RESOLUTION NUMBER 43-16

 

AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF $575,000 GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 2016A

 

BE IT RESOLVED, by the Council (the “Council”) of the City of Mountain Iron, St. Louis County, Minnesota (the “Issuer”), as follows:

 

Section 1.        Purpose, Authorization, and Award.

 

1.01     Authority. 

A.        Pursuant to authority contained in Minnesota Statutes, Chapters 429 and 475, the Council directs the issuance and sale of $575,000 General Obligation Improvement Refunding Bonds, Series 2016A (the “Bonds”), for the purpose of refunding the outstanding principal of the Issuer’s $1,455,000 General Obligation Improvement Bonds, Series 2007A (the “Prior Bonds”) in the amount of $555,000 (the “Refunded Bonds”) on February 1, 2017 (the “Redemption Date”); and

B.        The Prior Bonds were issued pursuant to a resolution of the Council adopted August 20, 2007 (the “Prior Resolution”), for the purposes of financing a portion of the costs of local public improvements (the “Project”) which are to be paid for in part by special assessments levied or to be levied upon benefitted property (the “Special Assessments”) for payment of part of the interest cost of the Bonds herein and for payment of part of the issuance costs of the Prior Bonds.

C.        The principal of and interest on the Bonds shall be paid from Special Assessments and ad valorem taxes (the “Taxes”).  (The Special Assessments and Taxes are collectively referred to herein as the “Pledged Revenues.”)

 

1.02     Bonds Previously Sold.  The Issuer elects to apply the exception to the public sale requirement contained in Minnesota Statutes, Section 475.60, Subdivision 2(2) and will not sell obligations pursuant to this exception in an amount exceeding $1,200,000 during the 12-month period ending November 30, 2017.

1.03     Award of Sale  The Issuer has received an offer from Northland Securities, Inc. of Minneapolis, Minnesota (the “Purchaser”), to purchase the Bonds at a cash price of $576,523.75, plus accrued interest on the total principal amount from November 1, 2016, to the date of delivery upon the terms and conditions hereafter specified in this Resolution.  The Council, after due consideration, finds such offer reasonable and proper and the offer of the Purchaser is accepted.

Section 2.        Terms of the Bonds.

 

2.01     Date and Maturities.  A.  The Bonds shall be (i) issued as fully-registered bonds, (ii) designated “$575,000 General Obligation Improvement Refunding Bonds, Series 2016A,” (iii) dated November 1, 2016, as the date of original issue, (iv) issued in the denomination of $5,000, or any integral multiple thereof, (v) issued in fully registered form, and (vi) lettered and numbered R-1 and upward. 

 

            B.        The Bonds shall mature on February 1 in the years and amounts stated below and shall bear interest from the most recent Interest Payment Date (as hereinafter defined) to which interest has been paid or duly provided for, or, if no interest has been paid or provided for, from the date of original issue until paid at the rates per annum set forth below opposite such years and amounts:

 

Year	Amount	Interest Rate
2018	$125,000	2.000%
2023	$210,000	1.625%
2028	$240,000	2.250%

 

2.02     Redemption.  A. The Bonds maturing on and prior to February 1, 2024 shall not be subject to redemption and prepayment before maturity, but those maturing, or subject to mandatory redemption, after such date and in subsequent years shall each be subject to redemption and prepayment at the option of the Issuer on such date and on any day thereafter, in whole or in part, at a price equal to the principal amount thereof plus accrued interest to the redemption date.

 

            B.        In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Bond Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) not more than 60 and not less than 30 days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Bond Registrar and by publishing the notice of redemption, if required by law, in the manner required by Minnesota Statutes, Section 475.54, Subdivision 4; provided, however, that so long as the Bonds are registered in the name of Cede & Co., notice of redemption shall be given in accordance with the terms of the Representation Letter.  Failure to give notice by mail to any registered owner, or any defect therein, will not affect the validity of any proceeding for the redemption of Bonds not affected by such defect or failure.  Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time.

 

            C.        If less than all the Bonds of a maturity are called for redemption while the Bonds are registered in the name of Cede & Co., the Issuer or the Bond Registrar designated below will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interest in such maturity to be redeemed.  If less than all the Bonds of a maturity are called for redemption and the Bonds are not registered in the name of Cede & Co., the Bond Registrar will determine by lot or other manner deemed fair, the amount of each maturity to be redeemed.  All prepayments shall be at a price equal to the principal amount thereof plus accrued interest.

 

D.        The Bonds maturing on February 1 in the years 2023 and 2028 shall be subject to mandatory redemption prior to maturity pursuant to the requirements of this Section 2.02D at a redemption price equal to the stated principal amount thereof plus interest accrued thereon to the redemption date, without premium.  The Bond Registrar, as designated below, shall select for redemption, by lot or other manner deemed fair, on February 1 in each of the following years the following stated principal amounts:

 

For Bonds maturing on February 1, 2023:

 

Year	Amount
2019	$40,000
2020	$40,000
2021	$45,000
2022	$45,000
2023	$40,000

 

For Bonds maturing on February 1, 2028:

 

Year	Amount
2024	$45,000
2025	$45,000
2026	$50,000
2027	$50,000
2028	$50,000

 

2.03     Interest Payment Dates.  The Bonds shall bear interest at the annual rates stated therefor in Section 2.01.  The interest shall be payable semiannually on February 1 and August 1 in each year (each referred to herein as an “Interest Payment Date”) commencing on August 1, 2017.  Interest will be computed upon the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to the rules of the Municipal Securities Rulemaking Board.  The Bond Registrar designated below shall make all interest payments with respect to the Bonds by check or draft mailed to the registered owners of the Bonds shown on the bond registration records maintained by the Bond Registrar at the close of business on the 15th day (whether or not on a business day) of the month next preceding the Interest Payment Date at such owners’ addresses shown on such bond registration records.

 

 

 

 

            Section 3.        Registration; Global Book Entry System.

 

            3.01     Designation of Bond Registrar.  The City Council appoints Northland Trust Services, Inc. as registrar, authenticating agent and transfer agent for the Bonds (such bank or its successors is herein referred to as the “Bond Registrar”), and shall do so until a successor Bond Registrar is duly appointed, all pursuant to a contract which the Issuer and the Bond Registrar shall execute which is consistent herewith and which the Mayor and the Administrator are authorized to execute and deliver.  A successor Bond Registrar shall be a bank or trust company eligible for designation as bond registrar pursuant to Minnesota Statutes, Chapter 475.  The terms of the appointment of the successor Bond Registrar and its duties shall be specified in a contract between the Issuer and such successor Bond Registrar that is consistent herewith and that the Mayor and Administrator are authorized to execute and deliver.  The Bond Registrar, which may act through an agent, shall also serve as paying agent until and unless a successor paying agent is duly appointed. The Bond Registrar shall pay principal and interest on the Bonds to the registered Holders (or record Holders) of the Bonds in the manner set forth herein.  The Issuer agrees to pay the reasonable and customary charges for the services of such Bond Registrar.

 

            3.02     Designation of Depository.  DTC, a Securities and Exchange Commission designated depository, a limited purpose New York trust company, a member of the Federal Reserve System, and a “clearing corporation” within the meaning of the New York Uniform Commercial Code, is designated as the depository (the “Depository”) with respect to the Bonds.

 

            3.03     Authentication of Bonds.  No Bond shall be valid or obligatory for any purpose unless or until either (i) the Bond Registrar’s authentication certificate on such Bond, substantially set forth in Section 4.01 hereof, shall have been duly executed by an authorized representative of the Bond Registrar or (ii) the Bonds have been manually executed by at least one officer of the City Council.  Authentication certificates on different Bonds need not be signed by the same representative.  The Bond Registrar shall authenticate each Bond by execution of the Certificate of Authentication on the Bond and shall date each Bond in the space provided as of the date on which the Bond is registered. For purposes of delivering the original Bonds, the Bond Registrar shall insert as the date of registration the date of original issue.  The executed Authentication Certificate or the manual signature of at least one officer of the City Council on each Bond shall be conclusive evidence that it has been authenticated and delivered under this Resolution.

 

            3.04     Bond Register; Transfer; Exchange.

 

            A.        The Issuer shall cause to be kept by the Bond Registrar at its principal office, a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Issuer shall provide for the registration of the Bonds and the registration of transfers of the Bonds entitled to be registered or transferred as herein provided.  In the event of the resignation or removal of the Bond Registrar or its incapability of acting as such, the bond registration records shall be maintained at the office of the successor Bond Registrar as may be appointed by the City Council.

 

            B.        Upon surrender for transfer of any Bond at the principal corporate office of the Bond Registrar, the Issuer shall execute, if required by law or this Resolution, and the Bond Registrar shall authenticate, if required by law or this Resolution, date (in the space designated Date of Registration) and deliver, in the name(s) of the designated transferee or transferees, one or more new Bonds of the like aggregate principal amount having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of “bearer” or similar designation.  Transfer of a Bond may be made on the Issuer’s books by the registered owner in person or by the registered owner’s attorney duly authorized in writing.  Transfers shall be subject to reasonable regulations of the Issuer contained in any agreement with, or notice to, the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates.  The Issuer and the Bond Registrar shall not be required to make any transfer or exchange of any Bonds called for redemption or to make any such exchange or transfer of the Bonds during the 15 days next preceding the date of the first publication or the mailing (if there is no publication) of notice of redemption in the case of a proposed redemption of the Bonds.

 

            C.        Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the registered owner thereof, with signature guaranteed, or by the registered Holder’s attorney duly authorized in writing, and shall include written instructions as to the details of the transfer of the Bond.  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 shall incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized.

 

            D.        At the option of the Holder, replacement Bonds may be exchanged for Bonds of any authorized denomination or denominations of a like aggregate principal amount and stated maturity, upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar.  Whenever any Bonds are so surrendered for exchange, the Issuer shall execute (if required by law or this Resolution), and the Bond Registrar shall authenticate (if required by law or this Resolution), date (in the space designated Date of Registration) and deliver the replacement Bonds which the Holder making the exchange is entitled to receive.  Bonds registered in the name of Cede & Co. may not be exchanged for Bonds of smaller denominations.

 

            E.         All Bonds surrendered upon any exchange or transfer provided for in this Resolution shall be promptly canceled by the Bond Registrar and thereafter disposed of as directed by the Issuer.

 

            F.         Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all of the rights to interest, accrued and unpaid and to accrue, which are carried by such other Bond.  All Bonds delivered in exchange for or upon transfer of Bonds shall be valid general obligations of the Issuer evidencing the same debt, shall be entitled to the same benefits under this Resolution as the Bonds surrendered for such exchange or transfer, and shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bonds.

 

            G.        The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost bonds.

 

            H.        Bonds registered in the name of Cede & Co. may not after their original delivery, be transferred or exchanged except in accordance with the terms and conditions of the Representation Letter and:

 

(i)       upon exchange of a Bond after a partial redemption, if provided in Section 2.02 of this Resolution;

 

(ii)      to any successor of the Depository (or its nominee) or any substitute depository (a “Substitute Depository”) designated pursuant to clause (iii) below; provided that any successor of the Depository or any Substitute Depository must be both a “clearing corporation” as defined in the Minnesota Uniform Commercial Code, Minnesota Statutes, Section 336.8-102, and a qualified and registered “clearing agency” as provided in Section 17A of the Securities Exchange Act of 1934, as amended;

 

(iii)     to a Substitute Depository designated by and acceptable to the Issuer upon (a) the determination by the Depository that the Bonds shall no longer be eligible for its depository services or (b) a determination by the Issuer that the Depository is no longer able to carry out its functions; provided that any Substitute Depository must be qualified to act as such, as provided in subclause (ii) above; or

 

(iv)     in the event that (a) the Depository shall resign or discontinue its services for the Bonds or be declared no longer able to carry out its functions and the Issuer is unable to locate a Substitute Depository within two months following the resignation or discontinuance or determination of noneligibility, or (b) the Issuer determines in its sole discretion that (1) the continuation of the book-entry system described herein might adversely affect the interests of the beneficial owners of the Bonds, or (2) it is in the best interests of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, then the Issuer shall notify the Holders of its determination and of the availability of replacement Bonds to Holders.  The Issuer, the Bond Registrar and the Depository shall cooperate in providing Replacement Bonds to Holders requesting the same and the registration, transfer and exchange of such Bonds shall thereafter be conducted as provided in Section 3 of this Resolution.

 

            I.          In the event of the designation of a Substitute Depository as authorized by clause H., the Bond Registrar, upon presentation of a Bond, shall register their transfer to the Substitute Depository, and the Substitute Depository shall be treated as the Depository for all purposes and functions under this Resolution.  The Representation Letter shall not apply to the Substitute Depository unless the Issuer and the Substitute Depository so agree, and the execution of a similar agreement is authorized.

 

 

 

 

            3.05     Persons Deemed Owners; Payment.

 

            A.        The Issuer and the Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in Section 2.02 above), on such Bond and for all other purposes whatsoever, whether or not such Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary.

 

            B.        For the purposes of all actions, consents and other matters affecting Holders of Bonds issued under this Resolution as from time to time supplemented, other than payments, redemptions, and purchases, the Issuer may (but shall not be obligated to) treat as the Holder of a Bond the beneficial owner of the Bond instead of the person in whose name the Bond is registered.  For that purpose, the Issuer may ascertain the identity of the beneficial owner of the Bond by such means as the Bond Registrar in its sole discretion deems appropriate, including but not limited to a certificate from the Depository or other person in whose name the Bond is registered identifying such beneficial owner.

 

            C.        The principal of and interest on the Bonds shall be payable by the Bond Registrar in such funds as are legal tender for the payment of debts due the United States of America.  The Issuer shall pay the reasonable and customary charges of the Bond Registrar for the disbursement of principal and interest.

 

            3.06     Use of Global Book-Entry System.

 

            A.        There has been previously submitted to this City Council a form of Blanket Issuer Letter of Representations (the “Representation Letter”) between the Issuer and the Depository setting forth various matters relating to the Depository and its role with respect to the Bonds.  The terms and conditions of the Representation Letter are ratified.

 

            B.        All of the Bonds shall be registered in the name of Cede & Co., as nominee for DTC.  Payment of interest on and principal of any Bond registered in the name of Cede & Co. shall be made by wire transfer or New York Clearing House or equivalent same day funds by 10:00 a.m. CT or as soon as possible thereafter following the Bond Registrar’s receipt of funds from the Issuer on each Interest Payment Date to the account of Cede & Co. on each Interest Payment Date at the address indicated in or pursuant to the Representation Letter.

 

            C.        So long as DTC is the Depository or it or its nominee is the Holder of any Bonds, the Issuer shall comply with the provisions of the Representation Letter, as it may be amended or supplemented from time to time.

 

            D.        Additional matters with respect to, among other things, notices, consents and approvals by Holders and payments on the Bonds are set forth in the Representation Letter.

 

            E.         The provisions in the Representation Letter are incorporated herein by reference and made a part of this resolution, and if and to the extent any such provisions are inconsistent with the other provisions of this resolution, the provisions in the Representation Letter shall control.

 

            3.07     Mutilated, Stolen or Destroyed Bonds.  If a Bond becomes mutilated or is destroyed, stolen, or lost, the Bond Registrar will deliver a new Bond of like amount, number, maturity date, and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen, or lost, upon the payment of the reasonable expenses and charges of the Bond Registrar and the Issuer in connection therewith, including the cost of printing new Bonds; and, in the case of a Bond destroyed, stolen, or lost, upon filing with the Bond Registrar and the Issuer of evidence satisfactory to it and the Issuer that the 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 and the Issuer and as provided by law, in which both the Issuer and the Bond Registrar must be named as obligees.  Bonds so surrendered to the Bond Registrar will be canceled by the Bond Registrar and evidence of such cancellation must be given to the Issuer.  If the mutilated, destroyed, stolen, or lost Bond has already matured or been called for redemption in accordance with its terms, it is not necessary to issue a new Bond prior to payment.

Section 4.  Form of the Bonds.

4.01     The Bonds shall be printed or typewritten in substantially the following form:

 

UNITED STATES OF AMERICA

STATE OF MINNESOTA

COUNTY OF ST. LOUIS

R-_                                                                                                                $______

 

CITY OF MOUNTAIN IRON

GENERAL OBLIGATION IMPROVEMENT REFUNDING BOND,

SERIES 2016A

 

Rate	Maturity Date	Date of Original Issue	CUSIP
____%	February 1, 20__	November 1, 2016

 

REGISTERED OWNER:        CEDE & CO.

 

PRINCIPAL AMOUNT:         DOLLARS

 

            The City of Mountain Iron, St. Louis County, Minnesota (the “Issuer”), certifies that it is indebted and for value received, promises to pay to the registered owner specified above or on the Registration Certificate attached hereto, or registered assigns, in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, and to pay interest thereon from the date of original issue set forth above, or from the most recent Interest Payment Date (defined below) to which interest has been paid or duly provided for, until the principal amount is paid, said interest being at the rate per annum specified above.  Interest is payable semiannually on February 1 and August 1 of each year (each referred to herein as an “Interest Payment Date”) commencing on August 1, 2017, at the rate per annum specified above, calculated on the basis of a 360-day year of twelve 30-day months, until the principal amount is paid or has been provided for.  This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or duly provided for, or, if no interest has been paid or provided for, from the date of original issue hereof set forth above.

 

            Payment.  The principal of and premium, if any, on this Bond are payable by wire transfer (or other agreed means of payment) on each payment date no later than 12:00 noon (New York, New York time) upon presentation and surrender hereof at the office of Northland Trust Services, Inc., as registrar, paying agent, authenticating agent and transfer agent (the “Bond Registrar”), or at the office of such successor bond registrar as may be designated by the Issuer.  Interest on this Bond will be paid on each Interest Payment Date (by 12:00 noon, New York, New York time) by wire transfer (or other agreed means of payment) to the person in whose name this Bond is registered (the “Holder” or “Bondholder”) on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the 15th day of the calendar month next preceding such Interest Payment Date (the “Regular Record Date”).  Any interest not so timely paid or duly provided for shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date fixed for the payment of the defaulted interest, and notice of the special record date shall be given by the Bond Registrar to the Holders not less than 10 days prior thereto.  The Bond Registrar shall make all payments with respect to this Bond without, except for payment of principal on the Bond, the presentation or surrender of this Bond, and all such payments shall discharge the obligations of the Issuer to the extent of the payments so made.  The principal of, premium, if any, and interest on this Bond are payable in lawful money of the United States of America.  For the prompt and full payment of such principal and interest as they become due, the full faith and credit of the Issuer are irrevocably pledged.

 

            Date of Payment Not Business Day.  If the date for payment of the principal of, premium, if any, or interest on this Bond shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the City of New York, New York, or the city where the principal office of the Bond Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment.

 

Optional Redemption.  The Bonds maturing on and prior to February 1, 2024 shall not be subject to redemption before maturity, but those maturing, or subject to mandatory redemption, after such date are each subject to redemption and prepayment at the option of the Issuer on such date, and on any day thereafter, in whole or in part, and if in part at the option of the Issuer and in such manner as the Issuer shall determine and by lot as to Bonds maturing in the same year, at a price of par plus accrued interest to the date of redemption.

 

Mandatory Redemption.  The Bonds maturing on February 1 in the years 2023 and 2028 shall be subject to mandatory redemption prior to maturity pursuant to the requirements of the Resolution at a redemption price equal to the stated principal amount thereof plus interest accrued thereon to the redemption date, without premium.

 

            Notice of and Selection of Bonds for Redemption.  Not less than 30 nor more than 60 days prior to the date fixed for redemption and prepayment of any Bonds, notice of redemption shall be mailed to each registered owner of a Bond to be redeemed; provided, however, that so long as the Bonds are registered in the name of Cede & Co., as nominee for The Depository Trust Company, Jersey City, New Jersey (“DTC”), notice of redemption shall be given in accordance with the terms of the Blanket Issuer Letter of Representations which has been executed by the Issuer and DTC (the “Representation Letter”).

 

            If less than all the Bonds of a maturity are called for redemption while the Bonds are registered in the name of Cede & Co., the Issuer or the Bond Registrar designated below will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interest in such maturity to be redeemed.  If less than all the Bonds of a maturity are called for redemption and the Bonds are not registered in the name of Cede & Co., the Bond Registrar will determine by lot or other manner deemed fair, the amount of each maturity to be redeemed.  All prepayments shall be at a price equal to the principal amount thereof plus accrued interest.  If any Bond is redeemed in part, upon surrender of the Bond being redeemed, the Issuer shall deliver or cause to be delivered to the registered owner of such Bond, a Bond in like form in the principal amount equal to that portion of the Bond so surrendered not being redeemed.

 

            Issuance; Purpose.  This Bond is one of a series issued by the Issuer in the aggregate amount of $575,000, all of like date and tenor, except as to number, maturity date, denomination, redemption privilege and interest rate, pursuant to the authority contained in:  (i) Minnesota Statutes, Chapters 429 and 475 and all other laws thereunto enabling and (ii) an authorizing resolution adopted by the governing body of the Issuer on October 3, 2016 (the “Resolution”), for the purpose of refunding on February 1, 2017, the outstanding principal amounts of the Issuer’s $1,455,000 General Obligation Improvement Bonds, Series 2007A.  The principal of and interest on the Bonds are payable primarily from special assessments levied or to be levied against benefitted property, ad valorem taxes and from a portion of the proceeds of the Bonds.  Reference is made to the Resolution for a full statement of rights and powers thereby conferred. 

 

            General Obligation.  This Bond constitutes a general obligation of the Issuer, and to provide moneys for the prompt and full payment of the principal and interest when the same become due, the full faith and credit and taxing powers of the Issuer have been and are irrevocably pledged.

 

            Denominations; Exchange.  The Bonds of this series are issued as fully registered bonds without coupons, in the denomination of $5,000 or any integral multiple thereof.  The Issuer will, at the request of the registered owner, issue one or more new fully registered Bonds in the name of the registered owner in the aggregate principal amount equal to the unpaid principal balance of this Bond, and of like tenor except as to number and principal amount at the principal office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution and the Representation Letter.  Reference is made to the Resolution for a description of the rights and duties of the Bond Registrar.  Copies of the Resolution are on file in the principal office of the Bond Registrar.

 

            Registration; Transfer.  This Bond shall be registered in the name of the payee on the books of the Issuer by presenting this Bond for registration to the Bond Registrar, whose representative will endorse his or her name and note the date of registration opposite the name of the payee in the Registration Certificate attached hereto.  Thereafter this Bond may be transferred by delivery with an assignment duly executed by the Holder or the Holder’s legal representative, and the Issuer and Bond Registrar may treat the Holder as the person exclusively entitled to exercise all the rights and powers of an owner until this Bond is presented with such assignment for registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted hereon by the Bond Registrar, all subject to the terms and conditions provided in the Resolution and the Representation Letter and to reasonable regulations of the Issuer contained in any agreement with, or notice to, the Bond Registrar.  Thereupon the Issuer shall execute (if required by law or the Resolution) and the Bond Registrar shall authenticate (if required by law or the Resolution) and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee, of an authorized denomination, in an aggregate principal amount equal to the principal amount of this Bond, of the same maturity, and bearing interest at the same rate.

 

            Fees Upon Transfer or Loss.  The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds.  No service charge shall be made by the Issuer for any transfer or exchange hereinbefore referred to but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

            Treatment of Registered Owner.  The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes whatsoever, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary.

 

Qualified Tax-Exempt Obligations.  The Bonds of this issue have been designated by the Issuer as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, relating to the deduction of interest expenses allocable to the Bonds by financial institutions.

 

            Authentication.  This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until either (i) the Bond Registrar’s Authentication Certificate hereon shall have been executed by the Bond Registrar by one of its authorized representatives or (ii) the Bond has been manually executed by at least one officer of the governing body of the Issuer.

 

IT IS CERTIFIED AND RECITED that all acts and conditions required by the laws and the Constitution of the State of Minnesota to be done and to exist precedent to and in the issuance of this Bond, in order to make it a valid and binding general obligation of the Issuer in accordance with its terms, have been done and do exist in form, time and manner as so required; that all taxable property within the limits of the Issuer is subject to the levy of ad valorem taxes to the extent needed to pay the principal hereof and the interest hereon when due, without limitation as to rate or amount and that the issuance of this Bond does not cause the indebtedness of the Issuer to exceed any constitutional or statutory limitation.

 

IN WITNESS WHEREOF, the City of Mountain Iron, St. Louis County, Minnesota, by its governing body, has caused this Bond to be executed in its name by the facsimile or manual signature of the Mayor and attested by the facsimile or manual signature of the Administrator.

 

(form-no signature required)                                     (form-no signature required)

Administrator                                                              Mayor

 

BOND REGISTRAR’S AUTHENTICATION CERTIFICATE

 

The Bond Registrar confirms that the books reflect the ownership of this Bond registered in the name of the owner named above in the principal amount and maturing on the date stated above and this Bond is one of the Bonds of the series issued pursuant to the Resolution hereinabove described.

 

NORTHLAND TRUST SERVICES, INC.

 

 

By_________________________________

    Authorized Representative

 

 

REGISTRATION CERTIFICATE

 

This Bond must be registered as to both principal and interest in the name of the owner on the books to be kept by Northland Trust Services, Inc., of Minneapolis, Minnesota, as Bond Registrar.  No transfer of this Bond shall be valid unless made on said books by the registered owner or the owner’s attorney thereunto duly authorized and similarly noted on the registration books.  The ownership of the unpaid principal balance of this Bond and the interest accruing thereon is registered on the books of Northland Trust Services, Inc., as Bond Registrar, in the name of the registered owner last noted below.

 

Date	Registered Owner	Signature of Bond Registrar
11/8/16	Cede & Co. c/o The Depository Trust Company 570 Washington Blvd. Jersey City, NJ 07310 Federal Taxpayer I.D. No.: 13-2555119	_________________________

ASSIGNMENT

 

FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto

 

(Name and Address of Assignee)

 

_________________________          Social Security or Other

 

_________________________          Identifying Number of Assignee

 

the within Bond and all rights thereunder and does hereby irrevocably constitute and appoint _____________________________________ attorney to transfer the said 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 of the registered owner as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever.

 

Signature Guaranteed:

 

____________________________

(Bank, Trust Company, member of

National Securities Exchange)

 

Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Issuer or its agent for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

4.02     Preparation and Execution.  The Bonds shall be prepared for execution in accordance with the approved form and shall be signed by the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the Administrator.  The legal opinion of Fryberger, Buchanan, Smith & Frederick, P.A. shall be appended to each Bond.  The corporate seal of the Issuer may be omitted from the Bonds as permitted by law.  In case any officer whose signature or a facsimile of whose signature shall appear on the Bonds shall cease to be an officer before delivery of the Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery.

 

            4.03     Delivery of the Bonds.  Delivery of the Bonds and payment of the purchase price shall be made at a place mutually satisfactory to the Issuer and the Purchaser.  Printed or typewritten, and executed Bonds shall be furnished by the Issuer without cost to the Purchaser.  The Bonds, when prepared in accordance with this Resolution and executed, shall be delivered by or under the direction of the Administrator to the Purchaser upon receipt of the purchase price plus accrued interest.

 

Section 5.        Covenants, Funds and Accounts.

5.01     Covenants.  It is hereby determined that the Project will directly and indirectly benefit abutting property, and the Issuer hereby covenants with the holders from time to time of the Bonds as follows:

A.        The Issuer has caused the Special Assessments to be promptly levied and has taken and will take all steps necessary to assure prompt collection of the Special Assessments.  Construction of the Project has been completed.  Council will cause all further actions and proceedings to be taken with due diligence that are required for the appropriation of any other funds needed to pay the Bonds and interest thereon when due.

B.        The Issuer will keep complete and accurate books and records showing:  receipts and disbursements in connection with the Project and Special Assessments and other funds appropriated for their payment, collections and disbursements thereof, moneys on hand and the balance of unpaid Special Assessments.

C.        The Issuer will cause its books and records to be audited and will furnish copies of such audit reports to any interested person upon request.

D.        The Council covenants and agrees with the holders of the Bonds and with its taxpayers that it has assessed against benefitted property not less than 20% of the cost of the Project.

 

5.02     Funds, Accounts, Appropriations and Revenues.  There is created a special fund to be designated the “2016 Improvement Refunding Bonds Fund” (the “Fund”) to be administered and maintained by the Administrator as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the Issuer.  The Fund shall be maintained in the manner herein specified until all of the Bonds and the interest thereon have been fully paid.  There shall be maintained in the Fund three separate accounts, to be designated the “Refunding Account,” the “Cost of Issuance Account” and the “Debt Service Account,” respectively:

 

A.        Refunding Account. 

 

(i)        On receipt of the purchase price of the Bonds, the Issuer shall credit proceeds from the sale of the Bonds, less amounts allocated as capitalized interest, if any (the “Capitalized Interest”), less amounts used to pay part of the interest cost of the Bonds as allowed by Minnesota Statutes, Section 475.56 (the “Additional Interest”), less the Accrued Interest and less any amounts allocated to payment of costs of issuance of the Bonds (the “Proceeds”), to the Refunding Account.

 

(ii)       Moneys on deposit in the debt service account established in the Prior Resolution (the “Prior Debt Service Fund”) are pledged and appropriated and shall be transferred to the Refunding Account for payment of the Refunded Bonds on the Redemption Date.  Upon redemption of the Refunded Bonds on the Redemption Date, the Prior Debt Service Fund shall be terminated.  Any Taxes levied under the Prior Resolution and collected after the Redemption Date shall be deposited in the Debt Service Account. 

 

B.        Cost of Issuance Account.  On receipt of the purchase price of the Bonds, the Issuer shall credit the proceeds from the sale of the Bonds, less the Capitalized Interest, less the Additional Interest, less the Accrued Interest and less the amount required to meet the requirements of the Refunding Account to the Cost of Issuance Account.  Proceeds from the Bonds on deposit in the Cost of Issuance Account shall be used from time to time to pay, or reimburse the Issuer for payment of costs of issuance of the Bonds, as such become due.  Any funds remaining in the Cost of Issuance Account upon payment in full of the costs of issuance of the Bonds shall be transferred to the Debt Service Account.

 

C.        Debt Service Account.

 

(i)        There are hereby irrevocably appropriated and pledged to the Debt Service Account:  (i) the Pledged Revenues; (ii) the Capitalized Interest; (iii) the Accrued Interest; (iv) the Additional Interest; (v) the Taxes hereinafter levied; (vi) any funds remaining in the Prior Debt Service Fund upon payment of the Refunded Bonds in full on the Redemption Date; (vii) any funds remaining on deposit in the Cost of Issuance Account upon payment in full of the cost of issuance of the Bonds; (viii) any Taxes levied for payment of the Refunded Bonds collected after the Redemption Date; and (ix) investment earnings, if any, on the moneys identified in preceding clauses (i) through (viii).  The money in the Debt Service Account shall be used for no purpose other than the payment of principal of and interest on the Bonds.

 

(ii)       If the balances in the Debt Service Account are ever insufficient to pay all principal and interest then due on the Bonds, the Administrator shall nevertheless provide sufficient money from any other funds of the Issuer which are available for that purpose, and such other funds shall be reimbursed from the Debt Service Account when the balance therein is sufficient. 

 

5.03     Tax Levy.  A.  For the purpose of paying part of the debt service on the Bonds, there is hereby levied a direct annual ad valorem tax upon all taxable property in the Issuer which shall be spread upon the tax rolls and collected with and as part of other general property taxes in the Issuer.  Said levies are for the years and in the amounts set forth in ATTACHMENT A hereto (the “Tax Levies”), which is incorporated by reference as though fully set forth herein.  The Tax Levies shall be irrepealable so long as any of the Bonds are outstanding and unpaid; provided, however, that on November 30 of each year, while any Bonds issued hereunder remain outstanding, the Council shall reduce or cancel the above levies to the extent of funds available in the Debt Service Account to pay principal and interest due during the ensuing year, and shall direct the County Auditor to reduce the levy for such calendar year by that amount.

 

B.        The Tax Levies are such that if collected in full, they together with estimated collections of investment earnings and Special Assessments herein pledged for payment of the Bonds, will produce at least 5% in excess of the amount needed to meet when due the principal and interest payments on the Bonds.

 

5.04     Investments.  Monies on deposit in the Fund, Cost of Issuance Account and the Debt Service Account may, at the discretion of the Administrator, be invested in securities permitted by Minnesota Statutes, Chapter 118A; provided, that any such investments shall mature at such times and in such amounts as will permit payment of the principal and interest on the Bonds when due.

 

5.05     Additional Covenants.  It is recognized, however, that the Issuer’s liability on the Bonds is not limited to the Pledged Revenues, and the Council covenants and agrees that it will levy upon all taxable property within the Issuer, and cause to be extended, assessed, and collected, any taxes found necessary for full payment of the principal of and interest on the Bonds, without limitation as to rate or amount.

 

Section 6.        Tax Covenants.

 

6.01     General.  The Issuer covenants and agrees with the holders of the Bonds that it will:  (i) take all action on its part necessary to cause the interest on the Bonds to be exempt from federal income taxes including, without limitation, restricting, to the extent necessary, the yield on investments made with the proceeds of the Bonds and investment earnings thereon, making required payments to the federal government, if any, and maintaining books and records in a specified manner, where appropriate, and (ii) refrain from taking any action which would cause interest on the Bonds to be subject to federal income taxes, including, without limitation, refraining from spending the proceeds of the Bonds and investment earnings thereon on certain specified purposes.

 

6.02     Arbitrage Rebate Exception.  The Issuer expects all proceeds of the Bonds will be spent within six months of the date of closing and delivery of the Bonds and no rebate of arbitrage profits will be required.  In the event proceeds of the Bonds are not so spent, the Issuer will compute and cause the payment to the United States of all amounts required under the rebate requirement of Section 148(f) of the Code and the Regulations issued thereunder.

 

6.03     Bank Qualification of Bonds.  In order to qualify the Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code, the Issuer hereby makes the following factual statements and representations:

 

A.        the Bonds are not “private activity bonds” as defined in Section 141 of the Code;

B.        the Issuer hereby designates the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code:

C.        the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will by issued by the Issuer (and all entities whose obligations will be aggregated with those of the Issuer) during the calendar year in which the Bonds are issued will not exceed $10,000,000; and

D.        not more than $10,000,000 of obligations issued by the Issuer during the calendar year in which the Bonds are issued have been designated for purposes of Section 265(b)(3) of the Code.

Section 7.        Refunding; Findings; Redemption of Refunded Bonds.

7.01     Findings.  It is hereby found and determined that:

A.        based upon information presently available from the Issuer&rsq