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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/06/2007 - ITEMS RELATING TO THE ISSUANCE OF CITY OF FORT COL ITEM NUMBER: 19 A-B AGENDA ITEM SUMMARY DATE: February 6, 2007 FORT COLLINS CITY COUNCIL STAFF: Chuck Seest Chip Steiner SUBJECT Items Relating to the Issuance of City of Fort Collins Downtown Development Authority Subordinate Tax Increment Revenue Bonds, Series 2007A. RECOMMENDATION The DDA Board of Directors and staff recommend adoption of the Ordinances on Second Reading. EXECUTIVE SUMMARY A. Second Reading of Ordinance No. 016, 2007, Authorizing the Issuance of City of Fort Collins,Colorado,Downtown Development Authority Taxable Subordinate Tax Increment Revenue Bonds, Series 2007A, Dated Their Delivery Date, in the Maximum Aggregate Principal Amount of$5,700,000 for the Purpose ofFinancing Certain Capital Improvements, Capital Projects and Development Projects Within the Downtown Development Authority Area;and Providing for the Pledge of Certain Incremental Ad Valorem Tax Revenues to Pay the Principal of and Interest on the Bonds;Approving Documents in Connection Therewith; and Ratifying Action Previously Taken and Appertaining Thereto. B. Second Reading of Ordinance No. 017, 2007,Appropriating Proceeds from the Issuance of City of Fort Collins,Colorado,Downtown Development Authority Taxable Subordinate Tax Increment Revenue Bonds, Series 2007A, for the Purpose of Making Certain Capital Improvements, Capital Projects and Development Projects Within the Downtown Area of Fort Collins,Authorizing the Transfer of Appropriations Between Funds and Appropriating Expenditures from the DDA Debt Service Fund to Make the 2007 Payment on the Bonds The City of Fort Collins created the DDA to make desired improvements in the downtown area. Through tax increment financing,the DDA has made significant contributions to the redevelopment and improvement of the downtown area. These two Ordinances, unanimously adopted on First Reading on January 16,2007,contemplate additional improvements and initiate both a facade grant program and a cultural program in the downtown area. The first ordinance issues short term bonds for the projects which will be paid from the tax increment revenue. The second ordinance appropriates the bond proceeds to the DDA Operating Fund for the various projects. The total of the projects, programs and associated interest costs is $5,700,000. February 6, 2007 -2- Item No. 19 A-B Between First and Second Reading,Bond Counsel added the per annum interest rates,found on page 9 of Ordinance No. 016, 2007. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary- January 16, 2007. ATTACHMENT ITEM NUMBER: 29 A-B AGENDA ITEM SUMMARY DATE: January 16, 2007 FORT COLLINS C nLp-VFF: Chuck Seest Chip Steiner � a SUBJECT Items Relating to the Issuance of City of Fort Collins Downtown Development Authority Subordinate Tax Increment Revenue Bonds, Series 2007A. RECOMMENDATION The DDA Board of Directors and staff recommend adoption of the Ordinances on First Reading. FINANCIAL IMPACT At the end of 2006, the Downt n De me Arority D t Service Fund held$1,418,359 of unreserved fund balance. By the of 2 the unreserve d balance is projected to grow to between$16 million and$18 million. The Fort Collins Downtown Development Authority Board (the "Board") and City staff recommend using a portion of the unreserved fund balance and tax increment over the next five years to make capital improvements in the downtown area consistent with the mission of the Fort Collins Downtown Development Authority("DDA"). Over the ensuing years,the projects receiving the benefit through the capital improvements will repay the value of the projects through increased tax increment. In addition to the capital improvements, a portion of the bond proceeds will also be used to fund a fagade grant program and the Beet Street Cultural Program ("Beet Street'). Beet Street is intended to become an economic engine to generate significant commerce within the downtown area. The DDA debt service fund is projected to have sufficient revenue to meet all required debt service payments and reserve requirements for 2007 through 2011. r EXECUTIVE SUMMARY A. First Reading of Ordinance No. 016,2007,Authorizing the Issuance of City of Fort Collins, Colorado,Downtown Development Authority Taxable Subordinate Tax Increment Revenue Bonds, Series 2007A, Dated Their Delivery Date, in the Maximum Aggregate Principal Amount of$5,700,000 for the Purpose of Financing Certain Capital Improvements,Capital Projects and Development Projects Within the Downtown Development Authority Area;and Providing for the Pledge of Certain Incremental Ad Valorem Tax Revenues to Pay the January 16, 2007 -2. Item No. 29 A-B Principal of and Interest on the Bonds;Approving Documents in Connection Therewith;and Ratifying Action Previously Taken and Appertaining Thereto. B. First Reading of Ordinance No.017,2007,Appropriating Proceeds from the Issuance of City of Fort Collins, Colorrjran n e A rity Taxable Subordinate Tax Increment Revenue B s 20 fo he ose of Making Certain Capital Improvements, Capital d De 1 ent Pro cts Within the Downtown Area of Fort Collins,Authorizi A priati etween Funds and Appropriating Expenditures from the DDA Debt Service Fund to Make the 2007 Payment on the Bonds The City of Fort Collins created the DDA to make desired improvements in the downtown area. Through tax increment financing,the DDA has made significant contributions to the redevelopment and improvement of the downtown area. These two Ordinances contemplate additional improvements and initiate both a fagade grant program and a cultural program in the downtown area. The first ordinance issues short term bonds for the projects which will be paid from the tax increment revenue. The second ordinance appropriates the bond proceeds to the DDA Operating Fund for the various projects. The total of the projects, programs and associated interest costs is $5,700,000. Project, Program and Administ ti a(r,y Projects Bas Bleu Performing Arts Theater $ 250,000 Sears Trostel Building Renovation (CTL/Thompson) 175,000 252 East Mountain Avenue (Otter Industries) 290,000 Penny Flats Phase 1 Downtown Housing 547,085 Community Amphitheater 1,300,000 Downtown Hotel 500,000 Other Projects already approved by the DDA Board Including Tailgate Tommy's, Downtown Ice Rink, etc. 356,096 Miscellaneous Projects pending DDA Board Approval 800,000 Total Projects $4,218,181 Programs Fagade Grant Program $ 500,000 Beet Street Cultural Pr Cam., 0 P Y 737.753 Total Programs $1,237,753 Administrative Expenses $ 244,066 Total Project, Program and Administrative Costs January 16, 2007 -3- Item No. 29 A-B BACKGROUND A summary for each project and two Ptheexce . d w. All the projects listed for funding through this bond iss ave i r be d pending approval by the Board. All approvals by the Board ar ontinge upon icil propriation of the necessary funds to fulfill the DDA's commitme p - c 'on of those projects that are purely public in nature,no DDA expenditures are to be made until projects are completed and have received certificates of occupancy from the City. 1. Bas Bleu Performing Arts Theater. $250,000 commitment toward facade and ROW improvements. Bas Bleu has been redeveloping its property on Willow Street into a performing arts theater. It intends to renovate the exterior of the building and the DDA committed up to $250,000 toward that renovation contingent upon Bas Bleu raising the balance necessary to complete the project. 2. Sears Trostel Building Renovation (CTL/Thompson Engineering). $175,000 for facade and ROW improvements. The Old Sears Trostel Building is being completely redevelopedr c a y pso ,an engineering firm that bought the building earlier thi comp to ect add 26 jobs to downtown. DDA investment is for farad wor 3. 252 East Mountain Avenue (Otter Industries). $290,000 for facade and ROW improvements. 252 East Mountain was purchased by Otter Industries which will invest around$4 million in a complete renovation of the building. The project retains jobs in the central business district. 4. Penny Flats Phase 1 Downtown Housing. $547,085 for facade and ROW improvements. The project is scheduled to break ground in December. This project will be built in four phases with DDA commitments made to three of those phases. Funds in this bond issue are for the first phase only. Subsequent investments by the DDA will be made only upon the completion of additional phases. 5. Community Amphith ther. $1.3 million. Subject 0apoval plans to begin work on a community amphitheater this year. Additional funds will be necessary to complete the project. 6. Downtown Hotel. $500,000 to begin the planning, feasibility, and design work for a new downtown hotel. January 16, 2007 -4- Item No. 29 A-B 7. Fagade Grant Program. $500,000. Earlier this year the DDA created, subject to the appropriation of funds through a new bond issuance, a Othe ' s ui i g owners who would agree to undertake facade renov ions. o es DA to share the cost of the facade improvement, up to 50 centst not to ceed $50,000, for any one facade. The Authority has ma against 's program: 210 South College (currently Vivians) which will get a completely new facade and become Elliot's Mess (a sandwich shop); and 215-217 Jefferson,which is a restoration of the front and rear facades of the building. 8. Beet Street Cultural Program. The total DDA commitment to Beet Street is$3 million. $737,753 (year one)is included in this bond issue. This program proposal has been in the works since 2003. It entails the establishment of 24 week-long themed events loosely modeled on the programs of the Chautauqua Institution in New York. The program is intended to become a significant economic engine for Fort Collins. Programs will be developed to attract both local and national audiences. The Board has approve e i , wo 1 g for Beet Street. The vision and workplan are available r revie at the ebsit ww.downtownfortcollins.ore. SUMMARY The Board has met to review each of these projects as well as the facade grant program and Beet Street. For the reasons indicated above,the Board recommends each project and the two programs for funding through the issuance of subordinate taxable revenue bonds to be repaid with tax increments revenues that will be received in 2007 to 2011. The Board and its staff recommend adoption of the ordinances. City staff also recommends adoption of the ordinances. ATTACHMENTS 1. Background and minutes from the related Board Meetings where each of the above projects and programs were appro ORDINANCE NO. 016, 2007 AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF FORT COLLINS, COLORADO, DOWNTOWN DEVELOPMENT AUTHORITY TAXABLE SUBORDINATE TAX INCREMENT REVENUE BONDS, SERIES 2007A, DATED THEIR DELIVERY DATE, IN THE AGGREGATE PRINCIPAL AMOUNT OF $5,700,000, FOR THE PURPOSE OF FINANCING CERTAIN CAPITAL IMPROVEMENTS, CAPITAL PROJECTS AND DEVELOPMENT PROJECTS WITHIN THE DOWNTOWN DEVELOPMENT AUTHORITY AREA; PROVIDING FOR THE PLEDGE OF CERTAIN INCREMENTAL AD VALOREM TAX REVENUES TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS; APPROVING DOCUMENTS IN CONNECTION THEREWITH; AND RATIFYING ACTION PREVIOUSLY TAKEN AND APPERTAINING THERETO. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO, THAT: Section 1. Definitions and Construction. A. Definitions. In this Ordinance the following terms have the following respective meanings unless the context hereof clearly requires otherwise: (1) Additional Parity Bonds: any Parity Securities issued after the issuance of the Bonds. (2) Authority: the City of Fort Collins, Colorado, Downtown Development Authority. (3) Bond Year: the twelve (12) months commencing on the second day of December of any calendar year and ending on the first day of December of the next succeeding calendar year. (4) Bonds: the City of Fort Collins, Colorado, Downtown Development Authority Taxable Subordinate Tax Increment Revenue Bonds, Series 2007A. (5) Charter: the Home Rule Charter of the City, as amended. (6) City: the City of Fort Collins, Colorado. (7) Commercial Bank: a state or national bank or trust company that is a member of the Federal Deposit Insurance Corporation and of the Federal Reserve System, which has a combined capital and surplus of $25,000,000 or more, and that is located within the United States of America. (8) Cost of the Project: all or any part of the cost of acquiring, constructing and installing the Project; all surveying, inspection, fiscal, and legal expenses; all costs of issuing the Bonds: any discount on the sale of the Bonds; costs of financial, professional, and other estimates and advice; repayment of any interim loans or interfund borrowings; capitalized interest on the Bonds; contingencies; reserves for payment of the principal of or interest on the Bonds; and all such other costs as may be necessary or incidental to the acquisition, construction and installation of the Project or any part thereof. (9) Council: the governing body of the City. (10) Debt Service Requirements: the principal of, interest on and any premium due in connection with the redemption of the Bonds, any Additional Parity Bonds, any Parity Securities or any other securities payable from the Tax Increment Revenues. (11) Development and Expense Fund: the special fund created in Ordinance No. 142, 1985, of the City, designated therein as the "Development Account" of the "City of Fort Collins, Colorado, Downtown Development Authority Tax Increment Bonds, Bond Fund" and referred to in Section 5A hereof. (12) District: the area described in the Plan of Development and approved by Ordinance No. 46, 1981, of the City, as amended by Ordinance No. 162, 1981, of the City and Ordinance No. 2, 1983, of the City and as has heretofore been or as may hereafter be amended by valid legislative action of the City as may be determined in accordance with the decisions of the appellate courts of the State. (13) Downtown Development Authority Act: part 8 of article 25 of title 31, Colorado Revised Statutes, as amended. (14) Event of Default: one of the events described in Section 10A hereof. (15) Federal Securities: means only direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or ownership interests in any of the foregoing) and which are not callable prior to their scheduled maturities by the issuer thereof(or an ownership interest in any of the foregoing). (16) Financial Officer: the Financial Officer of the City. (17) Fiscal Year: the twelve (12) months commencing on the first day of January of any calendar year and ending on the last day of December of such calendar year or such other twelve-month period as may from time to time be designated by the Council as the fiscal year of the City. (18) Interest Payment Date: the interest payment dates on the Bonds. (19) Investment Earnings: all income derived from the investment of any proceeds of the Bonds deposited in the Development and Expense Fund or investment P earnings on funds on deposit in the Subordinate Bonds Debt Service Account- 2 (20) Investment Letter: the investment letter to be executed by any transferee of the Purchaser, who or which purchases all or any portion of the Bonds in a transaction exempt from the requirements of SEC Rule 15c2-12. (21) Maturity Date: the date for the payment of principal of the Bonds. (22) 1982 Election: the special election held in the City on Tuesday, June 1, 1982. (23) Ordinance: this Ordinance of the City. (24) Outstanding or outstanding: when used with reference to the Bonds or portions thereof as of an articular date means all of the Bonds or portions P YP thereof theretofore and thereupon being authenticated and delivered: (a) Except any Bond or portion thereof canceled by the City or by the Registrar or otherwise on the City's behalf at or before such date; (b) Except any Bond or portion thereof which has been paid or deemed to have been paid pursuant to the provisions hereof; and (c) Except any Bond or portion thereof in lieu of or in substitution for which another Bond shall have been authenticated and delivered by the Town pursuant hereto. (25) Owner: the holder of any bearer instrument or registered owner of any registered instrument. (26) Parity Securities: the outstanding 2004 DDA Bonds and any other bonds, warrants, notes, securities, leases or other contracts evidencing borrowings and payable from the Tax Increment Revenues equally or on a parity with the Bonds. (27) Paying gent: the Financial Officer of the City, or his successors, acting as paying agent for the Bonds. (28) Permitted Investments: all securities or deposits authorized by ordinances of the City and, to the extent applicable, the laws of the State. (29) Person: any individual, firm, partnership, corporation, company, association, joint-stock association, or body politic or any trustee, receiver, assignee, or other similar representative thereof. (30) Plan of Development: the plan approved by Resolution 81-129 of the City. Y (31) Pledged Revenues: the Tax Increment Revenues and the Investment Earnings. 3 (32) Project: the improvements or projects permitted by the Plan and the Downtown Development Authority Act. (33) Property Tax Base Dates: September 15, 1980, with respect to the District described in Ordinance No. 46, 1981, of the City; September 15, 1981, with respect to the area added to the District by Ordinance No. 162, 1981, of the City; September 15, 1982, with respect to the area added to the District by Ordinance No. 2, 1983, of the City; and the applicable dates pursuant to the Downtown Development Authority Act with respect to such other areas as have heretofore been or as may hereafter be added to the District by valid legislative action of the City as may be determined in accordance with the decisions of the appellate courts of the State. (34) Purchaser: the City. (35) Redemption Date: the date fixed for the redemption prior to maturity of any Bonds or other designated securities payable from the Tax Increment Revenues in any notice of prior redemption given by or on behalf of the City. (36) Registrar: the Financial Officer of the City, or his successors, acting as registrar for the Bonds. (37) Regular Record Date: the fifteenth day of the calendar month next preceding an Interest Payment Date for the Bonds. (38) Security or securities: any bond issued by the City or any other evidence of the advancement of money to the City. (39) Special Record Date: the date fixed by the Paying Agent for the determination of ownership of Bonds for the purpose of paying interest not paid when due or interest accruing after maturity. (40) State: the State of Colorado. (41) Subordinate Bonds or Subordinate Securities: any bonds or securities payable from the Tax Increment Revenues having a lien thereon subordinate or junior to the lien thereon of the Bonds. (42) Subordinate Bonds Debt Service Account: the special fund created in Ordinance No. 101, 1998, of the City designated therein as the "City of Fort Collins, Colorado, Downtown Development Authority Subordinate Tax Increment Bonds Debt Service Account" and referred to in Section 5E hereof. (43) Superior Bonds or Superior Securities: any bond or security payable from the Tax Increment Revenues having a lien thereon superior or senior to the lien thereon of the Bonds. (44) Supplemental Act: the Supplemental Public Securities Act, constituting Title 11, Article 57, Part 2, C.R.S. 4 (45) Tax Increment Fund: the special fund created in Ordinance No. 142, 1985, of the City designated therein as the "City of Fort Collins, Colorado, Downtown Development Authority Tax Increment Bonds, Bond Fund" and referred to in Section 513 hereof. (46) Tax Increment Principal and Interest Account: the special fund created in Ordinance No. 142, 1985, of the City, designated therein as the "Principal and Interest Account" of the "City of Fort Collins, Colorado, Downtown Development Authority Tax Increment Bonds, Bond Fund" and referred to in Section 5C hereof. (47) Tax Increment Reserve Account: the special fund created in Ordinance No. 142, 1985, of the City, designated therein as the "City of Fort Collins, Colorado, Tax Increment Bonds, Reserve Fund" and referred to in Section 5D hereof. (48) Tax Increment Revenues: all revenues derived in each Fiscal Year from the levy of ad valorem taxes at the rate fixed each year by or for each public body having taxing power over all or any portion of the District upon that portion of the valuation for assessment of all taxable property within the District and the boundaries of such public body that is in excess of the valuation for assessment of all taxable property within the District and the boundaries of such public body on the Property Tax Base Dates, all in accordance with Section 31-25-807(3)(a)(11) of the Downtown Development Authority Act, less any collection fees lawfully payable to the City or Larimer County, Colorado, for services rendered in connection with the collection of such ad valorem taxes; provided, that in the event of a general reassessment of taxable property in the City, the valuation for assessment of taxable property within the District on the Property Tax Base Dates will be proportionately adjusted as required by the Downtown Development Authority Act or other applicable law. (49) Transfer Agent: the Financial Officer of the City, or his successors, acting as transfer agent for the Bonds. (50) Trust Bank: any depository for public funds permitted by the laws of the State for political subdivisions of the State which has a capital and surplus of $25,000,000 or more, which is located within the United States, and which is authorized to exercise and is exercising trust powers. (51) 2004 DDA Bonds: the City of Fort Collins, Colorado, Downtown Development Authority Subordinate Tax increment Revenue Bonds, Series 2004A. (52) 2006 Election: the election held in the City on Tuesday, November 7, 2006. B. Construction. This Ordinance, except where the context by clear implication herein otherwise requires, shall be construed as follows: (1) Words in the singular number include the plural, and words in the plural include the singular. 5 (2) Words in the masculine gender include the feminine and the neuter, and when the sense so indicates, words of the neuter gender refer to any gender. (3) Articles, sections, subsections, paragraphs and subparagraphs mentioned by number, letter or otherwise correspond to the respective articles, sections, subsections, paragraphs and subparagraphs of this Ordinance so numbered or otherwise so designated. (4) The titles and headlines applied to articles, sections and subsections of this Ordinance are inserted only as a matter of convenience and ease in reference and in no way define or limit the scope or intent of any provisions of this Ordinance. Section 2. Recitals. A. Establishment of Authority and Approval of Plan of Development. Pursuant to Ordinance No. 46, 1981, the City has heretofore established the Authority. Pursuant to Resolution 81-129 the City has heretofore approved the Plan of Development. The Plan of Development so approved contained a provision for division of taxes as authorized by the Downtown Development Authority Act effective for thirty (30) years beginning September 8, 1981. B. 1982 Election. At the 1982 Election, a majority of the qualified electors of the District authorized the City to issue bonds or other indebtedness in an amount not to exceed $25,000,000 to finance capital improvements and capital projects within the parameters of the Plan of Development of the Authority pursuant to the following ballot question: SHALL THE CITY OF FORT COLLINS ISSUE BONDS OR OTHERWISE PROVIDE FOR LOANS, ADVANCES OR INDEBTEDNESS FROM TIME TO TIME IN AN AMOUNT NOT TO EXCEED $25,000,000 AT A MAXIMUM NET EFFECTIVE INTEREST RATE NOT TO EXCEED 18 PER CENTUM PER ANNUM, THE USE OF WHICH SHALL BE TO FINANCE CAPITAL IMPROVEMENTS AND CAPITAL PROJECTS WITHIN THE PARAMETERS OF THE PLAN OF DEVELOPMENT OF THE FORT COLLINS DOWNTOWN DEVELOPMENT AUTHORITY, AND IRREVOCABLY PLEDGE THE SPECIAL FUND INTO WHICH ALL OF THAT PORTION OF PROPERTY TAXES IN EXCESS OF SUCH TAXES WHICH ARE PRODUCED BY THE LEVY AT THE RATE FIXED EACH YEAR BY OR FOR ANY PUBLIC BODY UPON THE VALUATION FOR ASSESSMENT OF TAXABLE PROPERTY WITHIN THE BOUNDARIES OF THE DISTRICT LAST CERTIFIED PRIOR TO THE EFFECTIVE DATE OF APPROVAL BY THE FORT COLLINS CITY COUNCIL OF THE PLAN OF DEVELOPMENT OF THE DOWNTOWN DEVELOPMENT AUTHORITY OR, AS TO AN AREA LATER 6 ADDED TO THE BOUNDARIES OF THE DISTRICT, THE EFFECTIVE DATE OF THE MODIFICATION OF THE PLAN OF DEVELOPMENT FROM WHICH SPECIAL FUND SHALL BE PAID THE PRINCIPAL OF, THE INTEREST ON, AND ANY PREMIUMS DUE IN CONNECTION WITH THE BONDS OF, LOANS OR ADVANCES TO, OR INDEBTEDNESS INCURRED BY, WHETHER FUNDED, REFUNDED, ASSUMED, OR OTHERWISE, THE CITY OF FORT COLLINS FOR FINANCING OR REFINANCING, IN WHOLE OR IN PART, DEVELOPMENT PROJECTS WITHIN THE BOUNDARIES OF THE PLAN FOR DEVELOPMENT AREA. C. 2006 Election. At the 2006 Election, a majority of the qualified electors of the District authorized the City to issue bonds, notes, contracts or other financial obligations in an amount not to exceed $150,000,000 to finance the costs of development projects to be undertaken by or on behalf of the Authority pursuant to the following ballot question: SHALL CITY OF FORT COLLINS DEBT BE INCREASED BY NO MORE THAN $150,000,000 WITH A REPAYMENT COST OF $250,000,000 FOR THE PURPOSE OF FINANCING THE COSTS OF DEVELOPMENT PROJECTS TO BE UNDERTAKEN BY OR ON BEHALF OF THE FORT COLLINS DOWNTOWN DEVELOPMENT AUTHORITY PURSUANT TO THE APPLICABLE PROVISIONS OF COLORADO LAW AND THE FORT COLLINS DOWNTOWN DEVELOPMENT AUTHORITY PLAN OF DEVELOPMENT, AS SUCH PLAN MAY BE AMENDED FROM TIME TO TIME; SUCH DEBT AND THE INTEREST THEREON TO BE PAYABLE SOLELY FROM AND SECURED BY A PLEDGE OF THE SPECIAL FUND OF THE CITY WHICH SHALL CONTAIN AD VALOREM PROPERTY TAX INCREMENT REVENUES LEVIED AND COLLECTED WITHIN THE BOUNDARIES OF THE AUTHORITY; AND SHALL SUCH DEBT BE EVIDENCED BY BONDS, NOTES, CONTRACTS OR OTHER FINANCIAL OBLIGATIONS TO BE SOLD OVER TIME IN ONE SERIES OR MORE FOR A PRICE ABOVE OR BELOW THE PRINCIPAL AMOUNT THEREOF, ON SUCH TERMS AND CONDITIONS, AND WITH SUCH MATURITIES AS MAY BE PERMITTED BY LAW AND AS THE CITY COUNCIL MAY DETERMINE, INCLUDING PROVISIONS FOR REDEMPTION OF THE DEBT PRIOR TO MATURITY WITH OR WITHOUT PAYMENT OF THE PREMIUM OF NOT MORE THAN 3% OF THE PRINCIPAL AMOUNT SO REDEEMED AND SHALL THE PROCEEDS FROM SUCH DEBT AND ANY INVESTMENT INCOME EARNED FROM SUCH PROCEEDS BE COLLECTED AND SPENT AS A 7 VOTER-APPROVED REVENUE CHANGE UNDER SECTION 20 OF ARTICLE X OF THE COLORADO CONSTITUTION? D. Prior Bonds. The City has heretofore issued and sold $20,388,000 aggregate principal amount of bonds or other indebtedness pursuant to the authority conferred at the 1982 Election, and $4,612,000 of the authority so conferred at the 1982 Election remains. The City has not heretofore issued any bonds or other indebtedness pursuant to the authority conferred at the 2006 Election. Pursuant to Article X, Section 20(4) of the State Constitution, that portion of the Bonds that will be issued pursuant to the authority conferred at the 2006 Election may not be sold on terms which exceed their share of the maximum repayment costs described in the 2006 ballot question or in the notice sent to voters. Pursuant to the ballot issue notice provided to the electors in connection with the 2006 Election, the maximum annual repayment cost of the indebtedness issued pursuant to the election question may not exceed $17,000,000 and the total repayment cost of the debt issued pursuant to the election question may not exceed $250,000,000. E. Project. The City has need for and desires to acquire, construct, instal and finance the Project. The Council has determined, and does hereby determine, that it is necessary and for the best interest of the City that the Bonds now be authorized to be issued and delivered, and the City hereby determines to use the proceeds of the Bonds authorized by this Ordinance to finance the Project and to pay the costs of issuance of the Bonds. F. Authority. Pursuant to art. XX, §6 of the Colorado Constitution, Art. V, Section 19.8 of the Charter, the Downtown Development Authority Act, and the Supplemental Act, the City is authorized by Council action and pursuant to the 1982 Election and the 2006 Election to issue the Bonds. Section 3. The Bonds. A. Authorization of Bonds; Supplemental Act. (1) The Bonds are hereby authorized to be issued for the purpose of financing the Project and paying the costs of issuance of the Bonds. The Bonds shall be issued in the aggregate principal amount of$5,700,000. (2) Section 11-57-204 of the Supplemental Act provides that a public entity, including the City, may elect in an act of issuance to apply all or any of the provisions of the Supplemental Act. The Council hereby elects to apply all of the Supplemental Act to the Bonds, except for Section 11-57-205. The Bonds are issued under the authority of the Supplemental Act and shall so recite. Pursuant to Section 1 1- 57-210 C.R.S., such recital conclusively imparts full compliance with all provisions of said sections, and the bonds issued containing such recital shall be incontestable for any cause whatsoever after their delivery for value. B. Bond Details. (1) Generally. The Bonds shall be issuable in fully registered form in the denomination of$100,000 or any integral multiple of$5,000 in excess of thereof. No 8 Bond shall be issued in any denomination larger than the aggregate principal amount maturing on the Maturity Date of such Bond and bearing interest at the same interest rate, and no Bond shall be made payable on more than one Maturity Date. The Bonds shall be initially issued so that a single Bond shall evidence the obligation of the City to pay all principal due on each of the Maturity Dates set forth herein. Pursuant to the recommendations of the Committee on Uniform Security Identification Procedures, CUSIP numbers may be printed on the Bonds. The Bonds shall mature on December 1 in the following years in the following aggregate principal amounts and shall bear interest from their delivery date or the Interest Payment Dates to which interest has been paid next preceding their respective dates, whichever is later, to their respective Maturity Dates, except if redeemed prior thereto, at the following per annum interest rates: Years Principal Amounts Interest Rates 2007 $1,085,000 2008 1,075,000 .3 2009 1,130,000 5.27 2010 1,190,000 Sa26$ 2011 1,220,000 5168, Said interest shall be payable on June 1, 2007 and semiannually thereafter on the first day of June and the first day of December of each year. Interest on the Bonds shall be calculated on the basis of a 360-day year of twelve 30-day months. The maximum interest rate on the Bonds shall not exceed 6.00% per annum. The Debt Service Requirements of the Bonds shall be payable in lawful money of the United States of America to the Owners of the Bonds by the Paying Agent. The principal and interest shall be payable to the Owner of each Bond upon presentation and surrender thereof at maturity or upon prior redemption, by check or draft mailed to such Owner at the address appearing on the registration books of the City maintained by the Registrar or by wire transfer to such bank or other depository as the Owner shall designate in writing to the Paying Agent. Except as hereinbefore and hereinafter provided, the interest shall be payable to the Owner of each Bond determined as of the close of business on the Regular Record Date, irrespective of any transfer of ownership of the Bond subsequent to the Regular Record Date and prior to the Interest Payment Date, by check or draft or wire transfer directed to such Owner as aforesaid. Any interest not paid when due and any interest accruing after maturity shall be payable to the Owner of each Bond entitled to receive such interest determined as of the close of business on the Special Record Date, irrespective of any transfer of ownership of the Bond subsequent to the Special Record Date and prior to the date fixed by the Paying Agent for the payment of such interest, by check or draft or wire transfer directed to such Owner as aforesaid. Notice of the Special Record Date and of the date fixed for the payment of such interest shall be given by sending a copy thereof by certified or registered first-class, postage prepaid mail, at least fifteen (15) days prior to the Special Record Date, to the 9 Owner of each Bond upon which interest will be paid determined as of the close of business on the day preceding such mailing at the address appearing on the registration books of the City. If the date for making or giving any payment, determination or notice described herein is a Saturday, Sunday, legal holiday or any other day on which the office of the Paying Agent or Registrar is authorized or required by law to remain closed, such payment, determination or notice shall be made or given on the next succeeding day that is not a Saturday, Sunday, legal holiday or other day on which the office of the Paying Agent or Registrar is authorized or required by law to remain closed. The Paying Agent may make payments of interest on any Bond by such alternative means as may be mutually agreed to between the Owner of such Bond and the Paying Agent. All such payments shall be made in lawful money of the United States of America, without deduction for services of the Registrar or Paying Agent. (2) Redemption. The Bonds shall be subject to optional redemption prior to their respective Maturity Dates, in whole or in part, on any date at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the Redemption Date. The Bonds may be redeemed in part if issued in denominations that are integral multiples of $100,000, and any integral multiple of $5,000 in excess thereof. Such Bonds shall be treated as representing a corresponding number of separate Bonds in the denomination of $100,000 each. Any such Bond to be redeemed in part shall be surrendered for partial redemption in the manner hereinafter provided for transfers of ownership. Upon payment of the redemption price of any such Bond redeemed in part the Owner thereof shall receive a new Bond or Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond surrendered. Unless waived by the Owners of any Bonds to be redeemed, notice of redemption shall be given by the Paying Agent in the name of the City by sending a copy thereof by certified or registered first-class postage prepaid mail, not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date, to the Owner of each of the Bonds being redeemed determined as of the close of business on the day preceding the first mailing of such notice at the address appearing on the registration books of the City. Such notice shall specify the number or numbers of the Bonds to be redeemed, whether in whole or in part, the principal amounts thereof and the date fixed for redemption and shall further state that on the Redemption Date there will be due and payable upon each Bond or part thereof so to be redeemed the principal amount or part thereof plus accrued interest thereon to the redemption date and that from and after such date interest will cease to accrue. Bonds called for optional redemption as provided herein shall be redeemable only to the extent of moneys on deposit with the Paying Agent and legally available for redemption of Bonds on the date of such notice. Failure to mail any notice as aforesaid or any defect in any notice so mailed with respect to any Bond shall not affect the validity of the redemption proceedings with respect to any other Bond. Any Bonds redeemed prior to their respective Maturity Dates by call for prior redemption or otherwise shall not be reissued and shall be cancelled the same as Bonds paid at or after maturity. I 10 I Notwithstanding the provisions of this section, any notice of optional redemption may contain a statement that the redemption is conditioned upon the receipt by the Paying Agent of funds on or before the date fixed for redemption sufficient to pay the redemption price of the Bonds so called for redemption, and that if such funds are not available, such redemption shall be cancelled by written notice to the Owners of the Bonds called for redemption in the same manner as the original redemption notice was mailed. (3) Execution and Authentication. The Bonds shall be executed by and on behalf of the City with the facsimile or manual signature of the Mayor, shall bear a facsimile or manual impression of the seal of the City, shall be attested with the facsimile or manual signature of the City Clerk, shall be countersigned with the facsimile or manual signature of the Financial Officer of the City, and shall be authenticated with the manual signature of the Registrar. Should any officer whose facsimile or manual signature appears on the Bonds cease to be such officer before delivery of the Bonds to the Purchaser, such facsimile or manual signature shall nevertheless be valid and sufficient for all purposes. No Bond shall be valid or become obligatory for any purpose or be entitled to any security or benefit under this Ordinance unless and until the certificate of authentication on such Bond shall have been duly executed by the Registrar, and such executed certificate upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Ordinance. (4) Registration, Transfer and Exchange. Upon their execution and authentication and prior to their delivery the Bonds shall be registered for the purpose of payment of principal and interest by the Registrar. Thereafter, the Bonds shall be transferable only upon the registration books of the City by the Transfer Agent at the request of the Owner thereof or his, her or its duly authorized attorney-in-fact or legal representative. A Bond may be transferred upon surrender thereof together with a written instrument of transfer duly executed by the Owner or his, her or its duly authorized attorney-in-fact or legal representative with guaranty of signature satisfactory to the Transfer Agent, containing written instructions as to the details of the transfer, along with the social security number or federal employer identification number of the transferee and, if the transferee is a trust, the names and social security numbers of the settlors and the beneficiaries of the trust. The Transfer Agent shall not be required to transfer ownership of any Bond during the fifteen (15) days prior to the first mailing of any notice of redemption or to transfer ownership of any Bond selected for redemption on or after the date of such mailing. The Owner of any Bond or Bonds may also exchange such Bond or Bonds for another Bond or Bonds of authorized denominations. Transfers and exchanges shall be made without charge, except that the Transfer Agent may require payment of a sum sufficient to defray any tax or other governmental charge that may hereafter be imposed in connection with any transfer or exchange of Bonds. No transfer of any Bond shall be effective until entered on the registration books of the City. In the case of every transfer or exchange, the Transfer Agent shall deliver to the new Owner a new Bond or Bonds of the same aggregate principal amount, maturing in the same year, and bearing interest at the same per annum interest rate as the Bond or Bonds surrendered. Such Bond or Bonds shall be dated as of their date of authentication. New 11 Bonds delivered upon any transfer or exchange shall be valid obligations of the City, evidencing the same obligation as the Bonds surrendered, shall be secured by this Ordinance, and shall be entitled to all of the security and benefits hereof to the same extent as the Bonds surrendered. The City may deem and treat the Person in whose name any Bond is last registered upon the books of the City as the absolute owner thereof for the purpose of receiving payment of the Debt Service Requirements of such Bond and for all other purposes, and all such payments so made to such Person or upon his, her or its order shall be valid and effective to satisfy and discharge the liability of the City upon such Bond to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. (5) Replacement of Bonds. If any Bond shall have been lost, destroyed or wrongfully taken, the City shall provide for the replacement thereof in the manner set forth and upon receipt of the evidence, indemnity bond and reimbursement for expenses provided in Ordinance No. 80, 1984. (6) Recitals in Bonds. Each Bond shall recite in substance that the Bond is a special and limited obligation of the City payable solely from the Pledged Revenues and the funds and accounts hereby pledged and that the Bond is not a debt or an indebtedness of the City and that the Bond is not a general obligation of the City and that the full faith and credit of the City is not pledged to pay the Debt Service Requirements of such Bond. Each Bond shall further recite that it is issued under the authority of the Constitution of the State of Colorado, the Charter, the Downtown Development Authority Act, and this Ordinance. Pursuant to § 11-57-210, C.R.S., the Bonds shall also contain a recital that they are issued pursuant to the Supplemental Act, which recital shall conclusively impart full compliance with all of the provisions of the Supplemental Act, and all Bonds issued containing such recital shall be incontestable for any cause whatsoever after their delivery for value. (7) Form of Bonds. The Bonds shall be in substantially the following form, with such omissions, insertions, endorsements and variations as may be required by the circumstances, be required or permitted by this Ordinance, or necessary or appropriate to conform to the rules and requirements of any governmental authority or any usage or requirement of law with respect thereto: 12 [Form of Bond] (Text of Face) UNITED STATES OF AMERICA STATE OF COLORADO COUNTY OF LARIMER CITY OF FORT COLLINS DOWNTOWN DEVELOPMENT AUTHORITY TAXABLE SUBORDINATE TAX INCREMENT REVENUE BOND SERIES 2007A No. R- $ Interest Rate Maturity Date Original Date CUSIP December 1, 12007 REGISTERED OWNER: PRINCIPAL SUM: Thousand Dollars The City of Fort Collins, in the County of Larimer and State of Colorado, for value received, hereby promises to pay to the Registered Owner (specified above), or registered assigns, solely from the special fund and account provided therefor, as hereinafter set forth, the Principal Sum (specified above), in lawful money of the United States of America, on the Maturity Date (specified above), with interest thereon from the Original Date (specified above) to the Maturity Date, except if redeemed prior thereto, at the per annum Interest Rate (specified above), payable on the first day of June and the first day of December of each year, commencing June 1, 2007, or the first such date after the date hereof, whichever is later, in the manner provided herein. The Bonds are subject to optional redemption prior to their maturity date, in whole or in part, on any date at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the redemption date. Bonds that are redeemable prior to their maturity date may be redeemed in part if issued in denominations that are integral multiples of $100,000 and any integral multiple of $5,000 in excess thereof. In such case the Bond is to be surrendered in the manner provided for transfers of ownership. Upon payment of the redemption price the Registered Owner is to receive a new Bond or Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond surrendered. 13 Unless waived by the registered owners of the Bonds to be redeemed, notice of redemption of any Bonds is to be given by the paying agent in the name of the City by sending a copy of such notice by certified or registered first-class postage prepaid mail, not less than thirty (30) nor more than sixty (60) days prior to the redemption date, to the registered owner of each of the Bonds being redeemed determined as of the close of business on the day preceding the first mailing of such notice at the address appearing on the registration books of the City, in the manner and upon the conditions provided in the Ordinance authorizing the issuance of this Bond (the "Ordinance'). Bonds called for optional redemption as provided herein are redeemable only to the extent of moneys on deposit with the paying agent and legally available for redemption of Bonds on the date of such notice. Failure to mail any notice as aforesaid or any defect in any notice so mailed with respect to any Bond does not affect the validity of the redemption proceedings with respect to any other Bond. The principal of and interest on this Bond are payable to the Registered Owner by the Financial Officer of the City, or his successors, as paying agent. The principal and interest are payable to the Registered Owner upon presentation and surrender of this Bond at maturity or upon prior redemption, by check or draft mailed to the Registered Owner at the address appearing on the registration books of the City maintained by the Financial Officer of the City, or his successors as registrar, or by wire transfer to such bank or other depository as the Registered Owner shall designate in writing to the paying agent. Except as hereinbefore and hereinafter provided, the interest is payable to the Registered Owner determined as of the close of business on the regular record date, which is the fifteenth day of the calendar month next preceding the interest payment date, irrespective of any transfer of ownership hereof subsequent to the regular record date and prior to such interest payment date, by check or draft or wire transfer directed to the Registered Owner as aforesaid. Any interest hereon not paid when due and any interest hereon accruing after maturity is payable to the Registered Owner determined as of the close of business on the special record date, which is to be fixed by the paying agent for such purpose, irrespective of any transfer of ownership of this Bond subsequent to such special record date and prior to the date fixed by the paying agent for the payment of such interest, by check or draft or wire transfer directed to the Registered Owner as aforesaid. Notice of the special record date and of the date fixed for the payment of such interest is to be given by sending a copy thereof by certified or registered first-class postage prepaid mail, at least fifteen (15) days prior to the special record date, to the registered owner of each Bond upon which interest will be paid determined as of the close of business on the day preceding such mailing at the address appearing on the registration books of the City. If the date for making or giving any payment, determination or notice described herein is a Saturday, Sunday, legal holiday or any other day on which the office of the paying agent or registrar is authorized or required by law to remain closed, such payment, determination or notice is to be made or given on the next succeeding day that is not a Saturday, Sunday, legal holiday or other day on which the office of the paying agent or registrar is authorized or required by law to remain closed. Payment of the principal of and interest on this Bond is to be made solely from, and as security for such payment there is pledged, pursuant to the Ordinance, a special fund designated as the Tax Increment Fund and a special account designated as the Subordinate Bonds Debt Service Account, into which account the City has covenanted in the Ordinance to pay, respectively, from the pledged revenues described in the Ordinance sums sufficient to pay when due the principal of and interest on this Bond and any additional securities heretofore issued and 14 hereafter issued and payable from such pledged revenues on a parity with the Bonds, after provision for payment of all principal and interest due in the current year on any securities payable from the pledged revenues superior or senior to the Bonds. Interest on this Bond is not excluded from gross income or alternative minimum taxable income under federal income tax laws in effect on the date of delivery of this Bond. It is hereby recited, certified and warranted that for the payment of the principal of and interest on this Bond the City has created and will maintain said special fund and account and will deposit therein the required amounts out of the funds and revenues described in the Ordinance and out of said special fund and account will pay the principal of and interest on this Bond in the manner provided by the Ordinance. The Bonds are equitably and ratably secured by a lien on the pledged revenues, and such Bonds constitute an irrevocable lien(but not necessarily a first lien or an exclusive lien) upon the pledged revenues. At the time of issuance of the Bonds, certain bonds are outstanding that have a lien on the pledged revenues on a parity with the lien of the Bonds. Additional bonds and other types of securities, subject to certain conditions, may be issued and made payable from the pledged revenues having a lien thereon on a parity with the lien of the Bonds or having a lien thereon superior and senior with the lien of the Bonds in accordance with the provisions of the Ordinance. Except as otherwise expressly provided in this Bond and the Ordinance, the pledged revenues are pledged and set aside to the payment of the principal of and interest on the Bonds of this issue in anticipation of the collection of the pledged revenues. The City covenants and agrees with the Registered Owner that it will keep and perform all of the covenants of this Bond and of the Ordinance. This Bond is authorized and issued for the purpose of financing certain improvements and projects pursuant to, by virtue of and in full conformity with the Constitution of the State of Colorado, the City Charter, part 8 of article 25 of title 31, Colorado Revised Statutes, as amended, and all other laws of the State of Colorado thereunto enabling and pursuant to elections held June 1, 1982 and November 7, 2006, and the Ordinance duly adopted prior to the issuance of this Bond. The Bonds are also issued pursuant to Title 11, Article 57, Part 2, C.R.S. (the "Supplemental Act'). Pursuant to Section l 1-57-210 of the Supplemental Act, this recital shall be conclusive evidence of the validity and the regularity of the issuance of the Bonds after their delivery for value. Reference is hereby made to the Ordinance, and to any and all modifications and amendments thereof, for a description of the provisions, terms and conditions upon which the Bonds are issued and secured, including, without limitation, the nature and extent of the security for the Bonds, the bonds that are currently outstanding and that have a lien on the pledged revenues on a parity with the Bonds, provisions with respect to the custody and application of the proceeds of the Bonds, the collection and disposition of the revenues and moneys charged with and pledged to the payment of the principal of and interest on, the terms and conditions on which the Bonds are issued, a description of the special fund and account referred to above and the nature and extent of the security and pledge afforded thereby for the payment of the principal of and interest on the Bonds, and the manner of enforcement of said pledge, as well as the rights, 15 duties, immunities and obligations of the City and the members of its Council and also the rights and remedies of the registered owners of the Bonds. To the extent and in the respects permitted by the Ordinance, the provisions of the Ordinance, or any instrument amendatory thereof or supplemental thereto, may be modified or amended by action of the City taken in the manner and subject to the conditions and exceptions provided in the Ordinance. The pledge of revenues and other obligations of the City under the Ordinance may be discharged at or prior to the maturity or prior redemption of the Bonds upon the making of provision for the payment of the Bonds on the terms and conditions set forth in the Ordinance. It is hereby recited, certified and warranted that all the requirements of law have been fully complied with by the proper officers of the City in the issuance of this Bond; that it is issued pursuant to and in strict conformity with the Constitution and all other Taws of the State of Colorado, including the City Charter, and with the Ordinance; that this Bond does not contravene any constitutional or statutory limitation of the State of Colorado or any limitation of the City Charter; and that this Bond is issued under the authority of the Ordinance. This Bond is transferable only upon the registration books of the City by the Financial Officer of the City, or his successors, as transfer agent, at the request of the Registered Owner or his, her or its duly authorized attomey-in-fact or legal representative, upon surrender hereof together with a written instrument of transfer duly executed by the Registered Owner or his, her or its duly authorized attorney-in-fact or legal representative with guaranty of signature satisfactory to the transfer agent, containing written instructions as to the details of the transfer, along with the social security number or federal employer identification number of the transferee and, if the transferee is a trust, the names and social security numbers of the settlors and the beneficiaries of the trust. The transfer agent is not required to transfer ownership of this Bond during the fifteen (15) days prior to the first mailing of any notice of redemption or to transfer ownership of any Bond selected for redemption on or after the date of such mailing. The Registered Owner may also exchange this Bond for another Bond or Bonds of authorized denominations. Transfers and exchanges are to be made without charge, except that the transfer agent may require payment of a sum sufficient to defray any tax or other governmental charge that may hereafter be imposed in connection with any transfer or exchange of Bonds. No transfer of this Bond is to be effective until entered on the registration books of the City. In the case of every transfer or exchange, the transfer agent is to deliver to the new registered owner a new Bond or Bonds of the same aggregate principal amount, maturing in the same year, and bearing interest at the same per annum interest rate as the Bond or Bonds surrendered. Such Bond or Bonds are to be dated as of their date of authentication. The City may deem and treat the person or entity in whose name this Bond is last registered upon the books of the City as the absolute owner hereof for the purpose of receiving payment of the principal of and interest on this Bond and for all other purposes, and all such payments so made to such person or entity or upon his, her or its order will be valid and effective to satisfy and discharge the liability of the City upon this Bond to the extent of the sum or sums so paid, and the City will not be affected by any notice to the contrary. This Bond is a special and limited obligation of the City payable solely out of and secured by a pledge (but not necessarily an exclusive pledge) of certain tax increment revenues 16 and certain income derived from the investment of such revenues and of certain bond proceeds, all as more specifically provided in the Ordinance, and of certain funds and accounts pledged in the Ordinance. This Bond does not constitute a debt or an indebtedness of the City within the meaning of any constitutional, charter or statutory provision or limitation of the State of Colorado or of the City. This Bond is not a general obligation of the City, and the full faith and credit of the City is not pledged for the payment of the principal of or interest on this Bond. IN WITNESS WHEREOF, the City has caused this Bond to be executed in its name and on its behalf with the facsimile or manual signature of the Mayor of the City, to be sealed with a facsimile or manual impression of the seal of the City, to be attested with the facsimile or manual signature of the City Clerk of the City, and to be countersigned with the facsimile or manual signature of the Financial Officer of the City. CITY OF FORT COLLINS, COLOR-ADO (CITY) By: (Facsimile or Manual Signature) (SEAL) Mayor ATTEST: (Facsimile or Manual Signature) City Clerk Countersigned: (Facsimile or Manual Signature) Financial Officer 17 CERTIFICATE OF AUTHENTICATION This Bond is issued pursuant to the Ordinance herein described. Attached hereto is the complete text of the opinion of bond counsel, Sherman & Howard L.L.C., Denver, Colorado, a signed copy of which, dated the date of the first delivery of the Bonds, is on file with the undersigned. FINANCIAL OFFICER OF THE CITY as registrar (Manual Signature) Dated: 18 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with the right of survivorship and not as tenants in common UNIF TRANS MIN ACT - Custodian (Cust) (Minor) under Uniform Transfers to Minors Act (State) Additional abbreviations may also be used though not on the above list. 19 ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (Name and Address of Assignee) this Bond and does hereby irrevocably constitute and appoint , or its successors, to transfer this Bond on the books kept for registration thereof. Dated: Signature guaranteed: (Eligible Guarantor Institution) NOTICE: The signature to this assignment must correspond with the name of the Registered Owner as it appears upon the face of this Bond in every particular without alteration or enlargement or any change whatever. (End of Form of Bond] 20 C. Bonds Equally Secured. The covenants and agreements herein set forth to be performed on behalf of the City shall be for the equal benefit, protection and security of the Owners of the Bonds, all of which, regardless of the time or times of their maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as otherwise expressly provided in or pursuant to this Ordinance. D. Financial Obligations. All of the Bonds, as to all Debt Service Requirements thereof, shall be payable solely out of the Pledged Revenues and the funds and accounts pledged hereunder. The Owners of the Bonds may not look to the general or any other fund of the City for the payment of the Debt Service Requirements thereof, except the special fund and account pledged therefor, and the Bonds shall constitute special and limited obligations of the City. Section 4. Sale of Bonds. A. Purchaser's Proposal; Award of Contract. A proposal for the purchase of the Bonds upon terms favorable to the City has been received from the Purchaser, and the Financial Officer of the City has recommended that said proposal be accepted by the Council. The contract for the purchase of the Bonds is hereby awarded to the Purchaser at a price equal to the aggregate principal amount of the Bonds upon the terms set forth in this Ordinance. B. Approval of Investment Letter. The Council hereby approves the form of the Investment Letter that is on file in the office of the City Clerk, with such changes therein, if any, not inconsistent herewith as may be approved by the Financial Officer of the City. Section 5. Disposition of Bond Proceeds and Pledged Revenues; Funds and Accounts Adopted or Created by Ordinance; Security For Bonds. The proceeds of the sale of the Bonds and the Pledged Revenues received by the City shall be deposited by the City in the funds described in this Section 5, to be accounted for in the manner and priority set forth in this Section 5. Neither the Purchaser nor any subsequent Owner of any Bond shall be responsible for the application or disposal by the City or by any of its officers, agents and employees of the moneys derived from the sale of the Bonds or of any other moneys designated in this Section 5. The Pledged Revenues and all moneys and securities paid or to be paid to or held or to be held in any fund or account hereunder (except the Tax Increment Principal and Interest Account and the Tax Increment Reserve Account) are hereby pledged to secure the payment of the Debt Service Requirements of the Bonds, the Parity Securities and any Additional Parity Bonds. This pledge shall be valid and binding from and after the date of the first delivery of the Bonds, and the moneys, as received by the City and hereby pledged, shall immediately be subject to the lien of this pledge without any physical delivery thereof, any filing, or further act. The lien of this pledge and the obligation to perform the contractual provisions hereby made shall have priority over any or all other obligations and liabilities of the City (except as herein otherwise expressly provided), and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the City (except as herein otherwise expressly provided), irrespective of whether such parties have notice thereof. 21 A. Disposition of Bond Proceeds. The City shall deposit in the Development and Expense Fund forthwith upon receipt thereof the net proceeds of the Bonds, to be used and withdrawn only as provided in this Section 5A. The net proceeds of the Bonds deposited in the Development and Expense Fund shall be used and paid out from time to time solely for the purpose of paying the Cost of the Project. Any proceeds of the Bonds remaining in the Development and Expense Fund after payment in full of the Cost of the Project may be transferred to the Tax Increment Fund and used for the purposes thereof. B. Disposition of Tax Increment Revenues. For so long as any of the Bonds shall be Outstanding, as to any Debt Service Requirements, except as otherwise provided herein, the Tax Increment Revenues, upon their receipt from time to time by the City, shall be set aside and credited immediately to the Tax Increment Fund. For so long as any of the Bonds shall be Outstanding as to any Debt Service Requirements, the Tax Increment Fund shall be accumulated and administered, and the moneys on deposit therein shall be applied, in the following order of priority: (1) First, to the extent that there are Outstanding Superior Bonds or Superior Securities, to the Tax Increment Principal and Interest Account to pay any Debt Service Requirements of Superior Bonds or Superior Securities then Outstanding in the manner set forth in Section 5C hereof, (2) Second, to the extent that there are Outstanding Superior Bonds or Superior Securities, to the Tax Increment Reserve Account, in the manner set forth in Section 5D hereof; and (3) Third, to the Subordinate Bonds Debt Service Account to pay the Debt Service Requirements of the Bonds, any Parity Securities and any Additional Parity Bonds in accordance with Section 5E hereof. C. Tax Increment Principal and Interest Account Pam. To the extent that there are Outstanding Superior Bonds or Superior Securities, the City shall deposit in the Tax Increment Principal and Interest Account from the Tax Increment Revenues the amounts required by the Ordinances authorizing the Superior Bonds or Superior Securities, at the times and in the manner specified therein. ym D. Tax Increment Reserve Account Pa ents. To the extent that there are c Outstanding Superior Bonds or Superior Securities, the City shall retain in the Tax Increment Reserve Account the amounts, if any, required by the Ordinances authorizing such Superior Bonds or Superior Securities. The Tax Increment Reserve Account shall be funded at the times and in the manner specified in any such Ordinances and funds on deposit therein shall be utilized as set forth in any such Ordinances. E. Subordinate Bonds Debt Service Account Payments. After there have been deposited in the Tax Increment Principal and Interest Account an amount sufficient to pay all the Debt Service Requirements due or to become due during the current Bond Year on all Superior Bonds or Superior Securities then Outstanding and after the accumulations to and replenishments of the Tax Increment Reserve Account to be made in the current Bond Year have 22 been made, any moneys remaining in the Tax Increment Fund in any Bond Year shall be used by the City for the payment of Debt Service Requirements of the Bonds, any Parity Securities and any Additional Parity Bonds; but the lien of such securities on the Tax Increment Revenues and the pledge thereof for the payment of such securities shall be subordinate and junior to the lien and pledge for the payment of all Outstanding Superior Bonds or Superior Securities as herein provided. F. Budget and Appropriation of Sums. The sums required to make the payments specified in this Section 5 shall be appropriated for said purposes, and the amounts so required in each year shall be included in the budget and the appropriation ordinance or measures to be adopted or passed by the Council while any of the Bonds, as to either principal or interest, are Outstanding and unpaid. No provisions of any constitution, charter, statute, ordinance, resolution, or other order or measure enacted after the issuance of the Bonds shall in any manner be construed as limiting or impairing the obligation of the City to keep and perform the covenants contained in this Ordinance so long as any of the Bonds remain Outstanding and unpaid. Section 6. General Administration of Funds and Accounts. A. Places and Times of Deposits. Each of the special funds or accounts referred to in Section 5 hereof shall be kept separate and apart from all other accounts or funds of the City as trust accounts solely for the purposes herein designated therefor. For purposes of investment of moneys, nothing, except as specifically provided herein, prevents the commingling of moneys accounted for in any two or more such funds or accounts pertaining to the Pledged Revenues or to such fund and account and any other funds or accounts of the City adopted or created under this Ordinance. Such funds or accounts shall be continuously secured to the fullest extent required and permitted by the laws of the State for the securing of public funds and shall be irrevocable and not withdrawable by anyone for any purpose other than the respective designated purposes of such funds and accounts. Each periodic payment shall be credited to the proper fund or account not later than the date therefor herein designated, except that when any such date shall be a Saturday, a Sunday or a legal holiday, then such payment shall be made on or before the next preceding business day. B. Investment of Funds and Accounts. Any moneys in the Development and Expense Fund and the Subordinate Bonds Debt Service Account may be deposited, invested, or reinvested in Permitted Investments. Securities or obligations purchased as such an investment shall either be subject to redemption at any time at face value by the Owner thereof at the option of such Owner or shall mature at such time or times as shall most nearly coincide with the expected need for moneys from the fund or account in question. Securities or obligations so purchased as an investment of moneys in any such fund or account shall be deemed at all times to be a part of the applicable fund or account; provided that the interest accruing on such investments and any profit realized therefrom shall be credited to the Tax Increment Fund and any loss resulting from such investments shall be charged to the particular fund or account in question. The City shall present for redemption or sale on the prevailing market any securities or obligations so purchased as an investment of moneys in a given fund or account whenever it shall be necessary to do so in order to provide moneys to meet any required payment or transfer from such fund or account. 23 C. No Liability for Losses Incurred in Performing Terms of Ordinance. Neither the City nor any officer of the City shall be liable or responsible for any loss resulting from any investment or reinvestment made in accordance with this Ordinance. D. Character of Funds. The moneys in any fund or account herein authorized shall consist of lawful money of the United States of America or Permitted Investments or both such money and Permitted Investments. Moneys deposited in a demand or time deposit account in a Commercial Bank, appropriately secured according to the laws of the State, shall be deemed lawful money of the United States of America. E. Accelerated Payments Optional. Nothing contained herein prevents the accumulation in any fund or account herein designated of any monetary requirements at a faster rate than the rate or minimum rate, as the case may be, provided therefor, but no payment shall be so accelerated if such acceleration shall cause a default in the payment of any obligation of the City pertaining to the Pledged Revenues. Section 7. Priorities; Liens; Issuance of Additional Securities. A. Lien on Pledged Revenues. Except as expressly provided in this Ordinance with respect to the issuance of Superior Bonds or Superior Securities and Additional Parity Bonds or Parity Securities, the Tax Increment Revenues and the Investment Earnings shall be and hereby are irrevocably pledged and set aside to pay the Debt Service Requirements of the Bonds. The Bonds constitute an irrevocable lien (but not necessarily a first lien or an exclusive lien) upon the Tax Increment Revenues and the Investment Earnings. The Bonds, any Parity Securities and any Additional Parity Bonds authorized to be issued and from time to time Outstanding are equitably and ratably secured by a lien on the Tax Increment Revenues and the Investment Earnings and shall not be entitled to any priority one over the other in the application thereof regardless of the time or times of the issuance of the Bonds, any Parity Securities and any Additional Parity Bonds, it being the intention of the Council that there shall be no priority among the Bonds, any Parity Securities and any Additional Parity Bonds, regardless of the fact that they may be actually issued and delivered at different times. Bonds and other types of securities may be issued and made payable from the Pledged Revenues having a lien thereon superior and senior with the lien of the Bonds in accordance with the provisions of this Ordinance. B. Issuance of Additional Parity Bonds. Nothing herein, subject to the limitations stated in Section 7E hereof, prevents the issuance by the City of Additional Parity Bonds payable from the Pledged Revenues and constituting a lien thereon on a parity with the lien thereon of the Bonds. C. Issuance of Superior Securities Permitted. Subject to the limitations stated in Section 7E hereof and in the ordinances authorizing the issuance of Superior Bonds or Superior Securities, the City may issue Superior Bonds or Superior Securities for any lawful purpose payable from the Tax Increment Revenues and having a lien thereon superior and senior to the lien thereon of the Bonds. 24 D. Issuance of Subordinate Securities Permitted. Subject to the limitations stated in Section 7E hereof, the City may issue Subordinate Bonds or Subordinate Securities payable from the Tax Increment Revenues having a lien thereon subordinate or junior to the lien thereon of the Bonds. E. Action by Council. Additional Parity Bonds, Superior Bonds, Superior Securities, Subordinate Bonds and Subordinate Securities shall be issued only after authorization thereof by ordinance, supplemental ordinance or other instrument of the Council. Section 8. Covenants. The City hereby particularly covenants and agrees with the Owners of the Bonds from time to time, and makes provisions that shall be a part of its contract with such Owners, which covenants and provisions shall be kept by the City continuously until all of the Bonds have been fully paid and discharged: A. Continuance and Collection of Tax Increment Revenues. (1) The Plan of Development, as approved and amended as described in this Ordinance, is now in full force and effect. The City will not revoke its approval or amend the Plan of Development in any manner that would diminish the Tax Increment Revenues. (2) The City shall continue to collect the Tax Increment Revenues in accordance with the Downtown Development Authority Act. (3) The City shall maintain the Tax Increment Fund as a fund of the City separate and distinct from all other funds of the City and shall place the Tax Increment Revenues therein. The Tax Increment Fund shall be subject to appropriation only as authorized by the Downtown Development Authority Act and this Ordinance. (4) All of the Tax Increment Revenues shall be subject to the payment of the Debt Service Requirements of all securities payable therefrom, including any reserves therefor, as provided herein or in any instrument supplemental or amendatory hereto. B. Defense of Legality of Pledged Revenues. There is not pending or threatened in writing any suit, action or proceeding against or affecting the City before or by any court, arbitrator, administrative agency or other governmental authority that affects the validity or legality of this Ordinance, any ordinance affecting the Tax Increment Revenues or any of the City's obligations under such ordinances. The City shall, to the extent permitted by law, defend the validity and legality of all ordinances affecting the Tax Increment Revenues and all amendments thereto against all claims, suits and proceedings that would diminish or impair the Pledged Revenues. Except as permitted in this Ordinance, the City has not pledged the Pledged Revenues in any manner that would diminish the security for payment of the Bonds. 25 C. Performance of Duties. The City, acting and through its officers, or otherwise, shall faithfully and punctually perform, or cause to be performed, all duties with respect to the Pledged Revenues required by the Constitution and laws of the State, the Charter and the various ordinances, resolutions and contracts of the City, including, without limitation, the proper segregation of the proceeds of the Bonds and the Pledged Revenues and their application from time to time to the respective funds provided therefor. D. Contractual Obli atg ions. The City will perform all contractual obligations undertaken by it under the contract with the Purchaser and any other agreements relating to the Bonds and the Pledged Revenues. E. Further Assurances. At any and all times the City shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge, deliver, and file or record all and every such further instruments, acts, deeds, conveyances, assignments, transfers, other documents, and assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning and confirming all and singular the rights, the Pledged Revenues and other funds and accounts hereby pledged, or intended so to be, or that the City may hereafter become bound to pledge, or as may be reasonable and required to carry out the purposes of this Ordinance. The City, acting by and through its officers, or otherwise, shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Pledged Revenues and other funds and accounts pledged hereunder and all the rights of every Owner of any of the Bonds against all claims and demands of all Persons whomsoever. F. Conditions Precedent. Upon the date of issuance of any of the Bonds, all conditions, acts and things required by the Constitution or laws of the United States of America, the Constitution or laws of the State, the Charter, or this Ordinance, to exist, to have happened, and to have been performed precedent to or in the issuance of the Bonds shall exist, have happened and have been performed, and the Bonds do not contravene any debt or other limitation prescribed by the Constitution or laws of the United States of America, the Constitution or laws of the State or the Charter. G. Records. The City will keep proper books of record and account, separate and apart from all other records and accounts, showing complete and correct entries of all transactions relating to the funds and accounts described herein. H. Protection of Security. The City, its officers, agents and employees, shall not take any action in such manner or to such extent as might prejudice the security for the payment of the Debt Service Requirements of the Bonds and any other securities payable from the Pledged Revenues according to the terms thereof. No contract shall be entered into nor any other action taken by which the rights of any Owner of any Bond or other security payable from Pledged Revenues might be materially impaired or diminished. I. Accumulation of Interest Claims. In order to prevent any accumulation of claims for interest after maturity, the City shall not directly or indirectly extend or assent to the extension of the time for the payment of any claim for interest on any of the Bonds or any other securities payable from the Pledged Revenues; and the City shall not directly or indirectly be a party to or approve any arrangements for any such extension or for the purpose of keeping alive 26 any of such other claims for interest. If the time for the payment of any such installment of interest is extended in contravention of the foregoing provisions, such installment or installments of interest after such extension or arrangement shall not be entitled in case of default hereunder to the benefit or the security of this Ordinance, except upon the prior payment in full of the principal of all of the Bonds and any such securities the payment of which has not been extended. J. Prompt Payment of Bonds. The City shall promptly pay the Debt Service Requirements of every Bond on the dates and in the manner specified herein and in the Bonds according to the true intent and meaning hereof. K. Use of Funds and Accounts. The funds and accounts described in the Ordinance shall be used solely and only, and the moneys credited to such funds and accounts are hereby pledged, solely for the purposes specified herein. L. Additional Securities. The City shall not hereafter issue any bonds or securities payable from the Pledged Revenues without compliance with the requirements with respect to the issuance of such bonds or securities set forth herein to the extent applicable. M. Other Liens. There are no liens or encumbrances of any nature whatsoever on or against any of the Tax Increment Revenues except as provided herein. N. Surety Bonds. Each official or other person having custody of any Pledged Revenues, or responsible for their handling, shall be fully bonded at all times, which bond shall be conditioned upon the proper application of said moneys. Section 9. Defeasance. When all Debt Service Requirements of the Bonds have been duly paid, the pledge and lien and all obligations hereunder shall thereby be discharged and the Bonds shall no longer be deemed to be Outstanding within the meaning of this Ordinance. There shall be deemed to be such due payment when the City has placed in escrow or in trust with a Trust Bank located within or without the State, moneys or Federal Securities in an amount sufficient (including the known minimum yield available for such purpose from Federal Securities in which such amount wholly or in part may be initially invested) to meet all Debt Service Requirements of the Bonds, as the same become due to their respective Maturity Dates or to any Redemption Date as of which the City shall have exercised or shall have obligated itself to exercise its option to redeem Bonds prior to their respective Maturity Dates. The Federal Securities shall be non-callable and shall become due prior to the respective times at which the proceeds thereof shall be needed, in accordance with a schedule established and agreed upon between the City and such Trust Bank at the time of the creation of the escrow or trust, or the Federal Securities shall be subject to redemption at the option of the Owner thereof to assure such availability as so needed to meet such schedule. Nothing herein shall be construed to prohibit a partial defeasance of the Outstanding Bonds in accordance with the provisions of this Section 9. 27 Section 10. Default Provisions and Remedies of Bond Owners. A. Events of Default. Each of the following events is hereby declared to be an Event of Default by the City: (1) Payment of Principal. Payment of the principal of any of the Bonds is not made when the same becomes due and payable, either at maturity or upon prior redemption, or otherwise; (2) Nonpayment of Interest. Payment of any installment of interest on any of the Bonds is not made when the same becomes due and payable; (3) Incapacity to Perform. The City for any reason becomes incapable of fulfilling its obligations hereunder; (4) Nonperformance of Duties. The City shall have failed to carry out and to perform (or in good faith to begin the performance of) all acts and things lawfully required to be carried out to be performed by it under any contract relating to the Bonds or the Pledged Revenues, or to all or any combination thereof, or otherwise including, without limitation, this Ordinance, and such failure shall continue for sixty(60) days after receipt of notice from the Owners of ten percent (10%) in aggregate principal amount of the Bonds then Outstanding; (5) Appointment of Receiver. An order or decree is entered by a court of competent jurisdiction, with the consent or acquiescence of the City, appointing a receiver or receivers for the Pledged Revenues and any other moneys subject to the lien to secure the payment of the Bonds, or if any order or decree, having been entered without the consent or acquiescence of the City, is not vacated or discharged or stayed on appeal within sixty (60) days after entry; (6) Default of Any Provision. The City makes any default in the due and punctual performance of any other of the representations, covenants, conditions, agreements and other provisions contained in the Bonds or in this Ordinance on its part to be performed, and such default continues for sixty (60) days after written notice, specifying such default and requiring the same to be remedied, is given to the City by the Owners of ten percent (10%) in aggregate principal amount of the Bonds then Outstanding. B. Remedies for Defaults. Upon the happening and continuance of any Event of Default, the Owner or Owners of not less than ten percent (10%) in aggregate principal amount of the Bonds then Outstanding, including, without limitation, a trustee or trustees therefor, may proceed against the City and its agents, officers and employees to protect and to enforce the rights of any Owner of Bonds under this Ordinance by mandatory injunction or by other suit, action, or special proceedings in equity or at law, in any court of competent jurisdiction, either for the appointment of a receiver or an operating trustee or for the specific performance of any covenant or agreement contained herein or for any proper legal or equitable remedy as such Owner or Owners may deem most effectual to protect and to enforce the act that may be unlawful or in violation of an fight of aforesaid rights, or thereby to enjoin any a y Y g g 28 any Owner of any Bond, or to require the City to act as if it were the trustee of an expressed trust, or any combination of such remedies, or as otherwise may be authorized by any statute or other provision of law. All such proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Owners of the Bonds and any Parity Securities then Outstanding. Any receiver or operating trustee appointed in any proceedings to protect the rights of such Owners hereunder, the consent to any such appointment being hereby expressly granted by the City, may collect, receive and apply all Pledged Revenues arising after the appointment of such receiver or operating trustee in the same manner as the City itself might do. Notwithstanding the foregoing or any other applicable provisions of law, no Event of Default shall result in acceleration of any obligation of the City represented by the Bonds. C. Riahts and Privileges Cumulative. The failure of any Owner of any Outstanding Bond to proceed in any manner herein provided shall not relieve the City, or any of its officers, agents or employees of any liability for failure to perform or cant' out any duty, obligation or other commitment. Each right or privilege of any such Owner or any trustee thereof is in addition and is cumulative to any other right or privilege, and the exercise of any right or privilege by or on behalf of any Owner shall not be deemed a waiver of any other right or privilege thereof. Each Owner of any Bond shall be entitled to all of the privileges, rights, and remedies provided or permitted in this Ordinance and as otherwise provided or permitted by law or in equity or by statute, except as provided in Section 12A and Section 12B hereof, and subject to the applicable provisions concerning the Pledged Revenues and the proceeds of the Bonds. Nothing herein affects or impairs the right of any Owner of any Bond to enforce the payment of the Debt Service Requirements due in connection with his, her or its Bond or the obligation of the City to pay the Debt Service Requirements of each Bond to the Owner thereof at the time and the place expressed in such Bond. D. Duties Upon Defaults. Upon the happening of any of the Events of Default as provided in Section IOA hereof, the City, in addition, shall do and perform all proper acts on behalf of and for the Owners of the Outstanding Bonds to protect and to preserve the security created for the payment of their Bonds and to insure the payment of the Debt Service Requirements of the Bonds promptly as the same become due. During any period of default, so long as any of the Bonds, as to any Debt Service Requirements, are Outstanding, except to the extent it may be unlawful to do so, all Pledged Revenues shall be paid into the Tax Increment Principal and Interest Account, or, in the event of securities hereafter or heretofore issued and Outstanding during such period of time senior or subordinate to or on a parity with the Bonds, shall be applied as provided in Section 5C and Section 5E hereof on an equitable and prorated basis, and used for the purposes therein provided. If the City fails or refuses to proceed as in this Section lOD provided, the Owner or Owners of not less than ten percent (10%) in principal amount of the Bonds then Outstanding, after demand in writing, may proceed to protect and to enforce the rights of the Owners of the Bonds as hereinabove provided; and to that end any such Owners of Outstanding Bonds shall be subrogated to all rights of the City under any agreement or contract involving the Pledged Revenues entered into prior to the effective date of this Ordinance or thereafter while any of the Bonds are Outstanding. Nothing herein requires the City to proceed as provided herein if it determines in good faith and without any abuse of its discretion that such action is likely materially and prejudicially to affect the Owners of the Outstanding Bonds and any Outstanding Parity Securities. 29 E. Evidence of Security Owners. Any request, consent or other instrument that this Ordinance may require or may permit to be signed and to be executed by the Owner of any Bonds or other securities may be in one instrument or more than one instrument of similar tenor and shall be signed or may be executed by each Owner in person or by his, her or its attorney appointed in writing. Proof of the execution of any such instrument or of any instrument appointing any such attorney, or the ownership by any Person of the securities, shall be sufficient for any purpose of this Ordinance (except as otherwise herein expressly provided) if made in the following manner: (1) Proof of Execution. The fact and the date of the execution by any Owner of any Bonds or other securities or his, her or its attorney of such instrument may be proved by the certificate, which need not be acknowledged or verified, of any officer of a bank or trust company satisfactory to the City Clerk or of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he or she purports to act that the individual signing such request or other instrument acknowledged to him or her the execution, duly sworn to before such notary public or other officer; the authority of the individual or individuals executing any such instrument on behalf of a corporate Owner of any securities may be established without further proof if such instrument is signed by an individual purporting to be the president or vice- president of such corporation with the corporate seal affixed and attested by an individual purporting to be its secretary or an assistant secretary; and the authority of any Person or Persons executing any such instrument in any fiduciary or representative capacity may be established without further proof if such instrument is signed by a Person or Persons purporting to act in such fiduciary or representative capacity; and (2) Proof of Owners. The amount of Bonds owned by any Person executing any instrument as an Owner of Bonds, and the numbers, dates and other identification thereof, together with the dates of his ownership of the Bonds, shall be determined from the registration books of the City. The amount of other securities, if applicable, owned by any Person executing any instrument as an Owner of such securities, and the numbers, dates and other identification thereof, together with the dates of his ownership, if in bearer form, may be proved by a certificate, which need not be acknowledged or verified, in form satisfactory to the City Clerk, executed by a member of a financial firm or by an officer of a bank or trust company, insurance company or financial corporation or other depository satisfactory to the City Clerk, or by any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he or she purports to act, showing at the date therein mentioned that such Person exhibited to such member, officer, notary public or other officer so authorized to take acknowledgments of deeds or had on deposit with such depository the securities described in such certificate or if in registered form shall be determined from the related registration books; but the City Clerk may nevertheless in his or her discretion require further or other proof in cases where he or she deems the same advisable. F. Warranty Issuance of Bonds. Any of the Bonds as herein provided, when duly executed and registered for the purposes provided for in this Ordinance, shall constitute a warranty by and on behalf of the City for the benefit of each and every future Owner of any of 30 the Bonds that the Bonds have been issued for a valuable consideration in full conformity with law. Section 11. Amendment of Ordinance. A. Amendment of Ordinance Not Requiring Consent of Bond Owners. The City may, without the consent of, or notice to, the Owners of the Bonds, adopt such ordinances supplemental hereto, which amendments shall thereafter form a part hereof, for any one or more or all of the following purposes: (1) To cure or correct any formal defect, ambiguity or inconsistent provision contained in this Ordinance; (2) To appoint successors to the Paying Agent, Registrar or Transfer Agent; (3) To designate a trustee for the Owners of the Bonds, to transfer custody and control of the Pledged Revenues to such trustee, and to provide for the rights and obligations of such trustee; (4) To add to the covenants and agreements of the City or the limitations and restrictions on the City set forth herein; (5) To pledge additional revenues, properties or collateral to the payment of the Bonds; (6) To cause this Ordinance to comply with the Trust Indenture Act of 1939, as amended from time to time; or (7) To effect any such other changes hereto that do not in the opinion of nationally recognized bond counsel materially adversely affect the interests of the Owners of the Bonds. B. Amendment of Ordinance Requiring Consent of Bond Owners. Exclusive of the amendatory ordinances covered by Section I I hereof, this Ordinance may be amended or modified by ordinances or other instruments duly adopted by the Council, without receipt by it of any additional consideration but with the written consent of the Owners of sixty-six percent (66%) in aggregate principal amount of the Bonds Outstanding at the time of the adoption of such amendatory ordinance, provided that no such amendatory ordinance shall permit without the written consent of one hundred percent (100%) in aggregate principal amount of the Bonds Outstanding: (1) Changing Payment. A change in the maturity or in the terms of redemption of the principal of any Outstanding Bond or any installment of interest thereon; or 31 (2) Reducing Return. A reduction in the principal amount of any Bond, the rate of interest thereon or any premium payable in connection with the redemption thereof, without the consent of the Owner of the Bond; or (3) Prior Lien. The creation of a lien upon or a pledge of revenues ranking prior to the lien or to the pledge created by this Ordinance; or (4) Modifying Amendment Terms. A reduction of the principal amount or percentages of Bonds, or any modification otherwise affecting the description of Bonds, otherwise changing the consent of the Owners of Bonds, that may be required herein for any amendment hereto; or (5) Priorities Among Bonds or Parity Securities. The establishment of priorities as among Bonds issued and Outstanding under the provisions of this Ordinance or as among Bonds and other Securities on a parity therewith; or (6) Partial Modification. Any modifications otherwise materially and prejudicially affecting the rights or privileges of the Owners of less than all of the Bonds then Outstanding. Whenever the Council proposes to amend or modify this Ordinance under the provisions of this Section 11 B it shall give notice of the proposed amendment by mailing such notice to all Owners of Bonds at the addresses appearing on the registration books of the City. Such notice shall briefly set forth the nature of the proposed amendment and shall state that a copy of the proposed amendatory ordinance or other instrument is on file in the office of the City Clerk for public inspection. C. Time for and Consent to Amendment. Whenever at any time within one (1) year from the date of the completion of the notice required to be given by Section 11 B hereof there shall be filed in the office of the City Clerk an instrument or instruments executed by the Owners of at least sixty-six percent (66%) in aggregate principal amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed amendatory ordinance or other instrument described in such notice and shall specifically consent to and approve the adoption of such ordinance or other instrument, thereupon, but not otherwise, the Council may adopt such amendatory ordinance or instrument and such ordinance or instrument shall become effective. If the Owners of at least sixty-six percent (66%) in aggregate principal amount of the Bonds then Outstanding, at the time of the adoption of such amendatory ordinance or instrument, or the predecessors in title of such Owners, no Owner of any Bond, whether or not such Owner shall have consented to or shall have revoked any consent as herein provided, shall have any right or interest to object to the adoption of such amendatory ordinance or other instrument or to object to any of the terms or provisions therein contained or to the operation thereof or to enjoin or restrain the City from taking any action pursuant to the provisions thereof. Any consent given by the Owner of a Bond pursuant to the provisions thereof shall be irrevocable for a period of six (6) months from the date of the completion of the notice above provided for and shall be conclusive and binding upon all future Owners of the same Bond during such period. Such consent may be revoked at any time after six (6) months from the completion of such notice, by the Owner who gave such consent or by a successor in title, by filing notice of such revocation 32 with the City Clerk, but such revocation shall not be effective if the Owners of sixty-six percent (66%) in aggregate principal amount of the Bonds Outstanding as herein provided, prior to the attempted revocation, shall have consented to and approved the amendatory instrument referred to in such revocation. D. Unanimous Consent. Notwithstanding anything in the foregoing provisions contained, the terms and the provisions of this Ordinance, or of any ordinance or instrument amendatory thereof, and the rights and the obligations of the City and of the Owners of the Bonds may be modified or amended in any respect (except as would adversely affect the rights of the Owners of any Parity Securities or Superior Bonds or Superior Securities) upon the adoption by the City and upon the filing with the City Clerk of an instrument to that effect and with the consent of the Owners of all the Outstanding Bonds, such consent to be given in the manner provided in Section I IC hereof; and no notice to Owners of Bonds shall be required as provided in Section I I hereof, nor shall the time of consent be limited except as may be provided in such consent. E. Exclusion of Bonds. At the time of any consent or of other action taken hereunder the Registrar shall furnish to the City Clerk a certificate, upon which the City Clerk may rely, describing all Bonds to be excluded for the purpose of consent or of other action or of any calculation of Outstanding Bonds provided for hereunder, and, with respect to such excluded Bonds, the City shall not be entitled or required with respect to such Bonds to give or obtain any consent or to take any other action provided for hereunder. F. Notation on Bonds. Any of the Bonds delivered after the effective date of any action taken as provided in Section 11 B hereof, or Bonds Outstanding at the effective date of such action, may bear a notation thereon by endorsement or otherwise in form approved by the Council as to such action; and if any such Bonds so delivered after such date does not bear such notation, then upon demand of the Owner of any Bond Outstanding at such effective date and upon presentation of his Bond for such purpose at the principal office of the City, suitable notation shall be made on such Bond by the City Clerk as to any such action. If the Council so determines, new Bonds so modified as in the opinion of the Council to conform to such action shall be prepared, executed and delivered; and upon demand of the Owner of any Bond then Outstanding, shall be exchanged without cost to such Owner for Bonds then Outstanding upon surrender of such Outstanding Bonds. G. Proof of Instruments and Bonds. The fact and date of execution of any instrument under the provisions of this Section 11, the amount and number of the Bonds owned by any Person executing such instrument, and the date of his registering the same may be proved as provided by Section I OE hereof. Section 12. Miscellaneous. A. Consent as Owner of 2004 DDA Bonds. The City is the sole Owner of the 2004 DDA Bonds, and no other obligations are outstanding as of the date hereof that have a lien on the Pledged Revenues. The City, as owner of the 2004 DDA Bonds, hereby consents to the issuance of the Bonds upon the terns and conditions set forth herein, and waives or amends any 33 requirements in the Ordinance authorizing the issuance of the 2004 DDA Bonds that are in conflict herewith. B. Charter. Pursuant to Article XX of the State Constitution and the Charter, all State statutes that might otherwise apply in connection with the provisions of this Ordinance, including but not limited to the issuance of the Bonds and the use of the Pledged Revenues and the moneys on deposit in funds and accounts referred to herein, are hereby superseded to the extent of any inconsistencies between the provisions of this Ordinance and such statutes. Any such inconsistency is intended by the Council and shall be deemed made pursuant to the Charter. C. Tax Advice. Any express or implicit tax advice provided in this Ordinance cannot be used by any taxpayer to avoid penalties that may be imposed on any taxpayer by the Internal Revenue Service. D. Character of Agreement. None of the covenants, agreements, representations, or warranties contained herein or in the Bonds shall ever impose or shall be construed as imposing any liability, obligation, or charge against the City (except for the special funds pledged therefor) or against the general credit of the City payable out of general funds. E. No Pledge of Property. The payment of the Bonds is not secured by an encumbrance, mortgage or other pledge of property of the City except for the Pledged Revenues. No property of the City, subject to such exception with respect to the Pledged Revenues, pledged for the payment of the Bonds, shall be liable to be forfeited or taken in payment of the Bonds. F. Statute of Limitations. No action or suit based upon any Bond or other obligation of the City shall be commenced after it is barred by any statute of limitations pertaining thereto. Any trust or fiduciary relationship between the City and the Owner of any Bond or the obligee regarding any such obligation shall be conclusively presumed to have been repudiated on the Maturity Date or other due date thereof unless the Bond is presented for payment or demand for payment of such other obligation is otherwise made before the expiration of the applicable limitation period. Any moneys from whatever source derived remaining in any fund or account reserved, pledged or otherwise held for the payment of any such obligation, action or suit, the collection of which has been barred, shall revert to such fund as the Council shall provide by ordinance. Nothing herein prevents the payment of any such Bond or other obligation after an action or suit for its collection has been barred if the Council deems it in the best interests of the City or the public so to do and orders such payment to be made. G. Delegated Duties. The officers of the City are hereby authorized and directed to enter into such agreements and take all action necessary or appropriate to effectuate the provisions of this Ordinance and to comply with the requirements of law, including, without limitation: (1) Printin The printing of the Bonds or, if necessary or desirable, the preparation of typewritten Bonds as provided herein; and (2) Execution Authentication Registration and Delivery. The execution, authentication and registration of the Bonds and the delivery of the Bonds to the Purchaser pursuant to the provisions of this Ordinance. 34 (3) Closing Documents. The execution of such certificates as may be reasonably required by the Purchaser, relating, inter alia, to: (a) The signing of the Bonds; (b) The tenure and identity of the officials of the City; (c) If in accordance with fact, the absence of pending litigation affecting the validity of the Bonds; (d) That portion of the Bonds that are authorized pursuant to the authority conferred at the 1982 Election and that portion of the Bonds that are authorized pursuant to the authority conferred at the 2006 Election; and (e) The delivery of the Bonds and the receipt of the Bond purchase price. H. Successors. Whenever herein the City is named or is referred to, such provision shall be deemed to include any successors of the City, whether so expressed or not. All of the covenants, stipulations, obligations and agreements by or on behalf of and other provisions for the benefit of the City contained herein shall bind and inure to the benefit of any officer, board, district, commission, authority, agency, instrumentality or other Person or Persons to whom or to which there shall be transferred by or in accordance with law any fight, power or duty of the City or of its respective successors, if any, the possession of which is necessary or appropriate in order to comply with any such covenants, stipulations, obligations, agreements or other provisions hereof. I. Rights and Immunities. Except as herein otherwise expressly provided, nothing herein expressed or implied is intended or shall be construed to confer upon or to give to any Person, other than the City and the Owners from time to time of the Bonds, any right, remedy or claim under or by reason hereof or any covenant, condition or stipulation hereof. All the covenants, stimulations, promises and agreements herein contained by and on behalf of the City shall be for the sole and exclusive benefit of the City and any Owner of any of the Bonds. No recourse shall be had for the payment of the Debt Service Requirements of the Bonds or for any claim based thereon or otherwise upon this Ordinance authorizing their issuance or any other ordinance or instrument pertaining thereto, against any individual member of the Council, or any officer or other agent of the City, past, present or future, either directly or indirectly through the City, or otherwise, whether by virtue of any constitution, statute or rule of law or by the enforcement of any penalty or otherwise, all such liability, if any, being by the acceptance of the Bonds and as a part of the consideration of their issuance specially waived and released. J. Facsimile Signatures. Pursuant to the Uniform Facsimile Signature of Public Officials Act, part 1 of article 55 of title 11, Colorado Revised Statutes, as amended, the Mayor, the City Clerk and the Financial Officer of the City shall forthwith, and in any event prior to the time the Bonds are delivered to the Purchaser, file with the Colorado Secretary of State their manual signatures certified by them under oath. 35 K. Ordinance Irrepealable. This Ordinance is, and shall constitute, a legislative measure of the City and after any of the Bonds are issued, this Ordinance shall constitute an irrevocable contract between the City and the Owner or Owners of the Bonds; and this Ordinance, subject to the provisions of Section 9 and Section 1 I hereof, if any Bonds are in fact issued, shall be and shall remain irrepealable until the Bonds, as to all Debt Service Requirements, shall be fully paid, satisfied or discharged, as herein provided. L. Ratification. All actions not inconsistent with the provisions of this Ordinance heretofore taken by the City or its officers, and otherwise by the City directed toward the pledging of the Tax Increment Revenues, the construction, acquisition or installation of the Project, the issuance and delivery of the Bonds and sale thereof to the Purchaser are hereby ratified, approved and confirmed. M. Repealer. All ordinances, resolutions, bylaws, orders, and other instruments, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revive any ordinance, resolution, bylaw, order, or other instrument, or part thereof, heretofore repealed. N. Severability. If any section, subsection, paragraph, clause or other provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability thereof shall not affect any of the remaining sections, subsections, paragraphs, clauses or provisions of this Ordinance. Introduced and considered favorably on first reading and ordered published this 16th day of January, A.D. 2007, and to be presented for final passage on the 6th day of February, A.D. 2007. Mayor �TTEST: � City Clerk Passed and adopted on final reading this 6th day of February, A.D. 2007. Mayor ATTEST: City Clerk 36 ORDINANCE NO. 017, 2007 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PROCEEDS FROM THE ISSUANCE OF CITY OF FORT COLLINS, COLORADO, DOWNTOWN DEVELOPMENT AUTHORITY TAXABLE SUBORDINATE TAX INCREMENT REVENUE BONDS, SERIES 2007A, FOR THE PURPOSE OF MAKING CERTAIN CAPITAL IMPROVEMENTS, CAPITAL PROJECTS AND DEVELOPMENT PROJECTS WITHIN THE DOWNTOWN AREA OF FORT COLLINS, AUTHORIZING THE TRANSFER OF APPROPRIATIONS BETWEEN FUNDS AND APPROPRIATING EXPENDITURES FROM THE DDA DEBT SERVICE FUND TO MAKE THE 2007 PAYMENT ON THE BONDS WHEREAS, on April 21, 1981, the City of Fort Collins, Colorado, adopted Ordinance No. 46, 1981, establishing the Fort Collins, Colorado, Downtown Development Authority; and WHEREAS,the Downtown Development Authority's Plan of Development was approved by the City on September 8, 1981, and established the purpose of the Authority and the types of projects in which the Authority would participate; and WHEREAS, on June 1, 1982, a special election was held pursuant to Section 31-25-807(b) of the Colorado Revised Statutes approving the issuance by the City of up to $25,000,000 in tax increment obligations to finance certain projects of the Downtown Development Authority; and WHEREAS,on November 7,2006,an election was held and electors approved the issuance by the City of up to $150,000,000 in tax increment obligations to finance the costs of development projects of the Downtown Development Authority; and WHEREAS,there is sufficient remaining bonding authorization available to fund additional projects in the downtown area, pursuant to Ordinance No. 016, 2007, as approved by the City Council this same date, and there is sufficient revenue in the Operations and Maintenance Fund available to pay the annual debt service payments on the bonds issued by said Ordinance; and WHEREAS, through the adoption of Ordinance No. 016, 2007, of the Council of the City of Fort Collins,the Council authorized the issuance of the City of Fort Collins,Colorado,Downtown Development Authority Taxable Subordinate Tax Increment Revenue Bonds, Series 2007A (the "Bonds"), in the maximum aggregate principal amount $5,700,000; and WHEREAS, the issuance of the Bonds, and the appropriation of the proceeds thereof, are necessary to complete the construction of certain capital improvements, capital projects and development projects in the downtown area of the City; and WHEREAS,Article V, Section 9, of the Charter of the City of Fort Collins permits the City Council to make supplemental appropriations, in conjunction with all previous appropriations for that fiscal years,provided that the total amount of such supplemental appropriations,in combination with all previous appropriations for that fiscal year, does not exceed the current estimate of actual and anticipated revenues to be received during the fiscal year; and WHEREAS,Article V, Section 10,of the Charter authorizes the City Council to transfer by ordinance any unexpended appropriated amount or portion thereof from one fund or capital project to another fund or capital project, if the purpose for which the transferred funds are to be expended remains unchanged. NOW,THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That, contingent upon the final sale and issuance of the Bonds, there is hereby appropriated for expenditure from Bond proceeds in the Downtown Development Authority Operating Fund the amount of FIVE MILLION SEVEN HUNDRED THOUSAND DOLLARS fl ($5,700,000) to be used for the following: Projects 1. Bas Bleu Performing Arts Theater $ 250,000 2. Sears Trostel Building Renovation (CTL/Thompson) 175,000 3. 252 East Mountain Avenue(Otter Industries) 290,000 4. Penny Flats Phase I Downtown Housing 547,085 5. Community Amphitheater 1,300,000 6. Downtown Hotel 500,000 Other Projects already approved by the DDA Board (Tailgate Tommy's, Downtown Ice Rink, etc.) 356,096 Miscellaneous Projects pending DDA Board Approval 800,000 Total Projects $4,218,181 Programs Fagade Grant Program $ 500,000 Beet Street Cultural Program 737,753 Total Programs $1,237,753 Administrative Expenses $ 244,066 Total Project, Program and Administrative Costs $5,700,000 Section 2. That, there is hereby appropriated for expenditure from the Downtown Development Authority Debt Service Fund the amount of ONE MILLION THREE HUNDRED SEVENTEEN THOUSAND SIX HUNDRED DOLLARS($1,317,600)to be used for the payment of debt service on the bonds. -2- Introduced and considered favorably on first reading and o ered published this 16th day of January, A.D. 2007, and to be presented for final passage on e da f Fe A 007. May ATTEST:\�LL 1 i' City Clerk Passed and adopted on final reading this 6th day of February, A.D. 2007. Mayor ATTEST: City Clerk 3