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HomeMy WebLinkAboutResolution 138-1998I , . � �, • � . ' . RESOLUTION NO. 138-98 Resolution Authorizing The Issuance And Awarding The Sale Of Sales Tax Revenue Bonds, Series 1998, To Finance Acquisition, Construction, And Equipping Of Multi-Plex Project BE IT RESOLVED by the City Commission of the City of Brookings, Brookings County, South Dakota(the "City") as follows: Section l. RECITALS, AUTHORIZATION AND SALE 1.01. Recitals and authorization. (a) The City is a political subdivision of the State of South Dakota and a body corporate and politic. (b) Under the laws of the State of South Dakota, the City is possessed of all powers which are necessary, requisite or proper for the government and administration of its local and municipal matters, and all rights and powers that now or hereafter may be granted to municipalities by the laws of the State of South Dakota. (c) The City is authorized by Chapter 10-52, South Dakota Codified Laws (the "Act") to levy a "non-ad valorem tax" (as defined by the Act) on the sale, use, storage and consumption of items taxed under Sections 10-45 and 10-46, South Dakota Codified Laws (the "Act"), subject to certain exceptions. The City adopted and imposed a sales tax authorized by the Act (the "Sales Tax") with an original tax rate equal to 1% (the "Initial 1% Tax Rate"), pursuant to the Act and pursuant to Ordinance No. 21-81. Ordinance No. 21-81 was amended by Ordinances No. 25-96 and 20-98 which, among other things, imposed an additional 1% tax rate on the sale, use, storage and consumption of items taxed under Section 10-45 and 10-46 of the Act (the "Second 1% Tax Rate"). Ordinance No. 21-81, as amended, has been codified as Section 2-59 of the Revised Ordinances of the City of Brookings, South Dakota(the "Sales Tax Ordinances"). (d) The Act provides that cities levying a Sales Tax may issue non-ad valorem sales tax revenue bonds pursuant to Section 10-52-2.10 of the Act and Chapter 6-8B, South Dakota Codified Laws in anticipation of the collection of the Sales Tax. In accordance with the provisions of the Act and the Sales Tax Ordinances, such bonds are required to be payable solely from collections of the Second 1% Tax Rate (the "Pledged Revenues"). In accordance with the provisions of the Act, the City is required to covenant that it will continue to impose and collect the Sales Tax so long as such bonds are outstanding. � , , . . . � . . (e) As authorized by the Sales Ta�c Ordinances and the Act, the City has determined that it is necessary and desirable to issue its non-ad valorem sales tax revenue bonds in a principal amount not to exceed $7,200,000 (the "Bonds"), to be paid from Pledged Revenues. The Bonds shall be issued to provide funds to finance the acquisition, construction and equipping of a multiuse agricultural exposition and research center to be located in the northeast quadrant of the intersection of U.S. Highway I-29 and State Highway 14 (the "Multi-Plex" or the "Project"). (� In accordance with the requirements of the Act and the Sales Tax Ordinances, the use of Pledged Revenues to finance the Project will be open to referendum for the period from November 21, 1998, to December 10, 1998. 1.02. Sale, Terms and Bond Purchase A�exeement. The Bonds authorized by this Resolution (the "Bond Resolution") shall be sold to Norwest Investment Services, Inc. (the Underwriter) at a purchase price of not less than 98% of par, plus accrued interest, less original issue discount, if any. The Bonds are to bear interest at a rate or rates per annum resulting in a net interest cost of not to exceed 5.75% per annum and to mature over a period not to exceed 16 years. The Finance Officer is hereby authorized, empowered and directed to determine, approve a.ld ratify the final purchase price, principal amount, maturities, net interest cost or costs and payment dates of and for the Bonds, together with such related underwriting details, including but not limited to rights of optional redemption provisions, so long as the maturities and net interest costs are within the pazameters set forth in this Section 1.02. The execution and delivery of a Bond Purchase Agreement between the City and the Underwriter setting forth such final terms are hereby approved and authorized and such execution shall be conclusive evidence of such authority and shall be binding upon the City. The provisions of the Bond Purchase Agreement as so executed, including all Exhibits and Appendices thereto, are incorporated herein by reference. The law firm of Faegre & Benson LLP, of Minneapolis, Minnesota, is hereby appointed as the City's Bond Counsel for purposes of the issuance of the Bonds. 1.03. Official Statement. The Mayor, the City Attorney, and the Finance Officer, are authorized, in cooperation with the Underwriter, to prepare a Preliminary Official Statement and an Official Statement, (together referred to as the "Official Statement"), to be distributed to prospective purchasers of the Bonds. The Finance Officer is hereby authorized and directed to approve, to "deem final" and, if requested, to execute the Official Statement. 1.04 Continuin� Disclosure A�reement. The City is hereby authorized to enter into a Continuing Disclosure Agreement that complies with the requirements of Regulation 15c2-12, promulgated by the Securities and Exchange Commission. The execution and delivery of such a Continuing Disclosure Agreement by the Mayor and Finance Officer (or other officers of the City) are hereby approved and authorized and such execution shall be conclusive evidence of such authority and shall be binding upon the City. -2- , Section 2. FORMS. 2.01. The Bonds. The Bonds shall be printed in substantially the following form: [The balance of this page is intentionally left blank.] -3- ♦ UNITED STATES OF AMERICA STATE OF SOUTH DAKOTA COUNTY OF BROOKINGS CITY OF BROOKINGS SALES TAX REVENUE BOND SERIES 1998 Interest Date of Original Rate Maturitv Issue CUSIP December 1, 1998 REGISTERED OWNER: CEDE & Company, as nominee of The Depository Trust Company PRINCIPAL AMOLTNT: THE CITY OF BROOKINGS, a duly organized and existing municipal corporation of Brookings County, South Dakota (the City) acknowledges itself to be indebted and for value received promises to pay to the registered owner named above, or registered assigns, the principal amount specified above, on the maturity date specified above, with interest thereon from the date of original issue specified above at the annual rate specified above, payable June 1, 1999, and each December 1 and June 1 thereafter by check or draft mailed to the person in whose name this Bond is registered at the close of business on the fifteenth day of the preceding month (whether or not a business day) at the registered owner's address set forth on the registration records maintained by The First National Bank in Sioux Falls, as Bond Registrar and Paying Agent (the "Bond Registrar"), or its successor designated under the Bond Resolution hereinafter described. Notwithstanding anything else herein, so long as the Bonds are in Book-Entry-Only Form, principal and interest shall be paid in accordance with the requirements of the Depository Trust Company, New York, New York ("DTC"), as in effect from time to time. So long as the Bonds are in Book-Entry-Only Form, the operating procedures of DTC and the City's Blanket Letter of Representations shall apply, notwithstanding anything to the contrary set forth in this Bond or the Bond Resolution. Any interest not punctually paid or provided for will cease to be payable on the regular record dates provided for in the Bond Resolution and such defaulted interest may be paid to the person in whose name this Bond shall be registered at the close of business on a special record date for the payment of such defaulted interest established by the Bond Registrar pursuant to the Bond Resolution. T'his Bond is one of an issue of Bonds in the aggregate principal amount of $7,200,000 (the "Bonds"), all issued by the City for the purpose of providing money to finance the acquisition, construction and equipping of a multiuse agricultural exposition and -4- .' '. research center to be located m the northeast quadrant of the mtersection of U.S. Highway I- 29 and State Highway 14 (the "Multi-Plex" or the "Project"), and in full conformity with the provisions of the Constitution and laws of the State of South Dakota including Chapter 10- 52, South Dakota Codified Laws, as amended, and pursuant to an authorizing resolution adopted by the City Commission on November 17, 1998 (the "Bond Resolution"), to which reference is made for a description of the nature and extent of the security for the Bonds, the rights thereunder of the City and the Bondholders, and the terms upon which the Bonds and any additional obligations may be issued and secured. The Bonds are issuable in Book- Entry-Only form, in denominations of $5,000 or any integral multiple thereof, of single maturities. Series 1998 Bonds maturing on and after December 1, 2004 are subject to optional , redemption and prepayment upon request by the City to the Bond Registrar, on December 1, 2003, and on any date thereafter, in whole or in part, in inverse order of maturity, and if in part within a maturity, then by lot, at a redemption price equal to their principal amount, plus accrued interest and a premium (expressed as a percentage of the principal amount to be redeemed), as follows: Redemption Dates Premium December 1, 2003 to and including November 30, 2.00% 2004 December 1, 2004 to and including November 30, 1.00% 2005 and without premium thereafter. Not less than 30 nor more than 45 days prior to the date specified for redemption and prepayment of any Bonds, the City will mail notice of the call thereof to the registered owner of the Bonds to be redeemed and to the Bond Registraz. Upon partial redemption of any Bond, a new Bond or Bonds will be delivered to the owner without charge, representing the remaining principal amount outstanding. The Bonds have been designated as "qualified tax-exempt obligations" by the City pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. As provided in the Bond Resolution and subject to certain limitations set forth therein (including the Book-Entry-Only system of ownership), this Bond is transferable upon the books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange, the -5- �� , � City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any t�, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Resolution until the Certificate of Authentication hereon shall have been executed by the Bond Registrar by manual signature ' of one of its authorized representatives. IT IS CERTIFIED, RECITED, COVENANTED AND AGREED that under the laws and resolution referred to above, the City has duly created a Principal and Interest Account in its Special Tax Fund and has agreed to appropriate thereto monthly, from the collections of the r.on-ad valorem sales and use t�es, (excluding any �ollections received under the "Initial 1% T� Rate" described in the Bond Resolution and excluding any collections of the City's LLR Ta�c) imposed by the City (the "Pledged Revenues"), an amount sufficient to pay all principal of and interest on the Bonds as such become due; that so long as the Bonds and any additional obligations payable therefrom are outstanding, the City will continue to impose and collect such non-ad valorem sales and use taxes; that a Reserve Account (the "Reserve Account") has been created in the Special Tax Fund and will be funded by the deposit of proceeds of the Bonds to an amount equal to the Reserve Requirement (as provided for and within the meaning set forth in the Bond Resolution); that the City has pledged to the payment of the Bonds so much of the collections of the non-ad valorem sales and use taxes imposed by the City as are necessary to provide for the payment of the principal of and interest on the Bonds and to maintain the required amounts in the Reserve Account; that additional obligations may be issued and made payable from the Pledged Revenues on a parity with the Bonds in the manner and upon the conditions set forth in the Bond Resolution; that all acts, conditions and things required by the Constitution and laws of the State of South Dakota to be done precedent to and in the issuance of this Bond, in order to make it a valid and binding special obligation of the City in accordance with its terms, have been done, have happened and have been performed in regular and due time, form and manner. -6- . � . IN WITNESS WHEREOF, the City of Brookings, Brookings County, South Dakota, by its City Commission, has caused this Bond to be executed by the signatures of the Mayor and the Finance Officer, countersigned by an attorney resident and licensed to practice in the State of South Dakota, all such signatures being authentic manual, printed, engraved or lithographed facsimiles. CITY OF BROOKINGS Mayor Finance Officer Countersigned: Resident Attorney -7- - CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Bond Resolution mentioned within. DATE OF AUTHENTICATION: THE FIRST NATIONAL BANK IN SIOUX FALLS, as Bond Registrar By Authorized Representative -8- ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto , the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NLJMBER OF NOTICE: The signature to this Assignment ASSIGNEE: must correspond with the name as it appeazs upon the face of the within Bond in every / particular, without alteration or enlargement or any change whatsoever. Signature(s) must be guaranteed by a commercial bank or trust compan:� or by a brokerage firm having a membership in one of the major stock exchanges. 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 LJNIF TRANS MIN ACT . . . . . .Custodian . . . . . . common (Cust) (Minor) TEN ENT -- as tenants by the under Uniform Transfers to entireties Minors Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (State) JT TEN -- as j oint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used. -9- 2.02. [ Intentionally Omitted ] Section 3. BOND TERMS, EXECUTION AND DELIVERY. 3.01. Date. Maturities and Interest Rates. The Bonds shall be designated Sales Tax Revenue Bonds, Series 1998 shall be issued in the denomination of$5,000 each, or any integral multiple thereof, shall mature on the dates and in the respective years and amounts, and shall bear interest from date of original issue until paid or duly called for redemption payable on the dates and at the respective annual rates stated opposite such maturity years as shown on E}chibit A to the Bond Purchase Agreement, subject to the provisions of Section 1.02 hereof. The Bonds shall be initially issued in Book-Entry-Only Form, as further provided in Section 3.07, by using and delivering to The Depository Trust Company (the "Depository") one typed Bond for each stated maturity of the Bonds, registered to CEDE & Company, as nominee for the Depository Trust Company. The interest thereon and, upon surrender of each Bond, the principal amount thereof, shall be payable by check or draft issued by the Bond Registrar described herein. 3.02. Dates and Interest Payment Dates. Each Bond shall bear a date of original issue as of the first day of the month in which the Bonds are delivered to the Underwriter. Upon the initial delivery of the Bonds pursuant to Section 3.06 and upon any subsequent transfer or exchange pursuant to Section 3.03, the date of authentication shall be noted on each Bond so delivered, exchanged or transferred. The interest on the Bonds shall be payable on each interest payment date therefor to the owner of record thereof as the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day. 3.03. Registration. The City hereby appoints The First National Bank in Sioux Falls, as bond registrar, transfer agent and paying agent for the Bonds (the "Bond Registrar"). Subject to the Book-Entry System described in Section 3.07, the effect of registration and the rights and duties of the City and the Bond Registrar with respect thereto shall be as follows: (a) Re •g�ster. The Bond Registrar shall keep at its principal corporate trust office a bond register in which the Bond Registrar shall provide for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of any Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Bond Reg-istrar shall authenticate and deliver, in the name of the designated -10- , „ � transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Bond Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until such interest payment date. (c) Exchange of Bonds. Whenever any Bonds are surrendered by the registered owner for exchange, the Bond Registrar shall authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity, as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. All Bonds surrendered upon any transfer or exchange shall be promptly by the Bond Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When any Bond is presented to the Bond Registrar for transfer, the Bond Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Bond Registrar sha�l incur no liability for the refusal, in good faith, to m�ke transfers which it, in its judgment, deems improper or unauthorized. (� Persons Deemed Owners. The City and the Bond Registrar may treat the person in whose name any Bond is at any time registered in the bond register as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Bond and for all other purposes, and all such payments so made to any such reg-istered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Char�. For every transfer or exchange of Bonds, the Bond Reg-istrar may impose a charge upon the owner thereof sufficient to reimburse the Bond Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated, Lost, Stolen or Destroved Bonds. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Bond Registrar shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Bond Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Bond Registrar of evidence satisfactory to it that such Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Bond Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both the City -11- and the Bond Registrar shall be named as obligees. All Bonds so surrendered to the Bond Registrar shall be canceled by it and evidence of such cancellation shall be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Bond prior to payment. 3.04. Appointment of Initial and Successor Re 'sgi trars. The Mayor and the Finance Officer are authorized to execute and deliver, on behalf of the City, a contract with the Bond Registrar. Upon merger or consolidation of the Bond Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, such corporation shall be authorized to act as successor Bond Registrar. The City agrees to pay the reasonable and customary charges of the Bond Registrar for the services performed. The City reserves the right to remove the Bond Registrar upon thirty (30) days' notice and upon the appointment of a successor Registrar, in which event the predecessor Bond Registrar shall deliver all cash and Bonds in its possession to the successor Bond Registrar and shall deliver the bond register to the successor Bond Registrar. On or before each principal or interest due date, without further order of the Commission, the Finance Officer shall transmit to the Bond Registrar, from the accounts described in Section 4, moneys sufficient for the payment of all principal and interest then due. 3.05. Redemption. (a) The Bonds shall be subject to redemption prior to maturity, at the option of the City, in the years and at the redemption prices set forth in Exhibit A to the Bond Purchase Agreement in such order of maturities as may be designated by the City and, within any maturity, in $5,000 principal amounts selected by the Registrar by lot, assigned in proportion to their principal amounts. (b) Subject to the Book-Entry System described in Section 3.07, notice of redemption shall be given by first class mail not less than 30 nor more than 45 days prior to the redemption date, to the registered owner of each Bond to be redeemed, at the registered owner's address as it appears on the bond registration books maintained by the Bond Registrar or at such address as the registered owner may have filed with the Bond Registrar for the purpose. Neither failure to mail any such notice nor any defect in any notice so mailed shall affect the sufficiency of the proceedings for the redemption of any of the Bonds not affected thereby. Each notice of redemption shall state: (1) the redemption date, (2) the redemption price, (3) the interest rates, maturities and CUSIP numbers of the Bonds to be redeemed, (4) the principal amount of the Bonds to be redeemed, -12- (5) if less than all of the outstanding Bonds of any series are to be redeemed, the certificate numbers and the respective principal amounts of the Bonds to be redeemed. (6) that on the redemption date the redemption price and interest accrued to the redemption date will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after the redemption date, and (7) the address to which such Bonds are to be surrendered for payment of the Redemption Price. (c) Notice of redemption shall be given by the Registrar for and on behalf and at the expense of the City, upon the written request of the Finance Officer. (d) Notice of redemption having been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price specified in such notice, and from and after such redemption date (unless the City shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Registrar at the redemption price. (e) In addition to the foregoing notice, if required by the Underwriter or by the rules of the Municipal Securities Rulemaking Board, further notice shall be given by the Bond Registrar as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as set forth herein: (1) Each further notice of redemption given hereunder shall contain (i) the date of mailing of such notice of redemption; (ii) CUSIP number of each Bond being redeemed; (iii) the date of each Bond being redeemed; (iv) the rate of interest borne by each Bond being redeemed; (v) the maturity date of each Bond being redeemed; and (vi) any other descriptive information needed to identify accurately the Bonds being redeemed. (2) Each further notice of redemption shall be sent at least 35 days before the redemption date by registered or certified mail or ovemight delivery service to (i) the following registered securities depositories (if at the time of such notice such depositories are then in the business of holding substantial amounts of obligations of types comprising the Bonds of the relevant series): Depository Trust Company of New York, New York and Midwest Securities Trust Company of Chicago, Illinois, (ii) -13- � . � Moody's Municipal and Government and Standazd and Poor's Called Bond Record; and (iii) any other such depositories or national information services that disseminate notices of redemption of obligations such as the Bonds designated by the City to receive such notice. (3) Each such further notice shall be published one time in The Bond Bu•��er of New York, New York or, at the option of the City, in some other financial newspaper or journal which regularly carries notices of redemption of other obligations similar to the Bonds of the relevant series, such publication to be made at least 30 days prior to the date fixed for redemption. (4) Upon the payment of the redemption price of the Bonds redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. 3.06. Execution, Authentication and Deliverv. The Bonds shall be prepazed under the direction of the Finance Officer and shall be executed and authenticated on behalf of the City by the signatures of the Mayor and the Finance Officer, countersigned by an attorney resident and licensed to practice in the State of South Dakota, and the official seal of the City affixed thereto, and any certificates as to registration, indebtedness or legal opinion on the reverse side of each Bond shall be executed by the signature of the Finance Officer. All signatures and the seal may be printed, lithographed or engraved facsimiles of the original. In case any officer whose signature or a facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of any Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. Notwithstanding such execution, no Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Bond Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Bond Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on each Bond shall be conclusive evidence that it has been authenticated and delivered under this Bond Resolution. After the Bonds have been so prepared and executed, the Finance Officer shall deliver them to the Bond Registrar for delivery to the Underwriter on receipt of the purchase price heretofore agreed upon, and the Underwriter shall not be required to see to the application thereof. 3.07. Book-Entrv-Only System. The Bonds shall be initially issued in Book- Entry-Only Form by using and delivering to The Depository Trust Company (the "Depository") one typed Bond for each stated maturity of the Bonds, registered to CEDE & Company, as nominee for the Depository Trust Company. While the Bonds remain -14- r , issued in Book-Entry-Only Form, the provisions of this Bond Resolution which conflict with the operation of the Book-Entry-Only System shall not apply, and the provisions of the Letter of Representations previously entered into by the City (the "Letter of Representations") relating to such Book-Entry-Only System and the following provisions shall prevail. (a) Re�istration, Recording and Transfer of Ownershi�. The Depository (or its nominees) shall be and remain recorded on the registration records maintained by the Bond Registrar as the Holder of all Bonds which are in Book-Entry-Only Form. No transfer of any Bond in Book-Entry-Only Form shall be made, except from one Depository to another (or its nominee) or except to terminate the Book- Entry-Only Form. All Bonds of each stated maturity in Book-Entry-Only Form shall be issued and remain in a single Bond certificate registered in the name of the Depository (or its nominee); provided, however, that upon termination of the Book- Entry-Only Form pursuant to the Letter of Representations or as otherwise directed by written notice from the City, Bond Registrar and Depository, the City shall, upon delivery of all Bonds from the Depository, promptly execute, and the Bond Registrar shall thereupo*� authenticate and deliver, Bonds to all persons wl�o were Beneficial Owners thereof immediately prior to such termination; and the Bond Registrar shall register such Beneficial Owners as Holders of the applicable Bonds. The Bond Registrar, as bond registrar and paying agent, shall maintain accurate books and records of the principal balance, if any, of each such Outstanding Bond in Book- Entry-Only Form, which shall be conclusive for all purposes whatsoever. Upon the authentication of any new Bond in Book-Entry-Only Form in exchange for a previous Bond, the Bond Registrar shall designate thereon the principal balance remaining on such Bond according to the Bond Registrar's books and records. (b) Notices. The City and Bond Registrar shall each give notices to the Depository of such matters and at such times as are required by the Letter of Representations. All notices of any nature required or permitted hereunder to be delivered to a Holder of a Bond in Book-Entry-Only Form shall be transmitted to Beneficial Owners of such Bonds at such times and in such manner as shall be determined by the Depository and the Participants in accordance with the Book- Entry-Only System and Letter of Representations. (c) Payments. All payments of principal of, premium, if any, and interest on Bonds while in Book-Entry-Only Form shall be paid to the Depository in accordance with the Book-Entry-Only System and Letter of Representations in same day funds by wire transfer. All payments of principal of, premium, if any, and interest on any Bonds in Book-Entry-Only Form due Beneficial Owners shall be made at such times and in such manner as shall be determined by the Depository and -15- � , . the Participants in accordance with the Book-Entry-Only System and Letter of Representations. (d) Limitations on Liabilitv. With respect to Bonds in Book-Entry-Only Form, and any Beneficial Owners thereof, except as expressly provided to the contrary herein, the City and the Bond Registrar shall have no responsibility, liability or obligation of any nature whatsoever with respect to (i) the non-payment to any Beneficial Owner or any other person, other than the Depository, of any amount due for principal or interest; (ii) the failure to give any notice or other information to the applicable Beneficial Owner; (iii) the inaccuracy of the records of the Depository or any Participant, or (iv) the failure in any manner of the Depository or any Participant to timely or properly comply with procedures or requirements of the Book-Entry- Only System. Section 4. SPECIAL TAX FLTND. 4.01. Special Tax Fund. The Finance Officer has established and will maintain the Special Tax Fund as a separate and special fund in the financial records of the City until all Bonds issued and made payable therefrom, and interest due thereon, have been duly paid or discharged. All collections of the Pledged Revenues, as hereinafter defined, shall be credited, as received, to the Special Tax Fund. Within the Special Tax Fund are various separate accounts to be maintained by the City. 4.02. Pledged Revenues. Pursuant to the Act and the Sales Ta�c Ordinances, the City has levied the Sales Tax on the sale, use, storage and consumption of certain of the items taxed under Sections 10-45 and 10-46 of South Dakota Codified Laws. Sales Tax revenues consisting of the proceeds collected from the Second 1% Tax Rate, imposed by the Sales Tax Ordinances, are irrevocably pledged and appropriated to, and shall be deposited to the Special Tax Fund (the "Pledged Revenues"). For purposes of this Bond Resolution, "Outstanding Bonds" shall mean these Bonds and any parity lien bonds hereafter issued pursuant to this Bond Resolution. The Pledged Revenues and the Special Tax Fund shall be used and applied only in the manner and order hereinafter set forth. 4.03. Construction Account. There is hereby created and established as an account of the Special Tax Fund, a "Construction Account." There shall be credited to the Construction Account the proceeds from the sale of the Bonds remaining after (a) the deposit to the Reserve Fund, if any, required by Section 4.05, and (b) payment of the (i) underwriter's discount and(ii) any other expenses of issuing the Bonds. All moneys credited to the Construction Account shall be applied solely to the payment of the costs of the Project. For the purposes of this Bond Resolution, "costs of the Project" shall include costs of acquisition, construction and equipping the Project, including legal, accounting and other professional expenses relating to the Project, the costs of acquisition of properties, rights, easements, or other interest in properties, insurance premiums, and the costs of publishing, posting or mailing notices in connection with the Project. All sums derived from the -16- f , investment of moneys in the Construction Account shall remain in and become part of such account. When all costs of the Project have been paid, any balance remaining in the Construction Account shall be credited to the Principal and Interest Account hereinafter established. 4 .04. Princival and Interest Account. There is hereby created and established as an account of the Special Tax Fund, a "Principal and Interest Account." Immediately upon delivery of the Bonds, there shall be credited to the Principal and Interest Account the amount of accrued interest received from the Underwriter. Commencing on the first day of the month following the month in which the Bonds are delivered to the Underwriter, there shall be withdrawn from the Special Tax Fund at least monthly and credited to the Principal and Interest Account an amount which will equal at least one-sixth (1/6th) of the interest becoming due on the next succeeding interest payment date with respect to the Outstanding Bonds issued. Commencing on the first day of the month following the month in which the Bonds are delivered to the Underwriter, there shall be withdrawn from the Special Tax Fund at least monthly and credited to the Principal and Interest Account, an amount which will equal at least one-twelfth (1/12th) of the principal becoming due on the next succeeding principal payment date with respect to the Outstanding Bonds. In all events there shall be credited to the Principal and Interest Account amounts sufficient to pay the principal of and interest on the Outstanding Bonds as the same become due. 4.05. Reserve Account. There is hereby created and established as an account of the Special Tax Fund, a "Reserve Account." There shall be credited to the Reserve Account from the proceeds of the Bonds, an amount not greater than the lesser of(i) 10% of the original principal amount of the Bonds, or (ii) 125% of the average annual debt service on the Outstanding Bonds, or (iii) the maximum annual debt service on all Outstanding Bonds having a parity lien on the Pledged Revenues (the "Maximum Reserve Requirement"). Subject to the foregoing, the actual Reserve Requirement shall be in the amount set forth in E�chibit A to the Bond Purchase Agreement (for all purposes of this Bond Resolution, such amount shall be referred to as the "Reserve Requirement"). Thereafter, in the event that the amount on deposit in the Reserve Account shall thereafter fall below the Maximum Reserve Requirement, additional deposits shall be made from the Pledged Revenues to the Reserve Account until the Maximum Reserve Requirement is again reached. Upon the issuance of any parity lien bonds, the Maximum Reserve Requirement established in this section shall be increased to an amount equal to the combined maximum annual debt service on the Outstanding Bonds, subject to the applicable provisions of Section 148 of the Internal Revenue Code and pertinent regulations. The balance required shall be funded on the delivery date of the parity lien bonds. Moneys credited to the Reserve Account may be used only for the payment of principal of and interest on the Outstanding Bonds and shall be used only in the event that there are insufficient moneys in the Principal and Interest Account to meet such principal and interest payments promptly when due. The interest from any investment of the Reserve -17- r , Account may be transferred from time to time to the Construction Account, or be transferred to the Principal and Interest Account. No transfer of investment income shall be made from the Reserve Account at any time when the balance therein is less than the Reserve Requirement. Such investments shall be subject to the limitations of South Dakota law. 4.06. Subordinate Lien Bonds. After making the above required payments, any remaining Pledged Revenues shall be used for the payment of the principal of and interest on any additional sales tax revenue bonds having a lien which is subordinate to the lien of the Outstanding Bonds, and for a reserve fund as additional security for the payment of such subordinate lien bonds. 4.07. Other Pavment Sources. To the extent that the amounts on hand in the Principal and Interest Account and the Reserve Account are not sufficient to pay principal of and interest on the Bonds when due, the City agrees to appropriate in each Fiscal Yeaz from other sources available to it, for deposit in the Special Tax Fund, such additional amounts as are necessary to pay such principal and interest and to restore the Reserve Account to the Reserve Requirement; provided that the amount so appropriated shall be restored from Pledged Revenues. 4.08. Other Improvements. The remaining Pledged Revenues may be used for paying the cost of other projects or land acquisition which the City is legally authorized to undertake and/or the payment of debt service on other bonds of the City, and contractual obligations of the City incurred for the purpose of paying the costs of legally authorized projects for the City. Such Pledged Revenues shall not be pledged or expended, by interfund transfer or otherwise, for any general purposes of the City except as herein indicated. 4.09. Deposit and Investment of Funds. The Finance Officer shall cause all moneys pertaining to the Fund to be deposited as received with one or more banks which are duly qualified public depositories under the provisions of Chapter 4-6A, South Dakota Codified Laws, in a deposit account or accounts, which shall be accounted for separate and apart from all other accounts of the City, so long as any of the Bonds and the interest thereon shall remain unpaid. Any of such moneys not necessary for immediate use may be deposited with such depository banks in savings or time deposits. No moneys shall at any time be withdrawn from such deposit accounts except for the purposes of the Fund as authorized in this Bond Resolution; except that moneys from time to time on hand in the Fund may at any time, in the discretion of this Commission, be invested in securities permitted by the provisions of Section 4-5-6, South Dakota Codified Laws; provided that moneys on hand in the Reserve Account may be invested only in direct, general obligations of the United States of America maturing and bearing interest at the times and in the amounts estimated to be required to provide cash when needed for the purposes of the respective accounts. Income received from the deposit or investment of moneys shall be credited to the account from whose moneys the deposit was made or the investment was purchased, and handled and accounted for in the same manner as other moneys in that account. -18- � . . Section 5. ADDITIONAL OBLIGATIONS. (a) No additional obligations shall be issued and made payable from the Pledged Revenues and having a lien upon such revenues and the Special Tax Fund which is prior to or superior to the lien of the Bonds authorized herein. (b) Nothing in this Bond Resolution shall be construed in such manner as to prevent the issuance by the City of additional obligations payable from the Pledged Revenues and constituting a lien upon the Pledged Revenues and the Special Tax Fund equal to or on a parity with the lien of the Bonds authorized herein, provided (i) the City is current in the payment of principal and interest on the Outstanding Bonds and is current in the accumulations required for the Principal and Interest Account and the Reserve Account, (ii) the City is in compliance with the covenants herein contained, and either (iii) the Pledged Revenues collected by the City in the last preceding fiscal year (as determined by the City) is sufficient to cover 1.25 times the combined average annual principal and interest requirements on the Outstanding Bonds, and the proposed parity lien obligations, or (iv) the estimated Pledged Revenues to be collected in the fiscal year in which the proposed parity lien obligation� will be issued shall be at least equal to 1.25 times ;he combined average annual principal and interest requirements of the Outstanding Bonds and the proposed parity lien obligations. (c) Nothing herein shall prevent the City from issuing obligations payable from the Pledged Revenues and the Special Ta�c Fund and having a lien thereon which is junior and subordinate to the lien of the Bonds authorized herein. Section 6. COVENANTS OF THE CITY. The City hereby irrevocably covenants and agrees with each and every holder of the Bonds, that so long as any of the Bonds remain outstanding: (a) It will not amend or repeal the Sales T� Ordinances relating to the Sales Tax by decreasing the sales ta�c rate or the allocation of revenues thereof to the Special Tax Fund, or in any way that would adversely affect the amount of Sales Tax revenues which would otherwise be collected and deposited to the Special Tax Fund. However, nothing shall prevent the City from amending the Sales Tax Ordinances in order to make certain changes in the administration, collection or enforcement of the Sales Tax, provided that such changes would not materially adversely affect the owners of the Bonds. (b) It will administer, enforce, and collect, or cause to be administered, enforced or collected, the Sales Tax authorized by the Sales Tax Ordinances, and shall take such necessary action to collect delinquent payments in accordance with law. -19- � .. . (c) It will keep or cause to be kept such books and records showing the proceeds of the Sales Tax, in which complete entries shall be made in accordance with standard principles of accounting, and any owner of any Bond shall have the right at all reasonable times to inspect the records and accounts relating to the collection and receipts of such Sales Tax. (d) In the event the Sales Tax of the City is replaced and superseded by a state collected-locally shared sales tax or taxes, or is replaced and superseded in some other manner from some other source or sources, the revenues derived by the City from the replacement source or sources, as received by the City shall be appropriated in the same manner as if the City had levied and imposed a sales tax. From and after the date of a replacement, the Outstanding Bonds shall have a first and prior lien, but not necessarily an exclusive such lien, upon such replacement revenues to the extent therein specified. (e) The City covenants that, as of the date of issuance of the Bonds, no prior obligations will have been issued and remain outstanding payable in any manner from the Pledged Revenues or any portion thereof. Section 7. TAX MATTERS. 7.01. Tax Matters. (a) Covenant. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations issued thereunder. (b) Investment of Moneys on Deposit in the Principal and Interest Account. The Finance Officer shall ascertain monthly the amount on deposit in the Principal and Interest Account. If the amount on deposit therein, ever exceeds by more than an amount equal to the lesser of (i) 5% of the original principal amount of all Outstanding Bonds, or (ii) $100,000, the aggregate amount of principal and interest due and payable from the Principal and Interest Account within 13 months thereafter, such excess shall either (1) not be invested except at a yield equal to or less than the yield borne by the Bonds, or (2) be used to prepay and redeem principal of the Bonds. (c) Certification. The Mayor and Finance Officer, being the officers of the City charged with the responsibility for issuing the obligations pursuant to this Bond Resolution, are authorized and directed to execute and deliver to the pwchaser a certification in order to satisfy the provisions of all applicable arbitrage and arbitrage rebate regulations adopted by the treasury or other applicable agency or department and applicable to the Bonds. Such certification shall state that on the basis of the -20- . . , . � . facts, estimates and circumstances in existence on the date of issue and delivery of the Bonds as therein set forth, it is not expected that the proceeds of the Bonds will be used in such a manner that would cause any of the Bonds to be an arbitrage bond, and the certification shall further state that to the best of the knowledge and belief of the certifying officers there are no other facts, estimates or circumstances that would materially change such expectation. 7.02. �ualified Tax-Exempt Obli at�. The City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code relating to the disallowance of interest expense for financial institutions, and hereby finds that the reasonably anticipated amount of qualified tax-exempt obligations (within the meaning of Section 265(b)(3) of the Code) which will be issued by the City and all subordinate entities thereof during calendar year 1998, including the Bonds, does not exceed $10,000,000. 7.03. Arbitrage Rebate. In order to comply with relevant provisions of the Internal Revenue Code (the "Code") relating to the t�-exempt status of the Bonds, the City will undertake to prevent the Bonds (or any series or portion thereo fl from being considered an "arbitrage bond" within the meaning of Section 148 of the Code and regulations thereunder. The City hereby covenants to comply with the arbitrage rebate requirements of Section 148(� of the Code. The City and agrees to make computations, retain records and pay amounts to the United States at the times and in the manner required by said Section 148(�. Section 8. CERTIFICATIONS, DEFEASANCE. 8.01. Certifications of Proceedin�s. The officers of the City and the County Auditor of Brookings County are authorized and directed to prepare and furnish to the City's financial consultants, the Underwriter and to Faegre & Benson LLP, Bond Counsel, certified copies of all proceedings and records of the City relating to the authorization and issuance of the Bonds and such other affidavits, certificates and opinions as may reasonably be required to show the facts relating to the legality and marketability of the Bonds as such facts appear from the officers' books and records or as are otherwise known to them. All such certified copies, certificates, affidavits and opinions, including any heretofore furnished, shall constitute representations of the City as to the correctness of the facts recited therein and the actions stated therein to have been taken. 8.02. Defeasance. When all of the Bonds have been discharged as provided in this section, all pledges, covenants and other rights granted by this Bond Resolution shall cease. The City may discharge its obligations with respect to any Bonds which are due on any date by depositing with the paying agent on or before that date a sum sufficient for the payment thereof in full; or, if any Bond should not be paid when due, the same may nevertheless be discharged by depositing with the paying agent a sum sufficient for the payment thereof in full with interest accrued from the due date of such deposit. The City -21- , . � � . , . .' � � . may also discharge its obligations with respect to any prepayable Bonds according to their terms by depositing with the paying agent on or before that date an amount equal to the principal and interest which are then due, provided that notice of such redemption has been duly given as provided herein. 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 bank qualified by law to act as an escrow agent for this purpose, cash and/or securities which are general obligations of the United States or securities of United States agencies which are authorized by law to be so deposited, bearing interest payable at such times and at such rates and maturing on such dates, as shall be required to pay all principal and interest to become due on such Bonds to maturity or the redemption date thereof, as the case may be. Passed and approved this 17�' day of November, 1998. A Mayo `a�Qeo�`" �ar�: c� �' � M�R.9 �;� m 1883 i r �'oo � ��V S CO•g0 s Finance Officer -22- • V ♦ � � •� • i � STATE OF SOUTH DAKOTA ) ) ss. COUNTY OF BROOKINGS ) I, the undersigned, being the duly qualified and acting City Finance Officer of the City of Brookings, South Dakota(the "Municipality"), do hereby certify that attached hereto is a compared, true and correct copy of a resolution giving final approval to the issuance of sales tax revenue bonds of the Municipality, duly adopted by the City Commission of the Municipality on November 2, 1998, at a regular meeting thereof duly called and held, as on file and of record in my office, which resolution has not been amended, modified or rescinded since the date thereof and which resolution is in full force and effect as of the date hereof, and that the attached Extract of Minutes as to the adoption of the resolution is a true and accurate account of the proceedings taken in passage thereof. � WITNESS My hand this/`] day of November, 1998. Finance Officer M1:435136.02 -23- < , J . . ,. ' � ' .. EXTRACT OF MINUTES OF MEETING OF THE CITY COMMISSION OF THE CITY OF BROOKINGS, SOUTH DAKOTA Pursuant to due call and notice thereof, a regular meeting of the City Commission of the City of Brookings, South Dakota was duly held at City Hall in the City of Brookings, on the 17�' day of November, 1998 at 2:00 o'clock P.M. The following Commission Members were present: and the following were absent: * * * Commission Member then introduced the following written resolution and moved the adoption thereof: RESOLUTION AUTHORIZING THE ISSUANCE AND AWARDING THE SALE OF SALES TAX REVENUE BONDS, SERIES 1998, TO FINANCE ACQUISITION, CONSTRUCTION, AND EQUIPPING OF MULTI-PLEX PROJECT The motion for the adoption of the foregoing resolution was duly seconded by Commission Member and upon vote being taken thereon the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted.