekeptattheprincipal officeoftheBondRegistrarabondregisterinwhich,subjecttosuchreasonableregulationsas theBondRegistrarmayprescribe,theBondRegistrarshallprovidefortheregistrationofBonds andtheregistrationoftransfersofBondsentitledtoberegisteredortransferredasherein provided. UponsurrenderfortransferofanyBondattheprincipalofficeoftheBondRegistrar,the Cityshallexecute(ifnecessary),andtheBondRegistrarshallauthenticate,insertthedateof registration(asprovidedinparagraph9)of,anddeliver,inthenameofthedesignatedtransferee ortransferees,oneormorenewBondsofanyAuthorizedDenominationorDenominationsofa likeaggregateprincipalamount,havingthesamestatedmaturityandinterestrate,asrequested bythetransferor;provided,however,thatnoBondmayberegisteredinblankorinthenameof "bearer"orsimilardesignation. AttheoptionoftheHolder,BondsmaybeexchangedforBondsofanyAuthorized DenominationorDenominationsofalikeaggregateprincipalamountandstatedmaturity,upon surrenderoftheBondstobeexchangedattheofficeoftheBondRegistrar.Wheneverany Bondsaresosurrenderedforexchange,theCityshallexecute(ifnecessary),andtheBond Registrarshallauthenticate,insertthedateofregistrationof,anddelivertheBondswhichthe Holdermakingtheexchangeisentitledtoreceive. AllBondssurrendereduponanyexchangeortransferprovidedforinthisresolutionshall bepromptlycanceledbytheBondRegistrarandthereafterdisposedofasdirectedbytheCity. 14 6999877v3 AllBondsdeliveredinexchangefororupontransferofBondsshallbevalidgeneral obligationsoftheCityevidencingthesamedebt,andentitledtothesamebenefitsunderthis resolution,astheBondssurrenderedforsuchexchangeortransfer. EveryBondpresentedorsurrenderedfortransferorexchangeshallbedulyendorsedor beaccompaniedbyawritteninstrumentoftransfer,informsatisfactorytotheBondRegistrar, dulyexecutedbytheHolderthereofortheHolder'sattorneydulyauthorizedinwriting. TheBondRegistrarmayrequirepaymentofasumsufficienttocoveranytaxorother governmentalchargepayableinconnectionwiththetransferorexchangeofanyBondandany legalorunusualcostsregardingtransfersandlostBonds. TransfersshallalsobesubjecttoreasonableregulationsoftheCitycontainedinany agreementwiththeBondRegistrar,includingregulationswhichpermittheBondRegistrarto closeitstransferbooksbetweenrecorddatesandpaymentdates.TheCityManagerishereby authorizedtonegotiateandexecutethetermsofsaidagreement. 11.RightsUponTransferorExchange.EachBonddeliveredupontransferoforin exchangefororinlieuofanyotherBondshallcarryalltherightstointerestaccruedandunpaid, andtoaccrue,whichwerecarriedbysuchotherBond. 12.InterestPayment;RecordDate.InterestonanyBondshallbepaidoneach InterestPaymentDatebycheckordraftmailedtothepersoninwhosenametheBondis registered(the"Holder")ontheregistrationbooksoftheCitymaintainedbytheBondRegistrar andattheaddressappearingthereonatthecloseofbusinessonthefirstdayofthecalendar monthofsuchInterestPaymentDate(the"RegularRecordDate").Anysuchinterestnotso timelypaidshallceasetobepayabletothepersonwhoistheHolderthereofasoftheRegular RecordDate,andshallbepayabletothepersonwhoistheHolderthereofatthecloseof businessonadate(the"SpecialRecordDate")fixedbytheBondRegistrarwhenevermoney becomesavailableforpaymentofthedefaultedinterest.NoticeoftheSpecialRecordDateshall begivenbytheBondRegistrartotheHoldersnotlessthantendayspriortotheSpecialRecord Date. 13.TreatmentofRegisteredOwner.TheCityandBondRegistrarmaytreatthe personinwhosenameanyBondisregisteredastheownerofsuchBondforthepurposeof receivingpaymentofprincipalofandpremium,ifany,andinterest(subjecttothepayment provisionsinparagraph12)on,suchBondandforallotherpurposeswhatsoeverwhetherornot suchBondshallbeoverdue,andneithertheCitynortheBondRegistrarshallbeaffectedby noticetothecontrary. 14.Delivery;ApplicationofProceeds.TheBondswhensopreparedandexecuted shallbedeliveredbytheManagertothePurchaseruponreceiptofthepurchaseprice,andthe Purchasershallnotbeobligedtoseetotheproperapplicationthereof. 15.FundandAccounts.Thereisherebyestablishedaspecialfundtobedesignated "GeneralObligationBonds,Series2015AFund"(the"Fund")tobeadministeredandmaintained bytheFinanceDirectorasabookkeepingaccountseparateandapartfromallotherfunds maintainedintheofficialfinancialrecordsoftheCity.TheFundshallbemaintainedinthe 15 6999877v3 mannerhereinspecifieduntilalloftheBondsandtheinterestthereonhavebeenfullypaid.The OperationandMaintenanceAccountheretoforeestablishedbytheCityshallcontinuetobe maintainedinthemannerheretoforeprovidedbytheCity.Allmoneysremainingafterpayingor providingfortheitemssetforthintheresolutionestablishingtheOperationandMaintenance Accountshallconstituteorarereferredtoas"netrevenues"untiltheRefundingPortionofthe BondsandtheOutstandingBondshavebeenpaid.ThereshallbemaintainedintheFundthe followingseparateaccountstowhichshallbecreditedanddebitedallincomeanddisbursements oftheSystemashereinaftersetforth.TheManagerandallofficialsandemployeesconcerned therewithshallestablishandmaintainfinancialrecordsofthereceiptsanddisbursementsofthe Systeminaccordancewiththisresolution.Insuchrecordsthereshallbeestablishedaccountsor accountsshallcontinuetobemaintainedasthecasemaybe,oftheFundforthepurposesandin theamountsasfollows: (a)EscrowAccount.TheEscrowAccountshallbemaintainedasanescrowaccount withNorthlandTrustServices,Inc.(the"EscrowAgent"),inMinneapolis,Minnesota,whichisa suitablefinancialinstitutionwithinorwithouttheState.$5,405,232.91inproceedsofthesaleof theRefundingPortionoftheBondsincludingaproratashareofaccruedinterestshallbeusedto fundtheEscrowAccountand$55,005.00proceedsofthesaleoftheBondsshallbereceivedby theEscrowAgentandappliedtopaycostsofissuingtheBonds.ProceedsoftheRefunding PortionoftheBonds,lessproceedsusedtopaycostsofissuanceandanyrounding(orsurplus funds)returnedtotheCity,areherebyirrevocablypledgedandappropriatedtotheEscrow Account,togetherwithallinvestmentearningsthereon.TheamountsdepositedintheEscrow Accountatclosingshallbeinanamountsufficienttoprovidefunds,(i)topaywhenduethe interesttoaccrueontheRefundingPortionoftheBondstoandincludingtheCrossoverDate; and(ii)topaywhencalledforredemptionontheCrossoverDate,theprincipalamountofthe RefundedBonds.TheEscrowAccountshallbeirrevocablyappropriatedtothepaymentof(i) allinterestontheRefundingPortionoftheBondstoandincludingtheCrossoverDate,and(ii) theprincipaloftheRefundedBondsduebyreasonoftheircallforredemptionontheCrossover Date.ThemoneysintheEscrowAccountshallbeusedsolelyforthepurposeshereinsetforth andfornootherpurpose,exceptthatanysurplusintheEscrowAccountmayberemittedtothe City,allinaccordancewiththeEscrowAgreement,byandbetweentheCityandEscrowAgent (the"EscrowAgreement"),aformofwhichisonfileintheofficeoftheCityManager.Any moneysremittedtotheCitypursuanttotheEscrowAgreementshallbedepositedintheDebt ServiceAccount. (b)ConstructionAccount.TotheConstructionAccountthereshallbecredited $4,567,798.06oftheproceedsofthesaleoftheBonds,lessaccruedandcapitalizedinterest receivedthereon,plusaproratashareofanyspecialassessmentsleviedwithrespecttothe ImprovementsandcollectedpriortocompletionoftheProjectandpaymentofthecoststhereof. FromtheConstructionAccountthereshallbepaidallcostsandexpensesoftheProject, includingthecostofanyconstructioncontractsheretoforeletandallothercostsincurredandto beincurredofthekindauthorizedinMinnesotaStatutes,Section475.65.Moneysinthe ConstructionAccountshallbeusedfornootherpurposeexceptasotherwiseprovidedbylaw; providedthattheproceedsoftheBondsmayalsobeusedtotheextentnecessarytopayinterest ontheBondsduepriortotheanticipateddateofcommencementofthecollectionoftaxesor specialassessmentshereinleviedorcovenantedtobelevied;andprovidedfurtherthatifupon completionoftheProjectthereshallremainanyunexpendedbalanceintheConstruction 16 6999877v3 Account,thebalance(otherthananyspecialassessments)shallbetransferredbytheCouncilto theDebtServiceAccount,orinthecaseofanybalanceattributabletotheImprovementPortion oftheBonds,thefundofanyotherimprovementinstitutedpursuanttoMinnesotaStatutes, Chapter429,andprovidedfurtherthatanyspecialassessmentscreditedtotheConstruction AccountshallonlybeappliedtowardspaymentofthecostsoftheImprovementsuponadoption ofaresolutionbytheCityCouncildeterminingthattheapplicationofthespecialassessmentsfor suchpurposewillnotcausetheCitytonolongerbeincompliancewithMinnesotaStatutes, Section475.61,Subdivision1. (c)DebtServiceAccount.Thereshallbemaintainedseparatesubaccountsinthe DebtServiceAccounttobedesignatedthe"ImprovementDebtServiceSubaccount"andthe "RefundingDebtServiceSubaccount."Thereareherebyirrevocablyappropriatedandpledged to,andthereshallbecreditedtotheseparatesubaccountsoftheDebtServiceAccount: (i)ImprovementDebtServiceSubaccount.Thereareherebyirrevocably appropriatedandpledgedto,andthereshallbecreditedtotheImprovementDebt ServiceSubaccount:(i)aproratashareofallcollectionsofspecialassessments hereincovenantedtobeleviedwithrespecttotheImprovementsandeither initiallycreditedtotheConstructionAccountandnotalreadyspentaspermitted aboveandrequiredtopayanyprincipalandinterestdueontheImprovement PortionoftheBondsorcollectedsubsequenttothecompletionofthe Improvementsandpaymentofthecoststhereof;(ii)capitalizedinterestinthe amountof$125,798.82(togetherwithinterestearningsthereonandsubjectto suchotheradjustmentsasareappropriatetoprovidesufficientfundstopay interestdueontheImprovementPortionoftheBondsonorbeforeJune15, 2016);(iii)aproratashareofallaccruedinterestreceivedupondeliveryofthe Bonds;(iv)anycollectionsofalltaxeshereinorhereafterleviedforthepayment oftheImprovementPortionoftheBondsandinterestthereon;(v)anyfunds remainingintheConstructionAccountaftercompletionoftheImprovementsand paymentofthecoststhereof,notsotransferredtotheaccountofanother improvement;(vi)allinvestmentearningsonfundsheldintheImprovementDebt ServiceSubaccount;and(vii)anyandallothermoneyswhichareproperly availableandareappropriatedbythegoverningbodyoftheCitytothe ImprovementDebtServiceSubaccount.TheImprovementDebtService Subaccountshallbeusedsolelytopaytheprincipalandinterestandany premiumsforredemptionoftheImprovementPortionoftheBondsandanyother generalobligationbondsoftheCityhereafterissuedbytheCityandmade payablefromsaidaccountasprovidedbylaw. (ii)RefundingDebtServiceSubaccount.TotheRefundingDebtServiceSubaccount thereshallbeirrevocablyappropriatedandpledgedto:(i)aftertheDecember15, 2017CrossoverDate,thenetrevenuesoftheSystemnototherwisepledgedand appliedtothepaymentofotherobligationsoftheCity,inanamount,together withotherfundswhichmayhereinorhereafterfromtimetotimebeirrevocably appropriatedtotheaccountsufficienttomeettherequirementsofMinnesota Statutes,Section475.61forthepaymentoftheprincipalandinterestofthe RefundingPortionoftheBonds;(ii)anycollectionsofalltaxeswhichmay hereafterbeleviedintheeventthenetrevenuesoftheSystemhereinpledgedto 17 6999877v3 thepaymentoftheprincipalandinterestontheRefundingPortionoftheBonds areinsufficienttherefor;(iii)anybalanceremittedtotheCitypursuanttothe EscrowAgreement;(iv)allinvestmentearningsonfundsheldintheRefunding DebtServiceSubaccount;(v)anyfundsremainingaftertheCrossoverDateinthe debtserviceaccountestablishedbythePriorResolution;and(vi)anyandall othermoneyswhichareproperlyavailableandareappropriatedbythegoverning bodyoftheCitytotheRefundingDebtServiceSubaccount.TheRefundingDebt ServiceSubaccountshallbeusedsolelytopaytheprincipalandinterestandany premiumforredemptionoftheRefundingPortionoftheBondsandanyother generalobligationbondsoftheCityhereafterissuedbytheCityandmade payablefromsaidsubaccountasprovidedbylaw. NoportionoftheproceedsoftheBondsshallbeuseddirectlyorindirectlytoacquire higheryieldinginvestmentsortoreplacefundswhichwereuseddirectlyorindirectlytoacquire higheryieldinginvestments,except(1)forareasonabletemporaryperioduntilsuchproceedsare neededforthepurposeforwhichtheBondswereissuedand(2)inadditiontotheaboveinan amountnotgreaterthanthelesseroffivepercentoftheproceedsoftheBondsor$100,000.To thiseffect,anyproceedsoftheBondsandanysumsfromtimetotimeheldintheConstruction Account,OperationandMaintenanceAccountorDebtServiceAccount(oranyotherCity accountwhichwillbeusedtopayprincipalorinteresttobecomedueonthebondspayable therefrom)inexcessofamountswhichunderthenapplicablefederalarbitrageregulationsmay beinvestedwithoutregardtoyieldshallnotbeinvestedatayieldinexcessoftheapplicable yieldrestrictionsimposedbysaidarbitrageregulationsonsuchinvestmentsaftertakinginto accountanyapplicable"temporaryperiods"or"minorportion"madeavailableunderthefederal arbitrageregulations.MoneyintheFundshallnotbeinvestedinobligationsordepositsissued by,guaranteedbyorinsuredbytheUnitedStatesoranyagencyorinstrumentalitythereofifand totheextentthatsuchinvestmentwouldcausetheBondstobe"federallyguaranteed"withinthe meaningofSection149(b)oftheInternalRevenueCodeof1986,asamended(the"Code"). 16.CovenantsRelatingtotheImprovementPortionoftheBonds. (a)Assessments.Itisherebydeterminedthatnolessthantwentypercent(20%)of thecosttotheCityofeachImprovementfinancedhereunderwithinthemeaningofMinnesota Statutes,Section475.58,Subdivision1(3),shallbepaidbyspecialassessmentstobelevied againsteveryassessablelot,pieceandparceloflandbenefittedbyanyoftheImprovements. TheCityherebycovenantsandagreesthatitwillletallconstructioncontractsnotheretoforelet withinone(1)yearafterorderingeachImprovementfinancedhereunderunlesstheresolution orderingtheImprovementspecifiesadifferenttimelimitforthelettingofconstructioncontracts. TheCityherebyfurthercovenantsandagreesthatitwilldoandperformassoonastheymaybe doneallactsandthingsnecessaryforthefinalandvalidlevyofsuchspecialassessments,andin theeventthatanysuchassessmentbeatanytimeheldinvalidwithrespecttoanylot,pieceor parceloflandduetoanyerror,defect,orirregularityinanyactionorproceedingstakenortobe takenbytheCityortheCityCounciloranyoftheCityofficersoremployees,eitherinthe makingoftheassessmentsorintheperformanceofanyconditionprecedentthereto,theCityand theCityCouncilwillforthwithdoallfurtheractsandtakeallfurtherproceedingsasmaybe requiredbylawtomaketheassessmentsavalidandbindinglienuponsuchproperty.The specialassessmentshaveheretoforebeenauthorized.Subjecttosuchadjustmentsasarerequired bytheconditionsinexistenceatthetimetheassessmentsarelevied,itisherebydeterminedthat 18 6999877v3 theassessmentsshallbepayableinequal,consecutive,annualinstallments,withgeneraltaxes fortheyearsshownbelowandwithinterestonthedecliningbalanceofallsuchassessmentsat theratesperannumnotlessthantherateperannumsetforthoppositethecollectionyears specifiedbelow: ImprovementCollection DesignationAmountLevyYearsYearRate CreditRiverRoad$399,1852015-20242016-20253.75% MushtownRoad,Maple$294,3822015-20242016-20253.75% LaneandPanamaAvenue$509,8082015-20342016-20353.75% HighlandAvenue,March Street,SkylineAvenue, GrainwoodTrailandEau ClaireTrail$928,6062015-20242016-20253.75% AtthetimetheassessmentsareinfactleviedtheCityCouncilshall,basedonthethen- currentestimatedcollectionsoftheassessments,makeanyadjustmentsinanyadvaloremtaxes requiredtobeleviedinordertoassurethattheCitycontinuestobeincompliancewith MinnesotaStatutes,Section475.61,Subdivision1. (b)TaxLevy;CoverageTest.Toprovidemoneysforpaymentoftheprincipaland interestontheImprovementPortionoftheBondsthereisherebylevieduponallofthetaxable propertyintheCityadirectannualadvaloremtaxwhichshallbespreaduponthetaxrollsand collectedwithandaspartofothergeneralpropertytaxesintheCityfortheyearsandinthe amountsasfollows: YearsofTaxLevyYearsofTaxCollectionAmount Seeattachedschedule Thetaxleviesaresuchthatifcollectedinfullthey,togetherwithestimatedcollectionsof specialassessmentsandotherrevenueshereinpledgedforthepaymentoftheImprovement PortionoftheBonds,willproduceatleastfivepercent(5%)inexcessoftheamountneededto meetwhenduetheprincipalandinterestpaymentsontheImprovementPortionoftheBonds. ThetaxleviesshallbeirrepealablesolongasanyoftheBondsareoutstandingandunpaid, providedthattheCityreservestherightandpowertoreducetheleviesinthemannerandtothe extentpermittedbyMinnesotaStatutes,Section475.61,Subdivision3. (c)GeneralObligationPledge.Forthepromptandfullpaymentoftheprincipaland interestontheImprovementPortionoftheBonds,asthesamerespectivelybecomedue,thefull faith,creditandtaxingpowersoftheCityshallbeandareherebyirrevocablypledged.Ifthe balanceintheImprovementDebtServiceSubaccountiseverinsufficienttopayallprincipaland interestthendueontheImprovementPortionoftheBondsandanyotherbondspayable therefrom,thedeficiencyshallbepromptlypaidoutofanyotherfundsoftheCitywhichare 19 6999877v3 availableforsuchpurpose,andsuchotherfundsmaybereimbursedwithorwithoutinterest fromtheImprovementDebtServiceSubaccountwhenasufficientbalanceisavailabletherein. 17.CovenantsRelatingtotheRefundingPortionoftheBonds. (a)PledgeofSystemNetRevenues;CoverageTest.Itisherebyfound,determined anddeclaredthatthenetrevenuesoftheSystemaresufficienttopaywhenduetheprincipalof andinterestontheRefundingPortionoftheBondsandasumatleastfivepercentinexcess thereof.ThenetrevenuesoftheSystemaresufficienttopaywhenduetheprincipalandinterest andasumatleastfivepercentinexcessthereof.Nothingcontainedhereinshallbedeemedto precludetheCityfrommakingfurtherpledgesandappropriationsoftheSystemnetrevenuesfor thepaymentofotheroradditionalobligationsoftheCity,providedthatithasfirstbeen determinedbytheCityCouncilthattheestimatedSystemnetrevenueswillbesufficientforthe paymentoftheRefundingPortionoftheBondsandsuchadditionalobligationsandanysuch pledgeandappropriationoftheSystemnetrevenuesmaybemadesuperiororsubordinateto,or onaparitywiththepledgeandappropriationherein. (b)CovenanttoMaintainRatesandCharges.InaccordancewithMinnesotaStatutes, Section444.075,theCityherebycovenantsandagreeswiththeHoldersoftheRefunding PortionoftheBondsthatitwillimposeandcollectchargesfortheservice,use,availabilityand connectiontotheSystematthetimesandintheamountsrequiredtoproduceSystemnet revenuesadequatetopaytheprincipalandinterestwhendueontheRefundingPortionofthe Bonds.MinnesotaStatutes,Section444.075,Subdivision2,providesasfollows:"Realestate taxrevenuesshouldbeusedonly,andthenonatemporarybasis,topaygeneralorspecial obligationswhentheotherrevenuesareinsufficienttomeettheobligations." (c)ExcessSystemNetRevenues.Systemnetrevenuesinexcessofthoserequired fortheforegoingmaybeusedforanyproperpurpose. (d)GeneralObligationPledge.Forthepromptandfullpaymentoftheprincipalof andinterestontheRefundingPortionoftheBondsasthesamerespectivelybecomedue,thefull faith,creditandtaxingpowersoftheCityshallbeandareherebyirrevocablypledged.Ifthe SystemnetrevenuespledgedtothepaymentoftheprincipalandinterestontheRefunding PortionoftheBonds,togetherwithotherfundsirrevocablyappropriatedtotheEscrowAccount ortheRefundingDebtServiceSubaccount,shallatanytimebeinsufficienttopaytheprincipal andinterestwhendue,theCitycovenantsandagreestolevy,withoutlimitationastorateor amountanadvaloremtaxuponalltaxablepropertyintheCitysufficienttopaysuchprincipal andinterestasitbecomesdue.IfthebalanceintheEscrowAccountortheRefundingDebt ServiceSubaccountiseverinsufficienttopayallprincipalandinterestthendueonthe RefundingPortionoftheBondspayabletherefrom,thedeficiencyshallbepromptlypaidoutof anyotheraccountsoftheCitywhichareavailableforsuchpurpose,andsuchotherfundsmaybe reimbursedwithoutinterestfromtheEscrowAccountortheRefundingDebtServiceSubaccount whenasufficientbalanceisavailabletherein. 18.Securities;EscrowAgent.SecuritiespurchasedfrommoneysintheEscrow AccountshallbelimitedtosecuritiessetforthinMinnesotaStatutes,Section475.67, Subdivision8,andanyamendmentsorsupplementsthereto.Securitiespurchasedfromthe EscrowAccountshallbepurchasedsimultaneouslywiththedeliveryoftheRefundingPortionof 20 6999877v3 theBonds.TheCityCouncilhasinvestigatedthefactsandherebyfindsanddeterminesthatthe EscrowAgentisasuitablefinancialinstitutiontoactasescrowagent. 19.EscrowAgreement.OnorpriortothedeliveryoftheRefundingPortionofthe BondstheMayorandtheManagershall,andareherebyauthorizedanddirectedto,executeon behalfoftheCityanEscrowAgreement.TheEscrowAgreementisherebyapprovedand adoptedandmadeapartofthisresolution,andtheCitycovenantsthatitwillpromptlyenforce allprovisionsthereofintheeventofdefaultthereunderbytheEscrowAgent. 20.PurchaseofSLGSorOpenMarketSecurities.TheEscrowAgent,asagentfor theCity,isherebyauthorizedanddirectedtopurchaseonbehalfoftheCouncilandinitsname theappropriateUnitedStatesTreasurySecurities,StateandLocalGovernmentSeriesand/or openmarketsecuritiesasprovidedinparagraph18,fromtheproceedsoftheBondsand,tothe extentnecessary,otheravailablefunds,allinaccordancewiththeprovisionsofthisresolution andtheEscrowAgreementandtoexecuteallsuchdocuments(includingtheappropriate subscriptionform)requiredtoeffectsuchpurchaseinaccordancewiththeapplicableU.S. TreasuryRegulations. 21.RedemptionofPriorBonds.ThePriorBondsshallberedeemedandprepaidin accordancewiththetermsandconditionssetforthintheNoticeofCallforRedemption,inthe formattachedtotheEscrowAgreement,whichtermsandconditionsareherebyapprovedand incorporatedhereinbyreference.TheNoticeofCallforRedemptionshallbegivenpursuantto theEscrowAgreement. 22.ContinuingDisclosure.TheCityisthesoleobligatedpersonwithrespecttothe Bonds.TheCityherebyagrees,inaccordancewiththeprovisionsofRule15c2-12(the"Rule"), promulgatedbytheSecuritiesandExchangeCommission(the"Commission")pursuanttothe SecuritiesExchangeActof1934,asamended,andaContinuingDisclosureUndertaking(the "Undertaking")hereinafterdescribed: (a)ProvideorcausetobeprovidedtotheMunicipalSecuritiesRulemakingBoard (the"MSRB")byfilingatwww.emma.msrb.orginaccordancewiththeRule,certainannual financialinformationandoperatingdatainaccordancewiththeUndertaking.TheCityreserves therighttomodifyfromtimetotimethetermsoftheUndertakingasprovidedtherein. (b)ProvideorcausetobeprovidedtotheMSRBnoticeoftheoccurrenceofcertain eventswithrespecttotheBondsinnotmorethanten(10)businessdaysaftertheoccurrenceof theevent,inaccordancewiththeUndertaking. (c)ProvideorcausetobeprovidedtotheMSRBnoticeofafailurebytheCityto providetheannualfinancialinformationwithrespecttotheCitydescribedintheUndertaking,in notmorethanten(10)businessdaysfollowingsuchoccurrence. (d)TheCityagreesthatitscovenantspursuanttotheRulesetforthinthisparagraph andintheUndertakingisintendedtobeforthebenefitoftheHoldersoftheBondsandshallbe enforceableonbehalfofsuchHolders;providedthattherighttoenforcetheprovisionsofthese covenantsshallbelimitedtoarighttoobtainspecificenforcementoftheCity'sobligationsunder thecovenants. 21 6999877v3 TheMayorandManageroranyotherofficeroftheCityauthorizedtoactintheirplace (the"Officers")areherebyauthorizedanddirectedtoexecuteonbehalfoftheCitythe UndertakinginsubstantiallytheformpresentedtotheCityCouncilsubjecttosuchmodifications thereoforadditionstheretoasare(i)consistentwiththerequirementsundertheRule,(ii) requiredbythePurchaseroftheBonds,and(iii)acceptabletotheOfficers. 23.Defeasance.WhenallBondshavebeendischargedasprovidedinthisparagraph, allpledges,covenantsandotherrightsgrantedbythisresolutiontotheregisteredholdersofthe Bondsshall,totheextentpermittedbylaw,cease.TheCitymaydischargeitsobligationswith respecttoanyBondswhicharedueonanydatebyirrevocablydepositingwiththeBond Registraronorbeforethatdateasumsufficientforthepaymentthereofinfull;orifanyBond shouldnotbepaidwhendue,itmayneverthelessbedischargedbydepositingwiththeBond Registrarasumsufficientforthepaymentthereofinfullwithinterestaccruedtothedateofsuch deposit.TheCitymayalsodischargeitsobligationswithrespecttoanyprepayableBondscalled forredemptiononanydatewhentheyareprepayableaccordingtotheirterms,bydepositing withtheBondRegistraronorbeforethatdateasumsufficientforthepaymentthereofinfull, providedthatnoticeofredemptionthereofhasbeendulygiven.TheCitymayalsoatanytime dischargeitsobligationswithrespecttoanyBonds,subjecttotheprovisionsoflawnowor hereafterauthorizingandregulatingsuchaction,bydepositingirrevocablyinescrow,witha suitablebankinginstitutionqualifiedbylawasanescrowagentforthispurpose,cashor securitiesdescribedinMinnesotaStatutes,Section475.67,Subdivision8,bearinginterest payableatsuchtimesandatsuchratesandmaturingonsuchdatesasshallberequired,without regardtosaleand/orreinvestment,topayallamountstobecomeduethereontomaturityor,if noticeofredemptionashereinrequiredhasbeendulyprovidedfor,tosuchearlierredemption date. 24.ComplianceWithReimbursementBondRegulations.Theprovisionsofthis paragraphareintendedtoestablishandprovidefortheCity'scompliancewithUnitedStates TreasuryRegulationsSection1.150-2(the"ReimbursementRegulations")applicabletothe "reimbursementproceeds"oftheImprovementPortionoftheBonds,beingthoseportions thereofwhichwillbeusedbytheCitytoreimburseitselfforanyexpenditurewhichtheCity paidorwillhavepaidpriortotheClosingDate(a"ReimbursementExpenditure"). TheCityherebycertifiesand/orcovenantsasfollows: (a)NotlaterthansixtydaysafterthedateofpaymentofaReimbursement Expenditure,theCity(orpersondesignatedtodosoonbehalfoftheCity)hasmadeorwillhave madeawrittendeclarationoftheCity'sofficialintent(a"Declaration")whicheffectively(i) statestheCity'sreasonableexpectationtoreimburseitselfforthepaymentoftheReimbursement Expenditureoutoftheproceedsofasubsequentborrowing;(ii)givesageneralandfunctional descriptionoftheproperty,projectorprogramtowhichtheDeclarationrelatesandforwhichthe ReimbursementExpenditureispaid,oridentifiesaspecificfundoraccountoftheCityandthe generalfunctionalpurposethereoffromwhichtheReimbursementExpenditurewastobepaid (collectivelythe"Project");and(iii)statesthemaximumprincipalamountofdebtexpectedtobe issuedbytheCityforthepurposeoffinancingtheProject;provided,however,thatnosuch Declarationshallnecessarilyhavebeenmadewithrespectto:(i)"preliminaryexpenditures"for theProject,definedintheReimbursementRegulationstoincludeengineeringorarchitectural, surveyingandsoiltestingexpensesandsimilarprefatorycosts,whichintheaggregatedonot 22 6999877v3 exceedtwentypercentofthe"issueprice"oftheImprovementPortionoftheBonds,and(ii)ade minimisamountofReimbursementExpendituresnotinexcessofthelesserof$100,000orfive percentoftheproceedsoftheImprovementPortionoftheBonds. (b)EachReimbursementExpenditureisacapitalexpenditureoracostofissuanceof theImprovementPortionoftheBondsoranyoftheothertypesofexpendituresdescribedin Section1.150-2(d)(3)oftheReimbursementRegulations. (c)The"reimbursementallocation"describedintheReimbursementRegulationsfor eachReimbursementExpenditureshallandwillbemadeforthwithfollowing(butnotpriorto) theissuanceoftheImprovementPortionoftheBondsandinalleventswithintheperiodending onthedatewhichisthelaterofthreeyearsafterpaymentoftheReimbursementExpenditureor oneyearafterthedateonwhichtheProjecttowhichtheReimbursementExpenditurerelatesis firstplacedinservice. (d)Eachsuchreimbursementallocationwillbemadeinawritingthatevidencesthe City'suseofImprovementPortionoftheBondproceedstoreimbursetheReimbursement Expenditureand,ifmadewithin30daysaftertheBondsareissued,shallbetreatedasmadeon thedaytheImprovementPortionoftheBondsareissued. Provided,however,thattheCitymaytakeactioncontrarytoanyoftheforegoing covenantsinthisparagraphuponreceiptofanopinionofitsBondCounselfortheBondsstating ineffectthatsuchactionwillnotimpairthetax-exemptstatusoftheImprovementPortionofthe Bonds. 25.CertificateofRegistration.TheCityManagerisherebydirectedtofileacertified copyofthisresolutionwiththeCountyAuditorofScottCounty,Minnesota,togetherwithsuch otherinformationastheAuditorshallrequire,andtoobtaintheCountyAuditor'scertificatethat theBondshavebeenenteredintheCountyAuditor'sBondRegisterandthetaxlevyrequiredby lawhasbeenmade. 26.RecordsandCertificates.TheofficersoftheCityareherebyauthorizedand directedtoprepareandfurnishtothePurchaser,andtotheattorneysapprovingthelegalityofthe issuanceoftheBonds,certifiedcopiesofallproceedingsandrecordsoftheCityrelatingtothe BondsandtothefinancialconditionandaffairsoftheCity,andsuchotheraffidavits,certificates andinformationasarerequiredtoshowthefactsrelatingtothelegalityandmarketabilityofthe Bondsasthesameappearfromthebooksandrecordsundertheircustodyandcontroloras otherwiseknowntothem,andallsuchcertifiedcopies,certificatesandaffidavits,includingany heretoforefurnished,shallbedeemedrepresentationsoftheCityastothefactsrecitedtherein. 27.NegativeCovenantastoUseofBondProceedsandProject.TheCityhereby covenantsnottousetheproceedsoftheBondsortousetheProjectortheSystem,ortocauseor permitthemtobeused,ortoenterintoanydeferredpaymentarrangementsforthecostofthe Project,insuchamannerastocausetheBondstobe"privateactivitybonds"withinthemeaning ofSections103and141through150oftheCode. 23 6999877v3 28.Tax-ExemptStatusoftheBonds;Rebate-RefundingPortionoftheBonds; ImprovementPortionoftheBonds. (i)RefundingPortionoftheBonds.TheCityissubjecttotherebate requirementimposedbySection148(f)oftheCodebecausetheRefundedBondsdidnot qualifyforthesmallissuerexemptionfromrebate,asprovidedinSection148(f)(4)(D)of theCodeandSection1.148-8oftheRegulationsandnoexceptionsareavailable. (ii)ImprovementPortionoftheBonds.TheCityshallcomplywith requirementsnecessaryundertheCodetoestablishandmaintaintheexclusionfrom grossincomeunderSection103oftheCodeoftheinterestontheBonds,including withoutlimitation(a)requirementsrelatingtotemporaryperiodsforinvestments,(b) limitationsonamountsinvestedatayieldgreaterthantheyieldontheBonds,and(c)the rebateofexcessinvestmentearningstotheUnitedStates.TheCityexpectstosatisfythe twentyfourmonthexpenditureexemptionforgrossproceedsoftheImprovementPortion oftheBondsasprovidedinSection1.148-7(d)(1)oftheRegulations. Ifanyelectionsareavailablenoworhereafterwithrespecttoarbitrageorrebatematters relatingtotheBonds,theMayor,theManager,oreitherofthem,areherebyauthorizedand directedtomakesuchelectionsastheydeemnecessary,appropriateordesirableinconnection withtheBonds,andallsuchelectionsshallbe,andshallbedeemedandtreatedas,electionsof theCity. 29.DesignationofQualifiedTax-ExemptObligations.InordertoqualifytheBonds as"qualifiedtax-exemptobligations"withinthemeaningofSection265(b)(3)oftheCode,the Cityherebymakesthefollowingfactualstatementsandrepresentations: (a)theBondsareissuedafterAugust7,1986; (b)theBondsarenot"privateactivitybonds"asdefinedinSection141oftheCode; (c)theCityherebydesignatestheBondsas"qualifiedtax-exemptobligations"for purposesofSection265(b)(3)oftheCode; (d)thereasonablyanticipatedamountoftax-exemptobligations(otherthanprivate activitybonds,treatingqualified501(c)(3)bondsasnotbeingprivateactivitybonds)whichwill beissuedbytheCity(andallentitiestreatedasoneissuerwiththeCity,andallsubordinate entitieswhoseobligationsaretreatedasissuedbytheCity)duringthiscalendaryear2015will notexceed$10,000,000; (e)notmorethan$10,000,000ofobligationsissuedbytheCityduringthiscalendar year2015havebeendesignatedforpurposesofSection265(b)(3)oftheCode; (f)theaggregatefaceamountoftheBondsdoesnotexceed$10,000,000. TheCityshalluseitsbesteffortstocomplywithanyfederalproceduralrequirements whichmayapplyinordertoeffectuatethedesignationmadebythisparagraph. 24 6999877v3 30.Severability.Ifanysection,paragraphorprovisionofthisresolutionshallbeheld tobeinvalidorunenforceableforanyreason,theinvalidityorunenforceabilityofsuchsection, paragraphorprovisionshallnotaffectanyoftheremainingprovisionsofthisresolution 31.Headings.Headingsinthisresolutionareincludedforconvenienceofreference onlyandarenotaparthereof,andshallnotlimitordefinethemeaningofanyprovisionhereof. Themotionfortheadoptionoftheforegoingresolutionwasdulysecondedbymember McGuireand,afterafulldiscussionthereofanduponavotebeingtakenthereon,thefollowing votedinfavorthereof:Hedberg,Keeney,McGuire,MortonandThompson andthefollowingvotedagainstthesame:None. Whereupontheresolutionwasdeclareddulypassedandadopted. 25 6999877v3 TAXLEVIES YearofTaxLevyYearofTaxCollectionAmount 20222023$345,509.24 20232024521,969.34 20242025726,359.45 20252026690,211.95 20262027617,405.34 20272028598,542.48 20282029634,673.37 20292030585,229.26 7000395v1