HomeMy WebLinkAboutResolution 072-2010 Resolution No. 72-10
Resolution authorizing the execution, terms, issuance, sale and payment of Sales
Tax Revenue and Refunding Bonds, Series 2010A in the aggregate principal amount
of not to exceed Twenty One Million and 00/100 ($21,000,000) of the City of
Brookings of Brookings County, South Dakota.
WHEREAS, the City of Brookings is authorized by the provisions of SDCL §§10-52-2.10 to
issue Sales Tax Revenue Bonds to fund capital improvements and land acquisition pursuant to
the provisions of Chapter 78 of the Ordinances of Brookings, South Dakota; and
WHEREAS, the City of Brookings is authorized by the provisions of SDCL §§ 6-8B-30 though 6-
8B-52 to issue sales tax bonds to refund and refinance validly issued outstanding sales tax bonds
of the City; and
WHEREAS, the City Council has determined that refunding certain Sales Tax Bonds of the
City will reduce the interest expense to the City; and
WHEREAS, the City Council has determined that is necessary and in the best interest of the
City to issue Sales Tax Revenue and Refunding Bonds, Series 2010A of the City for the purpose
of providing funds to: (i) full net advance refund the 2010 through 2021 maturities of the City's
Sales Tax Revenue Bonds, Series 2001 dated March I, 2001, the 2010 through 2013 maturities
of Sales Tax Revenue Refunding Bonds, Series 2003 dated September 1, 2003, the 2010
through 2015 maturities of the Sales Tax Revenue Bonds Series 2005 dated December 20,
2005, (ii) pay costs of the acquisition of land and construction of new city/county offices, (iii)
fund a debt service reserve account for the Bonds and (iv) to pay the costs of issuance of the
Bonds.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF BROOKINGS OF BROOKINGS COUNTY, AS FOLLOWS:
ARTICLE I
DEFINITIONS
Section 1.1. Definition of Terms.
In addition to the words and terms elsewhere defined in this Bond Resolution, the following
words and terms as used herein, whether or not the words have initial capitals, shall have the
following meanings, unless the context or use indicates another or different meaning or intent,
and such definitions shall be equally applicable to both the singular and plural forms of any of
the words and terms herein defined:
"Act" means collectively SDCL Chapter 6-8B and Title 10-52, as amended.
1
"Authorized Officer of the City" means the Mayor and the Finance Officer, or, in the case of
any act to be performed or duty to be discharged, any other member, officer, or employee of
the City then authorized to perform such act or discharge such duty.
"Bonds" means not to exceed $21,000,000 in aggregate principal amount of Sales Tax Revenue
and Refunding Bonds, Series 2010A, dated in 2010, or such other designation or date as shall be
determined by the City Council pursuant to Section 8.1 hereof, authorized and issued under
the Bond Resolution.
"Bond Counsel" means Meierhenry Sargent LLP, a firm of attorneys recognized as having
experience in matters relating to the issuance of state or local governmental obligations.
"Book-Entry Form" or "Book-Entry System" means a form or system, as applicable, under which
physical Bond Bonds in fully registered form are issued to a Depository or to its nominee as
Registered Owner, with the certificated Bonds being held by and "immobilized" in the custody
of such Depository, and under which records maintained by persons, other than the City or the
Registration Agent, constitute the written record that identifies, and records the transfer of the
beneficial "book-entry" interests in those Bonds.
"Bond Insurer" means a municipal bond insurance company which has the highest rating for the
rating agencies.
"Bond Payment Date" means each date on which interest, or both principal and interest, shall
be payable on the Bonds so long as any of the Bonds shall be outstanding.
"Bond Resolution" means the within Resolution, duly adopted by the City Council on the date
hereof, as it may be amended from time to time.
"Bondholder", "Holder" and "Registered Owner" means the registered owner of a Bond,
including any nominee of a Depository.
"Bonds" mean not to exceed 21,000,000 of Sales Tax Revenue and Refunding Bonds, Series
2010A, dated the Closing Date, or such other designation or date as shall be determined by the
City Council pursuant to Section 8.I hereof, authorized and issued under the Bond Resolution.
"City" means the City of Brookings, Brookings County, South Dakota.
"City Council" means the Common Council elected pursuant to the provisions of SDCL Title 9.
"City of Brookings " means the City of Brookings, Brookings County, South Dakota.
"Closing Date" means the date of delivery and payment of the Bonds.
"Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations
of the United States Department of Treasury promulgated thereunder as in effect on the date
of issuance of the Bonds.
2
"Costs of Issuance" means all costs, fees, charges and expenses incurred in connection with the
issuance of the Bonds, including costs for bond insurance and rating agency fees.
"Debt" means (I) indebtedness of the City for borrowed money or for the deferred purchase
price of property or services, and expressly including the obligation to pay principal and interest
on or with respect to revenue bonds, (2) the obligation of the City as lessee under leases which
should be recorded as capital leases under generally accepted accounting principles, and (3)
obligations of the City under direct or indirect guarantees in respect of, and obligations,
contingent or otherwise, to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds referred to in
subdivisions (I) and (2) above.
"Depository" means any securities depository that is a clearing agency under federal laws
operating and maintaining, with its participants or otherwise, a Book-Entry System, including,
but not limited to DTC.
"DTC Participant(s)" means securities brokers and dealers, banks, trust companies and clearing
corporations that have access to the DTC system.
"DTC" means the Depository Trust Company, a limited purpose company organized under the
laws of the State of New York, and its successors and assigns.
"Escrow Agent" means First Bank & Trust, Brookings, South Dakota, as Escrow Agent under
the Escrow Agreement, or its successor or successors under the terms of the Escrow
Agreement or such other entity as designated in the Bond Purchase Agreement.
"Escrow Agreement" means the Refunding Escrow Agreement.
"Finance Officer" means the Finance Officer of the City appointed pursuant to the provisions of
South Dakota Codified Laws Title 9 or, in the absence of such appointment or in the event the
person so appointed is unable or incapable of acting in such capacity, the person appointed by
the Mayor and approved by the City Council to perform the duties otherwise performed by
the Finance Officer, or his/her designee.
"Interest Payment Date" means June I and December I of each year commencing June I, 2011.
"Letter of Representation" means the Issuer Letter of Representations or Blanket Issuer Letter
of Representations to DTC of the City.
"Mayor" means the Mayor elected pursuant to the provisions of SDCL § 9-8-I or his or her
designee acting on his or her behalf pursuant to the Charter.
"Minimum Reserve" means the lesser of (i) 10% of the original principal amount, (ii) the
maximum annual debt service on, or (iii) 125% of the average annual debt service on, all
3
Outstanding Bonds having a parity lien on the Net Revenues. City may apply for a Surety Bond
from an insurance company rather than funding the full Reserve Fund amount.
"Official Statement" and "Preliminary Official Statement" means that Official Statement and
Preliminary Official Statement described in Section 8.2 hereof pertaining to the sale of the
Bonds.
"Original Issue Discount or O.I.D." means the difference between the issue price and the stated
redemption price at maturity. The stated redemption price is determined without regard to
optional call dates.
"Original Issue Premium or O.I.P." means the difference between the issue price and the stated
redemption price at maturity. The stated redemption price is determined without regard to
optional call dates.
"Outstanding," "Bonds Outstanding," or "Outstanding Bonds" means, as of a particular date all
Bonds issued and delivered under this Bond Resolution except: (I) any Bond paid or redeemed
or otherwise canceled by the City at or before such date; (2) any Bond for the payment of
which cash, equal to the principal amount thereof with interest to date of maturity, shall have
theretofore been deposited prior to maturity by the City for the benefit of the Owner thereof;
(3) any Bond for the redemption of which cash, equal to the redemption price thereof with
interest to the redemption date, shall have theretofore been deposited with the Registration
Agent and for which notice of redemption shall have been mailed in accordance with this Bond
Resolution; (4) any Bond in lieu of or in substitution for which another Bond shall have been
delivered pursuant to this Resolution, unless proof satisfactory to the City is presented that any
Bond, for which a Bond in lieu of or in substitution therefor shall have been delivered, is held by
a bona fide purchaser, as that term is defined in Article 8 of the Uniform Commercial Code of
the State, as amended, in which case both the Bond in lieu of or in substitution for which a new
Bond has been delivered and such new Bond so delivered therefor shall be deemed
Outstanding; and, (5) any Bond deemed paid under the provisions of Article VII of this
Resolution, except that any such Bond shall be considered Outstanding until the maturity or
redemption date thereof only for the purposes of being exchanged, transferred, or registered.
"Paying Agent" means First Bank & Trust, Brookings, South Dakota or his or her successor or
successors hereafter appointed in the manner provided in Article VI hereof.
"Person" means an individual, partnership, corporation, trust, or unincorporated organization,
or a governmental entity or agency or political subdivision thereof.
"President" means the President of the City Council who may act for the Mayor in the absence
of the Mayor.
"Project" means the acquisition of land and construction of new city/county offices, (iii) fund a
debt service reserve account for the Bonds and (iv) to pay the costs of issuance of the Bonds
4
"Purchase Agreement" means the Bond Purchase Agreement authorized pursuant to and
described in Section 8.1 hereof by and between the City and the Underwriter.
"Rating Agency" means one or more of the following rating agencies: Standard & Poor's Credit
Market Services, Moody's Investors Service Inc. and Fitch IBCA, Inc.
"Record Date" means the close of business on the fifteenth day (whether or not a business day)
of the calendar month next preceding such interest payment date.
"Refunded Bonds" means the Sales Tax Revenue Bonds, Series 2001 dated March I, 2001, Sales
Tax Revenue Refunding Bonds, Series 2003 dated September I, 2003 and Sales Tax Revenue
Bonds, Series 2005 dated December 20, 2005.
"Registration Agent" means First Bank & Trust, Brookings, South Dakota or his or her
successor or successors hereafter appointed in the manner provided in Article VI hereof.
"Resolution" means this Bond Resolution.
"Reasonably Require Reserve" means an amount, if required, which will comply with the
Internal Revenue Regulations specifying the maximum amount in a reserve fund permitted to be
invested without regard to investment yield
"Sales Tax" means the 1% in excess of 1% non ad valorem tax imposed by SDCL §10-52.2 and
Chapter 78 Article II of the City of Brookings Code.
"Schedule" means the schedule which indicates the principal and interest payments on the
Bonds.
"Series 2001 Bonds" means the City's outstanding Sales Tax Revenue Bonds, Series 2001, dated
March 1, 2001, as follows:
Year Principal Interest Rate CUSIP
Maturing Outstanding
2010 300,000 4.400% 113660 AZ7
2011 310,000 4.500% 113660 BA I
2012 325,000 4.600% 1 13660 BB9
2013 340,000 4.700% 113660 BC7
2014 585,000 4.800% 113660 BD5
2015 755,000 4.850% 113660 BE3
2016 790,000 4.950% 113660 BFO
2021 4,615,000 5.125% 113660 BG8
5
"Series 2003 Bonds" means the City's outstanding Sales Tax Revenue Refunding Bonds, Series
2003, dated September 1, 2003, as follows:
Year Principal Interest Rate CUSIP
Maturing Outstanding
2010 810,000 3.30% 113660 BP8
201 I 840,000 3.45% 113660 BQ6
2012 870,000 3.50% 113660 BR4
2013 900,000 3.60% 113660 BS2
"Series 2005 Bonds" means the City's outstanding Sales Tax Revenue Bonds, Series 2005, dated
December 20, 2005, as follows:
Year Principal Interest Rate CUSIP
Maturing Outstanding
2010 305,000 3.55% 113660 CC6
2011 315,000 3.60% 113660 CE2
2012 325,000 3.65% 113660 CG7
2013 340,000 3.70% 113660 CH5
2014 355,000 3.80% 113660 CJ l
2015 365,000 3.90% 113660 CK8
"Underwriter" means Northland Securities, Inc., acting for and on behalf of themselves and such
securities dealers as they may designate.
"Verification Agent" means Grant Thorton, LLP, Minneapolis, Minnesota or any other firm that
the Authorized Officers of the City appoint.
Section 1.2. References to Resolution.
The words "hereof', "herein", "hereunder", and other words of similar import refer to this
Bond Resolution as a whole.
Section 1.3. References to Articles, Sections, Etc.
References to Articles, Sections, and other subdivisions of this Bond Resolution are to the
designated Articles, Sections, and other subdivisions of this Bond Resolution as originally
adopted.
Section 1.4. Headings.
The headings of this Bond Resolution are for convenience only and shall not define or limit the
provisions hereof.
6
ARTICLE II
FINDINGS
Section 2.1.
It is hereby found and determined by the City Council as follows:
(a) The refunding of the Refunded Bonds as set forth herein through the issuance of the Bonds
will result in the reduction in debt service payable by the City over the term of the Refunded
Bonds thereby effecting a cost savings to the public;
(b) It is advantageous to the City to deposit a portion of the proceeds from the sale of the
Bonds and other funds of the City, if any, with the paying agent of the Refunded Bonds, will be
sufficient to pay principal of, premium, if any, and interest on the Refunded Bonds.
(c) The City hereby determines that all limitations upon the issuance of Bonds have been met
and the Bonds are being authorized, issued and sold in accordance with the provisions of§§ 6-
8B-30 to 6-8B-52, inclusive.
(d) All limitations upon the issuance of Bonds have been met and the Bonds are being
authorized, issued and sold in accordance with the provisions of the Act.
(e) It is hereby declared and found necessary to issue the Bonds in accordance and compliance
with SDCL Chapter 10-52 and 6-8B.
ARTICLE III
AUTHORITY, PLEDGE, AND COLLECTION OF TAXES
Section 3.1. Authority.
In order to (i) refund the Refunded Bonds and (ii) pay costs incident to the sale and issuance of
the Bonds, there shall be issued pursuant to, and in accordance with, the provisions of the Act,
the Bond Resolution, and other applicable provisions of law, Sales Tax Revenue and Refunding
Bonds, Series 2010A of the City in the aggregate principal amount of not to exceed
$21,000,000.
Section 3.2. Pledge.
The City does hereby pledge so much of the collections of the Sales Tax as may be necessary
to pay the principal, premium and interest on the outstanding Bonds and to maintain any debt
service reserve established herein, if any. The Sales Tax is irrevocably pledged to the prompt
and full payment of the principal of and interest on each and all of said Bonds as such principal
and interest respectively become due.
Section 3.3. Collection of Taxes.
The City agrees and covenants to impose and collect the Sales Tax as long as the Bonds are
outstanding in accordance with SDCL I0-52.
7
Section 3.4. Accounts.
(a) Special Revenue Fund. The Finance Officer has established and will maintain the Special
Revenue Fund as a separate and special account 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 Sales Tax shall be credited, as received, to the Special Revenue
Fund. Within the Special Revenue Fund are various separate accounts to be maintained by the
City.
(b) Construction Account. There is hereby created and established as an account of the Special
Revenue 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 Account
required by Section 3.05, and (b) payment of the (i) underwriter's discount, (ii) original issue
discount and (iii) 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 Improvements.
For the purposes of this Resolution, "costs of the Improvements" shall include costs of
acquiring, constructing, and installing the Improvements including costs of labor, services,
materials and supplies, financial, architectural, engineering, legal, accounting and other
professional expenses relating to the Improvements, the costs of acquisition or properties,
rights, easements, or other interest in properties, insurance premiums, and the costs of
publishing, posting or mailing notices in connection with the Improvements. All sums derived
from the investment of moneys in the Construction Account shall remain in and become part
of such fund. Upon completion of the Improvements and when all costs of the Improvements
have been paid, any balance remaining in the Construction Account shall be credited to the
Principal and Interest Account hereinafter established.
(c) Principal and Interest Account. There is hereby created and established as an account of the
Special Revenue 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 date specified in the Bond
Purchase Agreement, there shall be withdrawn from the Special Revenue Fund at least monthly
and credited to the Principal and Interest Account an amount which will equal at least one-sixth
(I/6th) of the interest becoming due on the next succeeding payment date and one-twelfth
(1/12th) of the principal becoming due on the next succeeding payment dates 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.
(d) Reserve Account. There is hereby created and established as an account of the Special
Revenue Fund, a "Reserve Account." There shall be credited to the Reserve Account from the
proceeds of the Bonds, an amount equal to the Minimum Reserve. Thereafter, in the event that
the amount on deposit in the Reserve Account shall thereafter fall below the Minimum Reserve,
additional deposits shall be made from the Pledged Revenues to the Reserve Account until the
Minimum Reserve is again reached. Upon the issuance of any parity lien bonds, the Minimum
Reserve established in this section shall be increased to an amount equal to the combined
maximum annual debt service on the Outstanding Bonds. The balance required shall be funded
8
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 Account may be transferred from time to time to the Construction
Account, provided that after completion of the Improvements such interest shall 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 Minimum Reserve. Such
investments shall be subject to the limitations of South Dakota law.
(e) Escrow Account. There is hereby established an Escrow Account under SDCL 6-8B-46,
into which bond proceeds and any other moneys available for such purpose shall be used to
pay, together with interest earnings, principal, interest and premiums, if any, on the Refunded
Bonds when due.
(f) Subordinate Lien Bonds. After making the above required payments, any remaining Pledged
Revenues may 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.
(g) Other Expenditures. The remaining Pledged Revenues may be used for any legally
authorized purpose.
ARTICLE IV
FORM, TERMS, EXECUTION, AND TRANSFER OF BONDS
Section 4.1. Authorized Bonds;
The aggregate principal amount of Bonds that may be issued under the Bond Resolution shall
not exceed Twenty One Million and 00/100 Dollars ($21,000,000).
Section 4.2. Form of Bonds; Execution.
(a) The Bonds are issuable only as fully registered Bonds, without coupons, in the denomination
of Five Thousand Dollars ($5,000) or any integral multiple thereof. All Bonds issued under the
Resolution shall be substantially in the form set forth in Exhibit A attached hereto, and by this
reference incorporated herein as fully as though copied.
(b) The Bonds shall be executed in such manner as may be prescribed by applicable law in the
name and on behalf of the City with the manual or facsimile signature of the Mayor, attested by
the manual or facsimile signature of the Finance Officer, and approved as to form and
countersigned by a Resident Attorney by his manual or facsimile signature.
(c) In the event any officer whose manual or facsimile signature shall appear on any Bond shall
cease to be such officer before the delivery of such Bond, such manual or such facsimile
signature shall nevertheless be valid and sufficient for all purposes as if he or she had remained
in office until such delivery. Any Bond may bear the facsimile signature of, or may be manually
9
signed by, such individuals who, at the actual time of the execution of such Bond, were the
proper officers of the City to sign such Bond, although on the date of the adoption by the City
of this Resolution, such individuals may not have been such officers.
Section 4.3. Maturities, Interest Rates, and Certain Other Provisions of Bonds.
(a) The Bonds shall become due and payable semi-annually of each of the years (subject to
Optional Redemption of certain official Bonds as hereinafter provided) in the amount and
bearing interest per annum as negotiated with the Underwriter.
(b) The Bonds shall be designated "Sales Tax Revenue and Refunding Bonds, Series 2010A", or
such other designation as shall be determined by the City Council pursuant to Section 8.1
hereof. The Bonds shall bear interest from their date or from the most recent interest
payment date to which interest has been paid or duly provided for, until the principal amount of
the Bond is paid, such interest (computed upon the basis of a 360-day year of twelve 30-day
months) being payable on Interest Payment Date, commencing on June I, 2011 and
semiannually thereafter. Interest on each Bond shall be paid by wire transfer, check or draft of
the Paying Agent, payable in lawful money of the United States of America, to the person in
whose name such Bond is registered at the close of business on the Record Date. The
principal of the Bond shall be payable in lawful money of the United States of America at the
principal office of the Paying Agent.
(c) The Registration Agent shall make all interest payments with respect to the Bonds on each
interest payment date directly to the registered owners as shown on the Bond registration
records maintained by the Registration Agent as of the close of business on the Record Date by
wire transfer, check or draft mailed to such owners at their addresses shown on said Bond
registration records, without, except for final payment, the presentation or surrender of such
registered Bonds, and all such payments shall discharge the obligations of the City in respect of
such Bonds to the extent of the payments so made. Payment of principal of and premium, if any,
on the Bonds shall be made upon presentation and surrender of such Bonds to the Registration
Agent as the same shall become due and payable.
Section 4.4. Negotiability of Bonds.
All Bonds issued under this Resolution shall be negotiable, subject to the provisions for
registration and transfer contained in this Resolution and in the Bonds.
Section 4.5. Registration, Transfer and Exchange of Bonds.
(a) The Bonds are transferable only by presentation to the Registration Agent by the
registered owner, or his legal representative duly authorized in writing, of the registered
Bond(s) to be transferred with the form of assignment on the reverse side thereof
completed in full and signed with the name of the registered owner as it appears upon
the face of the Bond(s) accompanied by appropriate documentation necessary to prove
the legal capacity of any legal representative of the registered owner. Upon receipt of
the Bond(s) in such form and with such documentation, if any, the Registration Agent
shall issue a new Bond or Bonds to the assignee(s) in $5,000 denominations, or integral
multiples thereof, as requested by the registered owner requesting transfer. The
Registration Agent shall not be required to transfer or exchange any Bond during the
10
period commencing on a Regular or Special Record Date and ending on the
corresponding interest payment date of such Bond, nor to transfer or exchange any
Bond after the publication of notice calling such Bond for redemption has been made,
nor to transfer or exchange any Bond during the period following the receipt of
instructions from the City to call such Bond for redemption; provided, the Registration
Agent, at its option, may make transfers after any of said dates. No charge shall be made
to any registered owner for the privilege of transferring any Bond, provided that any
transfer tax relating to such transaction shall be paid by the registered owner requesting
transfer. The person in whose name any Bond shall be registered shall be deemed and
regarded as the absolute owner thereof for all purposes and neither the City nor the
Registration Agent shall be affected by any notice to the contrary whether or not any
payments due on the Bonds shall be overdue. Bonds, upon surrender to the Registration
Agent, may, at the option of the registered owner, be exchanged for an equal aggregate
principal amount of Bonds of the same maturity in any authorized denomination or
denominations.
(b) Except as otherwise provided in this subsection, the Bonds shall be registered in the
name of Cede & Co., as nominee of DTC, which will act as securities depository for the
Bonds. References in this Section to a Bond or the Bonds shall be construed to mean
the Bond or the Bonds that are held under the Book-Entry System. One Bond for each
maturity shall be issued to DTC and immobilized in its custody. Unless otherwise
provided herein, a Book-Entry System shall be employed, evidencing ownership of the
Bonds in authorized denominations, with transfers of beneficial ownership affected on
the records of DTC and the DTC Participants pursuant to rules and procedures
established by DTC.
Each DTC Participant shall be credited in the records of DTC with the amount of such
DTC Participant's interest in the Bonds. Beneficial ownership interests in the Bonds may
be purchased by or through DTC Participants. The holders of these beneficial
ownership interests are herein referred to as the "Beneficial Owners." The Beneficial
Owners shall not receive the Bonds representing their beneficial ownership interests.
The ownership interests of each Beneficial Owner shall be recorded through the
records of the DTC Participant from which such Beneficial Owner purchased its Bonds.
Transfers of ownership interests in the Bonds shall be accomplished by book entries
made by DTC and, in turn, by DTC Participants acting on behalf of Beneficial Owners.
SO LONG AS CEDE & CO., AS NOMINEE FOR DTC, IS THE REGISTERED OWNER
OF THE BONDS, THE REGISTRATION AGENT SHALL TREAT CEDE & CO., AS THE
ONLY HOLDER OF THE BONDS FOR ALL PURPOSES UNDER THIS RESOLUTION,
INCLUDING RECEIPT OF ALL PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST
ON THE BONDS, RECEIPT OF NOTICES, VOTING AND REQUESTING OR
DIRECTING THE REGISTRATION AGENT TO TAKE OR NOT TO TAKE, OR
CONSENTING TO, CERTAIN ACTIONS UNDER THIS BOND RESOLUTION.
Payments of principal, interest, and redemption premium, if any, with respect to the
Bonds, so long as DTC is the only owner of the Bonds, shall be paid by the Registration
Agent directly to DTC or its nominee, Cede & Co., as provided in the Letter of
11
Representation. DTC shall remit such payments to DTC Participants, and such
payments thereafter shall be paid by DTC Participants to the Beneficial Owners.
Neither the City nor the Registration Agent shall be responsible or liable for payment
by DTC or DTC Participants, for sending transaction statements or for maintaining,
supervising or reviewing records maintained by DTC or DTC Participants.
In the event that (I) DTC determines not to continue to act as securities depository for
the Bonds or (2) the City determines that the continuation of the Book-Entry System of
evidence and transfer of ownership of the Bonds would adversely affect their interests
or the interests of the Beneficial Owners of the Bonds, the City may discontinue the
Book-Entry System with DTC. If the City fails to identify another qualified securities
depository to replace DTC, the City shall cause the Registration Agent to authenticate
and deliver replacement Bonds in the form of fully registered Bonds to each Beneficial
Owner.
NEITHER THE CITY NOR THE REGISTRATION AGENT SHALL HAVE ANY
RESPONSIBILITY OR OBLIGATIONS TO ANY DTC PARTICIPANT OR ANY
BENEFICIAL OWNER WITH RESPECT TO (i) THE BONDS; (ii) THE ACCURACY OF
ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT; (iii) THE
PAYMENT BY DTC OR ANY DTC PARTICIPANT OF ANY AMOUNT DUE TO ANY
BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF AND INTEREST ON
THE BONDS; (iv) THE DELIVERY OR TIMELINESS OF DELIVERY BY DTC OR ANY
DTC PARTICIPANT OF ANY NOTICE DUE TO ANY BENEFICIAL OWNER THAT IS
REQUIRED OR PERMITTED UNDER THE TERMS OF THIS BOND RESOLUTION TO
BE GIVEN TO BENEFICIAL OWNERS, (v) THE SELECTION OF BENEFICIAL
OWNERS TO RECEIVE PAYMENTS IN THE EVENT OF ANY PARTIAL
REDEMPTION OF THE BONDS; OR (vi) ANY CONSENT GIVEN OR OTHER
ACTION TAKEN BY DTC, OR ITS NOMINEE, CEDE & CO., AS OWNER.
SO LONG AS A BOOK-ENTRY SYSTEM OF EVIDENCE OF TRANSFER OF
OWNERSHIP OF ALL THE BONDS IS MAINTAINED IN ACCORDANCE
HEREWITH, THE PROVISIONS OF THIS RESOLUTION RELATING TO THE
DELIVERY OF PHYSICAL BOND CERTIFICATES SHALL BE DEEMED INAPPLICABLE
OR BE OTHERWISE SO CONSTRUED AS TO GIVE FULL EFFECT TO SUCH BOOK-
ENTRY SYSTEM. IF THE PROVISIONS OF THE LETTER OF REPRESENTATION
SHALL BE IN CONFLICT WITH THE PROVISIONS OF THIS RESOLUTION AS SAID
PROVISIONS RELATE TO DTC, THE PROVISIONS OF THE LETTER OF
REPRESENTATION SHALL CONTROL.
Section 4.6. Mutilated, Lost, Stolen, or Destroyed Bonds.
(a) In the event any Bond is mutilated, lost, stolen, or destroyed, the City may execute, and
upon the request of an Authorized Officer of the City the Registration Agent shall authenticate
and deliver, a new Bond of like maturity, interest rate, and principal amount, and bearing the
same number (but with appropriate designation indicating that such new Bond is a replacement
Bond) as the mutilated, destroyed, lost, or stolen Bond, in exchange for the mutilated Bond or
in substitution for the Bond so destroyed, lost, or stolen. In every case of exchange or
substitution, the Bondholder shall furnish to the City and the Registration Agent: (I) such
12
security or indemnity as may be required by them to save each of them harmless from all risks,
however remote; and, (2) evidence to their satisfaction of the mutilation, destruction, loss, or
theft of the subject Bond and the ownership thereof. Upon the issuance of any Bond upon such
exchange or substitution, the City and the Registration Agent may require the Owner thereof
to pay a sum sufficient to defray any tax or other governmental charge that may be imposed in
relation thereto and any other expenses, including printing costs and counsel fees, of the City
and the Registration Agent. In the event any Bond which has matured or is about to mature
shall become mutilated or be destroyed, lost, or stolen, the City may, instead of issuing a Bond
in exchange or substitution therefor, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Bond) if the Owner thereof shall pay all
costs and expenses, including attorneys fees, incurred by the City and the Registration Agent in
connection herewith, as well as a sum sufficient to defray any tax or other governmental charge
that may be imposed in relation thereto and shall furnish to the City and the Registration Agent
such security or indemnity as they may require to save them harmless and evidence to the
satisfaction of the City and the Registration Agent the mutilation, destruction, loss, or theft of
such Bond and of the ownership thereof.
(b) Every Bond issued pursuant to the provisions of this section shall constitute an additional
contractual obligation of the City (whether or not the destroyed, lost, or stolen Bond shall be
found at any time to be enforceable) and shall be entitled to all the benefits of this Bond
Resolution equally and proportionately with any and all other Bonds duly issued under this
Bond Resolution.
(c) All Bonds shall be held and owned upon the express condition that the provisions of this
Section are exclusive, with respect to the replacement or payment of mutilated, destroyed, lost,
or stolen Bonds, and, to the maximum extent legally permissible, shall preclude all other rights
or remedies, notwithstanding any law or statute now existing or hereafter enacted to the
contrary.
Section 4.7. Authentication.
The Registration Agent is hereby authorized to authenticate and deliver the Bonds to the
Underwriter or as it may designate upon receipt by the City of the proceeds of the sale
thereof, to authenticate and deliver Bonds in exchange for Bonds of the same principal amount
delivered for transfer upon receipt of the Bond(s) to be transferred in proper form with proper
documentation as hereinabove described. The Bonds shall not be valid for any purpose unless
authenticated by the Registration Agent by the manual signature of an officer thereof on the
certificate set forth herein on the Bond form.
Section 4.8. Qualification for DTC.
The Registration Agent is hereby authorized to take such actions as may be necessary from
time to time to qualify and maintain the Bonds for deposit with DTC, including but not limited
to, wire transfers of interest and principal payments with respect to the Bonds, utilization of
electronic book entry data received from DTC in place of actual delivery of Bonds and
provision of notices with respect to Bonds registered by the DTC (or any of its designees
identified to the Registration Agent) by overnight delivery, courier service, telegram, telecopy
or other similar means of communication. No such arrangements with DTC may adversely
13
affect the interest of any of the Owners of the Bonds, provided, however, that the Registration
Agent shall not be liable with respect to any such arrangements it may make pursuant to this
section.
Section 4.9. Additional Bonds.
The City may issue additional bonds (the "Parity Bonds") payable from the Pledged Revenues
and having a lien upon such revenues on parity with the Bonds and the Outstanding Parity
Bonds providing that:
I. the City is current in the payment of principal and interest on the Outstanding
Bonds and is current in the collections required for the Principal and Interest
Account and the Reserve Account.
2. the City is in compliance with all covenants of outstanding sales tax revenue bonds
and
3. the Pledged Revenues collected by the City in the last preceding fiscal year are
sufficient to cover 1.25 times the combined average annual principal and interest
requirements on the Outstanding Bonds and any Parity Bonds.
Section 4.10. Rating Agency.
The Mayor and Finance Officer are authorized to enter into an agreement with a Rating Agency
as may be required under the Bond Purchase Agreement. Any terms or conditions of the
Rating Agency shall be attached to this resolution and incorporated herein as if stated in full.
Section 4.1 1. Surety Bond.
The Mayor and Finance Officer are authorized to purchase a surety bond upon such terms and
conditions as they deem appropriate if necessary.
Section 4.1 1 Bond Insurer.
The Mayor and Finance Officer are authorized to enter into an agreement with a Bond Insurer
as may be required under the Purchase Agreement. Any terms or conditions of the Bond
Insurer shall be attached to this resolution and incorporated herein as if stated in full.
4.12. Bond Counsel. The Mayor and Finance Officer are authorized to retain Bond Counsel
upon such terms as they approve.
ARTICLE V
REDEMPTION OF BONDS PRIOR TO MATURITY
Section 5.1. Optional Redemption
The Bonds shall be subject to optional redemption as set forth in the Bond Purchase
Agreement.
14
Section 5.2. Notice of Redemption.
(a) Notice of call for redemption, whether optional or mandatory, shall be given by the
Registration Agent on behalf of the City not less than thirty (30) nor more than sixty (60) days
prior to the date fixed for redemption by sending an appropriate notice to the registered
owners of the Bonds to be redeemed by first-class mail, postage prepaid, at the addresses
shown on the Bond registration records of the Registration Agent as of the date of the notice;
but neither failure to mail such notice nor any defect in any such notice so mailed shall affect
the sufficiency of the proceedings for redemption of any of the Bonds for which proper notice
was given. The Registration Agent shall mail said notices, in the case of mandatory redemption
of term Bonds, as and when provided herein and in the Bonds, and, in the case of optional
redemption, as and when directed by the City pursuant to written instructions from an
Authorized Representative of the City given at least thirty (30) days prior to the redemption
date (unless a shorter notice period shall be satisfactory to the Registration Agent).
(b) Each notice required by this Section shall state: (I) the Bonds to be redeemed identified by
CUSIP number and called amounts of each bond (for partial calls), date of issue, interest rate,
and maturity date; (2) the date fixed for redemption; (3) that such Bonds will be redeemed at
the principal corporate trust office of the Registration Agent; (4) the redemption price to be
paid; and, (5) that from and after the redemption date interest thereon shall cease to accrue. If
at the time of notice of optional redemption, the City shall not have deposited with the
Registration Agent monies sufficient to redeem all the Bonds called for optional redemption,
such notice may state that it is conditional, that is, subject to the deposit of the redemption
monies with the Registration Agent not later than the opening of business on the redemption
date, and such notice shall be of no effect unless monies are so deposited.
Section 5.3. Payment of Redeemed Bonds.
(a) If notice of redemption shall have been given in the manner and under the conditions
provided in Section 5.2 hereof and if on the date so designated for redemption the Registration
Agent shall hold sufficient monies to pay the redemption price of, and interest to the
redemption date on, the Bonds to be redeemed as provided in this Bond Resolution, then: (I)
the Bonds so called for redemption shall become and be due and payable at the redemption
price provided for redemption of such Bonds on such date; (2) interest on the Bonds so called
for redemption shall cease to accrue; and, (3) such Bonds shall no longer be Outstanding or
secured by, or be entitled to, the benefits of the Resolution, except to receive payment of the
redemption price thereof and interest thereon from monies then held by the Registration
Agent.
(b) If on the redemption date, monies for the redemption of all Bonds or portions thereof to
be redeemed, together with interest thereon to the redemption date, shall not be held by the
Registration Agent so as to be available therefor on such date, the Bonds or portions thereof
so called for redemption shall continue to bear interest until paid at the same rate as they
would have borne had they not been called for redemption and shall continue to be secured by
and be entitled to the benefits of the Resolution.
15
ARTICLE VI
REGISTRATION AGENT, ESCROW AGENT, VERIFICATION AGENT
Section 6.1. Appointment and Acceptance of Duties.
(a) The City hereby authorizes the Finance Officer to appoint the Registration and Paying Agent
with respect to the Bonds and authorizes and directs the Registration Agent to maintain Bond
registration records with respect to the Bonds, to authenticate and deliver the Bonds as
provided herein, either at original issuance, upon transfer, or as otherwise directed by the City,
to effect transfers of the Bonds, to give all notices of redemption as required herein, to make all
payments of principal and interest with respect to the Bonds as provided herein, to cancel and
destroy Bonds which have been paid at maturity or upon earlier redemption or submitted for
exchange or transfer, to furnish the City at least annually a certificate of destruction with
respect to Bonds canceled and destroyed, and to furnish the City at least annually an audit
confirmation of Bonds paid, Bonds Outstanding and payments made with respect to interest on
the Bonds. The Mayor and the Finance Officer, or either of them is hereby authorized to
execute and the Finance Officer is hereby authorized to attest such written agreement between
the City and the Registration Agent as they shall deem necessary or proper with respect to the
obligations, duties and rights of the Registration Agent. The payment of all reasonable fees and
expenses of the Registration Agent for the discharge of its duties and obligations hereunder or
under any such agreement is hereby authorized and directed.
Section 6.2. Permitted Acts and Functions.
The Registration Agent may become the Owner of any Bonds, with the same rights as it would
have if it were not a Registration Agent. The Registration Agent may act as an underwriter or
fiscal agent in connection with the sale of the Bonds or of any other securities offered or issued
by the City.
Section 6.3. Resignation or Removal of the Registration Agent and Appointment of
Successors.
(a) The Registration Agent may at any time resign and be discharged of the duties and
obligations created by the Bond Resolution by giving at least sixty (60) calendar days' written
notice to the Mayor. The Registration Agent may be removed at any time by the Finance
Officer, provided that such removal does not constitute a breach of any contractual agreement
with any such Registration Agent, by filing written notice of such removal with such Registration
Agent. Any successor Registration Agent shall be appointed by the Mayor and shall be a trust
company or a bank having the powers of a trust company, willing to accept the office of
Registration Agent on reasonable and customary terms and authorized by law to perform all
the duties imposed upon it by the Bond Resolution.
(b) In the event of the resignation or removal of the Registration Agent, such Registration
Agent shall pay over, assign and deliver any monies and securities held by it as Registration
Agent, and all books and records and other properties held by it as Registration Agent, to its
successor, or if there be no successor then appointed, to the Finance Officer until such
successor be appointed.
16
Section 6.4. Merger or Consolidation of Registration Agent.
Any corporation or association into which the Registration Agent may be converted or
merged, or with which it may be consolidated, or to which it may sell or transfer its trust
business and assets as a whole, or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation, or transfer to which it is a
party shall be and become successor Registration Agent hereunder and shall be vested with all
the trusts, powers, discretion, immunities, privileges, and other matters as was its predecessor,
without the execution or filing of any instrument or any further act, deed, or conveyance on
the part of any of the parties hereto, anything herein contained to the contrary
notwithstanding. Upon any such conversion, merger, consolidation, sale or transfer, the Finance
Officer r shall have the right and option, upon notice to such converted, merged, consolidated
or acquiring entity, to remove such entity and appoint a successor thereto pursuant to the
procedures and requirements set forth in Section 6.3 hereof.
Section 6.5. Escrow Agent.
The City Council hereby authorizes the Mayor and Finance Officer to appoint the Escrow
Agent.
Section 6.6. Escrow Refunding Agreement.
The Mayor and Finance Officer are authorized to enter into a Refunding Escrow Agreement.
The final form of the Refunding Escrow Agreement shall be filed with the Finance Officer and
open to public inspection.
Section 6.7. Verification Agent.
The City Council hereby authorizes the Mayor and Finance Officer to appoint the Verification
Agent.
Section 7.1. Call and Redemption of Refunded Bonds
The Refunded Bonds shall be called on the dates set forth in the attached Exhibits B, C and D.
The Bonds shall cease to accrue interest after the call dates.
ARTICLE VIII
SALE OF BONDS AND DEPOSIT OF PROCEEDS
Section 8.1. Sale of Bonds.
The Bonds shall be sold to the Underwriter at a price to be set forth in the Bond Purchase
Agreement. The Mayor and the Finance Officer, or either of them, in consultation with the
Underwriter, are authorized to make such changes in the structuring of the terms and sale of
the Bonds as they shall deem necessary to maximize the savings from the refunding of the
Refunded Bonds. In this regard, they, or either of them, in consultation with the Underwriter,
are authorized to cause to be sold an aggregate principal amount of the Bonds less than that
authorized herein, cause fewer than all the Refunded Bonds to be refunded, to sell any or all of
the Bonds as term Bonds with annual mandatory redemption requirements which will produce
substantially the same annual principal reductions as authorized herein, to change the dated
17
date of the Bonds, and to adjust principal and interest payment dates and redemption dates of
the Bonds. The form of the Bond set forth in Exhibit A attached hereto shall be conformed to
reflect any changes, if any, as hereinbefore mentioned. The Mayor and the President, or either
of them, are hereby authorized to execute and the Finance Officer is authorized to attest the
Purchase Agreement with the Underwriter providing for the purchase and sale of the Bonds.
The Purchase Agreement shall be in form and content acceptable to the Mayor and Finance
Officer, the execution thereof by either of them to constitute conclusive evidence thereof, and
approved as to form and legality by the City Attorney; provided the Purchase Agreement
effects the sale of the Bonds in accordance with the provisions of this Resolution, and is not
inconsistent with the terms hereof. The Mayor and the Finance Officer, or either of them, are
authorized to cause the Bonds to be authenticated and delivered by the Registration Agent to
the Underwriter and to execute, publish, and deliver all certificates and documents, including
the Official Statement, and closing certificates and documents, as they shall deem necessary in
connection with the sale and delivery of the Bonds.
Section 8.2. Official Statement.
The Mayor, Finance Officer, and the Underwriter are hereby authorized and directed to
provide for the preparation and distribution of a Preliminary Official Statement describing the
Bonds (the "Preliminary Official Statement"). After the Bonds have been sold, the Mayor and
Finance Officer shall make such completions, omissions, insertions and changes in the
Preliminary Official Statement not inconsistent with this resolution as are necessary or
desirable to complete it as a final Official Statement for purposes of Rule I 5c2-12(e)(3) of the
Securities and Exchange Commission.
To comply with paragraph (b) (3) of Rule I 5c2-12 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934 (the "Rule") and with Rule G-32 and all other
applicable rules of the Municipal Securities Rulemaking Board, the City agrees to deliver to the
Underwriter, the Official Statement (which shall be a final official statement, as such term is
defined in the Rule, as of its date) in an electronic format as prescribed by the MSRB.
Section 8.3. Disposition of Bond Proceeds.
The proceeds of the sale of the Bonds shall be disbursed as follows:
(a) An amount representing accrued interest on the Bonds from the dated date to the closing
date shall be deposited in their respective portion to the escrow and to the Principal and
Interest Account to be used to fund the escrow and to pay interest of the Bonds on the first
interest payment date following delivery of the Bonds, as the case may be;
(b) An amount, together with other legally available funds of the City, if any, and investment
earnings thereon, which shall be sufficient to purchase government securities for the escrow;
which shall be sufficient to pay principal of and interest on the Refunded Bonds to and including
December I, 2012, shall be transferred to the Escrow Agent and applied as provided in the
Escrow Agreement;
(b) The remaining proceeds of the sale of the Bonds shall be used to pay costs of the
acquisition of land and construction of new city/county offices, (iii) fund a debt service reserve
account for the Bonds and (iv) to pay the costs of issuance of the Bonds including necessary
18
legal, accounting and fiscal expenses, printing, engraving, advertising and similar expenses,
administrative and clerical costs, rating agency fees, Registration Agent fees, and other
necessary miscellaneous expenses incurred in connection with the issuance and sale of the
Bonds. Any funds remaining after payment of said expenses shall be used to pay interest on the
Bonds on the first interest payment date following delivery of the Bonds.
Section 8.4. Tax Matters.
(a) The City covenants and agrees with the registered owners 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 includable in gross income for federal
income tax purposes under the Code and applicable Treasury Regulations (the "Regulations"),
and covenants to take any and all actions within its powers to ensure that the basic interest on
the Bonds will not become includable in gross income for federal income tax purposes under
the Code and the Regulations.
(b) The Mayor and the Finance Officer, being the officers of the City charged with the
responsibility for issuing the Bonds pursuant to this Resolution are hereby authorized and
directed to execute and deliver to the Underwriter thereof a certificate in accordance with the
provisions of Section 148 of the Code, and Section 1.148-2(b) of the Regulations, stating that
on the basis of facts, estimates and circumstances in existence on the date of issue and delivery
of the Bonds, it is reasonably expected that the proceeds of the Bonds will be used in a manner
that would not cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of
the Code and the Regulations.
(c) The City shall file with the Secretary of the Treasury a statement concerning the Bonds
containing the information required by Section 149(e) of the Code.
(d) Pursuant to Section 265(b)(3)(B)(ii) of the Code, the City hereby designates the Bonds as
"qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code. The City
hereby represents that it does not anticipate that obligations bearing interest not includable in
gross income for purposes of federal income taxation under Section 103 of the Code (including
refunding obligations as provided in Section 265 (b) (3) of the Code and including "qualified 501
(c)(3) Bonds" but excluding other "private activity bonds," as defined in Sections I41(a) and
145(a) of the Code) will be issued by or on behalf of the City and all "subordinate entities" of
the City in 2010 in an amount greater than $30,000,000.
ARTICLE IX
NOTICE OF REFUNDING
Section 9.1 Notice of Refunding.
After the issuance of the Bonds, notice of the City's intention to refund the Refunded Bonds
shall be given, at the direction of the Finance Officer, by the respective paying agents for the
Refunded Bonds, via first-class mail to the respective Registered Owners of the Refunded
Bonds. Such notice shall be in substantially the form as provided in Exhibit B, C and D attached
hereto and by this reference made a part hereof.
19
ARTICLE X
MISCELLANEOUS
Section 10.1. Failure to Present Bonds.
(a) Subject to the provisions of Section 4.7 hereof, in the event any Bond shall not be presented
for payment when the principal or redemption price hereof becomes due, either at maturity or
at the date fixed for prior redemption thereof or otherwise, and in the event monies sufficient
to pay such Bond shall be held by the Registration Agent for the benefit of the Owner thereof,
all liability of the City to such Owner for the payment of such Bond shall forthwith cease,
determine, and be completely discharged. Whereupon, the Registration Agent shall hold such
monies, without liability for interest thereon, for the benefit of the Owner of such Bond who
shall thereafter be restricted exclusively to such monies for any claim under the Resolution or
on, or with respect to, said Bond.
(b) If any Bond shall not be presented for payment within a period of five years following the
date when such Bond becomes due, whether by maturity or otherwise, the Registration Agent
shall, subject to the provisions of any applicable escheat or other similar law, pay to the City
any monies then held by the Registration Agent for the payment of such Bond and such Bond
shall (subject to the defense of any applicable statute of limitation) thereafter constitute an
unsecured obligation of the City.
Section 10.2. Payments Due on Saturdays, Sundays, and Holidays.
In any case where the date of maturity or interest on or principal of any Bond, or the date fixed
for redemption of any Bond, shall be a Saturday or Sunday or shall be, at the place designated
for payment, a legal holiday or a day on which banking institutions similar to the Registration
Agent are authorized by law to close, then the payment of the interest on, or the principal, or
the redemption price of, such Bond need not be made on such date but must be made on the
next succeeding day not a Saturday, Sunday, or a legal holiday or a day upon which banking
institutions similar to the Registration Agent are authorized by law to close, with the same
force and effect as if made on the date of maturity or the date fixed for redemption, and no
interest shall accrue for the period after such date.
Section 10.3. Miscellaneous Acts.
The appropriate officers of the City are hereby authorized, empowered, and directed to do any
and all such acts and things, and to execute, acknowledge, deliver, and, if applicable file or
record, or cause to be filed or recorded, in any appropriate public offices, all such documents,
instruments, and certifications, in addition to those acts, things, documents, instruments, and
certifications hereinbefore authorized and approved, as may, in their discretion, be necessary or
desirable to implement or comply with the intent of the Bond Resolution, or any of the
documents herein authorized and approved, or for the authorization, issuance, and delivery by
the City of the Bonds.
20
Section 10.4. Amendment.
The City Council is hereby authorized to make such amendments to the Bond Resolution as
will not impair the rights of the Bondholders.
Section 10.5. No Recourse Under Bond Resolution or on Bonds.
All stipulations, promises, agreements, and obligations of the City contained in the Initial
Resolutions or the Resolution shall be deemed to be the stipulations, promises, agreements,
and obligations of the City and not of any officer, director, or employee of the City in his or
her individual capacity, and no recourse shall be had for the payment of the principal of or
interest on the Bonds or for any claim based thereon or on the Initial Resolution or the
Resolution against any officer, director, or employee of the City or against any official or
individual executing the Bonds.
Section 10.6. Partial Invalidity.
If any one or more of the provisions of the Bond Resolution, or of any exhibit or attachment
thereto, shall be held invalid, illegal, or unenforceable in any respect, by final decree of any
court of lawful jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other
provision hereof, or of any exhibit or attachment thereto, but the Bond Resolution, and the
exhibits and attachments thereto, shall be construed the same as if such invalid, illegal, or
unenforceable provision had never been contained herein, or therein, as the case may be.
Section 10.7. Continuing Disclosure.
The City hereby covenants and agrees that it will provide financial information and material
event notices as required by Rule I 5c2-12 of the Securities Exchange Commission for the
Bonds. The Mayor is authorized to execute at the Closing of the sale of the Bonds, an
agreement for the benefit of and enforceable by the owners of the Bonds specifying the details
of the financial information and material event notices to be provided and its obligations relating
thereto. Failure of the City to comply with the undertaking herein described and to be detailed
in said closing agreement, shall not be a default hereunder, but any such failure shall entitle the
owner or owners of any of the Bonds to take such actions and to initiate such proceedings as
shall be necessary and appropriate to cause the City to comply with its undertaking as set forth
herein and in said agreement, including the remedies of mandamus and specific performance.
Section 10.8. Post Issuance Compliance.
The City does hereby adopt the Meierhenry Sargent LLP Post Issuance Compliance Procedure
Manual as the City's written post issuance compliance procedures with regard to the Bonds.
The City appoints the finance officer as the officer in charge of the post issuance compliance
procedures.
Section 10.9. Conflicting Resolutions Repealed.
All resolutions or parts thereof in conflict herewith are, to the extent of such conflict, hereby
repealed.
21
The above and foregoing resolution was moved for adoption by Bezdichek, seconded by
McClemans. Upon vote being taken, the following voted AYE: McClemans, Bartley, Thorpe,
Corbett, Bezdichek, and Reed voted yes, and the following voted NAY: none. Council
Member Kubal was absent. Motion carried.
Whereupon the Mayor declared the resolution to be duly passed and adopted.
Adopted: July 27, 2010
Published: July 30, 2010
Effective Date: August 18, 2010
CITY OF BROOKINGS
Tim Reed, Mayor
ATTES
'�+ ay I
fi M7/121
. hornes, City Clerk
22
EXHIBIT A-(SUBSTANTIAL FORM OF BOND-SUBJECT TO CHANGE)
UNITED STATES OF AMERICA
STATE OF SOUTH DAKOTA
BROOKINGS COUNTY
CITY OF BROOKINGS
SALES TAX REVENUE AND REFUNDING BONDS SERIES 2010A
REGISTERED
No. «No» $«AMOUNT».00
Interest Rate Maturity Date Bond Date CUSIP No.
«INTEREST_RATE»% «maturity» «cusip»
Registered Owner: Cede&Co.
55 Water Street, I5` Floor.
New York, New York 10041
Tax ID#13-25551I9
Principal Amount: «DOLLARLONG»AND NO\l00 DOLLARS
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THE BOND SET
FORTH ON THE FOLLOWING PAGES, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
It is hereby certified and recited that all conditions, acts and things required by law to exist or to be done
precedent to and in the issuance of this Bond did exist, have happened, been done and performed in regular and
due form and time as required by law. The Bonds are issued and sold in full compliance in full compliance with
South Dakota Codified Laws Sections 6-8B-30 to 6-8B-52 inclusive and are incontestable for any cause whatsoever
after their delivery for value.
STATEMENT OF INSURANCE
Assured Guaranty Municipal Corp.(formerly known as Financial Security Assurance Inc.)("AGM"), New York,
New York, has delivered its municipal bond insurance policy (the "Policy") with respect to the scheduled
payments due of principal of and interest on this Bond to First Bank&Trust, Brookings, South Dakota, or its
successor,as paying agent for the Bonds(the "Paying Agent"). Said Policy is on file and available for inspection
at the principal office of the Paying Agent and a copy thereof may be obtained from AGM or the Paying Agent.
All payments required to be made under the Policy shall be made in accordance with the provisions thereof.
The owner of this Bond acknowledges and consents to the subrogation rights of AGM as more fully set forth in
the Policy.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or
security under the Resolution until it shall have been authenticated by the execution by the Registrar of the
certificate of authentication endorsed hereon.
IN WITNESS WHEREOF, the City has caused this Bond to be signed by the manual or facsimile
signature of its Mayor of the City and to be countersigned by the manual or facsimile signature of its Finance
Officer all as of the Bond Date specified above.
ATTEST: City of Brookings, South Dakota
Finance Officer By:
COUNTERSIGNED: Mayor
Resident Attorney
CERTIFICATE OF AUTHENTICATION
This Bond is a Bond of the series designated therein and has been issued under the provisions of the
within-mentioned Resolution and the date of its authentication is , 2010.
First Bank&Trust
Brookings,South Dakota
Bond Registrar and Paying Agent
By:
Authorized Officer
23
KNOW ALL MEN BY THESE PRESENTS: That the City of Brookings, South Dakota (the "City"), in
Brookings County, in the State of South Dakota, hereby acknowledges itself to owe and for value received
promises to pay, from the Sales Tax Bond Fund of the City, to the Registered Owner mentioned above in lawful
money of the United States of America, together with interest thereon from the Bond Date mentioned above at
the Interest Rate mentioned above. The interest hereon is payable June I, 2011, and semiannually thereafter on
June I and December I in each year to maturity or earlier redemption by wire transfer, check or draft mailed to
the Registered Owner at its address as it appears on the Bond registration books of the City maintained by First
Bank & Trust, Brookings, South Dakota, as Bond registrar and paying agent (the "Registrar"), as of the close of
business on the fifteenth day (whether or not a business day) of the calendar month next preceding such interest
payment date (the "Record Date"). The principal hereof due at maturity or upon redemption prior to maturity is
payable at the office of Registrar upon presentation and surrender of this Bond at maturity or upon earlier
redemption. The principal of, premium (if any) and interest on this Bond is payable in any coin or currency of the
United States of America which,at the time of payment, is legal tender for the payment of public and private debts.
The Bonds: This Bond is one of an authorized issue of Bonds limited in aggregate principal amount to a
maximum of $21,000,000 (the "Bonds") all of like date and tenor except as to maturity, interest rates and
privileges of redemption, the proceeds of this issue to: (i)full net advance refund the 2010 through 2021 maturities
of the City's Sales Tax Revenues Bonds, Series 2001 dated March I, 2001, the 2010 through 2013 maturities of
Sales Tax Revenue Refunding Bonds, Series 2003 dated September I, 2003, the 2010 through 2015 maturities of
the Sales Tax Revenue Bonds Series 2005 dated December 20, 2005, (ii) pay costs of the acquisition of land and
construction of new city/county offices, (iii) fund a debt service reserve account for the Bonds and (iv) to pay the
costs of issuance of the Bonds, pursuant to a resolution duly and regularly adopted by the City on July_, 2010
(the"Bond Resolution"), and are subject to all the provisions and limitations of the Resolution and Chapters 10-52
and Sections 6-8B-30 to 6-8B-52, South Dakota Codified Laws,as amended.
Security Provisions: The Bonds are special limited obligations of the City and payments of principal and interest
on the Bonds are payable solely from the I% in excess of I% non ad valorem tax imposed by SDCL §10-52.2 and
Chapter 78 Article II of the City of Brookings Code(the"Pledged Revenues").
Reserve Account: Assured Guaranty will provide a Surety Bond for the Debt Service Reserve
Fund. The surety bond will cover a reserve fund that would be in the amount equal to the lesser of(i) 10%of the
original principal amount, (ii)the maximum annual debt service on, or(iii) 125%of the average annual debt service
on,all Outstanding Bonds having a parity lien on the Net Revenues. City may apply for a Surety Bond from an
insurance company rather than funding the full Reserve Fund amount.
Additional Bonds: The City may issue additional bonds(the"Parity Bonds") payable from the Pledged
Revenues and having a lien upon such revenues on parity with the Bonds and the Outstanding Parity Bonds
providing that:
1. the City is current in the payment of principal and interest on the Outstanding Bonds and is current in the
collections required for the Principal and Interest Account and the Reserve Account.
2. the City is in compliance with all covenants of outstanding sales tax revenue bonds and
3. the Pledged Revenues collected by the City in the last preceding fiscal year are sufficient to cover 1.25
times the combined average annual principal and interest requirements on the Outstanding Bonds and any
Parity Bonds.
[Redemption: Redemption Language to be inserted]
This Bond is transferable by the registered holder hereof in person or by his attorney duly authorized in writing at
the office of the Bond Registrar in Brookings, South Dakota, but only in the manner, subject to the limitations and
upon payment of the charges provided in the Bond Resolution, and upon surrender and cancellation of this Bond.
Upon such transfer a new Bond or Bonds of authorized denomination of the same maturity and for the same
aggregate principal amount will be issued to the transferee in exchange therefore.
24
The City and the Bond Registrar may deem and treat the registered holder hereof as the absolute owner hereof
and neither the City nor the Bond Registrar shall be affected by any notice to the contrary.
Bank Qualification: The City has in the Resolution designated such issue of Bonds as "qualified tax-exempt
obligations" pursuant to Section 265(b)(3)(B)(III) of the Internal Revenue Code of 1986, as amended.
Form of Bond Opinion
, 2010
CITY OF BROOKINGS
BROOKINGS COUNTY, SOUTH DAKOTA
$ SALES TAX REVENUE AND REFUNDING BONDS
SERIES 2010A
We have acted as bond counsel in connection with the issuance by the City of Brookings , Brookings
County, South Dakota, (the "Issuer") of $ Sales Tax Revenue and Refunding Bonds, Series
2010A, dated , 2010 (the "Bonds"). We have examined the law, Resolution (the
"Resolution") and such certified proceedings and other papers as we deemed necessary to render this opinion.
We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the
Official Statement or other offering material relating to the Bonds and we express no opinion relating thereto.
As to questions of fact material to our opinion, we have relied upon the certified proceedings and other
certifications of public officials furnished to us without undertaking to verify such facts by independent
investigation.
Based upon the foregoing,we are of the opinion that, under existing law:
I. The Issuer is duly created and validly existing as a body corporate and politic and public
instrumentality of the State of South Dakota with the corporate power to adopt and perform the resolution and
issue the Bonds.
2. Resolution has been duly adopted by the Issuer on ,
2010 and constitutes a valid and binding obligation of the Issuer enforceable upon the Issuer and enforceable within
its terms.
3. Pursuant to SDCL 10-52 (the "Act"), the Resolution creates a valid lien on the fund pledged by
the Resolution for the security of the Bonds issued under the Resolution, consisting of a pledge of the sales tax.
The City pledges the I%in excess of I%non ad valorem tax imposed by SDCL§I0-52.2 and Chapter 78 Article II of
the City of Brookings Code
4. The Bonds have been duly authorized, executed and delivered by the Issuer and are valid and
binding special obligations of the Issuer, payable solely from the sources provided therefore in the resolution and
enforceable within their terms.
5. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not
an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and
corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax
imposed on certain corporations as defined for federal income tax purposes, such interest is taken into account in
determining adjusted current earnings. The opinions set forth in the preceding sentence are subject to the
condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that
must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be,
excluded from gross income for federal income tax purposes. The Issuer has covenanted to comply with each
such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the
Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds.
(We express no opinion regarding other federal tax consequences arising with respect to the Bonds.)
25
6. The Bonds are exempt from all taxation as property by the State of South Dakota, its subdivisions and
municipalities and bear interest not includible in the gross income of the recipient for purposes of computing any
tax imposed by the provisions of South Dakota law, except for estate, inheritance tax and taxes imposed upon
financial institutions. Under existing law,the interest on the Bonds is includible in "taxable income"for the State of
South Dakota income tax purposes when the recipient is a "financial institution" as defined by Chapter 10-43,
South Dakota Codified Laws, according to present state laws, regulations and decisions. We express no further
opinions regarding other South Dakota tax consequences arising with regard to the Bonds.
7. The Bonds are qualified tax-exempt obligations within the meaning of Section 265(b)(3)(B)(i)(III) of the
Code. The Bonds are eligible for purchase by financial institutions.
It is to be understood that the rights of the holders of the Bonds and the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights
heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may be
subject to the exercise of judicial discretion in appropriate cases.
Meierhenry Sargent LLP
AS PROVIDED IN THE RESOLUTION REFERRED TO HEREIN, UNTIL THE TERMINATION OF
THE SYSTEM OF BOOK-ENTRY-ONLY TRANSFERS THROUGH DEPOSITORY TRUST
COMPANY, NEW YORK, NEW YORK (TOGETHER WITH ANY SUCCESSOR SECURITIES
DEPOSITORY APPOINTED PURSUANT TO THE RESOLUTION, "DTC"), AND
NOTWITHSTANDING ANY OTHER PROVISIONS OF THE RESOLUTION TO THE
CONTRARY, A PORTION OF THE PRINCIPAL AMOUNT OF THIS BOND MAY BE PAID OR
REDEEMED WITHOUT SURRENDER HEREOF TO THE REGISTRAR. DTC OR A NOMINEE,
TRANSFEREE OR ASSIGNEE OF DTC OF THIS BOND MAY NOT RELY UPON THE PRINCIPAL
AMOUNT INDICATED HEREON AS THE PRINCIPAL AMOUNT HEREOF OUTSTANDING
AND UNPAID. THE PRINCIPAL AMOUNT HEREOF OUTSTANDING AND UNPAID SHALL
FOR ALL PURPOSES BE THE AMOUNT DETERMINED IN THE MANNER PROVIDED IN THE
RESOLUTION.
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED OFFICER OF DTC (A) TO THE
REGISTRAR FOR REGISTRATION OF TRANSFER OR EXCHANGE OR(B) TO THE REGISTRAR
FOR PAYMENT OF PRINCIPAL, AND ANY BOND ISSUED IN REPLACEMENT HEREOF OR
SUBSTITUTION HEREFOR IS REGISTERED IN THE NAME OF DTC AND ANY PAYMENT IS
MADE TO DTC OR ITS NOMINEE, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE ONLY THE
REGISTERED OWNER HEREOF, DTC OR ITS NOMINEE, HAS AN INTEREST HEREIN.
(Form of 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:
NOTICE: The 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
enlargement or any change whatever.
26
EXHIBIT B
NOTICE OF REDEMPTION
SALES TAX REVENUE BONDS, SERIES 2001
OF THE CITY OF BROOKINGS
BROOKINGS COUNTY
STATE OF SOUTH DAKOTA
GREETINGS BONDHOLDER:
Notice is hereby given to the owners and holders of following Bonds named in the above caption that the
City of Brookings, Brookings County, State of South Dakota has exercised its option to call for redemption and
payment all of said Bonds prior to their maturity, and such Bonds will be paid on December I, 2011, upon
surrender of said Bonds, and such payment will be at a price of par plus accrued interest up to and including
December I, 201 I.
Year Maturing Principal Interest Rate CUSIP
Outstanding
2010 300,000 4.400% 1 13660 AZ7
2011 310,000 4.500% 113660 BAI
2012 325,000 4.600% 113660 BB9
2013 340,000 4.700% 113660 BC7
2014 585,000 4.800% 113660 BD5
2015 755,000 4.850% 113660 BE3
2016 790,000 4.950% 113660 BFO
2021 4,615,000 5.125% 113660 BG8
Payment of the Bonds called for redemption will be made upon presentation and surrender of such Bonds
at First Bank&Trust, Brookings, South Dakota. Called Bonds should be presented as follows:
By Mail or Hand:
Registered or certified insured mail is suggested when submitting Bonds for payment.
When inquiring about this redemption, please have the Bond Number available. Please inform customer service
representative of the CUSIP number(s)of the affected Bonds(s). Customer Service(605)696-2200.
First Bank&Trust
Brookings,South Dakota
As Registrar and Paying Agent
Dated:
Withholding of 28%of gross redemption proceeds of any payment made within the United States may be required by the Economic Growth and Tax Relief
Reconciliation Act of 2003 (the `Act') unless the Paying Agent has the correct taxpayer identification number(social security number) or exemption
certificate of the payee. Please furnish a properly completed form W-9 or exemption certificate or equivalent when presenting your Certificates.
*The Issuer and Paying Agent shall not be responsible for the use of the CUSIP numbers selected, nor is any representation made as to their correctness
indicated in the notice or as printed on any Certificate.They are included solely for the convenience of the holders.
27
EXHIBIT C
NOTICE OF REDEMPTION
SALES TAX REVENUE REFUNDING BONDS, SERIES 2003
OF THE CITY OF BROOKINGS
BROOKINGS COUNTY
STATE OF SOUTH DAKOTA
GREETINGS BONDHOLDER:
Notice is hereby given to the owners and holders of following Bonds named in the above caption that the
City of Brookings, Brookings County, State of South Dakota has exercised its option to call for redemption and
payment all of said Bonds prior to their maturity, and such Bonds will be paid on December 1, 2011, upon
surrender of said Bonds, and such payment will be at a price of par plus accrued interest up to and including
December 1, 2 0 1 1.
Year Maturing Principal Interest Rate CUSIP
Outstanding
2010 810,000 3.30% 113660 BP8
2011 840,000 3.45% 113660 BQ6
2012 870,000 3.50% 113660 BR4
2013 900,000 3.60% 113660 BS2
Payment of the Bonds called for redemption will be made upon presentation and surrender of such Bonds
at First Bank&Trust, Brookings, South Dakota. Called Bonds should be presented as follows:
By Mail or Hand:
Registered or certified insured mail is suggested when submitting Bonds for payment.
When inquiring about this redemption, please have the Bond Number available. Please inform customer service
representative of the CUSIP number(s)of the affected Bonds(s). Customer Service(605)696-2200.
First Bank&Trust
Brookings,South Dakota
As Registrar and Paying Agent
Dated:
Withholding of 28%of gross redemption proceeds of any payment made within the United States may be required by the Economic Growth and Tax Relief
Reconciliation Act of 2003 (the "Act") unless the Paying Agent has the correct taxpayer identification number (social security number) or exemption
certificate of the payee. Please furnish a properly completed form W-9 or exemption certificate or equivalent when presenting your Certificates.
*The Issuer and Paying Agent shall not be responsible for the use of the CUSIP numbers selected,nor is any representation made as to their correctness
indicated in the notice or as printed on any Certificate.They are included solely for the convenience of the holders.
28
EXHIBIT D
NOTICE OF REDEMPTION
SALES TAX REVENUE BONDS, SERIES 2005
OF THE CITY OF BROOKINGS
BROOKINGS COUNTY
STATE OF SOUTH DAKOTA
GREETINGS BONDHOLDER:
Notice is hereby given to the owners and holders of following Bonds named in the above caption that the
City of Brookings, Brookings County, State of South Dakota has exercised its option to call for redemption and
payment all of said Bonds prior to their maturity, and such Bonds will be paid on December I, 2012, upon
surrender of said Bonds, and such payment will be at a price of par plus accrued interest up to and including
December I, 2012.
Year Maturing Principal Interest Rate CUSIP
Outstanding
2010 305,000 3.55% 1 13660 CC6
2011 315,000 3.60% 1 13660 CE2
2012 325,000 3.65% 113660 CG7
2013 340,000 3.70% 1 13660 CH5
2014 355,000 3.80% 113660 CJ I
2015 365,000 3.90% 113660 CK8
Payment of the Bonds called for redemption will be made upon presentation and surrender of such Bonds
at First Bank&Trust, Brookings, South Dakota. Called Bonds should be presented as follows:
By Mail or Hand:
Registered or certified insured mail is suggested when submitting Bonds for payment.
When inquiring about this redemption, please have the Bond Number available. Please inform customer service representative
of the CUSIP number(s)of the affected Bonds(s). Customer Service(605)696-2200.
First Bank&Trust
Brookings,South Dakota
As Registrar and Paying Agent
Dated:
Withholding of 28%of gross redemption proceeds of any payment made within the United States may be required by the Economic Growth and Tax Relief
Reconciliation Act of 2003 (the "Act") unless the Paying Agent has the correct taxpayer identification number(social security number) or exemption
certificate of the payee. Please furnish a properly completed form W-9 or exemption certificate or equivalent when presenting your Certificates.
*The Issuer and Paying Agent shall not be responsible for the use of the CUSIP numbers selected,nor is any representation made as to their correctness
indicated in the notice or as printed on any Certificate. They are included solely for the convenience of the holders.
29