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2001-42DEXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF CHANHASSEN, MINNESOTA HELD: June 25, 2001 Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Chanhassen, Carver and Hennepin Counties, Minnesota, was duly held at the City Hall in said City on Monday, the 25th day of June, 2001, at 7:00 P.M., for the purpose, in part, of considering proposals for, and awarding the sale of, $2,720,000 General Obligation Tax Increment Refunding Bonds, Series 2001D of the City. The following members were present: Mayor Linda Jansen and Council Members Bob Ayotte, Craig Peterson and Steve Labatt and the following were absent: None Member Peterson introduced the following resolution and moved its adoption. Resolution No. 2001-42D RESOLUTION ACCEPTING PROPOSAL ON SALE OF $2,720,000 GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2001D, PLEDGING FOR THE SECURITY THEREOF TAX INCREMENTS AND AUTHORIZING EXECUTION OF A PLEDGE AGREEMENT A. WHEREAS, the Economic Development Authority of the City of Chanhassen, Minnesota (the "Authority"), has jurisdiction over the Redevelopment Plan (the "Redevelopment Plan") for the Downtown Redevelopment Project Area heretofore established by the Housing and Redevelopment Authority of the City of Chanhassen, Minnesota and qualified as a redevelopment project and has approved a tax increment financing plan (the "Plan") with respect to said redevelopment project (the "Project Area"), all pursuant to the provisions of Minnesota Statutes, Sections 469.001 through 469.047 and 469.090 through 469.1081 (collectively, the "Act"); and B. WHEREAS, the City of Chanhassen, Minnesota (the "City") has heretofore issued $2,685,000 General Obligation Tax Increment Refunding Bonds, Series 1990A, dated March 1, 1990 (the "Prior Bonds"), for the purpose of providing money to refund in advance of maturity the City's outstanding General Obligation Tax Increment Bonds of 1983, (the "Original Project"), including payment of the expenses incidental thereto; and 1302092vl C. WHEREAS, the City Council deems it desirable and in the best interests of the City to call for redemption and prepayment all of the Outstanding Prior Bonds which mature on February 1, 2002 and after on August 1, 2001 in accordance with the Resolution adopted by the City Council on March 5, 1990, authorizing the Issuance of the Prior Bonds (the "Prior Resolution") in order to reduce debt service costs to the City; and D. WHEREAS, $2,685,000 of the principal amount of the Prior Bonds which mature on and after February 1, 2002, are callable on February I, 2001 and any date thereafter at par plus accrued interest as provided in the Prior Resolution; and E. WHEREAS, the City Council has determined and declared that it is necessary and expedient to issue $2,720,000 General Obligation Tax Increment Refunding Bonds, Series 2001D (the "Bonds") pursuant to Minnesota Statutes, Chapter 475, which will be sufficient to pay on August 1, 2001, all of the City's Outstanding Prior Bonds (the "Refunding"); and F. WHEREAS, on May 14, 2001, the City Council adopted a resolution (the "Preliminary Resolution") which provided for the sale of the Bonds; and G. WHEREAS, proposals to purchase the Bonds have been solicited by Ehlers and Associates, Inc., in Roseville, Minnesota ("Ehlers") in accordance with the Preliminary Resolution; H. WHEREAS, the proposals set forth on Exhibit A attached hereto were received pursuant to the Terms of Proposal established for the Bonds by the Acting City Manager, or designee, at the City Hall at 2:00 P.M., Central Time, this same day; and I. WHEREAS, it is in the best interests of the City that the Bonds be issued in book-entry form as hereinafter provided; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Chanhassen, Minnesota, as follows: 1. Acceptance of Proposal. The proposal of U.S. Bancorp Piper Jaffray (the "Purchaser"), to purchase the Bonds (or individually a "Bond"), in accordance with the Terms of Proposal established for the Bonds, at the rates of interest hereinafter set forth, and to pay therefor the sum of $2,707,352.00, plus interest accrued to settlement, is hereby found, determined and declared to be the most favorable proposal received and is hereby accepted, and the Bonds are hereby awarded to said proposal maker. The Acting City Manager is directed to retain the deposit of said proposal maker and to forthwith return to the unsuccessful proposal makers their good faith checks or drafts. 2. Bond Terms. (a) Title; Original Issue Date; Denominations; Maturities; Term Bond Option. The Bonds shall be titled "General Obligation Tax Increment Refunding Bonds, Series 2001D", shall be dated July 15, 2001, as the date of original issue and shall be issued forthwith on or after such date as fully registered bonds. The Bonds shall be numbered from R-1 upward in the 1302092vl 2 denomination of $5,000 each or in any integral multiple thereof of a single maturity (the "Authorized Denominations"). The Bonds shall mature, without the option of prepayment, on February 1 in the years and amounts as follows: Year Amount 2002 $1,315,000 2003 1,405,000 All dates are inclusive. As may be requested by the Purchaser, one or more term Bonds may be issued having mandatory sinking fund redemption and final maturity amounts conforming to the foregoing principal repayment schedule, and corresponding additions may be made to the provisions of the applicable Bond(s). (b) Book Entry Only System. The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York or any of its successors or its successors to its functions hereunder (the "Depository") will act as securities depository for the Bonds, and to this end: (i) The Bonds shall be initially issued and, so long as they remain in book entry form only (the "Book Entry Only Period"), shall at all times be in the form of a separate single fully registered Bond for each maturity of the Bonds; and for purposes of complying with this requirement under paragraphs 5 and 10 Authorized Denominations for any Bond shall be deemed to be limited during the Book Entry Only Period to the outstanding principal amount of that Bond. (ii) Upon initial issuance, ownership of the Bonds shall be registered in a bond register maintained by the Bond Registrar (as hereinafter defined) in the name of CEDE & CO., as the nominee (it or any nominee of the existing or a successor Depository, the "Nominee"). (iii) With respect to the Bonds neither the City nor the Bond Registrar shall have any responsibility or obligation to any broker, dealer, bank, or any other financial institution for which the Depository holds Bonds as securities depository (the "Participant") or the person for which a Participant holds an interest in the Bonds shown on the books and records of the Participant (the "Beneficial Owner"). Without limiting the immediately preceding sentence, neither the City, nor the Bond Registrar, shall have any such responsibility or obligation with respect to (A) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in the Bonds, or (B) the delivery to any Participant, any Owner or any other person, other than the Depository, of any notice with respect to the Bonds, including any notice of redemption, or (C) the payment to any Participant, any Beneficial Owner or any other person, other than the Depository, of any amount with respect to the principal of or premium, if any, or interest on the Bonds, or (D) the consent given or other action taken by the Depository as the Register Holder of any Bonds (the "Holder"). For purposes of 1302092v I 3 securing the vote or consent of any Holder under this Resolution, the City may, however, rely upon an omnibus proxy under which the Depository assigns its consenting or voting rights to certain Participants to whose accounts the Bonds are credited on the record date identified in a listing attached to the omnibus proxy. (iv) The City and the Bond Registrar may treat as and deem the Depository to be the absolute owner of the Bonds for the purpose of payment of the principal of and premium, if any, and interest on the Bonds, for the purpose of giving notices of redemption and other matters with respect to the Bonds, for the purpose of obtaining any consent or other action to be taken by Holders for the purpose of registering transfers with respect to such Bonds, and for all purpose whatsoever. The Bond Registrar, as paying agent hereunder, shall pay all principal of and premium, if any, and interest on the Bonds only to or upon the Holder of the Holders of the Bonds as shown on the bond register, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. (v) Upon delivery by the Depository to the Bond Registrar of written notice to the effect that the Depository has determined to substitute a new Nominee in place of the existing Nominee, and subject to the transfer provisions in paragraph 10 hereof, references to the Nominee hereunder shall refer to such new Nominee. (vi) So long as any Bond is registered in the name of a Nominee, all payments with respect to the principal of and premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, by the Bond Registrar or City, as the case may be, to the Depository as provided in the Letter of Representations to the Depository required by the Depository as a condition to its acting as book-entry Depository for the Bonds (said Letter of Representations, together with any replacement thereof or amendment or 'substitute thereto, including any standard procedures or policies referenced therein or applicable thereto respecting the procedures and other matters relating to the Depository's role as book-entry Depository for the Bonds, collectively hereinafter referred to as the "Letter of Representations"). (vii) All transfers of beneficial ownership interests in each Bond issued in book-entry form shall be limited in principal amount to Authorized Denominations and shall be effected by procedures by the Depository with the Participants for recording and transferring the ownership of beneficial interests in such Bonds. (viii) In connection with any notice or other communication to be provided to the Holders pursuant to this Resolution by the City or Bond Registrar with respect to any consent or other action to be taken by Holders, the Depository shall consider the date of receipt of notice requesting such consent or other action as the record date for such consent or other action; provided, that the City or the Bond Registrar may establish a special record date for such consent or other action. The City or the Bond Registrar shall, to the extent possible, give the Depository notice of such special record date not less than 15 calendar days in advance of such special record date to the extent possible. 1302092¥1 4 (ix) Any successor Bond Registrar in its written acceptance of its duties under this Resolution and any paying agency/bond registrar agreement, shall agree to take any actions necessary from time to time to comply with the requirements of the Letter of Representations. (c) Termination of Book-Entry Only System. Discontinuance of a particular Depository's services and termination of the book-entry only system may. be effected as follows: (i) The Depository may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the City and discharging its responsibilities with respect thereto under applicable law. The City may terminate the services of the Depository with respect to the Bond if it determines that the Depository is no longer able to carry out its functions as securities depository or the continuation of the system of book-entry transfers through the Depository is not in the best interests of the City or the Beneficial Owners. (ii) Upon termination of the services of the Depository as provided in the preceding paragraph, and if no substitute securities depository is willing to undertake the functions of the Depository hereunder can be found which, in the opinion of the City, is willing and able to assume such functions upon reasonable or customary terms, or if the City determines that it is in the best interests of the City or the Beneficial Owners of the Bond that the Beneficial Owners be able to obtain certificates for the Bonds, the Bonds shall no longer be registered as being registered in the bond register in the name of the Nominee, but may be registered in whatever name or names the Holder of the Bonds shall designate at that time, in accordance with paragraph 10 hereof. To the extent that the Beneficial Owners are designated as the transferee by the Holders, in accordance with paragraph 10 hereof, the Bonds will be delivered to the Beneficial Owners. (iii) Nothing in this subparagraph (c) shall limit or restrict the provisions of paragraph 10 hereof. (d) The provisions in the Letter of Representations are incorporated herein by reference and made a part of the resolution, and if and to the extent any such provisions are inconsistent with the other provisions of this resolution, the provisions in the Letter of Representations shall control. 3. Purpose. The Bonds shall provide funds to finance the Refunding. It is hereby found, determined and declared that the Refunding is pursuant to Minnesota Statutes, Section 475.67 and shall result in a reduction of debt service cost to the City. Pursuant to a pledge agreement previously entered into between the Authority and the City and pursuant to the Redevelopment Plan and Plan, tax increments derived from the Tax Increment Financing District as defined in the Redevelopment Plan and Plan (the "Tax Increments',) have been pledged to.the payment of the Prior Bonds. Pursuant to a Pledge Agreement dated July 15, 2001 entered into between the Authority and the City, Tax Increments have been pledged to the payment of the Bonds and interest thereon on a parity lien with the Prior Pledge. 1302092vl 5 4. Interest. The Bonds shall bear interest payable semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"), commencing February 1,2002, calculated on the basis of a 360-day year of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturity Interest Year Rate 2002 2.75% 2003 3.20% 5. Redemption. The Bonds shall not be subject to redemption and prepayment prior to their maturity. 6. Bond Registrar. U.S. Bank Trust National Association is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Bonds shall be paid to the registered holders (or record holders) of the Bonds in the manner set forth in the form of Bond and in paragraph 12 of this resolution. 7. Form of Bond. The Bonds, together with this Bond Registrar's Certificate of Authentication, the form of Assignment and the registration information thereon, shall be in substantially the following form: 1302092vl 6 UNITED STATES OF AMERICA STATE OF MINNESOTA CARVER AND HENNEPIN COUNTIES CITY OF CHANHASSEN R- $ GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2001D INTEREST MATURITY DATE OF RATE DATE ORIGINAL IS SUE CUSIP JULY 15,2001 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS KNOW ALL PERSONS BY THESE PRESENTS that the City of Chanhassen, Carver and Hennepin Counties, Minnesota (the "Issuer"), certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns without option of prepayment, in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, and to pay interest thereon semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"), commencing February 1, 2002, at the rate per annum specified above (calculated on the basis of a 360-day year of twelve 30-day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof at the principal office of U.S. Bank Trust National Association (the "Bond Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Holder" or "Bondholder") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. [So long as this Bond is registered in the name of the Depository or its Nominee as provided in the Resolution hereinafter described, and as those terms are defined therein, payment of principal of, premium, if any, and interest on this Bond and notice with respect thereto shall be made as provided in the Letter of Representations, as defined in the Resolution. Until termination of the book- 1302092vl 7 entry only system pursuant to the Resolution, Bonds may only be registered in the name of the Depository or its Nominee.]* REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law, and that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and on the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or s. tatutory limitation of indebtedness. IN WITNESS WHEREOF, the City of Chanhassen, Carver and Hennepin Counties, Minnesota, by its City Council has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its Acting City Manager, the corporate seal of the Issuer having been intentionally omitted as permitted by law. Date of Registration: Registrable by: U.S. BANK TRUST NATIONAL ASSOCIATION Payable at: U.S. BANK TRUST NATIONAL ASSOCIATION BOND REGISTRAR'S CERTIFICATE OF AUTHENTICATION CITY OF CHANHASSEN, CARVER AND HENNEPIN COUNTIES, MINNESOTA This Bond is one of the Bonds described in the Resolution mentioned within. /s/ Facsimile Mayor U.S. BANK TRUST NATIONAL ASSOCIATION, St. Paul, Minnesota Bond Registrar /s/ Facsimile Acting City Manager By Authorized Signature Include only until termination of the book-entry only system under paragraph 2 hereof. 1302092vl 8 ON REVERSE OF BOND Redemption. The Bonds of this issue (the "Bonds") are not subject to redemption and prepayment prior to their maturity. Issuance: Purpose: General Obligation. This Bond is one of an issue in the total principal amount of $2,720,000, all of like date of original issue and tenor, except as to number, maturity, interest rate and denomination which Bond has been issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota and pursuant to a resolution adopted by the City Council of the Issuer on June 25, 2001 (the "Resolution"), for the purpose of providing funds to redeem on August 1, 2001, the outstanding General Obligation Tax Increment Refunding Bonds, Series 1990A, dated March 1, 1990 of the Issuer. The Bonds are payable out of the General Obligation Tax Increment Refunding Bonds Fund of the Issuer to which fund tax increments derived from a tax increment financing district are pledged as a primary source of payment. This Bond constitutes a general obligation of the Issuer, and to provide moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the Issuer have been and are hereby irrevocably pledged. Denominations; Exchange; Resolution. The Bonds are issuable solely as fully registered bonds in Authorized Denominations (as defined in the Resolution) and are exchangeable for fully registered Bonds of other Authorized Denominations in equal aggregate principal amounts at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the principal office of the Bond Registrar. Transfer. This Bond is transferable by the Holder in person or by his, her or its attorney duly authorized in writing at the principal office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with the Bond Registrar. Thereupon the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an Authorized Denomination or Denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Registered Owners. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided on the reverse side hereof with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. 1302092v I 9 Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Bond Registrar. Oualified Tax-Exempt Obligation. This Bond has been designated by the Issuer as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. 1302092vl 10 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - as custodian for (Cust) (Minor) under the Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. 1302092vl 1 1 ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad-15(a)(2). The Bond Registrar will not effect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: (Include information for all joint owners if the Bond is held by joint account.) 1302092vl 12 8. Execution; Temporary Bonds. The Bonds shall be printed (or, at the request of the Purchaser, typewritten) and shall be executed on behalf of the City by the signatures of its Mayor and Acting City Manager and be sealed with the seal of the City; provided, however, that the seal of the City may be a printed (or, at the request of the Purchaser, photocopied) facsimile; and provided further that both of such signatures may be printed (or, at the request of the Purchaser, photocopied) facsimiles and the corporate seal may be omitted on the Bonds as permitted by law. In the event of disability or resignation or other absence of either such officer, the Bonds may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer. In case either such officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. The City may elect to deliver, in lieu of printed definitive bonds, one or more typewritten temporary bonds in substantially the form set forth above, with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Such temporary bonds may be executed with photocopied facsimile signatures of the Mayor and Acting City Manager. Such temporary bonds shall, upon the printing of the definitive bonds and the execution thereof, be exchanged therefor and cancelled. 9. Authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless a Certificate of Authentication on such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. Certificates of Authentication on different Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the Certificate of Authentication on the Bond and by inserting as the date of registration in the space provided the date on which the Bond is authenticated, except that for purposes of delivering the original Bonds to the Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue, xvhich date is July 15,2001. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. I0. Registration; Transfer; Exchange. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration (as provided in paragraph 9) of, and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any Authorized Denomination or Denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. At the option of the Holder, Bonds may be exchanged for Bonds of any Authorized Denomination or Denominations of a like aggregate principal amount and stated 1302092vl 13 maturity, upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the Holder making the exchange is entitled to receive. All Bonds surrendered upon any exchange or transfer provided for in this resolution shall be promptly cancelled by the Bond Registrar and thereafter disposed of as directed by the City. All Bonds delivered in exchange for or upon transfer of Bonds shall be valid general obligations of the City evidencing the same debt, and entitled to the same benefits under this resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the Holder thereof or his, her or its attorney duly authorized in writing. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. The Acting City Manager is hereby authorized to negotiate and execute the terms of said agreement. 11. Rights Upon Transfer or Exchange. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 12. Interest Payment; Record Date. Interest on any Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered (the "Holder") on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fif{eenth (15th) day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the Holders not less than ten (10) days prior to the Special Record Date. 13. Treatment of Registered Owner. The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in paragraph 12 above) on, such Bond and for all other purposes whatsoever whether 1302092,,1 14 or not such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 14. Delivery; Application of Proceeds. The Bonds when so prepared and executed shall be delivered by the Finance Director to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 15. Fund and Accounts. A. All of the proceeds of the Bonds, less accrued interest received thereon and any unused discount, shall be deposited in the Bond Fund of the General Obligation Tax Increment Refunding Bonds, Series 1990A Fund heretofore created by the Prior Resolution for the Prior Bonds, which amount, together with all other funds held therein, and $0 of the City, deposited at bond closing for the Bonds, is sufficient to prepay the outstanding Prior Bonds on August 1, 2001. B. There is hereby established a special fund to be designated "General Obligation Tax Increment Refunding Bonds" (the "Fund") to be administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall be maintained in the manner herein specified, until all of the Bonds and the interest thereon have been fully paid. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Bond Fund: (i) all sums required to be credited to the Bond Fund under the Pledge Agreement, including certain tax increments; (ii) all accrued interest received upon delivery of the Bonds; (iii) any amount paid for the Bonds in excess of $2,699,600; (iv) any collections of all taxes hereafter levied for the payment of the Bonds and interest thereon; (v) any and all other moneys which are properly available and which are appropriated by the City Council to the Bond Fund; and (vii) all investment earnings on funds held in the Bond Fund. The Bond Fund shall be used solely to pay the principal and interest and any premiums for redemption of the Bonds. 16. Tax Increments. The City hereby pledges and appropriates the Tax Increments remitted by the Authority to the City derived from the Tax Increment District to the Bond Fund, which pledge and appropriation shall continue until all of the Bonds, and any additional bonds payable from the Bond Fund, are paid or discharged. The City hereby expressly reserves the right to use the Tax Increments to finance costs set forth in the Redevelopment Plan and Plan not financed hereby or to finance costs of other projects to be undertaken from time to time within the Project Area in accordance with the Redevelopment Plan and the Plan, as may be from time to time amended. 17. Future Tax Levies. In the event that it is anticipated that the aggregate of Tax Increments and any other funds appropriated to and then held in the Bond Fund and the estimated collections of Tax Increments to be received in the next succeeding year will not be sufficient to pay the principal and interest on the Bonds to become due in the first calendar year after such determination and the first six (6) months of the succeeding calendar year, the City Council shall pass a resolution requesting the County Auditor to levy an ad valorem tax in an amount as is necessary, together with the aforementioned funds then held in the Bond Fund and 1302092vl 15 said estimated collections of Tax Increments, to pay the principal and interest on the Bonds to become due during said period. 18. Reservation of Rights. Notwithstanding any provisions herein to the contrary, the City and the Authority reserve the right to terminate, reduce, or apply to other lawful purposes the Tax Increments herein pledged to the payment of the Bonds and interest thereon to the extent and in the manner permitted by law. 19. Pledge Agreement. The Mayor and Acting City Manager are hereby authorized to execute the Tax Increment Pledge Agreement in substantially the form presented to the City Council, which Tax Increment Pledge Agreement pledges Tax Increments derived from the Tax Increment District to the payment of the Bonds. 20. No Tax Levy; Coverage Test. The Tax Increments required to be remitted to the City pursuant to the Pledge Agreement and herein pledged to the payment of the Bonds are such that if collected in full they will produce at least five percent (5%) in excess of the amount needed to meet when due the principal and interest payments on the Bonds. Accordingly, no taxes upon all taxable property in the City are required to be levied for the payment of the Bonds prior to their issuance as permitted by Minnesota Statutes, Section 469.060. 21. Defeasance. When all Bonds have been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the registered holders of the Bonds shall, to the extent permitted by law, cease. The City may discharge its obligations with respect to any Bonds which are due on any date by irrevocably depositing with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full; or if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Bond Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a suitable banking institution qualified by law ag an escrow agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest payable at such times and at such rates and maturing on such dates as shall be required, without regard to sale and/or reinvestment, to pay all amounts to become due thereon to maturity. 22. Continuing Disclosure. The City is the sole obligated person with respect to the Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2-12 (the "Rule"), promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking") hereinafter described to: A. Provide or cause to be provided to each nationally recognized municipal securities information repository ("NRMSIR") and to the appropriate state information depository ("SID"), if any, for the State of Minnesota, in each case as designated by the Commission in accordance with the Rule, certain annual financial information and operating data in accordance with the Undertaking. The City reserves the right to modify from time to time the terms of the Undertaking as provided therein. 1302092vl 16 B. Provide or cause to be provided, in a timely'manner, to (i) each NRMSIR or to the Municipal Securities Rulemaking Board ("MSRB") and (ii) the SID, notice of the occurrence of certain material events with respect to the Bonds in accordance with the Undertaking. C. Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the MSRB and (ii) the SID, notice of a failure by the City to provide the annual financial information with respect to the City described in the Undertaking. D. The City agrees that its covenants pursuant to the Rule set forth in this paragraph 19 and in the Undertaking is intended to be for the benefit of the Holders of the Bonds and shall be enforceable on behalf of such Holders; provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants. The Mayor and Acting City Manager of the City, or any other officer of the City authorized to act in their place with "Officers" are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the City Council subject to such modifications thereof or additions thereto as are (i) consistent with the requirements under the Rule, (ii) required by the Purchaser of the Bonds, and (iii) acceptable to the Officers. 23. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Bonds as the same respectively become due, the full faith, credit and taxing powers of the City shall be and are hereby irrevocably pledged. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, and such other funds may be reimbursed with or without interest from the Debt Service Account when a sufficient balance is available therein. 24. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser, and to the attorneys approving the legality of the issuance of the Bonds, certified copies of all proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 25. Notice of Call for Redemption. Wells Fargo Bank, N.A. (formerly, Norwest Bank Minnesota, N.A.), as paying agent for the Prior Bonds, is hereby authorized and directed to give mailed notice of redemption prior to August 1, 2001 to all registered holders of the Prior Bonds. Said notice shall be in substantially the form attached hereto as Exhibit B. 26. Prior Bonds; Security. Until retirement of the Prior Bonds, all provisions theretofore made for the security thereof shall be observed by the City and all of its officers and agents. 1302092vl 17 27. Certificate of Registration. The Acting City Manager is hereby directed to file a certified copy of this resolution with the County Auditor of Carver and Hennepin Counties, Minnesota, together with such other information as he or she shall require, and to obtain the County Auditor's certificate that the Bonds have been entered in the County Auditor's Bond Register. 28. Negative Covenant as to Use of Proceeds and Project. The City hereby covenants not to use the proceeds of the Bonds or to use the Project, or to cause or permit them to be used, or to enter into any deferred payment arrangements for the cost of the Project, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 29. Authorization to Execute Pledge Agreement. The Pledge Agreement is hereby approved in substantially the form now on file in the office of the City; and the Mayor and Acting City Manager of the City are authorized to execute the same in the name of and on behalf of the City. In the event of the disability or the resignation or other absence of the Mayor or Acting City Manager of the City, such other officers of the City who may act in their behalf shall without further act or authorization of the City do all things and execute all instruments and documents required to be done or to be executed by such absent or disabled officials. The approval hereby given to the Pledge Agreement includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the City Attorney and by the City officials authorized herein to execute the Pledge Agreement prior to their execution; and said City officials are hereby authorized to approve said changes on behalf of the City. 30. Concurring Resolution of the Authority. The Authority will adopt a resolution authorizing execution of the Pledge Agreement. The City shall take such action as it determines is necessary to assure that the covenants of the Authority in the Pledge Agreement are fully and promptly performed; provided that in the exercise of any rights with respect thereto, the City shall be subject to the same standards and to the same rights applicable to the Authority under the covenants as if the City were the Authority. 31. Tax-Exempt Status of the Bonds; Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (1) requirements relating to temporary periods for investments, (2) limitations on amounts invested at a yield greater than the yield on the Bonds, and (3) the rebate of excess investment earnings to the United States if the Bonds (together with other obligations reasonably expected to be issued and outstanding at one time in this calendar year) exceed the small-issuer exception mnount of $5,000,000. For purposes of qualifying for the exception to the federal arbitrage rebate requirements for governmental units issuing $5,000,000 or less of bonds, the City hereby finds, determines and declares that (1) the Bonds are issued by a governmental unit with general taxing powers, (2) no Bond is a private activity bond, (3) ninety-five percent (95%) or more of the net proceeds of thc Bonds are to be used for local governmental activities of the City (or of a governmental unit the 1302092vl 18 jurisdiction of which is entirely within the jurisdiction of the City), and (4) the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the City (and all subordinate entities thereof, and all entities treated as one issuer with the City) during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section t48(f)(4)(D) of the Code. Furthermore: (i) there shall not be taken into account for purposes of said $5,000,000 limit any bond issued to refund (other than to advance refund) any bond to the extent the amount of the refunding bond does not exceed the outstanding amount of the refunded bond: (ii) the aggregate face amount of the Bonds does not exceed $5,000,000; (iii) each of the Refunded Bonds was issued as part of an issue which was treated as meeting the rebate requirements by reason of the exception for governmental units issuing $5,000,000 or less of bonds; (iv) the average maturity of the bonds does not exceed the average maturity of the Refunded Bonds; and (v) no part of the Bonds has a maturity date which is later than the date which is thirty (30) years after the dates the Refunded Bonds were issued. 32. Designation of Qualified Tax-Exempt Obligations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City hereby makes the following factual statements and representations: (a) the Bonds are issued after August 7, 1986; (b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (c) the City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (d) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all entities treated as one issuer with the City, and all subordinate entities whose obligations are treated as issued by the City) during this calendar year 2001 will not exceed $10,000,000; and (e) not more than $10,000,000 of obligations issued by the City during this calendar year 2001 have been designated for purposes of Section 265(b)(3) of the Code. (f) the aggregate face amount of the Bonds does not exceed $10,000,000; and 1302092vl 19 (g) the Bonds are issued to refund, and not to "advance refund" the Prior Bonds within the meaning of Section 149(d)(5) of the Code, and shall not be taken into account under the $10,000,000 issuance limit to the extent the bonds do not exceed the outstanding amount of the Prior Bonds. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 33. Payment of Issuance Expenses. The City authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses to U.S. Trust Company, Minneapolis, Minnesota on the closing date for further distribution as directed by the City's financial advisor, Ehlers. 34. Severability. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason,' the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution. 35. Headings. Headings in this resolution are included for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. The motion for the adoption of the foregoing resolution was duly seconded by member Labatt and, after a full discussion thereof and upon a vote being taken thereon, the following voted in favor thereof: Jansen, Ayotte, Peterson and Labatt and the following voted against the same: None Whereupon said resolution was declared duly passed and adopted. /s/Todd Gerhardt Acting City Manager /s/Linda C. Jansen Mayor 1302092vl 20 STATE OF MINNESOTA COUNTIES OF CARVER AND HENNEPIN CITY OF CHANHASSEN I, the undersigned, being the duly qualified and acting Acting City Manager of the City of Chanhassen, 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 of said City, duly called and held on the date therein indicated, insofar as such minutes relate to considering proposals for, and awarding the sale of, $2,720,000 General Obligation Tax Increment Refunding Bonds, Series 2001D of said City. WITNESS my hand this 25th day of June, 2001. Acting City Manager 1302092vl 21 EXHIBIT A BID TABULATION $2,720,000 General Obligation Tax Increment Refunding Bonds, Series 2001D City of Chanhassen, Minnesota SALE: June 25, 2001 AWARD: U.S. BANCORP PIPER JAFFRAY RATING: Standard & Poors Credit Market Services "A-" BBI: 5.20% NAME OF BIDDER RATE YEAR PRICE NET INTEREST COST TRUE INTEREST RATE U.S. BANCORP PIPER JAFFRAY Minneapolis, Minnesota j~EiLLS FARGO BROKERAGE SERVICE, LLC nneapolis, Minnesota 2.75% 2002 3.20% 2003 $2,707,352.00 $101,774.69 3.5379% SALOMON SMITH BARNEY Chicago, Illinois MORGAN STANLEY DEAN WITTER Chicago, Illinois UBS/PAINEWEBBER, INC. Chicago, Illinois CIBC WORLD MARKETS New York, New York CRONIN & COMPANY, INC. Minneapolis, Minnesota 4.00% 2002-2003 $2,730,743.55 $104,692.01 3.6139% DAIN RAUSCHER, INC. Minneapolis, Minnesota 3.375% 2002 3.45% 2003 $2,709,757.05 $109,269.15 3.7967% -_'OFFERING YIELDS: 2002 2.75% 2003 3.20% 1302092v I EXHIBIT B NOTICE OF CALL FOR REDEMPTION GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 1990A CITY OF CHANHASSEN, CARVER AND HENNEPIN COUNTIES, MINNESOTA NOTICE IS HEREBY GIVEN that by order of the City Council of the City of Chanhassen, Carver and Hennepin Counties, Minnesota, there have been called for redemption and prepayment on Augustl, 2001 those outstanding bonds of the City designated as General Obligation Tax Increment Refunding Bonds, Series 1990A, dated March 1, 1990 having stated maturity dates in the following years, totaling $2,685,000 in principal amount and having CUSIP numbers listed below: Year CUSIP Number* 2002 2003 The bonds are being called at a price of par plus accrued interest per bond called to August I, 2001, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment, at Wells Fargo Bank Minnesota, N.A. (formerly, Norwest Bank Minnesota, N.A.), Attn: Corporate Trust Operations, MAC N9303-121, Sixth Street and Marquette', Minneapolis, Minnesota 55479-0133, on or before August 1, 2001. Dated: June 25, 2001 BY ORDER OF THE CITY COUNCIL /s/Todd Gerhardt Acting City Manager Important Notice: Under the Interest and Dividend Compliance Act of I983, 31% will be withheld if tax identification is not-properly certified. *The City shall not be responsible for the selection of or use of the CUSIP numbers, nor is any representation made as to their correctness indicated in the notice. They are included solely for the convenience of the holders. 1302092v 1