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CCR2005050. . . The following resolution was moved by Alderperson Patterson and seconded by Alderperson Schroeder, and upon roll call vote, duly adopted by a vote of 7 to 0: RESOLUTION NO. 050-2005 A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF $4,225,000 SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 2005, OF THE CITY OF MUSKEGO, WAUKESHA COUNTY, WISCONSIN, AND PROVIDING FOR THE PAYMENT OF THE BONDS AND OTHER DETAILS WITH RESPECT TO THE BONDS WHEREAS, the City of Muskego, Waukesha County, Wisconsin ("City") now owns and operates and has for many years owned and operated its Sewer System, a public utility (the Sewer System and all properties of every nature in connection with such System now or hereafter owned by the City, including all improvements and extensions thereto, all real and personal property of every nature comprising part of and used or useful in connection therewith, and all appurtenances, contracts, leases, franchises and other intangibles, are hereinafter referred to collectively as the "System"); and WHEREAS, under the provisions of Chapter 66, Wis. Stats., any municipality in the State of Wisconsin may, by action of its governing body, provide funds for extending, adding to and improving a public utility or to refund obligations issued to finance extensions, additions and improvements from the proceeds of bonds, which bonds are to be payable only from the income and revenues derived from the operation of such utility and are to be secured by a pledge .of the revenues of the utility; and WHEREAS, the City has outstanding (a) its Sewer System Revenue Bonds dated March 1, 1996 (the "1996 Bonds"), (b) its Sewer System Revenue Bonds dated February 1, 1998 (the "1998 Bonds"), (c) its Sewer System Revenue Bonds dated January 1, 2000 (the "2000 Bonds") and (d) its Sewer System Revenue Bonds dated April 1, 2002 (the "2002 Bonds"), which bonds are payable from the income and revenues of the System; and WHEREAS, the City has determined that it is necessary and desirable to refund the outstanding 1996 Bonds, 1998 Bonds, 2000 Bonds and 2002 Bonds (collectively, the "Refunded Obligations"); and WHEREAS, it is desired to authorize and sell revenue bonds for such purpose payable solely from the revenues to be derived from the operation of the System, which bonds are to be -2- QBMKE\5705681.1 . . . authorized and issued pursuant to the provisions of Section 66.0621, Wis. Stats.; and WHEREAS, other than the Refunded Obligations, the City has no bonds or obligations outstanding which are payable from the income and revenues of the System; and WHEREAS, the City has duly received bids for its proposed issue of Sewer System Revenue Refunding Bonds, Series 2005 (the "Bonds") as described on the bid tabulation attached hereto as Exhibit A and incorporated herein by this reference; and WHEREAS, it has been determined that the best bid received was that submitted by the bidder (the "Purchaser") whose bid is attached hereto as Exhibit B and incorporated herein by this reference (the "Proposal"); NOW, THEREFORE, the Common Council of the City of Muskego, Waukesha County, Wisconsin, do resolve that: Section 1. Authorization of Bonds. For the purpose above stated, the City shall borrow on the credit of the income and revenue of the System the sum of $4,225,000. Negotiable, fully-registered bonds of the City, in the denomination of $5,000, or any whole multiple thereof, shall be issued in evidence thereof. The Bonds shall be designated "Sewer System Revenue Refunding Bonds, Series 2005", shall be numbered from R-l upward' and shall be dated March 1, 2005. The Bonds shall bear interest at the rates per annum set forth in the Proposal and shall mature on May 1 of each year, in the years and principal amounts set forth in the Proposal and the debt service schedule attached hereto as Exhibit C and incorporated herein by this reference (the "Schedule"). Interest on the Bonds shall be payable on May 1 and November 1 of each year, commencing November 1, 2005. Interest shall be computed upon the basis of a 360-day year of twelve 30- day months and will be rounded pursuant to the rule$ of the Municipal Securities Rulemaking Board. Bonds maturing in the years 2015 through 2020 shall be subject to redemption pr~or to maturity at the option of the City in whole or from time to time in part on May 1, 2014 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. The amounts and maturities of the Bonds to be redeemed shall be selected by the City. If less than the entire principal amount of any maturity is to be -3- QBMKE\5705681.1 . . . redeemed, the Bonds of that maturity which are to be redeemed shall be selected by lot. The schedule of maturities is found to be such that the amount of annual debt service payments is reasonable in accordance with prudent municipal utility practices. The Common Council hereby determines that the refunding of the Refunded Obligations is advantageous and necessary to the City. The Bonds shall be signed by the manual or facsimile signatures of the Mayor and City Clerk of the City (provided that, unless the City has contracted with a fiscal agent to authenticate the Bonds, at least one of such signatures shall be manual), and sealed with the corporate seal of the City. The Bonds, together with interest thereon, shall be payable only out of the Special Redemption Fund hereinafter provided, and shall be a valid claim of the owner thereof only against the Special Redemption Fund and the revenues pledged to such Fund, and sufficient revenues are pledged to the Special Redemption Fund, and shall be used for no other purpose than to pay the principal of and interest on the Bonds and Parity Bonds as the same fall due. Section 2. Form of Bonds. The Bonds shall be in substantially the form attached hereto as Exhibit D and incorporated herein by this reference. Section 3. Definitions. In addition to the words defined elsewhere in this Resolution, the following words shall have the following meanings unless the context or use indicates another or different meaning or intent: "Annual Debt Service Requirement" means the total amount of principal and interest due in any Fiscal Year on the Bonds and Parity Bonds. "Bond Year" means the one-year period ending on a principal payment date or mandatory redemption date for the Bonds. "Code" means the Internal Revenue Code of 1986, as amended. "Credit Facility" means any letter or line of credit, policy of bond insurance, surety bond, guarantee or similar instrument issued by a financial, insurance or other institution -4- QBMKE\5705681.1 . . . and which provides security and/or liquidity in respect of Bonds or Parity Bonds. "DTC" means The Depository Trust Company, New York, New York, or any successor securities depository for the City with respect to the Bonds. "Fiscal Year" means the fiscal year adopted by the City for the System, which is currently the calendar year. "Net Revenues" means the Revenues minus all Operation and Maintenance Expenses of the System. "Operation and Maintenance Expenses" means the reasonable and necessary costs of operating, maintaining, administering and repairing the System, including salaries, wages, costs of materials and supplies, insurance and audits, but excluding depreciation, debt service, tax equivalents and capital expenditures. "Parity Bonds" means additional bonds issued on a parity as to pledge and lien with the Bonds in accordance with the provisions of Section 9 of this Resolution. "Reserve Requirement" means an amount equal to the least of (a) 10% of the proceeds of the Bonds, (b) maximum annual debt service on the outstanding Bonds in any Bond Year and (c) 125% of average annual debt service on the outstanding Bonds. If Parity Bonds which are to be secured by the Reserve Account are issued, the Reserve Requirement shall mean the amount on deposit in the Reserve Account prior to the issuance of such Parity Bonds plus the amount permitted to be deposited therein from proceeds of the Parity Bonds pursuant to Section 148(d) (1) of the Code, but shall at no time exceed the maximum annual debt service requirement for outstanding obligations secured by the Reserve Account. "Revenues" means all income and revenue derived from operation of the System, including the revenues received from the City for services rendered to it and all moneys received from any other source, including income derived from investments. Section 4. Income and Revenue Funds. When the Bonds shall have been delivered in whole or in part, the Revenues shall be set aside into the following separate and special funds, which were created and established by Resolution No. 58-96 adopted -5- QBMKE\5705681.1 . February 27, 1996 (the "1996 Resolution") and are hereby continued and shall be used and applied as described below: - Revenues in amounts sufficient to provide for the reasonable and proper operation and maintenance of the System through the payment of Operation and Maintenance Expenses shall be set aside into the Sewer System Operation and Maintenance Fund (the "Operation and Maintenance Fund"). - Revenues in amounts sufficient to pay the principal of and interest on the Bonds and Parity Bonds and to meet the Reserve Requirement shall be set aside into the Sewer System Special Redemption Fund (the "Special Redemption Fund"), to be applied to the payment of the principal of and interest on the Bonds and Parity Bonds and to meet the Reserve Requirement. The monies standing in the Special Redemption Fund are irrevocably pledged to the payment of principal of and interest the Bonds and Parity Bonds. - Revenues in amounts sufficient to provide a proper and adequate depreciation account for the System shall be set aside into the Sewer System Depreciation Fund (the "Depreciation Fund") . . The Operation and Maintenance Fund and Depreciation Fund shall be deposited as received in public depositories to be selected by the Common Council in the manner required by Chapter 34 of the Wisconsin Statutes and may be invested in legal investments subject to the provisions of Section 66.0603(lm), Wis. Stats. Money in the Operation and Maintenance Fund shall be used to pay Operation and Maintenance Expenses as the same come due; money not immediately required for Operation and Maintenance Expenses Shðll be used to accumulate a reserve in the Operation and Maintenance Fund equal to estimated Operation and Maintenance Expenses for one month. Any money then available and remaining in the Operation and Maintenance Fund may be transferred to the Surplus Fund, which fund is hereby continued. . Revenues shall be deposited in the Depreciation Fund each month until such amount as the Common Council may from time to time determine to constitute an adequate and reasonable depreciation account for the System (the "Depreciation Requirement") is accumulated therein. Money in the Depreciation Fund shall be available and shall be used, whenever necessary, to restore any deficiency in the Special Redemption Fund and for the maintenance of the Reserve Account therein. When the -6- QBMKE\5705681.1 . . . Special Redemption Fund is sufficient for its purpose, funds in the Depreciation Fund may be expended for repairs, replacements, new construction, extensions or additions to the System. Any money on deposit in the Depreciation Fund in excess of the Depreciation Requirement which is not required during the current Fiscal Year for the purposes of the Depreciation Fund, may be transferred to the Surplus Fund. It is the express intent and determination of the Cornmon Council that the amount of Revenues to be set aside and paid into the Special Redemption Fund (including the Reserve Account) shall in any event be sufficient to pay principal of and interest on the Bonds and Parity Bonds and to meet the Reserve Requirement, and the City Treasurer shall each Fiscal Year deposit at least sufficient Revenues in the Special Redemption Fund to pay promptly all principal and interest falling due on the Bonds and Parity Bonds and to meet the Reserve Requirement. The Revenues so set aside for payment of the principal of and interest on the Bonds and Parity Bonds shall be set apart and shall be paid into the Special Redemption Fund so that the amount required to pay principal and interest due on the Bonds and Parity Bonds on any payment date is on deposit in the Special Redemption Fund at least thirty (30) days prior to the payment date. The minimum amounts to be so deposited for debt service on the Bonds are set forth on the Schedule. The Special Redemption Fund shall be used for no purpose other than the payment of interest upon and principal of the Bonds and Parity Bonds promptly as the same become due and payable or to pay redemption premiums. All money in the Special Redemption Fund shall be deposited in a special account and invested in legal investments subject to Section 66.0603(lm), wis. Stats., and the monthly payments required to be made to the Special Redemption Fund shall be made directly to such account. The Reserve Account established by the 1996 Resolution shall be continued to additionally secure the payment of principal of and interest on the Bonds. The City covenants and agrees that upon the issuance of the Bonds an amount equal to the Reserve Requirement shall be on deposit in the Reserve Account and shall be maintained therein. The City covenants and agrees that at any time that the Reserve Account is drawn on and the amount in the Reserve Account shall be less than the Reserve Requirement, an amount -7- QBMKE\5705681.1 . . . equal to one-twelfth of the Reserve Requirement will be paid monthly into the Reserve Account from those funds in the Special Redemption Fund, the Operation and Maintenance Fund, the Depreciation Fund and the Surplus Fund which are in excess of the minimum amounts required by the preceding paragraphs to be paid therein until the Reserve Requirement will again have accumulated in the Reserve Account. No such payments need be made into the Reserve Account at such times as the monies in the Reserve Account are equal to the highest remaining Annual Debt Service Requirement on the Bonds and Parity Bonds secured by the Reserve Account in any Bond Year. If at any time the amount on deposit in the Reserve Account exceeds the Reserve Requirement, the excess shall be transferred to the Special Redemption Fund and used to pay principal and interest on the Bonds. If for any reason there shall be insufficient funds on hand in the Special Redemption Fund to meet principal or interest becoming due on the Bonds or Parity Bonds secured by the Reserve Account, then all sums then held in the Reserve Account shall be used to pay the portion of interest or principal on such Bonds or Parity Bonds becoming due as to which there would otherwise be default, and thereupon the payments required by this paragraph shall again be made into the Reserve Account until an amount equal to the Reserve Requirement is on deposit in the Reserve Account. In lieu of the deposit of moneys in the Reserve Account, or in substitution of moneys previously deposited therein, the City at any time may cause to be credited to the Reserve Account a Credit Facility for the benefit of the owners of the Bonds and any Parity Bonds secured by the Reserve Account equal to the difference between the Reserve Requirement and all other amounts then on deposit (or, in the case of substitution of moneys previously on deposit therein~ the amount remaining on deposit) in the Reserve Account. Any funds in the Reserve Account that are subsequently replaced,by a Credit Facility shall be deposited in the Special Redemption Fund and used to pay principal and interest on the Bonds and Parity Bonds; provided that the City may transfer such funds ,to any other fund or account under this Resolution upon receipt of an opinion of nationally-recognized bond counsel to the effect that such transfer will not adversely affect the tax-exempt nature of the interest on any Bonds or Parity Bonds outstanding. The Credit Facility shall be payable (upon the giving of notice as required thereunder) on any date on which moneys will be required to be withdrawn from the Reserve Account and applied to the payment of the principal or redemption price of or interest on any Bonds or Parity Bonds when such withdrawals cannot be made by amounts credited to the Reserve Account. Any insurer providing such -8- QBMKE\5705681.1 . . . Credit Facility shall be an insurer whose municipal bond insurance policies insuring the payment, when due, of the principal of and interest on municipal bond issues results in such issues being rated in the highest rating category by either Standard & Poor's Ratings Group, Inc., Moody's Investors Service, Inc. or Fitch IBCA, Inc. or any insurer who holds the highest policyholder rating accorded insurers by A.M. Best & Co. or any comparable service. Any bank or other institution providing such Credit Facility shall be a bank or other institution which is rated not lower than the second highest rating category by either Standard & Poor's Ratings Group, Inc., Moody's Investors Service, Inc. or Fitch IBCA, Inc., and the Credit Facility itself shall be rated not lower than the ratings on the bank or other institution. If a disbursement is made pursuant to a Credit Facility provided pursuant to this paragraph the City shall be obligated either (i) to reinstate the maximum limits of such Credit Facility or (ii) to deposit funds into the Reserve Account, or a combination of such alternatives, so that the amount credited to the Reserve Account again equals the Reserve Requirement. Funds in the Special Redemption Fund in excess of the minimum amounts required to be paid therein plus reserve requirements may be transferred to the Surplus Fund. Money in the Surplus Fund shall first be used when necessary to meet requirements of the Operation and Maintenance Fund including the one month reserve, the Special Redemption Fund including the Reserve Account, and the Depreciation Fund. Any money then remaining in the Surplus Fund at the end of any Fiscal Year may be used only as permitted and in the order specified in Section 66.0811(2), Wis~ Stats. Money thereafter remaining in the Surplus Fund may be transferred to any of the funds or accounts created by this section. Section 5. Service to the City. The reasonable cost and value of any service rendered to the City by the System, including reasonable health protection charges, shall be charged against the City and shall be paid by it in monthly installments as the service accrues, out of the current revenues of the City collected or in the process of collection, exclusive of the revenues derived from the System, to wit: out of the tax levy of the City made by it to raise money to meet its necessary current expenses. It is hereby found and determined that the amount of such reasonable cost and value shall be equal to such amount as may be necessary from year to year to pay the balance of an amount which, together with Revenues of the System, will produce in each Fiscal Year Net Revenues equivalent to not less -9- QBMKE\5705681.1 . . . than 1.25 times the Annual Debt Service Requirement. Such compensation for such service rendered to the City shall, in the manner provided hereinabove, be paid into the separate and special funds described in Section 4 of this Resolution. However, such payment is subject to (a) annual appropriation by the Common Council, (b) approval of the Wisconsin Public Service Commission, if necessary, and (c) applicable levy limits, if any; and neither this Resolution nor such payment shall be construed as constituting an obligation of the City to make any such appropriation over and above the reasonable cost and value of services rendered to the City or to make any subsequent payment over and above such reasonable cost and value. Section 6. Operation of System; City Covenants. It is covenanted and agreed by the City with the owner or owners of the Bonds, and each of them, that: It will faithfully and punctually perform all duties with reference to the System required by the Constitution and Statutes of the State of Wisconsin, including the making and collecting of reasonable and sufficient rates lawfully established for services rendered by the System, and will segregate the Revenues of the System and apply them to the respective funds and accounts described hereinabove; It will not sell, lease, or in any manner dispose of the System, including any part thereof or any additions, extensions, or improvements that may be made part thereto, except that the City shall have the right to sell, lease or otherwise dispose of any property of the System found by the City to be neither necessary nor useful in the operation of the System, provided the proceeds received from such sale, lease or disposal shall be paid into the Special Redemption Fund or applied to the acquisition or construction of capital facilities for use in the normal operation of the System, and such payment shall not reduce the amounts otherwise required to be paid into the Special Redemption Fund; It will payor cause to be paid all lawful taxes, assessments, governmental charges, and claims for labor, materials or supplies which if unpaid could become a lien upon the System or its Revenues or could impair the security of the Bonds; It will maintain in reasonably good condition and operate the System, and will establish, charge and collect such lawfully established rates and charges for the service rendered by the System, so that in each Fiscal Year Net Revenues shall -10- QBMKE\5705681.1 . . . not be less than 125% of the Annual Debt Service Requirement, and so that the Revenues of the System herein agreed to be set aside to provide for the payment of the Bonds and Parity Bonds and the interest thereon as the same becomes due and payable, and to meet the Reserve Requirement, will be sufficient for those purposes; and It will prepare a budget not less than sixty days prior to the end of each Fiscal Year and, in the event such budget indicates that the Net Revenues for each Fiscal Year will not exceed the Annual Debt Service Requirement for each corresponding Fiscal Year by the proportion stated hereunder, will take any and all steps permitted by law to increase rates so that the aforementioned proportion of Net Revenues to the Annual Debt Service Requirement shall be accomplished as promptly as possible. Section 7. Books and Accounts; Inspection. The City will keep proper books and accounts relative to the System separate from all other records of the City and will cause such books and accounts to be audited annually by a recognized independent firm of certified public accountants including a balance sheet and a profit and loss statement of the System as certified by such accountants. Each such audit, in addition to whatever matters may be thought proper by the accountants to be included therein shall include the following: (1) a statement in detail of the income and expenditures of the System for the Fiscal Year; (2) a balance sheet as of the end of such Fiscal Year; (3) the accountants' comment regarding the manner in which the City has carried out the requirements of this Resolution and the accountants' recommendations for any changes or improvements in the operation of the System; (4) the number of connections to the System at the end of the Fiscal Year, for each user classification (i.e., residential, commercial, public and industrial); (5) a list of the insurance policies in force at the end of the Fiscal Year setting out as to each policy the amount of the policy, the risks covered, the name of the insurer, and the expiration date of the policy; and (6) the volume of water used in computing the sewer charge. The owners of any of the Bonds shall have at all reasonable times the right to inspect the System and the records, accounts and data of the City relating thereto. Section 8. Insurance. So long as any of the Bonds are outstanding the City will carry for the benefit of the owners of the Bonds: (a) adequate fire, lightning, vandalism, riot, strike, explosion, civil commotion, malicious damage, tornado -11- QBMKE\5705681.1 . . . and windstorm insurances on all portions of the System which are subject to loss through such casualties; (b) adequate insurance against loss of use and occupancy resulting from such casualties; (c) adequate public liability insurance and (d) insurance of the kinds and in the amounts normally carried by private companies engaged in the operation of similar systems. All money received for loss of use and occupancy shall be considered Revenue of the System payable into the separate funds and accounts named in Section 4 of this Resolution. All money received for losses under any of such casualty policies, except those specified in (b) above, shall be used in repairing the damage or in replacing the property destroyed provided that if the Common Council shall find it is inadvisable to repair such damage or replace such property and that the operation of the System has not been impaired thereby, such money, including proceeds from insurance under (b) above, shall be deposited in the Special Redemption Fund, but in that event such payments shall not reduce the amounts otherwise required to be paid into the Special Redemption Fund. Section 9. Additional Bonds. No bonds or obligations payable out of the Revenues of the System may be issued in such manner as to enjoy priority over the Bonds. Additional obligations may be issued if their lien and pledge is junior and subordinate to that of the Bonds. Additional obligations may be issued on a parity with the Bonds as to the pledge of Revenues of the System ("Parity Bonds") only if all of the following conditions are met: (a) Either: (1) The Net Revenues of the System for th~ Fiscal Year immediately preceding the issuance of such additional bonds must have been equal to at least 1.25 times the average combined annual principal and interest requirements on all bonds outstanding payable from Revenues of the System and on the Bonds then to be issued in any Fiscal Year. Should an increase in permanent rates and charges, including those made to the City, be properly ordered and made effective during the Fiscal Year immediately prior to the issuance of such additional bonds or during that part of the Fiscal Year of issuance prior to such issuance, then Revenues for purposes of such computation shall include such additional Revenues as an independent certified public accountant, consulting professional engineer or the Wisconsin Public Service Commission may certify would have accrued during the prior Fiscal -12- QBMKE\5705681.1 . Year had the new rates been in effect during that entire immediately prior Fiscal Year; or (2) An independent certified public accountant or consulting professional engineer provides a certificate setting forth for each of the three Fiscal Years commencing with the Fiscal Year following that in which the projects financed by such additional bonds are to be completed, the projected Net Revenues and the maximum annual interest and principal requirements on all bonds outstanding payable from the Revenues of the System and on the bonds then to be issued (the "Maximum Annual Debt Service Requirement"); and demonstrating that for each such Fiscal Year the projected Net Revenues will be in an amount not less than 125% of such Maximum Annual Debt Service Requirement. (b) The payments required to be made into the funds enumerated in Section 4 of this Resolution (including the Reserve Account, but not the Surplus Fund) must have been made in full. . (c) The additional bonds must have debt service (principal and/or interest) falling due on May 1 and November 1 of each year. (d) If the Parity Bonds are to be secured by the Reserve Account, the amount on deposit in the Reserve Account must be increased to an amount equal to the Reserve Requirement applicable upon the issuance of Parity Bonds as defined in Section 3 of this Resolution, through the deposit of cash or a Credit Facility. (e) The proceeds of the additional bonds must be used only for the purpose of providing additions, extensions or improvements to the System, or to refund obligations issued for such purpose. . Section 10. Sale of Bonds. The bid of the Purchaser for the purchase price set forth in the Proposal be and it hereby is accepted and the Mayor and City Clerk are authorized and directed to execute an acceptance of the offer of said successful bidder on behalf of the City. The good faith deposit of the Purchaser shall be retained by the City Treasurer until the closing of the bond issue, and any good faith deposits submitted by unsuccessful bidders shall be promptly returned. The officers of the City are authorized and directed to do any -13- QBMKE\5705681.1 . and all acts necessary to conclude delivery of the Bonds to the Purchaser, upon receipt of the purchase price, as soon after adoption of this Resolution as is convenient. Section 11. Application of Bond Proceeds. All accrued interest received from the sale of the Bonds shall be deposited into the Special Redemption Fund. An amount sufficient to make the amount currently on deposit in the Reserve Account equal to the Reserve Requirement shall be deposited in the Reserve Account. An amount sufficient to provide for the payment of the Refunded Obligations and incurred in authorizing, issuing and delivering the Bonds shall be deposited in the Escrow Account described in Section 21 hereof. Any balance remaining shall be transferred to the Special Redemption Fund for use in payment of principal of and interest on the Bonds. Section 12. Amendment to Resolution. After the issuance of any of the Bonds, no change or alteration of any kind in the provisions of this Resolution may be made until all of the Bonds have been paid in full as to both principal and interest, or discharged as herein provided, except: . (a) The City may, from time to time, amend this Resolution without the consent of any of the owners of the Bonds, but only to cure any ambiguity, administrative conflict, formal defect, or omission or procedural inconsistency of this Resolution; and (b) This Resolution may be amended, in any respect, with the written consent of the owners of not less than 51% of the principal amount of the Bonds then outstanding, exclusive of Bonds held by the City; provided, however, that no amendment shall permit any change in the pledge of Revenues derived from the System, or in the maturity of any Bond issued hereunder, or a reduction in the rate of interest on any Bond, or in the amount of the principal obligation thereof, or in the amount of the redemption premium payable in the case of redemption thereof, or change the terms upon which the Bonds may be redeemed or make any other modification in the terms of the payment of such principal or interest without the written consent of the owner of each such Bond to which the change is applicable. . Section 13. Defeasance. When all Bonds have been discharged, all pledges, covenants and other rights granted to the owners thereof by this Resolution shall cease. The City may discharge all Bonds due on any date by depositing into a special account on or before that date a sum sufficient to pay the same -14- QBMKE\5705681.1 . . . in full; or if any Bonds should not be paid when due, it may nevertheless be discharged by depositing into a special account a sum sufficient to pay it in full with interest accrued from the due date to the date of such deposit. The City, at its option, may also discharge all Bonds called for redemption on any date when they are prepayable according to their terms, by depositing into a special account on or before that date a sum sufficient to pay them in full, with the required redemption premium, if any, provided that notice of redemption has been duly given as required by this Resolution. The City, at its option, may also discharge all Bonds of said issue at any time by irrevocably depositing in escrow with a suitable bank or trust company a sum of cash and/or bonds or securities issued or guaranteed as to principal and interest of the U.S. Government, or of a commission, board or other instrumentality of the U.S. Government, maturing on the dates and bearing interest at the rates required to provide funds sufficient to pay when due the interest to accrue on each of said Bonds to its maturity or, at the City's option, if said Bond is prepayable to any prior date upon which it may be called for redemption, and to pay and redeem the principal amount of each such Bond at maturity, or at the City's option, if said Bond is prepayable, at its earliest redemption date, with the premium required for such redemption, if any, provided that notice of the redemption of all prepayable Bonds on such date has been duly given or provided for. Section. 14. Investments and Arbitrage. Monies accumulated in any of the funds and accounts referred to in Sections 4 and 11 hereof which are not immediately needed for the respective purposes thereof, may be invested in legal investments subject to the provisions of Sec. 66.0603(lm), Wis. Stats., until needed. All income derived from such investments shall be credited to the fund or account from which the investment was made; provided, however, that at any time that the Reserve Requirement is on deposit in the Reserve Account, any income derived from investment of the Reserve Account shall be deposited into the Special Redemption Fund and used to pay principal and interest on the Bonds. A separate banking account is not required for each of the funds and accounts established under this Resolution; however, the monies in each fund or account shall be accounted for separately by the City and used only for the respective purposes thereof. The proceeds of the Bonds shall be used solely for the purposes for which they are issued but may be temporarily invested until needed in legal investments. No such investment shall be made in such a manner as would cause the Bonds to be "arbitrage bonds" within the -15- QBMKE\5705681.1 . meaning of Section 148 of the Code or the Regulations of the Commissioner of Internal Revenue thereunder (the "Regulations"). An officer of the City, charged with the responsibility for issuing the Bonds, shall, on the basis of the facts, estimates and circumstances in existence on the date of closing, make such certifications as are necessary to permit the conclusion that the Bonds are not "arbitrage bonds" under Section 148 of the Code or the Regulations. . Section 15. Resolution a Contract. The provisions of this Resolution shall constitute a contract between the City and the owner or owners of the Bonds, and after issuance of any of the Bonds no change or alteration of any kind in the provisions of this Resolution may be made, except as provided in Section 12, until all of the Bonds have been paid in full as to both principal and interest. The owner or owners of any of the Bonds shall have the right in addition to all other rights, by mandamus or other suit or action in any court of competent jurisdiction, to enforce such owner's or owners' rights against the City, the governing body thereof, and any and all officers and agents thereof including, but without limitation, the right to require the City, its governing body and any other authorized body, to fix and collect rates and charges fully adequate to carry out all of the provisions and agreements contained in this Resolution. Section 16. Utilization of The Depository Trust Company Book-Entry-Only System. In order to make the Bonds eligible for the services provided by The Depository Trust Company, New York, New York, the City agrees to the applicable provisions set forth in the Blanket Issuer Letter of Representations previously executed on behalf of the City and on file in the City Clerk's office. Section 17. Persons Treated as Owners; Transfer of Bonds. The City Clerk shall keep books for the registration and for the transfer of the Bonds. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and payment of either principal or interest on any Bond shall be made only to the registered owner thereof. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. . Any Bond may be transferred by the registered owner thereof by surrender of the Bond at the office of the City Clerk, duly endorsed for the transfer or accompanied by an assignment duly -16- QBMKE\5705681.1 . . . executed by the registered owner or his attorney duly authorized in writing. Upon such transfer, the Mayor and City Clerk shall execute and deliver in the name of the transferee or transferees a new Bond or Bonds of a like aggregate principal amount, series and maturity, and the City Clerk shall record the name of each transferee in the registration book. No registration shall be made to bearer. The City Clerk shall cancel any Bond surrendered for transfer. The City shall cooperate in any such transfer, and the Mayor and City Clerk are authorized to execute any new Bond or Bonds necessary to effect any such transfer. The fifteenth day of each calendar month next preceding each interest payment date shall be the record dates for the Bonds. Payment of interest on the Bonds on any interest payment date shall be made to the registered owners of the Bonds as they appear on the registration book of the City at the close of business on the corresponding record date. Section 18. Compliance with Federal Tax Laws. (a) The City represents and covenants that the projects financed by the Bonds and the Refunded Obligations and their ownership, management and use will not cause the Bonds or the Refunded Obligations to be "private activity bonds" within the meaning of Section 141 of the Code. The City further covenants that it shall comply with the provisions of the Code to the extent necessary to maintain the tax-exempt status of the interest on the Bonds including, if applicable, the rebate requirements of Section 148(f) of the Code. The City further covenants that it will not take any action, omit to take any action or permit the taking or omission of any action within its control (including, without limitation, making or permitting any use of the proceeds of the Bonds) if taking, permitting or omitting to take such action would cause any of the Bonds to be an arbitrage bond or a private activity bond within the meaning of the Code or would otherwise cause interest on the Bonds to be included in the gross income of the recipients thereof for federal income tax purposes. The City Clerk or other officer of the City charged with the responsibility of issuing the Bonds shall provide an appropriate certificate of the City certifying that the City can and covenanting that it will comply with the provisions of the Code and Regulations. (b) The City also covenants to use its best efforts to meet the requirements and restrictions of any different or additional federal legislation which may be made applicable to the Bonds provided that in meeting such requirements the City -17- QBMKE\5705681.1 . . . will do so only to the extent consistent with the proceedings authorizing the Bonds and the laws of Wisconsin and to the extent that there is a reasonable period of time in which to comply. The foregoing covenants shall remain in full force and effect, notwithstanding the defeasance of the Bonds, until the date on which all of the Bonds have been paid in full. Section 19. Designation as Qualified Tax-Exempt Obligations. The Bonds are hereby designated as "qualified tax-exempt obligations" pursuant to Section 265 of the Code relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations. Section 20. Call of Refunded Obligations. (a) The 1996 Bonds maturing in the years 2007 through 2016 are called for prior payment on September 1, 2006 at the price of par plus accrued interest to the date of redemption. (b) The 1998 Bonds maturing in the years 2006 through 2009 are called for prior payment on September 1, 2005 at the price of par plus accrued interest to the redemption date. (c) The 2000 Bonds maturing in the years 2010 through 2017 are called for prior payment on September 1, 2009 at the price of par plus accrued interest to the redemption date. (d) The 2002 Bonds maturing in the years 2011 through 2019 are called for prior payment on September 1, 2010 at the price of par plus accrued interest to the redemption date. The Escrow Agent shall be directed pursuant to the Escrow Agreement referred to in Section 21 hereof to give notice of the call of the Refunded Obligations. Section 21. Escrow Agent; Escrow Agreement; Escrow Account. Associated Trust Company, National Association, Green Bay, Wisconsin is hereby appointed Escrow Agent of the City, for the purpose of ensuring the payment of the principal of and interest on the Refunded Obligations. The Mayor and City Clerk are hereby authorized and directed to execute an escrow agreement substantially in the form attached hereto as Exhibit E and incorporated herein by this reference (the "Escrow Agreement") (such form may be modified by said officers prior to execution, the execution of such -18- QBMKE\S705681.1 . . . agreement by said officers to constitute full approval of the City of any such modifications), with the Escrow Agent, for the purpose of effecting the provisions of this Resolution. The Bond proceeds allocable to refunding the Refunded Obligations shall be deposited in an Escrow Account which is hereby created with the Escrow Agent, pursuant to the Escrow Agreement. The use, investment and disbursement of the Bond proceeds by the Escrow Agent in the manner provided in the Escrow Agreement is authorized and approved. Section 22. SLGS Subscriptions. The Escrow Agent and Ehlers & Associates, Inc. are authorized to submit subscriptions for United States Treasury Securities - State and Local Government Series and to purchase other U.S. government securities on behalf of the City in such amount as is necessary in order to carry out the refunding authorized by this resolution pursuant to Section 66.0621, Wisconsin Statutes. Section 23. Official Statement. The Common Council hereby approves the Preliminary Official Statement with respect to the Bonds and deems the Preliminary Official Statement as "final" for purposes of SEC Rule 15c2-12. All actions taken by officers of the City in connection with the preparation of such Preliminary Official Statement and addenda to it are hereby ratified and approved. In connection with the closing for the Bonds, the appropriate City official shall certify the Preliminary Official Statement and addenda. The City Clerk shall cause copies of the Preliminary Official Statement and addenda to be distributed to the Purchaser of the Bonds. Section 24. Undertaking to Provide Continuing Disclosure. The City covenants and agrees, for the benefit of the holders of the Bonds, to enter into a written undertaking (the "Undertaking") required by SEC Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant to the Securities and Exchange Act of 1934 (the "Rule") to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events in accordance with the Rule. The Undertaking shall be enforceable by the holders of the Bonds or by the original purchaser(s) of the Bonds on behalf of such holders (provided that the rights of the holders and the purchaser(s) to enforce the Undertaking shall be limited to a right to obtain specific performance of the obligations thereunder and any failure by the City to comply with the provisions of the Undertaking shall not be an event of default with respect to the Bonds). -19- QBMKE\5705681.1 . . . The City Clerk, or other officer of the City charged with the responsibility for issuing the Bonds, shall provide a Continuing Disclosure Certificate for inclusion in the transcript of proceedings, setting forth the details and terms of the City's Undertaking. Section 25. Records. The City Clerk shall provide and keep a separate record book and shall record a full and correct statement of every step or proceeding had or taken in the course of authorizing and issuing the Bonds. Section 26. Bond Insurance. If the Purchaser of the Bonds determines to obtain municipal bond insurance with respect to the Bonds, the officers of the City are authorized to take all actions necessary to obtain such municipal bond insurance. The Mayor and City Clerk are authorized to agree to such additional provisions as the bond insurer may reasonably request and which are acceptable to the Mayor and City Clerk including provisions regarding restrictions on investment of Bond proceeds, the payment procedure under the municipal bond insurance policy, the rights of the bond insurer in the event of default and payment of the Bonds by the bond insurer and notices to be given to the bond insurer. In addition, appropriate reference to the municipal bond insurance policy shall be made in the form of Bond provided herein. Section 27. Closing. The Mayor and City Clerk are hereby authorized and directed to execute and deliver the Bonds to the Purchaser thereof upon receipt of the purchase price. The Mayor and City Clerk may execute the Bonds by manual or facsimile signature, but, unless the City has contracted with the Fiscal Agent to authenticate the Bonds, at least one of said officers shall sign the Bonds manually. . The officers of the City hereby are directed and authorized to take all necessary steps to close the bond issue as soon as practicable hereafter, in accordance with the terms of sale thereof, and said officers are hereby authorized and directed to execute and deliver such documents, certificates and acknowledgments as may be necessary or convenient in accordance therewith. -20- QBMKE\5705681.1 . . . Section 28. Conflicting Ordinances or Resolutions. All ordinances and resolutions or orders, or parts thereof heretofore enacted, adopted or entered, in conflict with the provisions of this Resolution, are hereby repealed and this Resolution shall be in effect from and after its passage. Adopted and approved March 8, 2005. I!tr~~b~ ayor The Mayor thereupon declared the Resolution adopted and approved. (Here occurred business not pertinent to the revenue bond issue. ) Upon motion made and seconded, the meeting was adjourned. Dated March 8, 2005 -21- QBMKE\5705681.1 . EXHIBIT A BID TABULATION (SEE ATTACHED) . . QBMKE\5705681.1 . BID TABULATION $4,315,000* Sewer System Revenue Refunding Bonds, Series 2005 CITY OF MUSKEGO, WISCONSIN SALE: March 8, 2005 AWARD: GRIFFIN, KUBIK, STEPHENS & THOMPSON, INC. RATING: XLCA Insured (Moody's Investors Service, Inc. "Aaa")** UNDERLYING RATING: Moody's Investors Service, Inc. "A1" 881: 4.50% PRICE NET INTEREST COST TRUE INTEREST RATE NAME OF BIDDER MATURITY (May 1) $4,274,500.00 $1,515,719.17 3.9057% GRIFFIN, KUBIK, STEPHENS & THOMPSON, INC. Chicago, Illinois 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 . J.P. MORGAN SECURITIES, INC. Chicago, Illinois STERNE, AGEE & LEACH, INC. Nashville, Tennessee 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 RATE REOFFERING YIELD 3.500% 3.500% 3.500% 3.500% 3.500% 3.500% 3.500% 3.500% 3.600% 3.700% 3.800% 3.900% 4.000% 4.000% 4.000% 3.000% 3.000% 3.000% 3.000% 3.500% 3.500% 3.750% 3.750% 3.800% 3.800% 3.850% 3.950% 4.000% 4.050% 4.100% 2.400% 2.700% 2.850% 3.000% 3.150% 3.300% 3.450% 3.550% 3.650% 3.750% 3.850% 3.950% 4.030% 4.100% 4.150% $4,283,980.17 $1,524,830.66 3.9190% *Subsequent to bid opening the issue size was decreased to $4,225,000 with the 2007 maturity decreased $5,000 to $260,000, the 2008 maturity decreased $5,000 to $265,000, the 2009 maturity decreased $5,000 to $250,000, the 2010 maturity decreased $5,000 to $260,000, the 2011 maturity decreased $5,000 to $265,000, the 2012 maturity decreased $5,000 to $270,000, the 2013 maturity decreased $5,000 to $280,000, the 2014 maturity decreased $5,000 to $295,000, the 2015 maturity decreased $5,000 to $305,000, the 2016 maturity decreased $5,000 to $320,000, the 2017 maturity decreased $5,000 to $330,000, the 2018 maturity decreased $5,000 to $345,000, the 2019 maturity decreased $10,000 to $350,000, and the 2020 maturity decreased $20,000 to $355,000 in maturity value. Adjusted Price - $4,185,607.55 Adjusted Net Interest Cost - $1,479,824.12 Adjusted TIC - 3.9039% 8**XL Capital Assurance purchased by Griffin, Kubik, Stephens & Thompson, Inc. 8 EHLERS & ASSOCIATES INC LEADERS IN PUBLIC FINANCE 375 Bishops Way, Suite 225, Brookfield, WI 53005.6202 262.785.1520 fax 262.785.1810 www.ehlers.inc.com Offices in Roseville, MH, Brookfield, WI and Naperville, Il . $4,315,000 Sewer System Revenue Refunding Bonds, Series 2005 City of Muskego, Wisconsin Page 2 ROBERT W. BAIRD l!< CO. Milwaukee, Wisconsin MATURITY RATE REOFFERING (May 1) YIELD 2006 3.000% 2007 3.000% 2008 3.000% 2009 3.000% 2010 3.125% 2011 3.200% 2012 3.375% 2013 3.500% 2014 3.600% 2015 4.000% 2016 4.000% 2017 4.000% 2018 4.000% 2019 4.000% 2020 4.100% 2006 3.000% 2007 3.250% 2008 3.400% 2009 3.400% 2010 3.550% 2011 3.600% 2012 3.700% 2013 3.750% 2014 3.750% 2015 3.750% 2016 3.800% 2017 3.900% 2018 4.000% 2019 4.050% 2020 4.100% 2006 3.625% 2007 3.750% 2008 3.750% 2009 3.750% 2010 3.800% 2011 3.800% 2012 3.800% 2013 3.800% 2014 3.800% 2015 3.800% 2016 3.800% 2017 3.800% 2018 3.900% 2019 4.000% 2020 4.050% PRICE NET TRUE INTEREST INTEREST COST RATE NAME OF BIDDER CREWS & ASSOCIATES, INC. Little Rock, Arkansas RBC DAIN RAUSCHER, INC. St. Petersburg, Florida SUNTRUST CAPITAL MARKETS, INC. Atlanta, Georgia FIRST TRUST PORTFOLIOS L.P. Lisle, Illinois STEPHENS INC. Nashville, Tennessee $4,261,455.80 $1,529,751.16 3.9407% HARRIS TRUST & SAVINGS BANK Chicago, Illinois eFTN Financial Capital Markets saak Bond Investments Inc. he Bankers Bank Wells Fargo Brokerage Services, LLC Axelrod Associates, Inc. $4,278,091.00 $1,534,386.08 3.9510% $4,261,074.25 $1,560,292.22 4.0366% . . $4,315,000 Sewer System Revenue Refunding Bonds, Series 2005 City of Muskego, Wisconsin Page 3 NAME OF BIDDER MATURITY (May 1) CRONIN & COMPANY, INC. Minneapolis, Minnesota UBS FINANCIAL SERVICES INC. Chicago, Illinois CIBC WORLD MARKETS New York, New York CITIZENS BANK Flint, Michigan 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 . . RATE REOFFERING YIELD 3.000% 3.000% 3.000% 3.500% 3.500% 3.500% 3.500% 3.650% 4.000% 4.000% 4.000% 4.000% 4.100% 4.125% 4.200% PRICE NET TRUE INTEREST INTEREST COST RATE $4,268,040.30 $1,572,234.28 4.0496% . EXHIBIT B PURCHASE PROPOSAL (SEE ATTACHED) . . QBMKE\5705681.1 MAR. 8. 2005 11: 44AM EHLERS & ASSOCS. BID FORM NO. 3349 P. 1 . The CDmmon Council City ofMWlkego, Wiseousb March 8, 2005 RE: $4,315,000* Sewer Syatem Revenue Re(unmng Bonds, Series 200S DATED: March 1, 2005 For all ornone of the ilbo\1: Bonds, in accordance with the Notü:e 9fSale and terms of the Global Book-Entry System as stated in this PreliminaIyOfficiaJ Statement. we win pay you $ ;f2-7-r:s1!k:7 (not less than $4,261,062) plus accruedinterellt 10 dale of delivery for fulJy registered Bonds bearing interOllt IBlea and maturing in the itated )'eBB as follows: . :iSêJ %dUð 2006 3..9 %due 2011 ~ %due 2016 3.5f7 %due 2007 3.50 %due 2012 .3.90 % due 2017 3.5ô % due 2008 ~S2J % due 2013 ~.OO %due 2018 'a6Ó %due 2009 .3:00 % due 2014 ~OO %due 2019 . .3.527 - % due 2010 3: 7() %4ue 2015 ~OO % due 2020 . ... The City reserves the righUo increase or decrease theprlnçjpal amoontofthe Bonds on the day of sale, in increments.of$S,ÒOO. Increase~ or decrea!:es may be måde in my maturjty. If any prinoipal amounts are adjusted, the purchase price proposed will be adjusted to maintain ~ same gross sproad per $1,000. . . We enclose our good faith deposit in the iUOOunt of $86,300, to be held by you pending delivery and payment. Alb:rnative1y, we have provided Ii financial surety bond or have wired our good faith deposit to the U. S. Trust CompàDy, NA, Greenwioh, CT, ABA No. 0211-13086, for further credit to Ehlers & Associates, Inc. Bond àSue Escrow Account No. 850-788-1. If our "bid is not accepted, said deposit shill be promptly returned to us. If the good faith deposit is wired to such escrow account, we au.", to the conditions and duties of EhlelS & Associates, Inc., 8S esorow holder of the good faith deposit, pursuant to this PretiminllIY OffioialStatement dated February 23.2005. This 'bid is for prompt acceptance and is conditionai upon deposit of said Bonds to The Depository TlUSt Compmy, New York, New York, in açcordanoe with the Notioo of Sale. Delivery is anticipatom to be on or about Marob 24, 2005. . . . . This bid is subject to the City's oovenant and agreement to enterintò a written undertaking to provide continuing disclosure under Rule t 5c2-12 promulgated by the Secmities IIIJd EXchange Commission under the Securities Exchange Act of 1934 as descn"bed in the Preliminary Official Statement for this bsuc' . We have received.and revi~cd 1he Preliminary Official Statement and have submitted our requests for additional information I: oncorICl1ti.on.ø:.tQ;the :FÙJaJ Pfficia1 Statemem. As.Syndicate MânBger, we agree to provide the C~ wUÞ the't\!o;ffering.price of . the Bonds wltbin 24 boUili ofthÞ bid aoceptance. . . ~ S1EPHENS & THOMPSON, ING. . J3y; /~1 .' r ß::n~I;,,--, Account Members: .....'...,,' , I- -.n.." ':~-" . n' Award win be on a true Interest cost bam. According to our computatiOns (thÞ COIteCt çomputation being controlling in the awanl), the total doUar intcnm COlt (including III1Y discoùnt or teas ~premium) computed fram March 1,2005 of the above hid is $~ .t.'S;719./7 and the true interest coat (TIC) ~~ %. . -------------------------------------------------------------------------------------------------------- The forego4tg offer is hen:by accepted by and on behalf of the Common Council oIthe Ci&y ofMuskego, Wisconsin) 00 March 8. 2005. Bv: Bv: Title: Title: "Subsequent to bid opening the issue size was decreased to $4,225,000 with the 2007 maturity decreased $5,000 to $260,000, the 2008 maturity decreased $5,000 to $265,000. the 2009 maturity decreased $5,000 to $250,000, the 201 0 maturity decreased $5,000 to $260,000, the 2011 maturity decreased $5,000 to $265,000. the 2012 maturity decreased $5,000 to $270,000, the 2013 maturity decreased $5,000 to . $280,000, the 2014 maturity decreased $5,000 to $295,000, the 2015 maturity decreased $5,000 to $305,000, the 2016 maturity decreased $5,000 to $320,000, the 2017 maturity decreased $5,000 to $330,000, the 2018 maturity decreased $5,000 to $345,000, the 2019 maturity decreased $10,000 to $350,000, and the 2020 maturity decreased $20,000 to $355,000 In maturity value. Adjusted Price- $4,185,807.55 Adjusted Net Interest Cost ~ $1,479,824.12 ! Adjusted TIC - 3.9039% . EXHIBIT C DEBT SERVICE SCHEDULE (SEE ATTACHED) . . QBMKE\5705681.1 .1 City of M uskego, WI $4,225,000 Sewer System Refunding Revenue Bonds Dated March 1, 2005 Winning Bidder: Griffin, Kubik Stephens & Thompson, Inc. r Debt Service Schedule Part 1 of 2 Date Principal Coupon Interest Total P+I Fiscal Total 03/24/2005 11/01/2005 104,206.67 104,206.67 12/01/2005 104,206.67 05/01/2006 75,000.00 3.500% 78,155.00 153,155.00 11/01/2006 76,842.50 76,842.50 12/01/2006 229,997.50 05/01/2007 260,000.00 3.500% 76,842.50 336,842.50 11/01/2007 72,292.50 72,292.50 12/01/2007 409,135.00 05/01/2008 265,000.00 3.500% 72,292.50 337,292.50 11/01/2008 67,655.00 67,655.00 12/01/2008 404,947.50 05/01/2009 250,000.00 3.500% 67,655.00 317,655.00 11/01/2009 63,280.00 63,280.00 12/01/2009 380,935.00 05/01/2010 260,000.00 3.500% 63,280.00 323,280.00 11/01/2010 58,730.00 58,730.00 . 12/01/2010 382,010.00 05/01/2011 265,000.00 3.500% 58,730.00 323,730.00 11/01/2011 54,092.50 54,092.50 12/01/2011 377,822.50 05/01/2012 270,000.00 3.500% 54,092.50 324,092.50 11/01/2012 49,367.50 49,367.50 12/01/2012 373,460.00 05/01/2013 280,000.00 3.500% 49,367.50 329,367.50 11/01/2013 44,467.50 44,467.50 12/01/2013 373,835.00 05/01/2014 295,000.00 3.600% 44,467.50 339,467.50 11/01/2014 39,157.50 39,157.50 12/01/2014 378,625.00. 05/01/2015 305,000.00 3.700% 39,157.50 344,157.50 11/01/2015 33,515.00 33,515.00 12/01/2015 377,672.50 05/01/2016 320,000.00 3.800% 33,515.00 353,515.00 11/01/2016 27,435.00 27,435.00 12/01/2016 380,950.00 05/01/2017 330,000.00 3.900% 27,435.00 357,435.00 11/01/2017 21,000.00 21,000.00 12/01/2017 378,435.00 05/01/2018 345,000.00 4.000% 21,000.00 366,000.00 11/01/2018 14,100.00 14,100.00 12/01/2018 380,100.00 05/01/2019 350,000.00 4.000% 14,100.00 364,100.00 11/01/2019 7,100.00 7,100.00 . 05SewerSystemRefdgBds FIN I SINGLE PURPOSE I 3/ 812005 I 11 ;35 AM Ehlers & Associates, Inc. Leaders in Public Finance I .1 . . City of Muskego, WI $4,225,000 Sewer System Refunding Revenue Bonds Dated March 1, 2005 Winning Bidder: Griffin, Kubik Stephens & Thompson, Inc. r Debt Service Schedule Part 2 of 2 Date Principal Coupon 12/01/2019 05/01/2020 355,000.00 4.000% 12/01/2020 Total $4,225,000.00 Interest Total P+I Fiscal Total 371,200.00 7,100.00 362,100.00 362,100.00 $1,440,431.67 $5,665,431.67 Yield Statistics Accrued Interest from 03/01/2005 to 03/24/2005 Bond Year Dollars Average Life Average Coupon 9,986.47 $38,009.17 8.996 Years 3.7896955% Net Interest Cost (NIC) True Interest Cost (TIC) Bond Yield for Arbitrage Purposes All Inclusive Cost (AIC) 3.8933348% 3.9039642% 3.8155488% 4.0695901% IRS Form 8038 Net Interest Cost Weighted Average Maturity 3.7883332% 8.889 Years 05SewerSystemRefdgBds FIN I SINGLE PURPOSE I 3/ 812005 I 11:35 AM I Ehlers & Associates, Inc. Leaders in Public Finance . . . EXHIBIT D (Form of Bond) UNITED STATES OF AMERICA STATE OF WISCONSIN COUNTY OF WAUKESHA CITY OF MUSKEGO SEWER SYSTEM REVENUE REFUNDING BOND, SERIES 2005 Number Maturity Date Date of Original Issue Rate Amount CUSIP R- 0 -ı March 1, 2005 $ KNOW ALL MEN BY THESE PRESENTS that the City of Muskego, Waukesha County, Wisconsin, hereby acknowledges itself to owe and for value received promises to pay to or registered assigns, solely from the fund hereinafter specified, the principal sum of DOLLARS ($ ) on the maturity date specified above together with interest thereon from March 1, 2005 or the most recent payment date to which interest has been paid, unless the date of registration of this Bond is after the 15th day of the calendar month immediately preceding an interest payment date, in which case interest will be paid from such interest payment date, at the rate per annum specified above, such interest being payable on May 1 and November 1 of each year, with the first interest on this issue being payable on November 1, 2005. . Bonds maturing in the years 2015 through 2020 are subject to redemption prior to maturity at the option of the City in whole or from time to time in part on May 1, 2014 or on any date thereafter at the redemption price of. par plus accrued interest to the date of redemption. The amounts and maturities of the Bonds to be redeemed shall be selected by the City. If less than the entire principal amount of any maturity is to be redeemed, the Bonds of that maturity which are to be redeemed shall be selected by lot. Notice of any call of the Bonds for redemption shall be given by the sending of a notice thereof by registered or certified mail, facsimile transmission or overnight express delivery at least thirty (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. IBMKE\5705681.1 . . . Both principal hereof and interest hereon are hereby made payable to the registered owner in lawful money of the United States of America. The principal of this Bond shall be payable only upon presentation and surrender of this Bond at the office of the City Treasurer. Interest hereon shall be payable by check or draft dated as of the applicable interest payment date and mailed from the office of the City Treasurer to the person in whose name this Bond is registered at the close of business on the fifteenth day of the calendar month next preceding each interest payment date. This Bond is transferable only upon the books of the City kept for that purpose at the office of the City Clerk, by the registered owner in person or his duly authorized attorney, upon surrender of this Bond together with a written instrument of transfer (which may be endorsed hereon) satisfactory to the City Clerk duly executed by the registered owner or his duly authorized attorney. Thereupon a new Bond or Bonds of the same aggregate principal amount, series and maturity shall be issued to the transferee in exchange therefor. The City may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of or on account of the principal or interest hereof and for all other purposes. The Bonds are issuable solely as negotiable, fully-registered Bonds without coupons in authorized denominations of $5,000 or any whole multiple thereof. This Bond has been designated by the City as a "qualified tax-exempt obligation" for purposes of Section 265 of the Internal Revenue Code of 1986, as amended. This Bond is one of an issue aggregating $4,225,000, issued for the purpose of refunding obligations of the City issued to finance additions, improvements and extensions to the City's Sewer System, pursuant to Article XI, Section 3, of the Wisconsin Constitution, Section 66.0621, Wisconsin Statutes, acts supplementary thereto and a Resolution adopted March 8, 2005, and entitled: "A Resolution' Authorizing the Issuance and Sale of $4,225,000 Sewer System Revenue Refunding Bonds, Series 2005, of the City of Muskego, Waukesha County, Wisconsin, and Providing for the Payment of the Bonds and Other Details With Respect to the Bonds," and is payable only from the income and revenues derived from the operation of said Sewer System. Such revenues have been set aside and pledged as a special fund for that purpose and identified as "Special Redemption Fund", created by a resolution adopted by the City on February 27, 1996 and continued by the resolution referred to above. This Bond does not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or provision. It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen, and be performed precedent to and in the issuance of this Bond have existed, have -2- ,,' Iv.< ,.\: 71' C, ,; . . . happened and have been performed in due time, form and manner as required by law; and that sufficient of the income and revenue to be received by said City from the operation of its Sewer System has been pledged to and will be set aside into a special fund for the payment of the principal of and interest on this Bond. IN WITNESS WHEREOF, the City of Muskego, Waukesha County, Wisconsin, has caused this Bond to be signed by its Mayor and City Clerk, and its corporate seal to be impressed hereon, all as of the date of original issue specified above. CITY OF MUSKEGO, WAUKESHA COUNTY, WISCONSIN (SEAL) By By Mayor City Clerk -3- QBMKE\5705681.1 . . . ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please print or typewrite name and address, including zip code, of Assignee) Please insert Social Security or other identifying number of Assignee the within Bond, and all rights thereunder, hereby irrevocably constituting and appointing Attorney to transfer said Bond on the books kept for the registration thereof with full power of substitution in the premlses. 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. Signature(s) guaranteed by: -4- QBMKE\5705681.1 . . . EXHIBIT E ESCROW AGREEMENT THIS ESCROW AGREEMENT is made and entered into the 24th day of March, 2005 by and between the City of Muskego, Wisconsin (the "City") and Associated Trust Company, National Association, Green Bay, Wisconsin, a national banking association with trust powers (the "Escrow Agent"). RECITALS The City has duly issued (a) its Sewer System Revenue Bonds dated March I, 1996 (the" I 996 Bonds"), (b) its Sewer System Revenue Bonds dated February 1, 1998 (the "1998 Bonds"), (c) its Sewer System Revenue Bonds dated January 1,2000 (the "2000 Bonds") and (d) its Sewer System Revenue Bonds dated April I ,2002 (the "2002 Bonds"). The City has duly authorized and sold and is delivering this day its $4,225,000 Sewer System Revenue Refunding Bonds, Series 2005, dated March 1,2005 (the "Refunding Obligations") for the purpose of providing funds sufficient to refund the outstanding 1996 Bonds, 1998 Bonds, 2000 Bonds and 2002 Bonds (the "Refunded Obligations") (the "Refunding"). The Refunded Obligations mature and bear interest on the dates and in the amounts shown on Exhibit A-I through Exhibit A-4, respectively. In order to accomplish the Refunding, it is necessary to irrevocably deposit in trust an amount (in the form of investment securities and cash) which, together with investment income therefrom, will be sufficient to pay when due the .principal of and interest on the Refunded Obligations. . To accomplish the Refunding, the Escrow Agent has been appointed depository of a portion of the proceeds of the Refunding Obligations (in the form of investment securities and cash) as hereinafter specified and has been appointed custodian of the City's debt service fund account for the Refunded Obligations until the Refunded Obligations are paid in full. The execution of this Agreement has been duly authorized by a resolution of the Common Council entitled: "A Resolution Authorizing the Issuance and Sale of $4,225,000 Sewer System Revenue Refunding Bonds, Series 2005, of the City of Muskego, Waukesha County, Wisconsin, and Providing for the Payment ofthe Bonds and Other Details with Respect to the Bonds" (the "Resolution") adopted by the Common Council of the City on March 8,2005. In consideration of the mutual covenants contained herein, the parties hereto covenant and agree as follows for the equal and proportionate benefit and security of the holders of the Refunding Obligations and the Refunded Obligations: I. Escrow Deposit. Concurrently with the execution of this Agreement, the City has irrevocably deposited with the Escrow Agent, receipt of which is hereby acknowledged by the Escrow Agent, $ being a portion of the proceeds of the Refunding Obligations (the "Bond Proceeds") and $ from funds ofthe City (the "Funds") for a total of$ QBMKE\5705690.1 . . . The foregoing, along with earnings and interest thereon, shall be held and disposed of by the Escrow Agent only in accordance with this Agreement. The City represents and warrants that the foregoing, if held, invested and disposed of by the Escrow Agent in accordance with this Agreement, will be sufficient, without the need for any further investment or reinvestment, to make all payments required under this Agreement. The Escrow Agent has not and is under no obligation to determine whether the amounts deposited hereunder are or will be sufficient to make all of the payments directed to be made hereunder. 2. Acceptance of Escrow. The Escrow Agent acknowledges receipt of the escrow deposit hereunder and accepts the responsibilities imposed on it by this Agreement. 3. Application of Escrow Deposit. There is hereby created by the City and ordered established with the Escrow Agent an account hereby designated, "City of Muskego Escrow Account" (the "Escrow Account"). The Escrow Agent shall deposit the amount described above in the Escrow Account to be used as follows: a) $ to be used to purchase the $ principal amount of United States Treasury Certificates ofIndebtedness, Notes and/or Bonds - State and Local Government Series ("SLGs"), described on the attached Exhibit B-1, pay D)r the SLGs from monies in the Escrow Account and hold the SLGs in the Escrow Account; ($ from Bond Proceeds and $ from Funds); b) $ to be used to establish a beginning cash balance in the Escrow from Bond Proceeds and $ from Funds}; and Account ($ c) $ to be used to pay the Issuance Expenses set forth on the attached Exhibit C-I, which the Escrow Agent is hereby authorized to pay. d) $ of accrued interest to be used to pay a portion of the interest on the Refunding Obligations on November 1, 2005. Except as set forth in Section 8 hereof, the Escrow Account (other than the cash held pursuant to subsection (b ) above} shall remain invested in the SLGs, and the Escrow Agent shall not sell or otherwise dispose of the SLGs. In addition to the foregoing, the Escrow Agent is hereby directed to reinvest excess investment proceeds accruing in the years - to in SLGs as follows: Amount Interest Rate Reinvestment Date Maturity Date $ 0.00% 0.00 The Escrow Agent is hereby directed to submit the subscription for these SLGs on behalf of the City, at least seven (7) days in advance of the date of reinvestment (or such other period of time in -2- QBMKE\5705690.1 . advance of the date of reinvestment as is then required by law or regulation) and shall be in accordance with their applicable law and regulations. The City will cooperate with the Escrow Agent as necessary to allow the subscriptions to be made as described herein. The Escrow Account cash flow (taking into account any reinvestments) prepared by the Accountant defined below is set forth on Exhibit D-l. If SLGs with an interest rate of 0.00% are not available at the time such Escrow Account monies are to be reinvested, the Escrow Agent is hereby directed to reinvest such Escrow Account monies on behalf of the City in direct obligations of the United States of America ("U.S. Government Obligations"), or hold such monies uninvested, as directed by the City, upon the Escrow Agent's receipt, at the expense of the City, of (i) an opinion of the bond counsel for the Refunding Obligations or other nationally recognized firm of attorneys experienced in the area of municipal finance to the effect that such transaction would not cause any of the Refunded Obligations or any of the Refunding Obligations to be an "arbitrage bond" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and the income tax regulations thereunder (the "Regulations") and (ii) a certification horn an independent certified public accountant that, after such transaction, the principal of and interest on the U.S. Government Obligations in the Escrow Account will, together with other monies in the Escrow Account available for such purposes, be sufficient at all times to pay, when due, the principal of and interest on the Refunded Obligations. . Except for the foregoing or as set forth in Section 8 hereof, no reinvestment of amounts on deposit in the Escrow Account shall be permitted. The Escrow Agent shall apply the monies in the Escrow Account to the payment ofthe Refunded Obligations at the times and in the amounts set forth on the attached Exhibit A-I through Exhibit A-4. McGladrey & Pullen LLP, Minneapolis, Minnesota, a firm of independent accountants (the "Accountant"), has delivered to the City, the Escrow Agent, , the bond insurer for the Refunding Obligations, if any, and Quarles & Brady LLP, for their purposes, a report stating that the firm has reviewed the arithmetical accuracy of certain computations based on assumptions relating to the sufficiency of forecasted net cash flow from the United States government securities (paragraph (a) above) and any initial cash deposit (paragraph (b) above) to pay the principal of and interest (if any) on the Refunded Obligations when due as described on Exhibit A-I through Exhibit A-4. Based upon the summarized data presented in its report and the assumption that the principal and interest payments on the United States government securities are deposited in the Escrow Account when due, in its opinion, the proceeds from the United States government securities, plus any initial cash deposit wiH be sufficient for the timely payment of principal and interest, when due, on the Refunded Obligations. If at any time it shall appear to the Escrow Agent that the money in the Escrow Account wiH not be sufficient to make any required payments due to the holders of the Refunded Obligations, the Escrow Agent shall immediately notify the City. Upon receipt of such notice, the City shall forthwith transmit to the Escrow Agent for deposit in the Escrow Account horn legally available funds such additional monies as may be required to make any such payment. . -3- QBMKE\5705690.1 . . . 4. Redemption of the Refunded Obligations. Pursuant to the Resolution, the City has heretofore ca11ed the ca11able maturities of the Refunded Obligations for redemption and authorized and directed the Escrow Agent to give notice of said intended redemption of the Refunded Obligations by providing appropriate notice (in substantiaIly the forms attached hereto as Exhibit E- I through Exhibit E-4) in the manner and at the times set forth on Exhibit E- I through Exhibit E-4, and the Escrow Agent hereby agrees to give such notice. 5. Notice of Advance Refunding of the Refunded Obligations. The Escrow Agent is hereby directed and agrees to provide to the owners of the Refunded Obligations a Notice of Advance Refunding and Redemption, in substantially the forms attached hereto as Exhibit F-I through F-4, as soon as practicable after the closing for the Refunding Obligations. The Notices of Advance Refunding and Redemption shaIl also be provided to any fiscal agent for the Refunded Obligations and to the nationaIly recognized municipal securities information repositories (NRMSIRs), the MSRB and to DTC and any other depositories as described in Exhibit F-l through F-4. 6. The Escrow Agent. a) Annual Report. The Escrow Agent shall, in the month of February of each year while this Agreement is in effect, and as soon as practicable after termination of this Agreement, forward by first class mail to the City a report ofthe receipts, income, investments, reinvestments, redemptions and payments of and fTom the Escrow Account during the preceding calendar year, including in such report a statement, as of the end of the preceding calendar year, regarding the manner in which it has carried out the requirements of this Agreement. The City shaIl have the right, at any time during business hours, to examine all of the Escrow Agent's records regarding the status and details of the Escrow Account. b) Separate Funds~ Accountability. Except as otherwjse permitted under Section 3 hereof, the Escrow Agent shall keep all monies, securities and other properties deposited hereunder, all investments and all interest thereon and profits therefrom, at a11 times in a special fund and separate trust account, whoIly 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 the Escrow Agent; and shall never at any time use, pledge, loan or borrow the same in any way. The fund established hereunder shall be held separately and distinctly and not commingled with any other such fund. Nothing herein contained shaIl be construed as requiring the Escrow Agent to keep the identical monies, or any part thereof, received from or for the Escrow Account, on hand, but monies of an equal amount shall always be maintained on hand as funds held by the Escrow Agent, belonging to the City, and a special account thereof, evidencing such fact, shaIl at all times be maintained on the books of the Escrow Agent. AIl uninvested money held at any time in the EscrowAccount shaIl be continuously secured by the deposit in a Federal Reserve Bank or direct obligations of the United States of America in a principal amount always not less than the total amount of uninvested money in the Escrow Account. It is understood and agreed that the responsibility of the Escrow Agent under this Agreement is limited to the safekeeping and segregation of the monies and securities deposited with it for the Escrow Account, and the collection of and accounting for the principal and interest payable with respect thereto. In the event the Escrow Agent due to any action or inaction required hereunder is unable or fails to account for any property held hereunder, such property sha11 be and remain the property of the -4- QBMKE\S70S690.1 . . . City, and if, for any reason such property cannot be identified, all other assets of the 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 the Escrow Agent hereunder shall not be deemed to be a banking deposit of the City to the extent that the 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. (c) 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 ofthe 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 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 as to the sufficiency ofthe trust deposit to accomplish the purposes hereof or in the Refunded Obligations or the Refunding Obligations or in any proceedings taken in connection therewith, but they are made solely by the City. (d) Resignations; Successor Escrow Agent. Escrow Agent may at any time resign by giving not less than 60 days written notice to the City. Upon giving such notice of resignation, 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 comparable qualifications to those of the resigning Escrow Agent. The resignation ofthe Escrow Agent shall take effect only upon 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 $5,000,000. . Any successor escrow agent shall execute, acknowledge and deliver to the City and to its predecessor escrow agent an instrument accepting such appointment hereunder, and thereupon the resignation of the predecessor escrow agent shall become effective and such successor escrow agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as escrow agent herein; but nevertheless, on written request of the City or on the request of the successor escrow agent, the escrow agent ceasing to act shall execute and deliver an instrument transferring to such successor escrow agent, upon the terms herein expressed, all the rights, power, and duties of the escrow agent so ceasing to act. Upon the request of any such successor escrow agent, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor escrow agent all such rights, powers and duties. Any predecessor escrow agent shall pay over to its successor escrow agent a proportional part of the Escrow Agent's fee hereunder. e) Fees. The Escrow Agent acknowledges receipt fTom the City the sum of DOLLARS ($ ) as and for full -5- QBMKE\5705690.1 . . . compensation for all services to be performed by it as the Escrow Agent under this Agreement. Any out-of-pocket expenses including legal fees and publication costs will be paid by the City as incurred. The Escrow Agent expressly waives any lien upon or claim against the monies and investments in the Escrow Account. 7. Arbitrage. The City has covenanted and agreed and the Escrow Agent hereby covenants and agrees, to the extent any action is within its control and to its knowledge, to and for the benefit of the holders of the Refunding Obligations and the Refunded Obligations, that no investment of the monies on deposit in the Escrow Account will be made in a manner that would cause the Refunding ObligaHons or the Refunded Obligations to be "arbitrage bonds" within the meaning of Section 148 of the Code or any Regulations promulgated or proposed thereunder. In order to ensure continuing compliance with Section 148 of the Code and the Regulations, the Escrow Agent agrees that it will not invest the cash balance nor reinvest any cash received in payment of the principal of and interest on the federal securities held in the Escrow Account nor redeem such federal securities except as specifically provided in Section 1 hereof. Said prohibition on reinvestment shall continue unless and until the City requests that such reinvestment be made and shall be restricted to noncallable direct obligations of the United States Treasury. Prior to any such request for reinvestment ofthe proceeds trom the federal securities held in the Escrow Account, the City shall provide to the Escrow Agent: (i) an opinion by an independent public accountant that after such reinvestment the principal amount ofthe substituted securities, together with the earnings thereon and other available monies, will be sufficient to pay, as the same become due, any required interest payments on the Refunding Obligations and all principal of, redemption premium where required, and interest on the Refunded Obligations which have not then previously been paid, and (ii) an unqualified opinion of nationally recognized bond counsel to the effect that (a) such reinvestment will not cause the Refunding Obligations or the Refunded Obligations to be "arbitrage bonds" within the meaning of Section 148 of the Code and the Regulations in effect thereunder on the date of such reinvestment, and (b) such reinvestment complies with the Constitution and laws of the State of Wisconsin and the provisions of all relevant documents relating to the issuance of the Refunding Obligations and the Refunded Obligations. 8. 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 and to substitute direct obligations of, or obligations which are unconditionally guaranteed by, the United States of America, which are not subject to redemption prior to maturity and which are available for purchase with the proceeds derived trom the disposition of the SLGs on the date of such transaction. The Escrow Agent shall purchase such substitute obligations with the proceeds derived trom the sale, transfer, disposition or redemption of the SLGs. The transactions may be effected only by simultaneous sale and purchase transactions, and only if (i) the amounts and dates on which the anticipated transfers from the Escrow Account to the fiscal agent or depository for the payment ofthe principal of and interest on the Refunded Obligations will not be diminished or postponed thereby, (ii) the Escrow Agent shall receive, at the expense of the City, an opinion of a nationally recognized firm of attorneys experienced in the area of municipal finance to the effect that such disposition and substitution would not cause any Refunded Obligations or Refunding Obligations to be "arbitrage bonds" within the meaning of Section 148 of the Code and the Regulations thereunder; and (iii) the Escrow Agent shall receive, at the expense of the City, a certification trom an independent certified public accountant that, after such transaction, the principal of and interest on the U.S. government -6- QBMKE\5705690.1 . . . obligations in the Escrow Account wiIJ, together with other monies in the Escrow Account available for such purpose, be sufficient at all times to pay, when due, the principal of, redemption premium, where required, and interest on the Refunded Obligations. 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 Refunded Obligations or Refunding Obligations to be "arbitrage bonds" within the meaning of Section 148 of the Code and the Regulations thereunder. 9. Miscellaneous. a) Third Party Beneficiaries. This Agreement has been entered into by the City and the Escrow Agent for the benefit of the holders of the Refunding Obligations and the Refunded Obligations, and is not revocable by the City or the Escrow Agent, and the investments and other funds deposited in the Escrow Account and all income therefrom have been irrevocably appropriated for the payment of interest on the Refunding Obligations when due and the payment and any redemption of the Refunded Obligations and interest thereon when due, in accordance with this Agreement. This Agreement shall be binding upon and shall inure to the benefit of the City and the Escrow Agent and their respective successors and assigns. In addition, this Agreement shall constitute a third party beneficiary contract for the benefit of the owners of the Refunding Obligations and the Refunded Obligations. Said third party beneficiaries shall be entitled to enforce performance and observance by the City and the Escrow Agent of the respective agreements and covenants herein contained as fully and completely as if said third party beneficiaries were parties hereto. b) Severability. If any section, paragraph, clause or 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 remainder of this Agreement would have been entered into by the parties hereto notwithstanding any such invalidity. c) Termination. This Agreement shall terminate upon the payment of all of the principal of and interest on the Refunded Obligations. The parties realize that some of the amounts hereunder may remain upon termination. Any amounts remaining upon termination shall be returned to the City for deposit in the account designated ;'Special Redemption Fund" described in the Resolution and used solely to pay the principal of and interest on the Refunding Obligations. Termination of this Agreement shall not, of itself, have any effect on the City's obligation to pay the Refunding Obligations and the Refunded Obligations in full in accordance with the respective terms thereof. d) Indemnification. The City agrees to hold the Escrow Agent harmless "arid to indemnify the Escrow Agent against any loss, liability, expenses (including attorney's fees and expenses), claims, or demand arising out of or in connection with the performance of its obligations in accordance with the provisions of this Agreement, except for gross negligence or willful misconduct of the Escrow Agent. The foregoing indemnities in this paragraph shall survive the resignation or removal of the Escrow Agent or the termination of the Agreement. -7- QBMKE\5705690.1 . . . e) Execution in Counterparts. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized officers on the date first above written. CITY OF MUSKEGO, W AUKESHA COUNTY, WISCONSIN By: Mark A. Slocomb Mayor (SEAL) By: Janice Moyer City Clerk ASSOCIATED TRUST COMPANY, NATIONAL ASSOCIATION, GREEN BAY, WISCONSIN, as Agent By: (SEAL) And: -8- QBMKE\5705690.1 . . . EXHIBIT A-I City of Muskego, Wisconsin Sewer System Revenue Bonds Dated March 1, 1996 Debt Service Requirements Payment Date Principal Amount Interest Rate Interest Amount Total Principal and Interest Depository: The Depository Trust Company New York, New York QBMKE\5705690.1 . . . EXHIBIT A-2 City of Muskego, Wisconsin Sewer System Revenue Bonds Dated February 1, 1998 Debt Service Requirements Payment Date Principal Amount Interest Rate Interest Amount Total Principal and Interest Depository: The Depository Trust Company New York, New York QBMKE\5705690.1 . . . Payment Date Principal Amount EXHIBIT A-3 City of Muskego, Wisconsin Sewer System Revenue Bonds Dated January I, 2000 Debt Service Requirements Interest Rate Interest Amount Total Principal and Interest Depository: The Depository Trust Company New York, New York QBMKE\5705690.1 . . . Payment Date Principal Amount EXHIBIT A-4 City of Muskego, Wisconsin Sewer System Revenue Bonds Dated April l, 2002 Debt Service Requirements Interest Rate Interest Amount Total Principal and Interest Depository: The Depository Trust Company New York, New York QBMKE\5705690.1 . EXHIBIT B-1 u.s. TREASURY SECURITIES (State and Local Government Series) For Delivery March 24, 2005 ~ Maturity Date Par Amount (SEE ATTACHED) . . Coupon Rate Cost QBMKE\5705690.1 . . . EXHIBIT C-l AUTHORIZED ISSUANCE EXPENSES Escrow Agent, Associated Trust Company, National Association, Green Bay, Wisconsin Escrow Verification, McGladrey & Pullen LLP, Minneapolis, Wisconsin Legal Opinion, Quarles & Brady LLP, Milwaukee, Wisconsin Rating Fee, Moody's Investors Service Inc., New York, New York Standard & Poor's, New York, New York Financial Advisor, Ehlers & Associates, Inc. Brookfield, Wisconsin Printing, Miscellaneous Total: $ $ QBMKE\5705690.1 . EXHIBIT D-l ESCROW ACCOUNT CASH FLOW (SEE ATTACHED) . . QBMKE\5705690.1 . EXHIBIT E-l NOTICE OF FULL CALL * Regarding CITY OF MUSKEGO W AUKESHA COUNTY, WISCONSIN SEWER SYSTEM REVENUE BONDS DATED MARCH 1, 1996 NOTICE IS HEREBY GIVEN that the Bonds of the above-referenced issue which mature on the dates and in the amounts; bear interest at the rates; and have CUSIP Nos. as set forth below have been called by the City for prior payment at the principal amount thereof plus accrued interest to the date of prepayment on September 1, 2006 at par: Maturity Date Principal Amount Interest Rate CUSIP No. 09/01/07 $ 300,000 4.70% 627653BP2 09/01/08 315,000 4.80 627653BQO 09/01/09 325,000 4.90 627653BR8 09/01/10 340,000 5.00 627653BS6 09/01 /11 355,000 5.10 627653BT4 . 09/01 /12 370,000 5.20 627653BUI 09/01/13 385,000 5.25 627653BV9 09/01/16 1,245,000 5.25 627653BY3 The City's Escrow Agent shall deposit federal or other immediately available funds sufficient for such redemption at the office of The Depository Trust Company on or before September 1, 2006. Said Bonds will cease to bear interest on September 1, 2006. By Order of the Common Council City of Muskego City Clerk Dated * To be provided by registered or certified mail to The Depository Trust Company, Attn: Supervisor, Call Notification Department, 55 Water Street, 50th Floor, New York, NY 10041-0099, not less than thirty (30) days prior to September I, 2006. Notice shall also be provided to Financial Security Assurance Inc., New York, New York, the bond insurer of the Bonds. . CBMKE\ '7 .IC ,C)O . . . . EXHIBIT E-2 NOTICE OF FULL CALL * Regarding CITY OF MUSKEGO W AUKESHA COUNTY, WISCONSIN SEWER SYSTEM REVENUE BONDS DATED FEBRUARY I, 1998 NOTICE IS HEREBY GIVEN that the Bonds of the above-referenced issue which mature on the dates and in the amounts; bear interest at the rates; and have CUSIP Nos. as set forth below have been called by the City for prior payment at the principal amount thereof plus accrued interest to the date of prepayment on September I, 2005 at par: Maturity Date Principal Amount Interest Rate CUSIP No. 09/01/06 $100,000 4.40% 627653CG I 09/0 I /07 100,000 4.40 627653CH9 09/01/08 100,000 4.45 627653CJ5 09/01109 100,000 4.55 627653CK2 The City's Escrow Agent shall deposit federal or other immediately available funds sufficient for such redemption at the office of The Depository Trust Company on or before September 1,2005. Said Bonds will cease to bear interest on September 1,2005. By Order of the Common Council City of Muskego City Clerk Dated * To be provided by registered or certified mail to The Depository Trust Company, Attn: Supervisor, Call Notification Department, 55 Water Street, 50th Floor, New York, NY 10041-0099, not less than thirty (30) days prior to September 1,2005. CBMKE\5705690.1 . EXHIBIT E-3 NOTICE OF FULL CALL * Regarding CITY OF MUSKEGO W AUKESHA COUNTY, WISCONSIN SEWER SYSTEM REVENUE BONDS DATED JANUARY 1,2000 NOTICE IS HEREBY GIVEN that the Bonds of the above-referenced issue which mature on the dates and in the amounts; bear interest at the rates; and have CUSIP Nos. as set forth below have been called by the City for prior payment at the principal amount thereof plus accrued interest to the date of prepayment on September I, 2009 at par: Maturity Date Principal Amount Interest Rate CUSIP No. 09/01/1 0 $150,000 5.25% 627653CV8 09/01 /11 150,000 5.30 627653CW6 09/01/12 150,000 5.35 627653CX4 09/01113 150,000 5.45 627653CY2 09/01/14 150,000 5.45 627653CZ9 . 09/01/15 150,000 5.55 627653DA3 09/01/16 150,000 5.65 627653DBI 09/01/17 100,000 5.75 627653DC9 The City's Escrow Agent shall deposit federal or other immediately available funds sufficient for such redemption at the office of The Depository Trust Company on or before September 1,2009. Said Bonds will cease to bear interest on September I, 2009. By Order of the Common Council City of Muskego City Clerk Dated * To be provided by registered or certified mail to The Depository Trust Company, Attn: Supervisor, Call Notification Department, 55 Water Street, 50th floor, New York, NY 1004 I -0099, not less than thirty (30) days prior to September I, 2009. Notice shall also be provided to MBIA Insurance Corporation, Armonk, New York, the bond insurer of the Bonds. . JBMKE' 5705690.1 . EXHIBIT E-4 NOTICE OF FULL CALL * Regarding CITY OF MUSKEGO WAUKESHA COUNTY, WISCONSIN SEWER SYSTEM REVENUE BONDS DATED APRIL 1,2002 NOTICE IS HEREBY GIVEN that the Bonds ofthe above-referenced issue which mature on the dates and in the amounts; bear interest at the rates; and have CUSIP Nos. as set forth below have been called by the City for prior payment at the principal amount thereof plus accrued interest to the date of prepayment on September 1, 2010 at par: Maturity Date Principal Amount Interest Rate CUSIP No. 09/01/11 $135,000 4.50 % 627653DL9 09/01/12 140,000 4.60 627653DM7 09/01/13 145,000 4.70 627653DN5 09/01/14 150,000 4.80 627653DPO 09/01/15 155,000 4.90 627653DQ8 . 09/01/16 160,000 5.00 627653DR6 09/01/17 175,000 5.00 627653DS4 09/01/18 185,000 5.125 627653DT2 09/01/19 200,000 5.125 627653DU9 The City's Escrow Agent shall deposit federal or other immediately available funds sufficient for such redemption at the office of The Depository Trust Company on or before September 1,2010. Said Bonds will cease to bear interest on September 1, 20 I O. By Order of the Common Council City of Muskego City Clerk Dated * To be provided by registered or certified mail to The Depository Trust Company, Attn: Supervisor, Call Notification Department, 55 Water Street, 50th Floor, New York, NY 1004 I -0099, not Jess than thirty (30) days prior to September 1,2010. Notice shall also be provided to Financial Security Assurance Inc., New York, New York, the bond insurer of the Bonds. . QBMKE\5705690.1 . EXHIBIT F -1 ' NOTICE OF ADVANCE REFUNDING AND REDEMPTION OF THE SEWER SYSTEM REVENUE BONDS, DATED MARCH 1, 1996 OF THE CITY OF MUSKEGO, WISCONSIN (THE "BONDS") Notice is given that the Bonds described below (the "Refunded Obligations")" of the City of Muskego, Wisconsin (the "City") have been advance refunded by the City pursuant to an Escrow Agreement dated the 24th day of March, 2005 between the City and Associated Trust Company, National Association, Green Bay, Wisconsin (the "Escrow Agent"). Maturity Date Principal Amount Interest Rate CUSIP No. 09/01/05 $ 270,000 4.60% 627653BM9*** 09/01/06 285,000 4.60 627653BN7*** 09/0 I /07 300,000 4.70 627653BP2*** 09/0 I /08 315,000 4.80 627653BQO*** 09/0 1/09 325,000 4.90 627653BR8*** 09/01110 340,000 5.00 627653BS6*** 09/01/11 355,000 5.10 627653BT4*** 09/01/12 370,000 5.20 627653BUI *** 09/01/13 385,000 5.25 627653BV9*** . 09/01/16 1,245,000 5.25 627653BY3*** ***Indicates refunding of full CUSIP. The City has instructed the Escrow Agent to call the Refunded Obligations maturing on September 1, 2007 and thereafter for redemption on September 1, 2006. The City has irrevocably deposited United States government securities and cash 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 Refunded Obligations up to and including September I, 2006 and to redeem the Refunded Obligations maturing on or after September I, 2007 at a price of par plus accrued interest to September I, 2006. Interest on the Refunded Obligations will cease to accrue on September I, 2006. Dated: ,2005. Associated Trust Company, National Association as Escrow Agent , As soon as practicable after the closing for the Refunding Obligations, notice shall be provided to the registered owners of the Refunded Obligations, to any fiscal agent for the Refunded Obligations and to nationally recognized municipal securities information repositories (NRMSIRs), the MSRB and to The Depository Trust Company and any other depositories. Notice shall also be provided to financial Security Assurance Inc., New York, New York, the bond insurer of the Bonds. . .. If the Refunded Obligations are subject to the continuing disclosure requirements ofSEC Rule 15c2-12 effective July 3, 1995, this Notice should be filed with the MSRB using Material Events Notice Cover Sheet available at http://www.msrb.org/msrbl/cdilpdfi.Generic Cover Sheet and Instructions.pdf ~BMKE\5705690.1 . . . EXHIBIT F-2' NOTICE OF ADVANCE REFUNDING AND REDEMPTION OF THE SEWER SYSTEM REVENUE BONDS, DATED FEBRUARY 1, 1998 OF THE CITY OF MUSKEGO, WISCONSIN (THE "BONDS") Notice is given that the Bonds described below (the "Refunded Obligations")"' of the City of Muske go, Wisconsin (the "City") have been advance refunded by the City pursuant to an Escrow Agreement dated the 24th day of March, 2005 between the City and Associated Trust Company, National Association, Green Bay, Wisconsin (the "Escrow Agent"). Maturity Date 09/01/05 09/01/06 09/01/07 09/01/08 09/01/09 Principal Amount Interest Rate 4.40% 4.40 4.40 4.45 4.55 CUSIP No. 627653CF3*** 627653CG1 *** 627653CH9*** 627653CJ5*** 627653CK2*** $100,000 100,000 100,000 100,000 100,000 ***Indicates refunding of full CUSIP. The City has instructed the Escrow Agent to call the Refunded Obligations maturing on September 1, 2006 and thereafter for redemption on September 1, 2005. The City has irrevocably deposited United States government securities and cash 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 Refunded Obligations up to and including September 1, 2005 and to redeem the Refunded Obligations maturing on or after September I, 2006 at a price of par plus accrued interest to September I, 2005. Interest on the Refunded Obligations will cease to accrue on September 1,2005. . Dated: ,2005. Associated Trust Company, National Association as Escrow Agent . As soon as practicable after the closing for the Refunding Obligations, notice shall be provided to the registered owners of the Refunded Obligations, to any fiscal agent for the Refunded Obligations and to nationally recognized municipal securities information repositories (NRMSIRs), the MSRB and to The Depository Trust Company and any other. depositories. . .. If the Refunded Obligations are subject to the continuing disclosure requirements ofSEC Rule 15c2-12 effective July 3, 1995, this Notice should be filed with the MSRB using Material Events Notice Cover Sheet available at http://www.msrb.org/msrbl/cdi/pdfì.Generic Cover Sheet and Instructions.pdf QBMKE\5705690.1 . EXHffiIT F-3' NOTICE OF ADVANCE REFUNDING AND REDEMPTION OF THE SEWER SYSTEM REVENUE BONDS, DATED JANUARY 1, 2000 OF THE CITY OF MUSKEGO, WISCONSIN (THE "BONDS") Notice is given that the Bonds described below (the "Refunded Obligations")" of the City of Muske go, Wisconsin (the "City") have been advance refunded by the City pursuant to an Escrow Agreement dated the 24th day of March, 2005 between the City and Assocjated Trust Company, National Association, Green Bay, Wisconsin (the "Escrow Agent"). Maturity Date Principal Amount Interest Rate CUSIP No. 09/01/05 $115,000 5.00% 62763 5CQ9* * * 09/01/06 125,000 5.05 627635CR7*** 09/01/07 125,000 5.10 627635CS5*** 09/01/08 150,000 5.15 627635CT3*** 09/01/09 150,000 5.20 627635CUO*** 09/01/10 150,000 5.25 627653CY8*** 09/01111 150,000 5.30 627653CW6*** 09/01/12 150,000 5.35 627653CX4*** 09/01113 150,000 5.45 627653CY2*** . 09/01114 150,000 5.45 627653CZ9*** 09/01115 150,000 5.55 627653DA3*** 09/01/16 150,000 5.65 627653DB1 *** 09/01/17 100,000 5.75 627653DC9*** ***Indicates refunding of full CUSIP. The City has instructed the Escrow Agent to call the Refunded Obligations maturing on September I, 2010 and thereafter for redemption on September I, 2009. The City has irrevocably deposited United States government securities and cash 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 Refunded Obligations up to and including September 1, 2009 and to redeem the Refunded Obligations maturing on or after September I, 20 I 0 at a price of par plus accrued interest to September 1,2009. Interest on the Refunded Obligations will cease to accrue on September I, 2009. Dated: ,2005. Associated Trust Company, National Association as Escrow Agent , As soon as practicable after the closing for the Refunding Obligations, notice shall be provided to the registered owners of the Refunded Obligations, to any fiscal agent for the Refunded Obligations and to nationally recognized municipal securities information repositories (NRMSIRs), the MSRB and to The Depository Trust Company and any other depositories. Notice shall also be provided to MBIA Insurance Corporation, Armonk, New York, the bond insurer of the Bonds. . .. If the Refunded Obligations are subject to the continuing disclosure requirements ofSEC Rule 15c2-12 effective July 3, 1995, this Notice should be filed with the MSRB using Material Events Notice Cover Sheet available at http://www.msrb.org/msrbl/cdilpdfì.Generic Cover Sheet and Instructions.pdf (~3MKE\:.705690.1 . EXHIBIT F-4' NOTICE OF ADVANCE REFUNDING AND REDEMPTION OF THE SEWER SYSTEM REVENUE BONDS, DATED APRIL L 2002 OF THE CITY OF MUSKEGO, WISCONSIN (THE "BONDS") Notice is given that the Bonds described below (the "Refunded Obligations")" of the City of Muskego, Wisconsin (the "City") have been advance refunded by the City pursuant to an Escrow Agreement dated the 24th day of March, 2005 between the City and Associated Trust Company, National Association, Green Bay, Wisconsin (the "Escrow Agent"). Maturity Date Principal Amount Interest Rate CUSIP No. 09/01/05 $105,000 4.00 % 627653DE5*** 09/01/06 110,000 4.00 627653DF2*** 09/01/07 115,000 4.25 627653DGO*** 09/01/08 120,000 4.25 627653DH8*** 09/01/09 125,000 4.40 627653DJ4*** 09/01/10 130,000 4.50 627653DKI *** 09/01/11 135,000 4.50 627653DL9*** 09/01/12 140,000 4.60 627653DM7*** 09/01/13 145,000 4.70 627653DN5*** 09/01/14 150,000 4.80 627653DPO*** . 09/01/15 155,000 4.90 627653DQ8*** 09/01/16 160,000 5.00 627653DR6*** 09/01/17 175,000 5.00 627653DS4*** 09/01/18 185,000 5.125 627653DT2*** 09/01/19 200,000 5.125 627653DU9*** ***Indicates refunding of full CUSIP. The City has instructed the Escrow Agent to call the Refunded Obligations maturing on September I, 20 II and thereafter for redemption on September 1,2010. The City has irrevocably deposited United States government securities and cash 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 Refunded Obligations up to and including September I, 20 I 0 and to redeem the Refunded Obligations maturing on or after September I, 20 I I at a price of par plus accrued interest to September I, 20 I O. Interest on the Refunded Obligations will cease to accrue on September 1,2010. Dated: ,2005. Associated Trust Company, National Association as Escrow Agent . . As soon as practicable after the closing for the Refunding Obligations, notice shall be provided to the registered owners of the Refunded Obligations, to any fiscal agent for the Refunded Obligations and to nationally recognized municipal securities information repositories (NRMSIRs), the MSRB and to The Depository Trust Company and any other depositories. Notice shall also be provided to Financial Security Assurance Inc., New York, New York, the bond insurer of the Bonds. ** If the Refunded Obligations are subject to the continuing disclosure requirements ofSEC Rule 15c2-12 effective July 3, 1995, this Notice should be filed with the MSRB using Material Events Notice Cover Sheet available at http://www.msrb.org/msrbl /cdilpdflGeneric ~ Cover - Sheet_and_Instructions.pdf '!BMKE' 57C", ,': J. . . . W/ ' ß' (Sewer System Revenue Refunding Bonds, Series 2005) Excerpts of Minutes of Open Meeting of the Cornmon Council of the City of Muskego A duly-convened meeting of the Cornmon Council of the City of Muskego, Waukesha County, Wisconsin, was held in open session on March 8, 2005 and called to order at 8:37 P.M., Central Time. The following Alderpersons were present: Patterson, Buckmaster, Borgman, Salentine, Melcher, Schroeder and Madden The following Alderpersons were absent: None The Mayor opened the meeting by announcing that this was an open meeting of the Cornmon Council. Notice of this meeting was given to the public at least 24 hours in advance of the meeting by forwarding the complete agenda to the official City newspaper, the Muskego 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. (Here occurred matters not pertinent to the revenue bond issue. ) QBMKE\5705681.1