Loading...
HomeMy WebLinkAbout18-095 Series 2018A Bond Issuance Set SaleEXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL CITY OF PRIOR LAKE, MINNESOTA HELD: June 18,2018 Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Prior Lake, Scott County, Minnesota, was duly held at the City Hall on June 18, 2018, at7:00 P.M. for the purpose in part of authorizing the competitive negotiated sale of the $8,745,000 General Obligation Bonds, Series 2018A. The following members were present: Briggs, McGuire, Thompson, Burkart and Braid and the following were absent: NA Member McGuire introduced the following resolution and moved its adoption: RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED SALE OF GENERAL OBLIGATION BONDS, SERIES 20184 IN AN AMOUNT NOT TO EXCEED $9,OOO,OOO A. WHEREAS, the City Council of the City of Prior Lake, Mirmesota (the "City"), has heretofore determined that it is necessary and expedient to issue General Obligation Bonds, Series 2018A (the "Bonds"), pursuant to Minnesota Statutes, Chapters 429, 444 and 475 and Sections 412301 and 475.521, in an amount not to exceed $9,000,000, to finance the purchase of equipment, a capital improvement plan project, an improvement project, a permanent improvement revolving fund, a water project, a sewer project and a street reconstruction project in the City; and B. WHEREAS, the City has retained Northland Securities, Inc., in Minneapolis, Minnesota ("Northland"), as its independent financial advisor and is therefore authorized to sell the Bonds by competitive negotiated sale in accordance with Miruresota Statutes, Section 475.60, Subdivision 2(9); and C. WHEREAS, the City has retained Briggs and Morgan, Professional Association, in Minneapolis, Minnesota as its bond counsel for purposes of this financing. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Prior Lake, Minnesota, as follows: 1. Authorization. The City Council hereby authorizes Northland to solicit proposals for the competitive negotiated sale of the Bonds. 2. Meeting: Proposal Opening. The City Council shall meet at the time and place specified in the Notice of Sale attached hereto as Exhibit A for the purpose of considering sealed proposals for and awarding the sale of the Bonds. The City Finance Director, or designee, shall open proposals at the time and place specified in the Notice of Sale. I 083491 5v I 3. Notice of Sale. The terms and conditions of the Bonds and the negotiation thereof are fully set forth in the Notice of Sale attached hereto as Exhibit A and hereby approved and made a part hereof. 4. Official Statement. In connection with the competitive negotiated sale of the Bonds, the City Finance Director and other officers or employees of the City are hereby authorized to cooperate with Northland and participate in the preparation of an official statement for the Bonds, and to execute and deliver it on behalf of the City upon its completion. The motion for the adoption of the foregoing resolution was duly seconded by member Thompson and, after fuIl discussion thereof and upon a vote being taken thereon, the following voted in favor thereof: Briggs, McGuire, Thompson, Burkart and Braid and the following voted against the same: NA Whereupon the resolution was declared duly passed and adopted. 2 1083491 5vl STATE OF MINNESOTA COLINTY OF SCOTT CITY OF PRIOR LAKE I, the undersigned, being the duly qualified and acting City Manager of the City of Prior Lake, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council duly called and held on the date therein indicated, insofar as such minutes relate to the City's General Obligation Bonds, Series 2018A. WITNESS mv hand on June 18. 2018 t City aJ 1 08349 I 5v1 EXHIBIT A NOTICE OF SALE $8,745,000* GENERAL OBLIGATION BONDS, SERIES 2018A CITY OF PRIOR LAKE, MINNESOTA (Book-Entry Only) NOTICE IS HEREBY GIVEN that these Bonds will be offered for sale according to the following terms: TIME AND PLACE: Proposals (also referred to herein as "bids") will be opened by the Finance Director, or designee, on Monday, July 16,2018 at 10:30 A.M., CT, at the offices of Northland Securities, Inc. (the City's "Municipal Advisor"), 150 South 5th Street, Suite 3300, Minneapolis, Minnesota 55402. Consideration of the Proposals for award of the sale will be by the City Council at its meeting at the City Offices beginning Monday, July 16, 2018, at7:00 P.M., CT. SUBMISSION OF PROPOSALS Proposals may be: a) submitted to the office of Northland Securities, Inc., b) faxed to Northland Securities, Inc. at 6 12-85 1 -59 1 8, c) for proposals submitted prior to the sale, the final price and coupon rates may be submitted to Northland Securities, Inc. by telephone at 612-851-5900 or 612-851-4945, or d) submitted electronically. Notice is hereby given that electronic proposals will be received via PARITY'", or its successor, in the manner described below, until 10:30 A.M., CT, on Monday, July 16, 2018. Proposals may be submitted electronically via PARITY'" or its successor, pursuant to this Notice until 10:30 A.M., CT, but no Proposal will be received after the time for receiving Proposals specified above. To the extent any instructions or directions set forth in PARITY'", or its successor, conflict with this Notice, the terms of this Notice shall control. For further information about PARITY'", or its successor, potential bidders may contact Northland Securities, Inc. or i- Deal@ at 13 59 Broadw dy, 2'd floor, New York, NY 1 00 I 8, telephone 212-849-5021 . Neither the City nor Northland Securities, Inc. assumes any liability if there is a malfunction of PARITY'" or its successor. All bidders are advised that each Proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds regardless of the manner in which the Proposal is submitted. BOOK-ENTRY SYSTEM The Bonds will be issued by means of a book-entry system with no physical distribution of bond certificates made to the public. The Bonds will be issued in fully registered form and one bond certificate, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of Depository Trust Company ("DTC"), New York, New York, which will act as securities depository ofthe Bonds. * Th. City reserves the right to increase or decrease the principal amount ofthe Bonds. Any such increase or decrease will be made in multiples of $5,000 and may be made in any maturity. If any maturity is adjusted, the purchase price will also be adjusted to maintain the same gross spread. 1 08349 1 5v l A-1 Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the City through Northland Trust Services, Inc. Minneapolis, Minnesota (the "Paying Agent/Registrar"), to DTC, or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC;transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The successful bidder, as a condition of delivery of the Bonds, will be required to deposit the bond certificates with DTC. The City will pay reasonable and customary charges for the services of the Paying Agent/Registrar. DATE OF ORIGINAL ISSUE OF BONDS Date of Delivery (Estimated to be August 15, 2018) AUTHORITY/PURPOSE/SECURITY The Bonds are being issued pursuant to Minnesota Statutes, Chapters 429,444 and 475 and Sections 412.301 and 415.521. Proceeds will be used to finance the purchase of equipment, a capital improvement plan project, an improvement project, a permanent improvement revolving fund, a water project, a sewer project, a street reconstruction project and to finance the costs associated with the issuance of the Bonds. The Bonds are payable from special assessments against benefited properry, water revenues, sewer revenues and additionally secured by ad valorem taxes on all taxable properly within the City. The full faith and credit of the City is pledged to their payment and the City has validly obligated itself to levy ad valorem taxes in the event of any deficiency in the debt service account established for this issue. INTEREST PAYMENTS Interest is due semiannually on each June 15 and December 15, commencing June 15, 2019,to registered owners of the Bonds appearing of record in the Bond Register as of the close of business on the first day (whether or not a business day) of the calendar month of such interest payment date. MATURITIES Principal is due annually on December 15, inclusive, in each of the years and amounts as follows: Year 2019 2020 2021 2022 Amount $760,000 860,000 885,000 915,000 Year 2023 2024 2025 Amount $925,000 855,000 875,000 Year 2026 2027 2028 Amount $890,000 920,000 860,000 Proposals for the Bonds may contain a maturity schedule providing for any combination of serial bonds and term bonds, subject to mandatory redemption, so long as the amount of principal maturing or subject to mandatory redemption in each year conforms to the maturify schedule set forth above. INTEREST RATES All rates must be in integral multiples of ll2}th or l/Sth of lo/o. Rates must be in level or ascending order. AII Bonds of the same maturity must bear a single uniform rate from date of issue to maturity. ESTABLISHMENT OF ISSUE PRICE (HOLD-THE-OFFERING-PRICE RULE MAY APPLY - BIDS NOT CANCELLABLE) The winning bidder shall assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at closing an "issue price" or similar certificate setting forth the reasonably expected initial offering I 08349 I 5v I A-2 price to the public or the sales price or prices of the Bonds, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit A, with such modifications as may be appropriate or necessary, in the reasonable judgment of the winning bidder, the City and Bond Counsel. A11 actions to be taken by the City under this Notice of Sale to establish the issue price of the Bonds may be taken on behalf of the City by the City's Municipal Advisor and any notice or report to be provided to the City may be provided to the City's Municipal Advisor. The City intends thatthe provisions of Treasury Regulation Section 1.148-l(0(3)(i) (defining "competitive sale" for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds (the "competitive sale requirements") because: ( I ) the City shall disseminate this Notice of Sale to potential underwriters in a manner that is reasonably designed to reach potential underwriters; (2) all bidders shall have an equal opportunity to bid; (3) the City may receive bids from at least three underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and (a) the City anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase the Bonds at the highest price (or lowest cost), as set forth in this Notice of Sale. Any bid submitted pursuant to this Notice of Sale shall be considered a firm offer for the purchase of the Bonds, as specified in the bid. In the event that the competitive sale requirements are not satisfied, the City shall promptly so advise the winning bidder. The City may then determine to treat the initial offering price to the public as of the award date of the Bonds as the issue price of each maturity by imposing on the winning bidder the Hold-the-Offering-Price Rule as described in the following paragraph (the "Hold-the-Offering-Price Rule"). Bids will not be subject to cancellation in the event that the City determines to apply the Holdthe-Offering-Price Rule to the Bonds. Bidders should prepare their bids on the assumption that the Bonds will be subject to the Hold-the- Offering-Price Rule in order to establish the issue price of the Bonds. By submitting a bid, the winning bidder shall (i) confirm that the underwriters have offered or will offer the Bonds to the public on or before the date of award at the offering price or prices (the "Initial Offering Price"), or at the coresponding yield or yields, set forth in the bid submitted by the winning bidder and (ii) agree, on behalf of the underwriters participating in the purchase of the Bonds, that the underwriters will neither offer nor sell unsold Bonds of any maturity to which the Hold-the-Offering Price Rule shall apply to any person at a price that is higher than the Initial Offering Price to the public during the period sta(ing on the award date for the Bonds and ending on the earlier of the following: (1) the close of the fifth (5th) business day after the award date; or (2) the date on which the underwriters have sold at least l0%o of a maturity of the Bonds to the public at a price that is no higher than the Initial Offering Price to the public (the "10o/o Test"), at which time only that particular maturity will no longer be subject to the Holdthe-Offering-Price Rule. The City acknowledges that, in making the representation set forth above, the winning bidder will rely on (i) the agreement of each underwriter to comply with the Hold-the-Offering-Price Rule, as set forth in an agreement among underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale ofthe Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the Holdthe-Offering-Price Rule, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an underwriter is a parly to a retail distribution agreement that was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a parfy to such agreement to comply with the Hold-the-Offering-Price Rule, as set forth in the retail distribution agreement and the related pricing wires. The City further acknowledges that each underwriter shall be solely liable for its failure to comply with its agreement regarding the Holdthe-Offering-Price Rule and that no underwriter shall be liable for the failure of any other underwriter, or of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement to comply with its corresponding agreement regarding the Holdthe-Offering-Price Rule as applicable to the Bonds. By submitting a bid, each bidder confirms that: (i) any agreement among underwriters, any selling group A-3 I 08349 I 5v1 agreement and each retail distribution agreement (to which the bidder is a parfy) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such retail distribution agreement, as applicable, to comply with the Hold-the-Offering-Price Rule, if applicable, in each case if and for so long as directed by the winning bidder and as set forth in the related pricing wires, and (ii) any agreement among underwriters relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such retail distribution agreement to comply with the Hold-the-Offering- Price Rule, if applicable, in each case if and for so long as directed by the winning bidder or such underwriter and as set forth in the related pricing wires. Notes: Sales of any Bonds to any person that is a related party to an underwriter shall not constitute sales to the public for purposes of this Notice of Sale. Further, for purposes of this Notice of Sale: (l) "public" means any person other than an underwriter or a related party, @ "underwriter" means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public). (j) a purchaser of any of the Bonds is a "related pqrty" to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50o% common ownership of the voting power or the total value of their stock, if both entities are corporcttions (including direct ownership by one corporation or another), (ii) more than 500% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 5004 common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (4) "sale date" means the date that the Bonds are awarded by the City to the winning bidder. ADJUSTMENTS TO PRINCIPAL AMOUNT AFTER PROPOSALS The City reserves the right to increase or decrease the principal amount of the Bonds. Any such increase or decrease willbe made in multiples of $5,000 and may be made in any maturity. If any maturity is adjusted, the purchase price will also be adjusted to maintain the same gross spread. Such adjustments shall be made promptly after the sale and prior to the award of Proposals by the City and shall be at the sole discretion of the City. The successful bidder may not withdraw or modify its Proposal once submitted to the City for any reason, including post-sale adjustment. Any adjustment shall be conclusive and shall be binding upon the successful bidder. OPTIONAL REDEMPTION Bonds maturing on December 15,2027 through 2028 are subject to redemption and prepayment at the option of the City on December 15,2026 and any date thereafter, at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the maturities and principal amounts within each maturity to be redeemed shall be determined by the City and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. I 08349 I 5vl A-4 CUSIP NUMBERS If the Bonds qualifu for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the successful bidder thereofto accept delivery ofand pay for the Bonds in accordance with terms of the purchase contract. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the successful bidder. DELTVERY Delivery of the Bonds will be within forly days after award, subject to an approving legal opinion by Briggs and Morgan, Professional Association, Bond Counsel. The legal opinion will be paid by the City and delivery will be anywhere in the continental United States without cost to the successful bidder at DTC. TYPE OF PROPOSAL Proposals of not less than $8,675,040(99.20%) and accrued interest on the principal sum of $8,745,000 must be filed with the undersigned prior to the time of sale. Proposals must be unconditional except as to legality. Proposals for the Bonds should be delivered to Northland Securities, Inc. and addressed to: Cathy Erickson, Finance Director Prior Lake City Hall 4646 Dakota Avenue Street SE Prior Lake, Minnesota 55372 A good faith deposit (the "Deposit") in the amount of $174,900 in the form of a federal wire transfer (payable to the order of the City) is only required from the apparent winning bidder, and must be received within two hours after the time stated for the receipt of Proposals. The apparent winning bidder will receive notification of the wire instructions from the Municipal Advisor promptly after the sale. If the Deposit is not received from the apparent winning bidder in the time allotted, the City may choose to reject their Proposal and then proceed to offer the Bonds to the next lowest bidder based on the terms of their original proposal, so long as said bidder wires funds for the Deposit amount within two hours of said offer. The City will retain the Deposit of the successful bidder, the amount of which will be deducted at settlement and no interest will accrue to the successful bidder. In the event the successful bidder fails to comply with the accepted Proposal, said amount willbe retained by the City. No Proposal can be withdrawn after the time set for receiving Proposals unless the meeting of the City scheduled for award of the Bonds is adjoumed, recessed, or continued to another date without award of the Bonds having been made. AWARI) The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis. The City's computation of the interest rate of each Proposal, in accordance with customary practice, will be controlling. In the event of a tie, the sale of the Bonds will be awarded by lot. The City will reserve the right to: (i) waive non-substantive informalities of any Proposal or of matters relating to the receipt of Proposals and award of the Bonds, (ii) reject all Proposals without cause, and (iii) reject any Proposal which the City determines to have failed to comply with the terms herein. INFORMATION FROM SUCCESSFUL BIDDER t 08349 I 5vl A-5 The successful bidder will be required to provide, in a timely manner, certain information relating to the initial offering price of the Bonds necessary to compute the yield on the Bonds pursuant to the provisions of the Internal Revenue Code of 1986, as amended. OFFICIAL STATEMENT By awarding the Bonds to any underwriter or underwriting syndicate submitting a Proposal therefor, the City agrees that, no more than seven business days after the date of such award, it shall provide to the senior managing underwriter ofthe syndicate to which the Bonds are awarded, the Final Official Statement in an electronic format as prescribed by the Municipal Securities Rulemaking Board (MSRB). FULL CONTINUING DISCLOSURE UNDERTAKING The City will covenant in the resolution awarding the sale of the Bonds and in a Continuing Disclosure Undertaking to provide, or cause to be provided, annual financial information, including audited financial statements of the City, and notices of certain material events, as required by SEC Rule 15c2-12. BANK QUALIFICATION The City will designate the Bonds as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. BOND INSURANCE AT UNDERWRITER'S OPTION If the Bonds qualifu for issuance of any policy of municipal bond insurance or commitment therefor at the option of the successful bidder, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense ofthe successful bidder ofthe Bonds. Any increase in the costs ofissuance of the Bonds resulting from such purchase of insurance shall be paid by the successful bidder, except that, if the Cify has requested and received a rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating agency fees shall be the responsibility of the successful bidder. Failure of the municipal bond insurer to issue the policy after the Bonds have been awarded to the successful bidder shall not constitute cause for failure or refusal by the successful bidder to accept delivery on the Bonds. The City reserves the right to reject any and all Proposals, to waive informalities and to adjourn the sale. Dated: June 18, 2018 BY ORDER OF THE PRIOR LAKE CITY COUNCIL lsl Cathy Erickson Finance Director Additional information may be obtained from Northland Securities, Inc. 150 South 5th Street, Suite 3300 Minneapolis, Minnesota 55402 Telephone No.: 612-85 I -5900 I 08349 I 5v1 A-6 EXHIBIT A (ISSUE PRICE CERTIFICATE - COMPETITIVE SALE SATISFIED) The undersigned, on behalfof (the "Underwriter"), hereby certifies as set forth below with respect to the sale of the General Obligation Bonds, Series 2018A (the "Bonds") of the City of Prior Lake, Minnesota (the "Issuer"). 1. Reasonably Expected Initial Offering Price. (a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the Public by the Underwriter are the prices listed in Schedule A (the "Expected Offering Prices"). The Expected Offering Prices are the prices for the Maturities of the Bonds used by the Underwriter in formulating its bid to purchase the Bonds. Attached as Schedule B is a true and correct copy ofthe bid provided by the Underwriter to purchase the Bonds. (b) The Underwriter was not given the opportunity to review other bids prior to submitting its bid. (c) The bid submitted by the Underwriter constituted a firm offer to purchase the Bonds. 2. Defined Terms. (a) "Maturiqr" means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (b) "Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related parly to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (c) "Sale Date" means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is (d) "Underwriter" means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or aparty to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Underwriter's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1 986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Nonarbitrage Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Briggs and Morgan, Professional Association, Bond Counsel in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer fiom time to time relating to the Bonds. 1083491 5vl Dated: A-7 QSSUE PRICE CERTIFICATE - HOLD THE PNCE) The undersigned, on behalf of _ (the "Underwriter"), on behalf of itself; hereby certifies as set forth below with respect to the sale and issuance of General Obligation Bonds, Series (the "Bonds") of the City of Minnesota (the "Issuer"). 1. Initial Offering Price of the Bonds. (a) The Underwriter offered each Maturity of the Bonds to the Public for purchase at the respective initial offering prices listed in Schedule A (the "lnitial Offering Prices") on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. (b) As set forth in the Notice of Sale, the Underwriter has agreed in writing that, (i) for each Maturity of the Bonds, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the "hold-the-offering- price rule"), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Bonds at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period. 2. Defined Terms. (a) "Holding Period" means, for each Maturity of the Bonds, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date or (ii) the date on which the Underwriter has sold at least 10% of such Maturity of the Bonds to the Public at prices that are no higher than the Initial Offering Price for such Maturity. (b) "Maturity" means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (c) "Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related parfy to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) "Sale Date" means the first day on which there is a binding conlract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is 201 8 (e) "Undenvriter" means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or aparty to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certific ate are limited to factual matters only. Nothing in this certificate represents the Representative's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Nonarbitrage Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Briggs and Morgan, Professional Association, Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue 1 08349 I 5v I A-8 Service Form 8038-G, and other federal income tax advice that it may give to the Issuer fiom time to time relating to the Bonds. Dated 2018 1083491 5vl A-9 MI,JMCIPAL ADVISORY SERVICE AGREEMENT BYANDBE"TWEEN THE CITY OFPRIORLAKE, MINNESOTA AND NORTHLAND SECI,.rTUTIES, INC. This Agreement made and entered into by and betrveen tlle Gty of ltior Iake Mirmesota ftereinafter "City") and Norttrland Securities, lnc., of Minneapolis, Minnesota (hereinafter "NSI"). WIINESSETH WHEREAS, Ere City desires to have NSI provide it witr advice on the structure, terrns, timing ard other sntters related to the issuance of the General Obligation Bonds, Series 2018A (the "Deb() serving in the role of municipal (financial) advisor, and WHEREAS, NSI is a registered municipal advisor with bo*r Ere Securities and Exchange C-ommission ("SEC') and the Murricipal Securities RuJerraking Board ('MSRB") (registsation # 866 0ffi82{0), and WHEREAS, NSI will act as municipal advisor in accordance with Ere duties and responsibilities of Rule G42 of t}re lvlSRB and WIIEREAS. the N{SRB provides a municipal advisory dimt brochure on its websiE (www.msrb.org) that describes fte proEctions trat may be provided by Erc N4SRB rules, irdudhg professional compeErcy, fair dealing, duty of loyalty, remedie for disputes and how to file a complaint with an appropriate reguJabry authority, and WHEREAS, dre Gty and NSI are entering into ttris Agreement to define Ere municipal advisory relationship at the earliest opportunity related to the irrception of the municipal advisory relatiorship for the Debt and WHEREAS, NSI desires to furnistr services tro the Gty as hereinafter descritred, NOW, THEREFORE, it is ageed by and between tre parties as follows: SERVICES TO BE PR,OVIDED BY NSI NSI shall provide &re Gty wi*r services necessary to analyze, structue, offer for sale and dose the Debt The services will be tailored to meet the needs of this engagement and may include: Plarming and Devdopnurt 1. Assist City officials to define the scope and the otjectives for tre Debt 2 lnvgsrigate and consider r€asonably feasible financing altematives. 3, Assist ttre City in understanding the material risks, potential bene6E, structue and other draracreristics of tre recommended plan for the Debt induding issue stsucture, estiruted debt Municipal Advisory Service Agreement service payments, projected revenues, method of issuance, bond rating, sale tirning, and call provisions. 4. Prepare a schedule of evenb related to the issuance process. 5. Coordinate with bond counsel any actions needed to authorize the issuance of the Debt. 6. Attend meetings of the City Council and other project and bond issue related meetings as needed and as requested. Bond SaIe 1,. Assist the City with the preparatiory review and approval of the preliminary official statement (Pos). 2. Assist the City and bond counsel with preparing and publishing the Official Notice of SaIe if required by Iaw. 3. Prepare and submit application for bond rating(s) and assist the City with fumishing the rating agenry(s) with any additional information required to conduct the rating review. Assist the City with preparing and conducting the rating call or other presentation. 4. Assist the City in receiving the bids, compute the accurary of the bids received, and recommend to the City the most favorable bid for award. 5. Coordinate with bond counsel the preparation of required contracb and resolutions. Post Sale Support L. Assist the City with the preparation of final official statement distribution to the underwriter and posting on EMMA. 2. Coordinate the bond issue closing, including making all arrangements for bond printing, registration, and delivery. 3. Furnish to the City a complete transcript of the transaction, if not provided by bond counsel. There are no specific limitations on the scope of this agreement COMPENSATION For providing these services with respect to the Debt, NSI shall be paid a lump sum of $3O010. The fee due to NSI shall be payable by the City upon the closing of the Bonds. NSI agrees to pay the following expenses from its fee: . Out-of-pocket expenses such as travel, long distance phone, and copy costs. . Production and distribution of material to rating agencies and/or bond insurance companies. . Preparation of the bond transcript. The City agrees to pay for all other expenses related to the processing of the bond issue(s) including, butnotlimited to, the following: o Engineeingand/ or architectural fees. . Publication of legal notices. . Bond counsel and local attomey fees. o Fees for various debt certificates. . The cost of printing Official Statements, if *y. . City staff expenses. o Airfare and lodging expenses of one NSI official and City officials when and if traveling for rating agency presentations. . Rating agency fees, if any. 2 Municipal Advisory Service Agreement o Bond insurance fees, if any.o Accounting and other related fees. It is erpressly rmderstood that there is no obligation on the part of the Gty rmder the terrrs of tris Ageement to issrue the Debt If the Debt js not issue4 NSI agrees to pay its own expenses and receive no fee for any services it has rcndered. NSI is not aware of any material conflicb of interest that could reasonably be anticipated to impair NSI's ability to provide advice to or on behalf of the Gty in accordance with the standards of conduct for mrmicipal advisors. The compersation for services provided in dris Agreement is customary in tre municipal securities marke! but may pose a conflict of interest Since the fee is payable at closing and only if the Debt is issud, NSI may have an incentive to €ncourage issuance. Compersation linked to tre size of the tsansaction may provide inctntive tro increase dre amount of the Debt. Comperuation consideratiors will not impair NSI s ability to provide unbiased and competent advice or to fr:lfill ib fiduciary duty to the City. In executing this Agreement, tre Cig ad<nowledges and accepts the potsntial conflicb of inErest posed by the compersation to NSI. Norftland Capital Holdings is the parent company of NSI. Another subsidiary of Norttrland Capital Holdings is Northland Trus! Inc. Northland Trust provides paylng agent services to issuers of municipal bonds. The City is solely responsible for the decision on the source of paying agent servic€s. Any engagement of Northland Trust is outside tre scope of ftis Ag€ement No compersation paid to Norlfiland Trust is shard with NSI. NSI does not provide executive search, organizational developmen! compensation systems or other manageurent consulting services that may directly or indirectly affect Gty staff that recommend the engag€mart of mruricipal advisor servicrs and may pose a conflict of interest. LEGAL AND DISOPI,INARY ACTIONS There are no legal or dixiptinary events reporH by the Securities and Exdrange Commission contained in Form MA or Form MA-[ The Gty can find information about these forms and acc€ssing infomr,ation relaEd b NSI at www.sec.gov/municipaf orrs+dgar-Iiriks. SUCCESSORSORASSIGNS The Ems and provisiors of ttris Agreerrent are binding upon and inure to the benefit of ttle Gty and NSI and treir successors or assigrs, CONFLICTSOFINTEREST 3 This shall Municipal Advisory Service Agreement TERM OFTI{IS AGREEMENT Agreementmay be terminated by thirty (30) days writtennotice by either the City or NSI and it terminate sixty (60) days following the dosing date related to the issuance of the Debt. Dated this 24 day of May, 2018. Securities, Inc. Byt Tom Bartzen - Executive Vice City of Prior Lake, Minnesota <fByt Its: 4 Northland (