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(b) the purpose of the bonds as approved by the voters is to provide financing for the construction of traffic signals and other improvements to the intersection of Main Street and Lake Drive and the intersection of Birch Street and Ware Road in the City (the "Interchange Improvements "): (c) the City is also authorized by Minnesota Statutes, Chapter 475 (the "Act ") and section 475.67, subdivision 3, of the Act to issue and sell its general obligation bonds to refund obligations and the interest thereon before the due date of the obligations, if consistent with covenants made with the holders thereof, when determined by the City Council to be necessary or desirable for the reduction of debt service cost to the City or for the extension or adjustment of.maturities in relation to the resources available for their payment; (c) Section 475.67, subdivision 4 of the Act permits the sale of refunding obligations during the six month period prior to the date on which the obligations to be refunded may be called for redemption; (d) the outstanding bonds to be refunded (the "Refunded Bonds ") consist of the $2,090,000 General Obligation Improvement and Refunding Bonds, Series 2003A, dated December 1, 2003, of which $425,000 in principal amount is currently outstanding and is callable on February 1, 2013. (e) it is necessary and expedient to the sound financial management of the affairs of the City to issue $2,030,000 General Obligation Bonds, Series 2012A (the "Bonds ") to (a) provide financing for the Interchange Improvements; and (b) effect a current refunding of the Refunded Bonds, summarized as follows Construction Fund (Interchange Improvements) Redemption of Refunded Bonds Underwriters Discount Allowance Costs of Issuance Capitalized Interest Rounding Amount Total $1,51.9,000.00 425,000.Q0 16,240.00 41,225.00 27,286.33 1,248.67 $2,030,000.00 2. To provide financing for the above purposes, the City will therefore issue and sell its Bonds in the approximate amount of $2,030,000. To provide in part the additional interest required to market the Bonds at this time, additional Bonds will be issued in the amount of $2,013,760. The excess of the purchase price of the Bonds over the sum of $16,240 will be credited to the debt service fund for the Bonds for the purpose of paying interest first coming due on the additional Bonds, unless otherwise provided in the resolution awarding sale of the Bonds. The amounts cited above are subject to adjustment in accordance with the Terms of Proposal. 410213v1 SJB LN140 -108 2 •