ESCROW AGREEMENT. (a) $4,208, to purchase an equivalent principal amount of federal securities as identified in Exhibit A attached hereto;

Transcription

1 ESCROW AGREEMENT THIS ESCROW AGREEMENT, made and entered into by and between the Plainview Elgin Sanitary District, Minnesota (the "Issuer"), and Northland Trust Services, Inc., in Minneapolis, Minnesota (the "Agent"); WITNESSETH, that the parties hereto recite and, in consideration of the mutual covenants and payments referred to and contained herein, covenant and agree as follows: 1. The Issuer has duly issued and presently has outstanding an issue of General Obligation Sewer Revenue Bonds, Series 2006A, originally issued in the aggregate principal amount of $5,770,000 (the "Series 2006A Bonds") and has issued its $4,215,000 General Obligation Sewer Revenue Crossover Refunding Bonds, Series 20 12A, dated as of April 1, 2012 (the "Refunding Bonds"), to refund on March 1,2015 (the "Crossover Date") those outstanding Series 2006A Bonds maturing in the years 2016 through 2027 (the "Refunded Bonds"). 2. The Issuer has also, in accordance with a resolution adopted March 21, 2012 (the "Resolution"), simultaneously with the execution of this Agreement, transmitted Refunding Bond proceeds in the amount of $4,227,644.20, plus $4, representing accrued interest from April 1, 2012 to the date hereof, to the Agent to be used as follows: (a) $4,208, to purchase an equivalent principal amount of federal securities as identified in Exhibit A attached hereto; (b) $0.15 to be deposited as a beginning cash balance in the Escrow Account hereinafter established; (c) $21, to pay issuance expenses of the Refunding Bonds; and (d) $2, to be deposited in the Bond Fund described in the resolution authorizing issuance of the Refunding Bonds. In the opinion of Grant Thornton LLP, independent, nationally recognized certified public accountants (the "Accountants"), the federal securities designated in paragraph (a) mature at such times and bear interest at such rates that the collections of principal and interest thereon, together with the initial cash balance designated in paragraph (b), will produce amounts shown on Exhibit B attached hereto sufficient to pay (i) the interest due on the Refunding Bonds to and including the Crossover Date and (ii) the principal amount of the Refunded Bonds on the Crossover Date. 3. The Agent agrees to apply the funds received from the Issuer in the manner and for the purposes set forth in Section 2 hereof and in this Section. The Agent acknowledges purchase and receipt of the cash and federal securities described in Section 2 and agrees that it will hold such cash and federal securities in a special escrow account (the "Escrow Account") in the name of the Issuer, and will collect and receive on behalf of the Issuer all payments of principal and

2 interest on such federal securities and will remit from the Escrow Account, as the paying agent for the Refunded Bonds, the money required from time to time for payment of principal of, redemption price and interest thereon as shown in Exhibit B. The Agent will, not less than 30 days prior to the Crossover Date, cause the Notice of Redemption relating to the Refunded Bonds attached hereto as Exhibit C, to be mailed to the holders of all Refunded Bonds to be redeemed on the Crossover Date. 4. In order to ensure continuing compliance with the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations (the "Regulations") promulgated thereunder, the Agent agrees that it will not reinvest any cash received in payment of the principal of and interest on the federal securities held in the Escrow Account. Said prohibition on reinvestment shall continue unless and until an opinion is received from nationally recognized bond counsel that reinvestments in general obligations of the United States or obligations the principal of and interest on which are guaranteed as to payment by the United States, as specified in said opinion, may be made in a manner consistent with the Code then existing Regulations. The federal securities described in Exhibit A hereto may, at the written direction of the Issuer, be replaced, in whole or in part, with general obligations of the United States or obligations the principal of and interest on which are guaranteed as to payment by the United States and which mature as to principal and interest in such amounts and at such times as will assure the availability of sufficient moneys to make payment when due of the interest on the Refunding Bonds to and including the Crossover Date, to the extent described in Section 2 hereof, and will be sufficient to pay the principal amount of the Refunded Bonds called for redemption on the Crossover Date, provided, however, that concurrently with such written direction, the Issuer shall provide the Agent with (a) a certification of an independent certified public accountant as to the sufficiency of the federal securities to be subject to this Agreement following such replacement and as to the yields thereof, setting forth in reasonable detail the calculations underlying such certification, (b) an unqualified opinion of nationally recognized bond counsel to the effect that such replacement (1) will not cause the Refunded Bonds or the Refunding Bonds to be subjected to treatment as "arbitrage bonds," under Section 148 of the Code, and (2) is otherwise in compliance with this Agreement. Any replacement authorized by this paragraph 4 shall be accomplished by sale, transfer, request for redemption or other disposition of all or a portion of the federal securities described in Exhibit A hereto with the proceeds thereof being applied to the purchase of substitute federal securities, all as specified in the written direction of the Issuer. 5. The Agent acknowledges that arrangements satisfactory to it for payment of its compensation for all services to be performed by it as Agent under this Agreement have been made. The Agent expressly waives any lien upon or claim against the moneys and investments in the Escrow Account. 6. If at any time it shall appear to the Agent that the money in the Escrow Account will not be sufficient to make any payment due to the registered owners of any of the Refunding Bonds or Refunded Bonds as described in Section 2 hereof, the Agent shall immediately notify the Issuer. Upon receipt of such notice the Issuer shall forthwith transmit to the Agent for deposit in the Escrow Account from moneys on hand and legally available therefor, such 2

3 additional moneys as may be required to make any such payment, and the Issuer recognizes its obligation to levy ad valorem taxes on all taxable property in the Issuer to the extent permitted by Minnesota law to produce the moneys necessary for this purpose. 7. Within 60 days following the close of each fiscal year of the Issuer and the close of the Escrow Account, the Agent shall submit to the Issuer a report covering all money it shall have received and all payments it shall have made or caused to be made hereunder during the preceding fiscal year or portion thereof. 8. It is recognized that title to the federal securities and money held in the Escrow Account from time to time shall remain vested in the Issuer but subject always to the prior charge and lien thereon of this Agreement and the use thereof required to be made by the provisions of this Agreement. The Agent shall hold all such money and obligations in a special trust fund and account separate and wholly segregated from all other funds and securities of the Agent or deposited therein. It is understood and agreed that the responsibility of the Agent under this Agreement is limited to the safekeeping and segregation of the moneys and securities deposited with it in the Escrow Account, and the collection of and accounting for the principal and interest payable with respect thereto. 9. This Agreement is made by the Issuer for the benefit of the holders of the Refunding Bonds and the Refunded Bonds, as their interests may appear, and is not revocable by the Issuer, 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 Bonds prior to and including the Crossover Date and the payment and redemption of the Refunded Bonds on the Crossover Date, in accordance with this Agreement. This Agreement may not be amended except to (i) sever any clause herein deemed to be illegal, (ii) provide for the reinvestment of funds or the substitution of securities as permitted by Section 4 hereof or (iii) cure any ambiguity or correct or supplement any provision herein which may be inconsistent with any other provision, provided that the Agent shall determine that any such amendment shall not adversely affect the owners of the Refunding Bonds or Refunded Bonds. In the event an amendment to this Agreement is proposed to be made pursuant to this Section 9, prior notice shall be given by first class mail, postage prepaid, to the following organization at the following address (or such other address as may be provided by the addressee) and shall be deemed effective upon receipt: Moody's Municipal Rating DesklRefunded Bonds, 7 World Trade Center Greenwich Street, New York, New York This Agreement shall be binding upon and shall inure to the benefit of the Issuer and the Agent and their respective successors and assigns. In addition, this Agreement shall constitute a third party beneficiary contract for the benefit of the registered owners of the Refunding Bonds and the Refunded Bonds, as their interests may appear. Said third party beneficiaries shall be entitled to enforce performance and observance by the Issuer and the Agent of the respective agreements and covenants herein contained as fully and completely as if said third party beneficiaries were parties hereto. 11. Upon merger or consolidation of the Agent, if the resulting corporation is a bank or trust company authorized by law to conduct such business, such corporation shall be authorized to act as successor Agent. Upon the resignation of the Agent, which shall be communicated in 3

4 writing to the Issuer, or in the event the Agent becomes incapable of acting hereunder, the Issuer reserves the power to appoint a successor Agent. No resignation shall become effective until a successor agent has been appointed. [Remainder of page intentionally left blank.] 4

5 IN WITNESS WHEREOF the parties hereto have caused this instrument to be duly executed by their duly authorized officers on April 19, PLAINVIEW-ELGIN SANITARY DISTRICT, MINNESOTA And fq.( LeUU Cf'!l SbM Secretary I Treasurer " [Signature Page to Escrow Agreement dated April 19, 2012] 5

6 NORTHLAND TRUST SERVICES, INC., as Agent By~~~~~~ -++- Its Chief Operating Offic [Signature Page to Escrow Agreement dated April 19, 2012] 6

7 EXHIBIT A PO F Department of the Treasury Bureau of the Public Debt (Revised July 1999) Final STATE AND LOCAL GOVERNMENT SERIES TIME DEPOSIT OMB No The United States Treasury Securities - State and Local Governement Series subscribed for on PO F 4144 and account information furnished on PO F to which this schedule is attached and incorporated, are requested to be issued and held in book-entry accounts on the books of the Department of the Treasury. PRINCIPAL INTEREST ISSUE MATURITY FIRST INTEREST* AMOUNT RATE DATE DATE PAYMENT DATE (MMDDYV) (MMDOYV) (MMDDYV) 70, % 4/19/2012 3/01/ , % 4/19/2012 9/01/2013 3/01/ , % 4/19/2012 3/01/2014 3/01/ , % 4/19/2012 9/01/2014 3/01/2013 4,023, % 4/19/2012 3/01/2015 3/01/ *A first Interest payment date must be specified for Interest bearing secuntles with a maturity date greater than one year. Taxpayer Identification Number: Name of State or Local Government Body: A-I

8 Final EXHIBITB Plainview - Elgin Sanitary District, Minnesota G.O. Sewer Revenue Crossover Refunding Bonds, Series 2012A 2006A Crossover Escrow Fund Cashflow Date Principal Rate Interest Receipts 04/19/ /01/ , % 13, , /01/ , % 7, , /01/ , % 7, , /01/ , % 7, , / ,023, % 7, ,030, Total $ $ $ Investment Parameters Investment Model [PV, GIC, or Securities] Default investment yield target Disbursements 83, , , , ,030, $4.251, Cash Balance Securities Bond Yield Cash Deposit Cost of Investments Purchased with Bond Proceeds Total Cost of Investments Target Cost of Investments at bond yield Adual positive or (negative) arbitrage Yield to Receipt Yield for Arbitrage Purposes State and Local Government Series (SLGS) rates for ,208, $4,208, $4,018, (189,767.60) % % 3/06/ ref I SINGLE PURPOSE I I 2:57 PM C-l f\ll'\rthl~nrf ~o""lritio~

9 EXHIBIT C NOTICE OF REDEMPTION $5,770,000 General Obligation Sewer Revenue Bonds, Series 2006A Dated as of July 1,2006 Plainview-Elgin Sanitary District, Minnesota Notice is hereby given that all Bonds of the above issue which mature on March 1 in the following years and amounts: Maturi!y Amount Rate CUSIP Maturi!y Amount Rate CUSIP 2016* $265, % 72663R AJ6 2022* $655, % 72663R AP2 2017* 275, R AK3 2023* 350, R AQO 2018* 285, R ALI 2024* 365, R AR8 2019* 295, R AM9 2026* 775, R AS6 2020* 310, R AN7 2027* 410, R AT4 *Indicates full call. are called for redemption and prepayment on March 1,2015. The Bonds will be redeemed at a price of 100% of their principal amount plus accrued interest to the date of redemption. Holders of such Bonds should present them for payment on or before said date, on which date they will cease to bear interest. A form W-9, Payer's Request for Taxpayer Identification Number, must be completed and returned with the called bond or 31 % of the bond redemption proceeds will be withheld. Payment of bonds to be redeemed will be made on and after March 1, 2015, by submitting said bond along with the completed form W-9 to Northland Trust Services, Inc., Minneapolis, Minnesota, at the following address: NORTHLAND TRUST SERVICES, INC. 45 SOUTH 7 TH STREET, SUITE 2000 MINNEAPOLIS, MINNESOTA If you request payment of principal and/or interest via wire transfer, please be advised there is a wire transfer fee which will be deducted from your payment. Dated: March 21, NORTHLAND TRUST SERVICES, INC. C-2