CCR1996032'U :. (Defeasance of
I99 I Bonds)
of the Common Council Held January 23, 1996
Excerpts of Minutes of the Meeting
Muskego, Waukesha County, Wisconsin, was held in open session
upon due notice on January 23, 1996 at 7:45 P.M. in the City
Hall. The following Alderpersons were present:
Aldermen D'Acquisto, Misko, Patterson, Rasmussen,
Salentine, Sanders, and Suhr.
A duly-convened meeting of the Common Council of the City of
The following Alderpersons were absent
None
The Mayor opened the meeting by announcing that this was an
open meeting of the Common Council Notice of this meeting was
given to the public at least 24 hours prior to the meeting by
forwarding the complete agenda to the official City newspaper,
the Muskeso Sun, and to all news media who have requested the
same as well as posting Copies of the complete agenda were
available for inspection at the City Clerk's office Anyone
desiring information as to forthcoming meetings should contact
the City Clerk's office.
0
(Here occurred business not pertinent to the authorization
of the escrow agreement.)
On motion made by Alderperson D'Acquisto
Alderperson Patterson , the following resolution was adopted
and seconded by
by a vote of 7 to 0.
Resolution NO. 3a -q\o
A RESOLUTION AUTHORIZING THE ESTABLISHMENT OF
AN ESCROW ACCOUNT WITH RESPECT
TO THE GENERAL OBLIGATION SEWERAGE BONDS,
OF THE CITY OF MUSKEG0
DATED FEBRUARY 1, 1991
(the "City") has outstanding its General Obligation Sewerage
Bonds, dated February 1, 1991 (the "1991 Bonds"); and
WHEREAS, the City of Muskego, Waukesha County, Wisconsin
Q82\205075.1
WHEREAS, it is necessary and desirable to establish an
escrow account for the purpose of providing for the payment of
the 1991 Bonds which mature in the years 1996 through 2001;
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the
City of Muskego, Waukesha County, Wisconsin, that:
1 Establishment of Escrow Account. The officers of the
City are authorized and directed to execute an Escrow Agreement
in substantially the form attached hereto as Exhibit A with a
bank or trust company approved by the Mayor and City Clerk The
form of the Escrow Agreement may be modified by said officers
prior to execution, the execution of such Agreement to constitute
full approval of the City of any such modifications. The deposit
into the Escrow Account to be established with the Escrow Agent
of funds of the City in an amount sufficient to provide for the
payment of the 1991 Bonds which mature in the years 1996 through
2001 is authorized and directed to be accomplished concurrently
with the execution of the Escrow Agreement and the subsequent
use, investment and disbursement thereof by the Escrow Agent in
the manner provided in the Escrow Agreement is authorized and
approved
2 Call of 1991 Bonds The 1991 Bonds maturing in the
years 1998 through 2001 are called for prior payment on
November 1, 1997 at the price of par plus accrued interest to the
date of redemption. The Escrow Agent shall be directed pursuant
to the Escrow Agreement to give notice of call of the 1991 Bonds
to be redeemed. 0
(Here occurred business not pertinent to the escrow account
authorization.)
upon motion made and duly seconded, the meeting was
adjourned.
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EXHIBIT A
ESCROW AGREEMENT
This Escrow Agreement is made and entered into this dav
of , 1996, by and between -
Muskego, Waukesha County, Wisconsin ("City")
("Escrow Agent") and the City of
Recitals
The City has outstanding its General Obligation Sewerage
Bonds, dated February 1, 1991 (the "1991 Bonds")
The City desires to set aside funds sufficient to provide
mature in the years 1996 through 2001.
for the payment of the debt service on the 1991 Bonds which
Escrow Agent has been appointed to hold and administer the
Escrow Account herein established.
In consideration of the mutual covenants and agreements
herein set forth, the parties therefore agree:
1 Escrow DeDOSit Concurrently with the execution of
this Agreement, the City has irrevocably deposited $
which sum is necessary to accomplish the purposes hereof, to be
held and used by Escrow Agent, together with any investment
income accruing thereto, in escrow only as herein set forth. 0
when held, invested and paid in accordance herewith will be
sufficient to make all payments required hereby, and agrees that
deposit will not be so sufficient, it will, upon notice by the
if at any time it shall appear to Escrow Agent that such escrow
hand and legally available for that purpose to the extent
Escrow Agent, forthwith deposit in the Escrow Account money on
required to meet fully the payments required hereby.
The City represents and warrants that this escrow deposit,
receipt of the escrow deposit hereunder and accepts the
responsibilities imposed on it, as Escrow Agent, by this
Agreement .
2. Acceptance of Escrow. Escrow Agent acknowledges
deposit the escrow deposit hereunder into an Escrow Account to be
3. ADDlication of Escrow DeDosit. Escrow Agent shall
used and invested as follows:
(a) Use of Escrow Deposit. The Escrow Agent shall:
State and Local Government Series Book-Entry
(i) on the date hereof, purchase the [U.S. Treasury
Securities] [U.S. Government Securities] described on
Schedule A hereto [ ("SLGS") I [("Securities") 1, in the
principal amount of and for the price of $
and Pay for them from the monies in the Escrow Account,
and hold the purchased [SLGS] [Securities] in the
Escrow Account; and
(ii) hold the $ balance of the escrow deposit
in cash in the Escrow Account until distributed as
provided in subsection (b) hereof
(other than the cash held in the Escrow Account pursuant to
(b) Distribution of Escrow Account. The Escrow Account
subsection (a) (ii) above) shall remain invested in the [SLGS]
Agent shall not sell or otherwise dispose of the [SLGS]
[Securities] Except as provided in Section 4 below, the Escrow
in the Escrow Account shall be permitted or made on behalf of the
[Securities] and no further investment or reinvestment of monies
City. Escrow Agent shall apply the monies in the Escrow Account
amounts and to the depository set forth on the attached Schedule
to the timely payment of the 1991 Bonds at the times and in the
B. The Escrow Account cash flow is set forth on Schedule C.
4 Substitute Investments. At the written request of the
City and upon compliance with the conditions hereinafter stated,
the Escrow Agent shall have the power to [request the redemption
of the SLGS] [sell the Securities] and to substitute direct
guaranteed by, the United States of America, which are not
obligations of, or obligations which are unconditionally
subject to redemption prior to maturity and which are available
for purchase with the proceeds derived from the disposition of
Escrow Agent shall purchase such substitute obligations with the
the [SLGS] [Securities] on the date of such transaction The
proceeds derived from the sale, transfer, disposition or
redemption of the [SLGS] [Securities]. The transactions may be
effected only by simultaneous sale and purchase transactions, and
only if (i) the amounts and dates on which the anticipated
Bonds will not be diminished or postponed thereby, (ii) the
transfers from the Escrow Account for the payment of the 1991
Escrow Agent shall receive, at the expense of the City, an
opinion of a nationally recognized firm of attorneys experienced
disposition and substitution would not cause any of the 1991
in the area of municipal finance to the effect that such
Bonds to be "arbitrage bonds" within the meaning of Section 148
of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder; and (iii) the Escrow Agent shall receive,
at the expense of the City, a certification from an independent
principal of and interest on the U.S. government obligations in certified public accountant that, after such transaction, the
Account available for such purpose, be sufficient at all times to
the Escrow Account will, together with other monies in the Escrow
make the payments set forth on Schedule B.
e
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0
The City hereby covenants that no part of the monies or
funds at any time in the Escrow Account shall be used directly or
indirectly to acquire any securities or obligations, the
acquisition of which would cause any of the 1991 Bonds to be
Internal Revenue Code of 1986, as amended
“arbitrage bonds“ within the meaning of Section 148 of the
City has called the 1991 Bonds maturinq in the vears 1998 throuah
5. Notice of Redemption of the Defeased 1991 Bonds. The
200i for prior payment on November 1, 1997. The Escrow Agent
shall cause timely notice of the call of the 1991 Bonds to be
redeemed to be given by mailing a notice thereof, in the form
attached hereto as Schedule D, by registered or certified mail no
later than September 30, 1997 to the registered owner of each of
the 1991 Bonds to be redeemed at the address shown on the
registration books.
- ~~2~-
In addition to the official notice of redemption provided
the 1991 Bonds shall be given by the Escrow Agent on behalf of
for in the paragraph above, further notice of the redemption of
the Issuer to all registered securities depositories then in the
business of holding substantial amounts of obligations of types
such as the 1991 Bonds (such depositories now being Depository
Trust Company of New York, New York, Midwest Securities Trust
Company of Chicago, Illinois and Philadelphia Depository Trust
Company of Philadelphia, Pennsylvania), to The Bond Buver, to
MBIA Insurance Corporation and to one or more national
obligations such as the 1991 Bonds Each further notice of
information services that disseminate notices of redemption of
redemption given hereunder shall be sent at least 35 days before
the redemption date by registered or certified mail or overnight
delivery service and shall contain the information set forth in
the official notice of redemption provided on Schedule D.
6. Notice of Defeasance of the 1991 Bonds The Escrow
Agent is directed and agrees to provide to the owners of the 1991
Bonds maturing in the years 1996 through 2001 a Notice of
Defeasance, in substantially the form attached hereto as Schedule
E, as soon as practicable after the closing for the defeasance.
The Notice of Defeasance shall also be provided to depositories
and national information services and to MBIA Insurance
Corporation as described in Section 5.
7 The Escrow Aqent.
(a) Escrow Asent’s Fee The Escrow Agent shall be paid a
fee of $ for the performance of its services hereunder. The
Escrow Agent waives any lien upon or claim against any of the
monies or securities now or hereafter held by it under this
Agreement.
0 February of each year while this Agreement is in effect, and as
(b) Annual Reuort. Escrow Agent shall, in the month of
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Soon as practicable after termination of this Agreement forward
by first class registered mail to the City a report of the
receipts, income, investments, redemptions and payments of and
year, including in such report a statement, as of the end of the
from all Of the Escrow Account during the preceding calendar
preceding calendar year, regarding the manner in which it has
carried Out the requirements of this Agreement The City shall
of the Escrow Agent's records regarding the status and details of
have the right, at any time during business hours, to examine all
the Escrow Account.
permitted under Section 3(b) hereof, Escrow Agent shall keep all
(c) Separate Funds; Accountability. Except as otherwise
monies and securities deposited hereunder, all investments and
all interest thereon and profits therefrom, at all times in the
special fund and separate trust account, wholly segregated from
all other funds and securities on deposit with it; shall never
commingle such deposits, investments and proceeds with other
funds or securities of Escrow Agent; and shall never at any time
use, loan or borrow the same in any way The several funds
established hereunder shall be held separately and distinctly and
not commingled with any other such fund Nothing herein
contained shall be construed as requiring Escrow Agent to keep
the identical monies, or any part thereof, received from or for
the City's account, on hand, but monies of an equal amount shall
always be maintained on hand as funds held by Escrow Agent as
escrow agent belonging to the City and a special account thereof,
evidencing such fact, shall at all times be maintained on the
books of Escrow Agent.
any property held hereunder, such property shall be and remain
the property of the City and if, for any reason, such property
cannot be identified, all other assets of Escrow Agent shall be
impressed with a trust for the amount thereof and the City shall
be entitled to the preferred claim upon such assets enjoyed by
any trust beneficiary. Property held by Escrow Agent hereunder
shall not be deemed to be a banking deposit of the City, and
Escrow Agent shall have no right or title with respect thereto
(including any right of set-off) and the City shall have no right
of withdrawal thereof.
In the event Escrow Agent is unable or fails to account for
id) Liability. Escrow Agent shall be under no obligation
to inquire into or be in any way responsible for the performance
or nonperformance by the City or any paying agent of any of its
obligations, or to protect any of the City's rights under any
bond proceeding or any of City's other contracts with or
franchises or privileges from any state, county, municipality or
other governmental agency or with any person. Escrow Agent shall
not be liable for any act done or step taken or omitted by it, as
Escrow Agent, or for any mistake of fact or law, or for anything
which it may do or refrain from doing in good faith and in the
exercise of reasonable care and believed by it to be within the
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discretion or power conferred upon it by this Agreement, except
for its negligence or its default in the performance of any
obligation imposed upon it hereunder Escrow Agent shall not be
responsible in any manner whatsoever for the recitals or
statements contained herein, including without limitation those
purposes hereof, but they are made solely by the City.
as to the sufficiency of the trust deposit to accomplish the
(e) Resiqnations; Successor Escrow Aqent. Escrow Agent may
at any time resign by giving not less than 60 days written notice
to City. Upon giving such notice of resignation, the Issuer
shall appoint a successor Escrow Agent and, if it does not, the
resigning Escrow Agent may petition any court of competent
jurisdiction for the appointment of a successor escrow agent
Such court may thereupon, after such notice, if any, as it may
deem proper and prescribes, appoint a successor escrow agent of
The resignation of the Escrow Agent shall take effect only upon
comparable qualifications to those of the resigning Escrow Agent
the appointment of a successor escrow agent and such successor
escrow agent's acceptance of such appointment.
Any successor escrow agent shall be a state or national
bank, have full banking and trust powers, and have a combined
capital and surplus of at least $5,000,000
Any successor escrow agent shall execute, acknowledge and
deliver to the City and to its predecessor escrow agent an
instrument accepting such appointment hereunder, and thereupon
the resignation of the predecessor escrow agent shall become
effective and such successor escrow agent, without any further
powers, duties and obligations of its predecessor hereunder, with
act, deed or conveyance, shall become vested with all the rights,
nevertheless, on written request of the City or on the request of
like effect as if originally named as escrow agent herein; but
the successor escrow agent, the escrow agent ceasing to act shall
execute and deliver an instrument transferring to such successor
escrow agent, upon the terms herein expressed, all the rights,
power, and duties of the escrow agent so ceasing to act. Upon
execute any and all instruments in writing for more fully and
the request of any such successor escrow agent, the City shall
certainly vesting in and confirming to such successor escrow
agent all such rights, powers and duties Any predecessor escrow
part of the escrow agent's fee hereunder.
agent shall pay over to its successor escrow agent a PrOPOrtiOna~
0
8 Miscellaneous
(a) Third-party Beneficiary. This Agreement has been
entered into by the City and Escrow Agent for the benefit of the
holders of the 1991 Bonds, and is not revocable by the City or
Escrow Agent. The Escrow Account has been irrevocably pledged to
accordance with this Agreement Notwithstanding the foregoing, the payment of principal of and interest on the 1991 Bonds in 0
-5- QB2\206079.1
e this Agreement shall not be construed as creating any rights in or obligations to any person other than the parties hereto.
provision of this Agreement shall be invalid or ineffective for
any reason, the remainder of this Agreement shall remain in full
force and effect, it being expressly hereby agreed that the
parties hereto notwithstanding any such invalidity.
remainder of this Agreement would have been entered into by the
(b) Severabilitv. If any section, paragraph, clause or
November 3, 1997. Any funds hereunder as shall remain upon
(c) Termination. This Agreement shall terminate on
Agreement shall not, of itself, have any effect on City‘s
termination shall be returned to the City. Termination of this
obligation to pay the 1991 Bonds in full in accordance with the
terms thereof
(d) Indemnification. The City agrees to hold the Escrow
Agent harmless and to indemnify the Escrow Agent against any
attorney‘s fees and expenses), claims, or demands arising out of
loss, liability, expenses (including but not limited to
or in connection with the performance of its obligations in
accordance with the provisions of this Agreement, except for
negligent acts or omissions or willful misconduct of the Escrow
Agent. The foregoing indemnities in this paragraph shall survive
the resignation of the Escrow Agent or the termination of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this
Agreement, being duly authorized so to do, each in the manner
most appropriate to it, on the date first above written
CITY OF MUSKEGO,
WAUKESHA COUNTY, WISCONSIN
BY Mayor
0
( SEAL )
(SEAL)
Attest:
City Clerk
Escrow Agent
By :
Title
Attest:
Title
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SCHEDULE A
DESCRIPTION OF [U.S. TREASURY
GOVERNMENT SERIES ("SLGS") 1 [SECURITIES]
OBLIGATIONS - STATE AND LOCAL
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SCHEDULE B
DEBT SERVICE PAYMENT SCHEDULE
Depository = The Depository Trust Company
New York, New York
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i
0 SCHEDULE C
ESCROW ACCOUNT CASH FLOW
082\206079.1
I. (Name and Address
SCHEDULE n
I of Registered Owner)
Re: City of Muskego, Wisconsin
General Obligation Sewerage Bonds
Date of Original Issue - February 1, 1991
issue which mature on November 1 of the years and bear interest
at the rates set forth below, have been called for prior payment
on November 1, 1997
Notice is hereby given that the Bonds of the above-described
Year Interest
Rate CUSIP No.
627636HR7
5 90 627636HS5
6.00 627636HT3
6.10 627636HU0
1998 5 80%
1999
2000
2001
Upon presentation and surrender of said Bonds at our offices
located at
be paid the principal amount of such Bonds and accrued interest
to the date of redemption. Owners of called Bonds should also
provide a fully-executed W-9 Taxpayer Identification Number
Certificate.
, you will
a
Such Bonds will cease to bear interest on November 1, 1997.
Very truly yours,
Escrow Agent
QB2\206079.1
SCHEDULE E
Notice of the Partial Defeasance and Redemption
of the General Obligation Sewerage Bonds,
of the City of Muskego, Wisconsin (the "Bonds")
dated February 1, 1991
1996 through 2001 (the "Defeased Bonds") of the City of Muskego,
Notice is given that the Bonds which mature in the years
Wisconsin (the "City") have been defeased by the City pursuant to
an Escrow Agreement dated , 1996 between the City and
Agent"). The Escrow Agent has been instructed to call all
Defeased Bonds outstanding on November 1, 1997 for redemption on
that date. United States government securities and cash have
been placed in escrow with the Escrow Agent in an amount which,
together with investment income on it, is sufficient to pay the
principal of and interest on the Defeased Bonds up to and
including November 1, 1997 and to redeem on November 1, 1997 the
Bonds maturing November 1, 1998 through 2001 at a price of par
plus accrued interest to November 1, 1997. Interest on the
Defeased Bonds will cease to accrue on November 1, 1997 Payment
of the redemption price will be made at the principal office of
the Escrow Agent, upon the presentation and surrender of the
Bonds.
, (the "Escrow
Dated , 19 - .
as Escrow Agent
QB2\206079.1