HomeMy WebLinkAbout186 - 11/03/1998 - AUTHORIZING ISSUANCE OF HIGHWAY USERS TAX REVENUE REFUNDING BONDS, SERIES 1998, FOR THE PURPOSE OF R ORDINANCE NO. 186, 1998
AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF FORT
COLLINS, COLORADO, HIGHWAY USERS TAX REVENUE REFUNDING
BONDS, SERIES 1998, DATED NOVEMBER 1, 1998, IN THE AGGREGATE
PRINCIPAL AMOUNT OF $3,399,729.20; FOR THE PURPOSE OF
REFUNDING THE CITY'S HIGHWAY USERS TAX REVENUE BONDS,
SERIES 1992, AND PLEDGING THE REVENUE DISTRIBUTED TO THE
CITY FROM THE STATE'S HIGHWAY USERS TAX FUND TO PAY THE
PRINCIPAL OF AND INTEREST ON THE BONDS.
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS,
COLORADO, AS FOLLOWS:
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) Act: part 2 of article 4 of title 43, Colorado Revised Statutes, as
amended.
(2) Additional Parity Bonds: any Parity Securities issued after
issuance of the Bonds.
(3) Average Annual Debt Service Requirements: the aggregate of all
Debt Service Requirements (excluding any redemption premiums) due on the Bonds or
any other issue of Parity Securities or any portion thereof for all Bond Years beginning
with the Bond Year in which Debt Service Requirements of the Bonds or such Securities
are first payable after the computation date and ending with the Bond Year in which the
last of the Debt Service Requirements are payable divided by the whole number of such
years.
(4) Beneficial Owners: those Persons having beneficial ownership
interests in Bonds registered in the name of the Securities Depository or a nominee
therefor.
(5) Bond Insurance Policy: the municipal bond insurance policy
issued by the Bond Insurer guaranteeing the scheduled payment of the principal of and
interest on the Bonds.
(6) Bond Insurer: Financial Security Assurance Inc., a New York
stock insurance company, or any successor thereto or assignee thereof.
(7) Bond Purchase Agreement: the Bond Purchase Agreement, dated
as of October 29, 1998 between the City and the Purchaser.
(8) Bonds: the City of Fort Collins, Colorado, Highway Users Tax
Revenue Refunding Bonds, Series 1998, dated November 1, 1998, in the aggregate
principal amount of$3,399,729.20.
(9) 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.
(10) Capital Appreciation Bonds: The Bonds maturing in the years 2007
and 2008, which bear interest compounded semiannually and payable at maturity.
(11) Charter: the Home Rule Charter of the City, as amended.
(12) Cam: the City of Fort Collins, Colorado.
(13) Code: the Code of the City, as amended.
(14) Combined Average Annual Debt Service Requirements: the sum
of the Average Annual Debt Service Requirements for all issues of Parity Securities for
which the computation is being made.
(15) Combined Maximum Annual Debt Service Requirements: the
Maximum Annual Debt Service Requirements for all issues of Parity Securities for which
the computation is being made, treated as a single issue.
(16) Commitment: the municipal bond insurance commitment, dated
October 21, 1998, from the Bond Insurer to the City.
(17) Commercial Bank: a state or national bank or trust company
which is a member of the Federal Deposit Insurance Corporation and of the Federal
Reserve System, which has a capital and surplus of$1,000,000 or more and which is
located within the United States of America.
(18) Costs of Issuance: all financial, legal, accounting and rating fees,
the fees and expenses of the Paying Agent, Registrar, Transfer Agent and Escrow Bank
and all costs of printing, mailing and publication incurred in connection with the issuance
of the Bonds.
(19) Costs of Issuance Subaccount: the special fund created and
referred to in Section 5B hereof.
(20) Current Interest Bonds: the Bonds maturing in the years 1999
through 2012, which bear interest payable semiannually.
(21) Council: the governing body of the City.
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(22) 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 and any other Securities payable from the Pledged Revenues.
(23) Escrow Account: the special fund referred to in Section 5A hereof.
(24) Escrow Agreement: the Escrow Agreement, dated as of
November 1, 1998, between the City and the Escrow Bank.
(25) Escrow Bank: U.S. Bank National Association, or its successors.
(26) Event of Default: one of the events described in Section l0A
hereof.
(27) Excess Investment Earnings Subaccount: the special fund created
and referred to in Section 5J hereof.
(28) Federal Securities: bills, certificates of indebtedness, notes, bonds
or similar securities which are direct obligations of, or the principal and interest of which
obligations are unconditionally guaranteed by, the United States of America, or, if the
Bond Insurer agrees in writing, are obligations the principal and interest of which are
unconditionally guaranteed by the United States of America.
(29) 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
Charter as the fiscal year of the City.
(30) Highway Users Tax Revenue Account: the special account created
by Ordinance No. 87, 1992, of the City and referred to in Section 5C hereof.
(31) Highway Users Tax Revenues: the revenues distributed to the City
from the highway users tax fund of the State created pursuant to the Act.
(32) Independent Accountant: any certified public accountant, or any
firm of such accountants, duly licensed to practice and practicing as such under the laws
of the State, appointed and paid by the City, who (a) is, in fact, independent and not under
the domination of the City, (b) does not have any substantial interest, direct or indirect, in
any of the affairs of the City, and (c) is not connected with the City as a member, officer
or employee, but who may be regularly retained to make annual or similar audits of any
books or records of the City.
(33) Insurance Agreement: the Insurance Agreement, dated as of
November 1, 1998, between the City and the Bond Insurer, relating to the Reserve
Insurance Policy.
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(34) Insurer's Fiscal Agent: any fiscal agent appointed or designated by
the Bond Insurer by written notice to the Paying Agent specifying the name and notice
address of such agent.
(35) Interest Payment Date: a date designated by ordinance for the
payment of interest on the Bonds or other designated securities.
(36) Maturity Date: a date designated by ordinance for the payment of
principal on the Bonds or any other designated securities.
(37) Maximum Annual Debt Service Requirements: the maximum
Debt Service Requirements (excluding any redemption premiums) due on the Bonds or
any other issue of Parity Securities in any Bond Year beginning with the Bond Year in
which Debt Service requirements of the Bonds or such Parity Securities are first payable
after the computation date and ending with the Bond Year in which the last of the Debt
Service Requirements are payable.
(38) MSRB: the Municipal Securities Rulemaking Board.
(39) NRMSIR: a nationally recognized municipal securities
information repository, recognized by the Securities and Exchange Commission pursuant
to SEC Rule 15c2-12.
(40) Ordinance: this Ordinance No. 186, 1998, of the City.
(41) Outstanding or outstanding: as of any particular date, all Bonds,
Additional Parity Bonds, Parity Securities or any such other securities payable in whole or
in part from the Pledged Revenues having been authorized, executed and delivered,
except the following:
(a) Any Bond, Additional Parity Bond, Parity Security or other
security canceled by the City, by the Paying Agent, or otherwise on the City's
behalf, at or before such date;
(b) Any Bond, Additional Parity Bond, Parity Security or other
security held by or on behalf of the City;
(c) Any Bond, Additional Parity Bond, Parity Security or other
security of the City for the payment or the redemption of which moneys or
Federal Securities 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 of the Debt Service Requirements of such Bond,
Additional Parity Bond, Parity Security or other security to the Maturity Date or
Redemption Date thereof shall have theretofore been deposited in escrow or in
trust with a Trust Bank for that purpose; and
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(d) Any lost, destroyed, or wrongfully taken Bond, Additional
Parity Bond, Parity Security or other security of the City in lieu of or in
substitution for which another bond or other security shall have been executed and
delivered.
(42) Owner: when used in conjunction with any Bond or any other
designated security, the holder of any bearer instrument or the registered owner of any
registered instrument.
(43) Parity Securities: bonds, warrants, other securities, leases or other
contracts evidencing borrowings and payable from the Pledged Revenues equally or on a
parity with the Bonds.
(44) Participants: underwriters, securities brokers or dealers, banks,
trust companies, closing corporations or other Persons for which or whom the Securities
Depository holds the Bonds.
(45) Paving Agent: the Financial Officer of the City, or his successors.
(46) Permitted Investments: any obligations permitted by the
ordinances of the City and, to the extent applicable, the laws of the State.
(47) Person: any individual, firm, partnership, corporation, company,
association,joint-stock association, or body politic or any trustee, receiver, assignee, or
other similar representative thereof.
(48) Pledged Revenues: the Highway Users Tax Revenues plus any
income from the investment of Highway Users Tax Revenues or proceeds of bonds
payable therefrom.
(49) Policy Costs: the principal amount of any claim paid by the Bond
Insurer under the Reserve Insurance Policy, reasonable expenses incurred by the Bond
Insurer in connection therewith and interest accrued on the foregoing at the rate specified
in the Insurance Agreement.
(50) Policy Payments Account: the special purpose trust account
described in Section 313(2) hereof.
(51) PreliminM Official Statement: the Preliminary Official
Statement, dated October 22, 1998, relating to the Bonds.
(52) Principal and Interest Subaccount: the special fund created by
Ordinance No. 87, 1992, of the City and referred to in Section 5D hereof.
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(53) Prior Bonds: the City of Fort Collins, Colorado, Highway Users
Tax Revenue Bonds, Series 1992, dated August 15, 1992, in the original aggregate
principal amount of$4,055,000.
(54) Purchaser: George K. Baum & Company, Denver, Colorado and
its associates, if any.
(55) Redemption Date: the date fixed for redemption prior to maturity
of any Bonds or other designated securities payable from the Pledged Revenues in any
notice of prior redemption authorized by the City or otherwise.
(56) Redemption Price: the principal amount of any Bond or other
designated security payable from the Pledged Revenues plus accrued interest thereon to
the Redemption Date plus the applicable premium, if any, payable upon redemption
thereof prior to the Maturity Date of such Bond or other security.
(57) Refunding Act: part 1 of article 56 of title 11, Colorado Revised
Statutes, as amended.
(58) Registrar: the Financial Officer of the City, or his successors.
(59) Regular Record Date: the fifteenth day of the calendar month next
preceding an Interest Payment Date for the Bonds.
(60) Reserve Insurance Policy: the municipal bond debt service reserve
insurance policy delivered by the Bond Insurer to the City for the purposes specified in
Section 5E hereof.
(61) Reserve Insurance Policy Commitment: the commitment to issue
the Reserve Insurance Policy, dated October 21, 1998, from the Bond Insurer to the City.
(62) Reserve Subaccount: the special fund created by Ordinance
No. 87, 1992, of the City and referred to in Section 5E hereof.
(63) Securities Depository: The Depository Trust Company, a limited
purpose trust company organized under the laws of New York.
(64) Securi or securities: any bond issued by the City or any other
evidence of the advancement of money to the City.
(65) SID: the state information depository for the State, if any,
recognized by the Securities and Exchange Commission pursuant to SEC Rule 15c2-12.
(66) Special Record Date: the date fixed by the Paying Agent for the
determination of ownership of Bonds or the purpose of paying interest not paid when due
or interest accruing after maturity.
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(67) State: the State of Colorado.
(68) Subordinate Bonds or Subordinate Securities: bonds or securities
payable from the Pledged Revenues having a lien thereon subordinate or junior to the lien
thereon of the Bonds.
(69) Superior Bonds or Superior Securities: bonds or securities payable
from the Pledged Revenues having a lien thereon superior or senior to the lien thereon of
the Bonds.
(70) Tax Code: the Internal Revenue Code of 1986, as amended.
(71) Transfer A ent: the Financial Officer of the City, or his
successors.
(72) Trust Bank: a Commercial Bank which is authorized to exercise
and is exercising trust powers.
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.
(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.
(5) Any inconsistency between the provisions of this Ordinance and
those of the Act or the Refunding Act is intended by the Council. To the extent of any
such inconsistency the provisions of this Ordinance shall be deemed made pursuant to the
Charter and shall supersede to the extent permitted by law the conflicting provisions of
the Act.
Section 2. Recitals.
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A. Prior Bonds. The City has heretofore issued and sold the Prior Bonds.
There is Outstanding of the Prior Bonds the aggregate principal amount of$3,400,000, maturing
on December 1 in the following years in the following aggregate principal amounts and bearing
interest at the following per annum interest rates:
Principal
Years Amounts Interest Rates
1998 $ 150,000 5.100%
1999 155,000 5.250
2000 165,000 5.450
2001 175,000 5.500
2002 185,000 5.600
2003 195,000 5.700
2004 205,000 5.900
2007 690,000 6.100
2012 1,480,000 6.375
The Prior Bonds maturing in the years 1998 through 2002 are not subject to optional redemption
prior to their Maturity Date. The Prior Bonds maturing in the year 2003 and thereafter are
subject to optional redemption prior to their respective Maturity Dates, in whole or in part in
inverse order of maturity and by lot within a maturity, on December 1, 2002, and on any Interest
Payment Date thereafter at a price equal to the principal amount of each Prior Bond so redeemed
plus accrued interest thereon to the Redemption Date.
The City desires to refund, pay and discharge the Prior Bonds in order to reduce
the net effective interest rate; reduce the total interest payable; reduce the total principal and
interest payable in any particular year or years, or effect other economies; or any combination of
the foregoing.
B. Authori . Pursuant to article XX, §6 of the Colorado Constitution and
Article V, Sections 19.3 and 19.4 of the Charter, the Act and the Refunding Act, the City is
authorized by Council action to issue the Bonds for the purpose of refunding, paying and
discharging the Prior Bonds. Pursuant to Article X, § 20 of the Colorado Constitution, the City is
authorized to issue the Bonds without voter approval in advance in order to refinance the Prior
Bonds at the lower interest rate.
Section 3. The Bonds.
A. Authorization. The Bonds are hereby authorized to be issued for the
aforesaid purpose.
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B. Bond Details.
(1) Generally.
The Bonds shall consist of the Current Interest Bonds and the Capital
Appreciation Bonds. The Current Interest Bonds shall be issued in fully registered form and
shall initially be registered in the name of the Securities Depository or a nominee therefor.
Purchases by Beneficial Owners shall be made in book-entry form in the principal amount of
$5,000 or any integral multiple thereof. The Beneficial Owners shall not receive certificates
evidencing their interests in the Current Interest Bonds. No Current Interest Bond shall be issued
in any denomination larger than the aggregate principal amount maturing on the Maturity Date of
such Current Interest Bond, and no Current Interest Bond shall be made payable on more than
one Maturity Date. The Current Interest Bonds shall be initially issued so that a single Current
Interest 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 Current Interest Bonds.
The Current Interest Bonds shall mature on December 1 in the following years in
the following aggregate principal amounts and shall bear interest from November 1, 1998, 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:
Principal Per Annum
Years Amounts Interest Rates
1999 $ 90,000 3.20%
2000 220,000 3.50
2001 230,000 3.60
2002 235,000 3.70
2003 245,000 3.80
2004 255,000 3.90
2005 260,000 4.00
2006 275,000 4.10
2007 145,000 4.15
2008 155,000 4.20
2009 300,000 4.25
2010 315,000 4.30
2011 330,000 4.40
2012 340,000 4.50
Said interest shall be payable on June 1, 1999, and semiannually thereafter on the first day of
December and the first day of June of each year. If upon presentation at maturity the principal of
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any Current Interest Bond is not paid as provided herein, interest shall continue thereon at the
same interest rate until the principal is paid in full.
The Capital Appreciation Bonds shall be issued in fully registered form and shall
initially be registered in the name of the Securities Depository or a nominee therefor. Purchases
by Beneficial Owners of the Capital Appreciation Bonds shall be made in book-entry form in the
maturity value (principal and interest payable at maturity) of$5,000 or any integral multiple
thereof. The Beneficial Owners of the Capital Appreciation Bonds shall not receive certificates
evidencing their interests in the Capital Appreciation Bonds. No Capital Appreciation Bond
shall be issued in any denomination larger than the aggregate principal and interest due on the
maturity date of such Capital Appreciation Bonds, and no Capital Appreciation Bond shall be
made payable on more than one maturity date. The Capital Appreciation Bonds shall be initially
issued so that a single Capital Appreciation Bond shall evidence the obligation of the District to
pay all principal and interest 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 Capital Appreciation Bonds.
The Capital Appreciation Bonds shall mature on December 1 in the following
years in the following aggregate principal amounts and shall bear interest from their delivery date
to their respective maturity dates at the rate of 48.00% per annum:
Years Principal Amounts
2007 $2,865.80
2008 1,863.40
Said interest shall be compounded on June 1, 1999, and semiannually thereafter on the first day
of June and the first day of December of each year. If upon presentation at maturity the principal
of or any interest on any Capital Appreciation Bond is not paid as provided herein, interest shall
continue thereon at the same interest rate until the principal and interest are paid in full.
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 the final installment of 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 the 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
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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 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. Any
premium shall be payable to the Owner of each Bond redeemed upon presentation and surrender
thereof upon prior redemption by check or draft or wire transfer directed to such Owner as
aforesaid. 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 which 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.
So long as the Owner of any Bond is the Securities Depository or a nominee
therefor, the Securities Depository shall disburse any payments received, through its Participants
or otherwise, to the Beneficial Owners.
Neither the City nor the Paying Agent shall have any responsibility or obligation
for the payment to any Participant, any Beneficial Owner or any other Person(except an Owner
of Bonds) of the Debt Service Requirements of the Bonds.
Notwithstanding any other provision of this Ordinance to the contrary, so long as
any Bond is registered in the name of Cede & Co., as nominee for the Securities Depository, all
payments with respect to Debt Service Requirements of such Bond shall be made in the manner
provided in the Letter of Representations.
(2) Claims Upon the Bond Insurance Policy and Payments by and to the Bond
Insurer. If, on the third business day prior to any Interest Payment Date there are not on deposit
with the Paying Agent, after making all transfers and deposits required under this Ordinance,
moneys sufficient to pay the principal of and interest on the Bonds due on such Interest Payment
Date, the Paying Agent shall give notice to the Bond Insurer and to the Insurer's Fiscal Agent, if
any, by telephone or telecopy of the amount of such deficiency by 12:00 noon, Eastern time, on
such business day. If, on the second business day prior to such Interest Payment Date, there
continues to be a deficiency in the amount available to pay the principal of and interest on the
Bonds due on such Interest Payment Date, the Paying Agent shall make a claim under the Bond
Insurance Policy and give notice to the Bond Insurer and the Insurer's Fiscal Agent, if any, by
telephone of the amount of such deficiency and the allocation of such deficiency between the
amount required to pay interest on the Bonds and the amount required to pay principal of the
Bonds, confirmed in writing to the Bond Insurer and the Insurer's Fiscal Agent, if any, by 12:00
noon, Eastern time, on such second business day by filing the form of notice of claim and
certificate delivered with the Bond Insurance Policy.
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The Paying Agent shall keep a complete and accurate record of all funds
deposited by the Bond Insurer into the Policy Payments Account and the allocation of such funds
to payment of interest on and principal paid in respect of any Bond. The Bond Insurer shall have
the right to inspect such records at reasonable times upon reasonable notice to the Paying Agent.
Upon payment of a claim under the Bond Insurance Policy the Paying Agent shall
establish a separate special purpose trust account for the benefit of the Owners of the Bonds to be
known as the Policy Payments Account, over which the Paying Agent shall have exclusive
control and sole right of withdrawal. The Paying Agent shall receive any amount paid under the
Bond Insurance Policy in trust on behalf of the Owners of the Bonds and shall deposit any such
amount in the Policy Payments Account and distribute such amount only for purposes of making
the payments for which a claim was made. Such amounts shall be disbursed by the Paying Agent
to the Owners of the Bonds in the same manner as principal and interest payments are to be made
with respect to the Bonds under the sections hereof regarding payment of Bonds. It shall not be
necessary for such payments to be made by checks or wire transfers separate from the checks or
wire transfers used to pay Debt Service Requirements from Pledged Revenues.
Funds held in the Policy Payments Account shall not be invested by the Paying
Agent.
Any funds remaining in the Policy Payments Account following an Interest
Payment Date shall promptly be remitted to the Bond Insurer.
The City hereby agrees to pay or reimburse the Bond Insurer any and all charges,
fees, costs and expenses which the Bond Insurer may reasonably pay or incur in connection with
the administration, enforcement, defense or preservation of any rights or security in respect of
this Ordinance or any document described herein, the pursuit of any remedies under this
Ordinance or any document described herein or otherwise afforded by law or equity, any
amendment, waiver or other action with respect to, or related to, this Ordinance or any document
described herein whether or not executed or completed, the violation by the City of any law, rule
or regulation or any judgment, order or decree applicable to it or any litigation or other dispute in
connection with this Ordinance or any document described herein or the transactions
contemplated thereby, other than amounts resulting from the failure of the Bond Insurer to honor
its obligations under the Bond Insurance Policy. The Bond Insurer shall have the right to charge
a reasonable fee as a condition to executing any amendment, waiver or consent proposed in
respect of this Ordinance or any document described herein.
The Bond Insurer shall, to the extent it makes any payment of principal of(or in
the case of the Capital Appreciation Bonds, accreted value) or interest on the Bonds, become
subrogated to the rights of the recipients of such payments in accordance with the terms of the
Bond Insurance Policy.
The Bond Insurer shall be entitled to pay principal or interest on the Bonds that
shall become "due for payment" but shall be unpaid by reason of"nonpayment by the issuer" (as
such terms are defined in the Bond Insurance Policy) and any amounts due on the Bonds as a
result of acceleration of the maturity thereof, whether or not the Bond Insurer has received a
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"notice" (as defined in the Bond Insurance Policy) of nonpayment or a claim upon the Bond
Insurance Policy.
(3) Redemption. Bonds maturing in the years 1999 through 2008 shall not be
subject to optional redemption prior to their respective Maturity Dates. Bonds maturing in the
year 2009 and thereafter shall be subject to optional redemption prior to their respective Maturity
Dates, in whole or in part in such order of maturity as may be determined by the City and by lot
within a maturity, on December 1, 2008, and on any Interest Payment Date thereafter 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 respective Maturity Dates may be
redeemed in part if issued in denominations which are integral multiples of$5,000. Such Bonds
shall be treated as representing a corresponding number of separate Bonds in the denomination of
$5,000 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
of any Bonds 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 Bond Insurer and 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 Redemption Price and that from and after such date interest will cease to accrue. In
addition, the Paying Agent is hereby authorized to give such other or further notice as may be
required by law and to comply with any operational procedures and requirements of the
Securities Depository relating to redemption of Bonds and notice thereof. 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 canceled the same as Bonds paid at or after maturity.
Notwithstanding any other provision of this Ordinance to the contrary, so long as
any Bond is registered in the name of Cede & Co., as nominee for the Securities Depository, all
notices with respect to the Bonds shall be given in the manner provided in the Letter of
Representations. In the event of a conflict between the provisions of this Ordinance and the
Letter of Representations, the provisions of this Ordinance shall be controlling.
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(4) Interest Rates. The weighted average interest rate of the Outstanding Prior
Bonds is 6.207% per annum, and the net effective interest rate of the Bonds is 4.695%per
annum.
(5) 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 an 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.
(6) 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 with the Registrar. Initially, each Bond shall be registered in the name of
the Securities Depository or a nominee therefor. Except as hereinafter provided, all of the Bonds
shall continue to be registered in the name of the Securities Depository or a nominee therefor. To
the extent that typewritten Bonds, rather than printed Bonds, are to be delivered, such
modifications to the form of Bond as may be necessary or desirable in such case are hereby
authorized and approved. There shall be no substantive change to the terms and conditions set
forth in the form of Bond, except as otherwise authorized by this Ordinance or any amendment
thereto.
Neither the City nor the Registrar shall have any responsibility or obligation with
respect to the accuracy of the records of the Securities Depository or a nominee therefor or any
Participant regarding any ownership interest in the Bonds or the delivery to any Participant,
Beneficial Owner, or any other Person (except an Owner of Bonds) of any notice with respect to
the Bonds.
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. The Registrar or Transfer Agent shall accept a Bond for
registration or transfer only if the Owner is to be an individual, a corporation, a partnership, or a
trust. 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
14
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
Registrar shall authenticate and the Transfer Agent shall deliver to the new Owner a new Bond or
Bond 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 to their date of authentication. New 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. Upon
the occurrence of an Event of Default which would require payment by the Bond Insurer under
the Bond Insurance Policy, the Bond Insurer and its designated agents shall be afforded access to
the registration books of the City.
Neither the City nor the Transfer Agent shall have any responsibility or obligation
with respect to the accuracy of the records of the Securities Depository or a nominee therefor or
any Participant regarding any ownership interest in the Bonds or transfers thereof.
(7) Resignation or Removal of Agents. If the Paying Agent, Registrar,
Transfer Agent or Escrow Bank shall resign as such, or if the City shall reasonably determine that
the Paying Agent, Registrar, Transfer Agent or Escrow Bank has become incapable of fulfilling
his or its duties hereunder, the City may, upon notice mailed to the Bond Insurer and to each
Owner of Bonds at the addresses last shown on the registration books of the City, accept the
resignation of the Paying Agent, Registrar, Transfer Agent or Escrow Bank and appoint a
successor paying agent, registrar, transfer agent or escrow bank. Every such successor paying
agent, registrar, transfer agent or escrow bank shall be a Trust Bank unless otherwise approved in
writing by the Bond Insurer. It shall not be required that the same institution serve as paying
agent, registrar, transfer agent and escrow bank hereunder, but the City shall have the right to
have the same institution serve as paying agent, registrar, transfer agent and escrow bank
hereunder. Any such resignation or removal shall become effective only on the appointment of a
successor and acceptance by the successor of its duties hereunder.
(8) Resignation or Removal of Securities Depository. The City may remove
the Securities Depository and the Securities Depository may resign by giving sixty (60) days'
written notice to the other of such removal or resignation. Additionally, the Securities
Depository shall be removed sixty (60) days after receipt by the City of written notice from the
Securities Depository to the effect that the Securities Depository has received written notice from
Participants having interests, as shown in the records of the Securities Depository, in an
15
aggregate principal amount of not less than fifty percent (50%) of the aggregate principal amount
of the then outstanding Bonds to the effect that the Securities Depository is unable or unwilling
to discharge its responsibilities or a continuation of the requirement that all of the outstanding
Bonds be registered in the name of the Securities Depository or a nominee therefor is not in the
best interests of the Beneficial Owners. Upon the removal or resignation of the Securities
Depository, the Securities Depository shall take such action as may be necessary to assure the
orderly transfer of the computerized book-entry system with respect to the Bonds to a successor
securities depository or, if no successor securities depository is appointed as herein provided, the
transfer of the Bonds in certificate form to the Beneficial Owners or their designees. Upon the
giving of notice by the City of the removal of the Securities Depository, the giving of notice by
the Securities Depository of its resignation or the receipt by the City of notice with respect to the
written notice of Participants referred to herein, the City may, within sixty (60) days after the
giving of such notice, appoint a successor securities depository upon such terms and conditions
as the City shall impose. Any such successor securities depository shall at all times be a
registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other
applicable statute or regulation, and in good standing thereunder. If the City fails to appoint a
successor securities depository within such time period, the Bonds shall no longer be restricted to
being registered in the name of the Securities Depository or a nominee therefor, but may be
registered in whatever name or names registered owners transferring or exchanging Bonds shall
designate.
(9) 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
Section 8-41 of the Code.
(10) Recitals in Bonds. Each Bond shall recite in substance that it is payable
solely from the Pledged Revenues and that it is not payable in whole or in part from ad valorem
taxes of the City and that the full faith and credit of the City is not pledged to pay the principal of
or interest on such Bond. Each Bond shall further recite that it is issued under the authority of
the Constitution of the State, the Charter, the Act, the Refunding Act and this Ordinance. The
Refunding Act provides that such recital conclusively imparts full compliance with all of the
provisions of the Refunding Act and that the Bonds containing such recital are incontestable for
any cause whatsoever after their delivery for value.
(11) Form of Bonds. The Bonds shall be in substantially the following form:
16
[Form of Current Interest Bond]
(Text of Face)
UNITED STATES OF AMERICA
STATE OF COLORADO COUNTY OF LARIMER
CITY OF FORT COLLINS
HIGHWAY USERS TAX REVENUE REFUNDING BOND
SERIES 1998
No. R- $
Interest Maturity Original
Rate Date Date CUSIP
% December 1, November 1, 1998
REGISTERED OWNER: Cede & Co.
PRINCIPAL SUM:
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 funds 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), or the interest
payment date to which interest has been paid next preceding the date hereof, whichever is later,
to the Maturity Date, except if redeemed prior thereto, at the per annum Interest Rate (specified
above), payable semiannually on the first day of June and the first day of December of each year,
commencing on June 1, 1999, or the first such date after the date hereof whichever is later, in the
manner provided herein. If upon presentation at maturity payment of the Principal Sum of this
Bond is not made as provided herein, interest is to continue at the Interest Rate until the Principal
Sum is paid in full.
Bonds maturing in the years 1999 through 2008 are not subject to optional
redemption prior to their respective maturity dates. Bonds maturing in the year 2009 and
thereafter are subject to optional redemption prior to their respective maturity dates, in whole or
in part in such order of maturity as may be determined by the City and by lot within a maturity,
17
on December 1, 2008, and on any interest payment date thereafter 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 respective maturity dates may be
redeemed in part if issued in denominations which are integral multiples of$5,000. 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.
Unless waived by the registered owners of any 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. Such notice
is to 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 is further to 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 plus any
premium due and that from and after such date interest will cease to accrue. In addition, the
paying agent is authorized to give such other or further notice as may be required by law and to
comply with any operational procedures and requirements of The Depository Trust Company
relating to redemption of Bonds and notice thereof. 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.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE HEREOF.
This Bond is a special and limited obligation of the City payable solely out of and
secured by an irrevocable assignment and pledge (but not necessarily an exclusive assignment
and pledge) of the revenues distributed to the City from the highway users tax fund of the State
of Colorado created pursuant to part 2 of article 4 of title 43, Colorado Revised Statutes, as
amended, plus any income from the investment thereof or of bond proceeds. 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
payable in whole or in part from ad valorem taxes 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.
18
CITY OF FORT COLLINS, COLORADO
(CITY) By:(Facsimile or Manual Signature)
(SEAL) Mayor
ATTEST:
(Facsimile or Manual Signature)
City Clerk
Countersigned:
(Facsimile or Manual Signature)
Financial Officer
19
CERTIFICATE OF AUTHENTICATION
This Bond is issued pursuant to the Ordinance therein described. Attached hereto
is the complete text of the opinion of bond counsel, Ballard Spahr Andrews & Ingersoll, LLP,
Denver, Colorado, a signed copy of which, dated the date of the first delivery of the Bonds
therein described, is on file with the undersigned.
FINANCIAL OFFICER OF THE CITY
as registrar
By: (Manual Si ng, ature)
Authorized Signatory
Dated:
20
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.
21
(Text of Reverse)
The principal of, interest on and any premium due in connection with the
redemption of this Bond are payable to the Registered Owner by the Financial Officer of the
City, or his successors, as paying agent. The principal and the final installment of 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. Any premium is payable to the Registered Owner upon
presentation and surrender of this Bond upon prior redemption by check or draft or wire transfer
directed to the Registered Owner as aforesaid. 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
which 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.
So long as the Registered Owner is the securities depository or a nominee
therefor, the securities depository is to disburse any payments received, through its participants or
otherwise, to the beneficial owner or owners hereof.
Neither the City nor the paying agent has any responsibility or obligation for the
payment to any participant, any beneficial owner hereof or any other person or entity (except the
Registered Owner) of the principal of, interest on or any premium due in connection with the
redemption of this Bond.
Neither the City nor the registrar has any responsibility or obligation with respect
to the accuracy of the records of the securities depository or a nominee therefor or any participant
with respect to any ownership interest in the Bonds or the delivery to any participant, beneficial
22
owner or any other person or entity (except the Registered Owner) of any notice with respect to
the Bonds.
Payment of the principal of, interest on and any premium due in connection with
the redemption of this Bond is to be made solely from, and as security for such payment there are
irrevocably (but not necessarily exclusively) assigned and pledged, pursuant to the Ordinance
authorizing the issuance of the Bonds, two special funds identified as the "City of Fort Collins,
Colorado, Highway Users Tax Revenue Bonds, Principal and Interest Subaccount" and the "City
of Fort Collins, Colorado, Highway Users Tax Revenue Bonds Reserve Subaccount," into which
funds the City has covenanted in the Ordinance to pay, respectively, from the revenues
distributed to the City from the highway users tax fund of the State of Colorado created pursuant
to part 2 of article 4 of title 43, Colorado Revised Statutes, as amended, plus certain investment
income sums sufficient to pay when due the principal of, interest on and any premium due in
connection with the redemption of the Bonds of this issue and any parity securities issued and
payable from such revenues and to accumulate and maintain a specified reserve for such
purposes.
It is hereby recited, certified and warranted that for the payment of this Bond the
City has created and will maintain said special funds and will deposit the aforesaid sums therein
out of the revenues and investment income specified in the Ordinance and out of said special
funds, as an irrevocable charge thereon, will pay this Bond and the interest thereon in the manner
provided by the Ordinance.
The Bonds are equitably and ratably secured by a lien on the aforesaid revenues,
and such Bonds constitute an irrevocable and first lien (but not necessarily an exclusive first lien)
thereon. Bonds and other types of securities, in addition to the Bonds of this issue, subject to
expressed conditions, may be issued and made payable from the aforesaid revenues and
investment income having a lien thereon subordinate and junior to the lien of the Bonds of this
issue or, subject to additional expressed conditions, having a lien thereon on a parity with the lien
of such Bonds in accordance with the provisions of the Ordinance. Except as otherwise
expressly provided in this Bond and the Ordinance, the aforesaid revenues and investment
income are assigned, pledged and set aside to the payment of the Bonds of this issue in
anticipation of the collection of the aforesaid revenues.
The City covenants and agrees with the Registered Owner that it will keep and
will perform all of the covenants of this Bond and of the Ordinance.
This Bond is authorized and issued for the purpose of refunding, paying and
discharging certain outstanding highway users tax revenue bonds of the City, pursuant to, by
virtue of, and in full conformity with the Constitution of the State of Colorado, the Home Rule
Charter of the City, part 2 of article 4 of title 43, Colorado Revenue Statutes, as amended, part I
of article 56 of title 11, Colorado Revised Statutes, as amended, and all other laws of the State of
Colorado thereunto enabling, and pursuant to the Ordinance duly adopted prior to the issuance of
this Bond. The foregoing recital conclusively imparts full compliance with all of the provisions
and limitations of the last-cited statute, and said statute provides that this Bond is incontestable
for any cause whatsoever after its delivery for value.
23
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 of this issue are issued and secured, including, without limitation, the nature and extent of
the security for 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, interest on and any premium due in connection with
the redemption of the Bonds, the terms and conditions on which the Bonds are issued, a
description of the special funds referred to above and the nature and extent of the security and
pledge afforded thereby for the payment of the principal of, interest on and any premium due in
connection with the redemption of the Bonds, and the manner of enforcement of said pledge and
the rights, duties, immunities and obligations of the City and the members of its Council and also
the rights and remedies of the Registered Owner hereof'.
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 investment income 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 laws of the State of
Colorado, including the Home Rule Charter of the City, 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 Home Rule Charter of the City; 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 attorney-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
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 registrar is to authenticate and the transfer agent is to deliver to
24
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, interest on and any premium due in connection with the redemption of this Bond
and for all other purposes, and all such payments so made to such person 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.
Neither the City nor the transfer agent has any responsibility or obligation with
respect to the accuracy of the records of the securities depository or its participants regarding any
ownership interest in the Bonds or transfers thereof.
The City may remove the securities depository and the securities depository may
resign by giving sixty(60) days' written notice to the other of such removal or resignation.
Additionally, the securities depository is to be removed sixty (60) days after receipt by the City of
written notice from the securities depository to the effect that the securities depository has
received written notice from participants having interests, as shown in the records of the
securities depository, in an aggregate principal amount of not less that fifty percent (50%) of the
aggregate principal amount of the then outstanding Bonds to the effect that the securities
depository is unable or unwilling to discharge its responsibilities or a continuation of the
requirement that all of the outstanding Bonds be registered in the name of the securities
depository or a nominee therefor is not in the best interests of the beneficial owners. Upon the
removal or resignation of the securities depository, the securities depository is to take such action
as may be necessary to assure the orderly transfer of the computerized book-entry system with
respect to the Bonds to a successor securities depository or, if no successor securities depository
is appointed as herein provided, the transfer of the Bonds in certificate form to the beneficial
owners or their designees. Upon the giving of notice by the City of the removal of the securities
depository, the giving of notice by the securities depository of its resignation or the receipt by the
City of notice with respect to the written notice by participants referred to herein, the City may,
within sixty(60) days after the giving of such notice, appoint a successor securities depository
upon such terms and conditions as the City shall impose. Any such successor securities
depository must at all times be a registered clearing agency under the Securities and Exchange
Act of 1934, as amended, or other applicable statute or regulation and in good standing
thereunder. If the City fails to appoint a successor securities depository within such time period,
the Bonds are no longer to be restricted to being registered in the name of the securities
depository or a nominee therefor, but may be registered in whatever name or names registered
owners transferring or exchanging Bonds shall designate.
25
STATEMENT OF INSURANCE
Financial Security Assurance Inc. ("Financial Security"),New York, New York,
has delivered its municipal bond insurance policy with respect to the scheduled payments due of
principal of and interest on this Bond to the Financial Officer of the City, or its successors, as
paying agent for the Bonds (the "Paying Agent"). Said policy is on file and available for
inspection at the office of the Paying Agent, and a copy thereof may be obtained from Financial
Security or the Paying Agent.
26
(Assignment)
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
alternation or enlargement or any change
whatever.
[End of Form of Current Interest Bond]
27
[Form of Capital Appreciation Bond]
(Text of Face)
UNITED STATES OF AMERICA
STATE OF COLORADO COUNTY OF LARIMER
CITY OF FORT COLLINS
HIGHWAY USERS TAX REVENUE REFUNDING BOND
SERIES 1998
No. R- $
Interest Maturity Original
Rate Date Date CUSIP
% December 1, November 1, 1998
REGISTERED OWNER: Cede & Co.
PRINCIPAL SUM:
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 funds 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 at the per annum Interest Rate (specified above), compounded semiannually on the first day
of June and the first day of December of each year, commencing on June 1, 1999, such principal
and interest being the Maturity Value (specified above), in the manner provided herein. If upon
presentation at maturity payment of the Principal Sum of this Bond is not made as provided
herein, interest is to continue at the Interest Rate until the Principal Sum is paid in full.
28
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE HEREOF.
This Bond is a special and limited obligation of the City payable solely out of and
secured by an irrevocable assignment and pledge (but not necessarily an exclusive assignment
and pledge) of the revenues distributed to the City from the highway users tax fund of the State
of Colorado created pursuant to part 2 of article 4 of title 43, Colorado Revised Statutes, as
amended, plus any income from the investment thereof or of bond proceeds. 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
payable in whole or in part from ad valorem taxes 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, COLORADO
(CITY) By:(Facsimile or Manual Signature)
(SEAL) Mayor
ATTEST:
(Facsimile or Manual Signature)
City Clerk
Countersigned:
(Facsimile or Manual Signature)
Financial Officer
29
CERTIFICATE OF AUTHENTICATION
This Bond is issued pursuant to the Ordinance therein described. Attached hereto
is the complete text of the opinion of bond counsel, Ballard Spahr Andrews & Ingersoll, LLP,
Denver, Colorado, a signed copy of which, dated the date of the first delivery of the Bonds
therein described, is on file with the undersigned.
FINANCIAL OFFICER OF THE CITY
as registrar
By: (Manual Signature)
Authorized Signatory
Dated:
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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.
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(Text of Reverse)
The principal of, 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 the 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. 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 which 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.
So long as the Registered Owner is the securities depository or a nominee
therefor, the securities depository is to disburse any payments received, through its participants or
otherwise, to the beneficial owner or owners hereof.
Neither the City nor the paying agent has any responsibility or obligation for the
payment to any participant, any beneficial owner hereof or any other person or entity (except the
Registered Owner) of the principal of, interest on or any premium due in connection with the
redemption of this Bond.
Neither the City nor the registrar has any responsibility or obligation with respect
to the accuracy of the records of the securities depository or a nominee therefor or any participant
with respect to any ownership interest in the Bonds or the delivery to any participant, beneficial
owner or any other person or entity(except the Registered Owner) of any notice with respect to
the Bonds.
Payment of the principal of, interest on and any premium due in connection with
the redemption of this Bond is to be made solely from, and as security for such payment there are
irrevocably (but not necessarily exclusively) assigned and pledged, pursuant to the Ordinance
authorizing the issuance of the Bonds, two special funds identified as the "City of Fort Collins,
Colorado, Highway Users Tax Revenue Bonds, Principal and Interest Subaccount" and the "City
of Fort Collins, Colorado, Highway Users Tax Revenue Bonds Reserve Subaccount," into which
funds the City has covenanted in the Ordinance to pay, respectively, from the revenues
distributed to the City from the highway users tax fund of the State of Colorado created pursuant
to part 2 of article 4 of title 43, Colorado Revised Statutes, as amended, plus certain investment
income sums sufficient to pay when due the principal of, interest on and any premium due in
connection with the redemption of the Bonds of this issue and any parity securities issued and
payable from such revenues and to accumulate and maintain a specified reserve for such
purposes.
It is hereby recited, certified and warranted that for the payment of this Bond the
City has created and will maintain said special funds and will deposit the aforesaid sums therein
32
out of the revenues and investment income specified in the Ordinance and out of said special
funds, as an irrevocable charge thereon, will pay this Bond and the interest thereon in the manner
provided by the Ordinance.
The Bonds are equitably and ratably secured by a lien on the aforesaid revenues,
and such Bonds constitute an irrevocable and first lien (but not necessarily an exclusive first lien)
thereon. Bonds and other types of securities, in addition to the Bonds of this issue, subject to
expressed conditions, may be issued and made payable from the aforesaid revenues and
investment income having a lien thereon subordinate and junior to the lien of the Bonds of this
issue or, subject to additional expressed conditions, having a lien thereon on a parity with the lien
of such Bonds in accordance with the provisions of the Ordinance. Except as otherwise
expressly provided in this Bond and the Ordinance, the aforesaid revenues and investment
income are assigned, pledged and set aside to the payment of the Bonds of this issue in
anticipation of the collection of the aforesaid revenues.
The City covenants and agrees with the Registered Owner that it will keep and
will perform all of the covenants of this Bond and of the Ordinance.
This Bond is authorized and issued for the purpose of refunding, paying and
discharging certain outstanding highway users tax revenue bonds of the City, pursuant to, by
virtue of, and in full conformity with the Constitution of the State of Colorado, the Home Rule
Charter of the City, part 2 of article 4 of title 43, Colorado Revenue Statutes, as amended,part 1
of article 56 of title 11, Colorado Revised Statutes, as amended, and all other laws of the State of
Colorado thereunto enabling, and pursuant to the Ordinance duly adopted prior to the issuance of
this Bond. The foregoing recital conclusively imparts full compliance with all of the provisions
and limitations of the last-cited statute, and said statute provides that this Bond is incontestable
for any cause whatsoever after its 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 of this issue are issued and secured, including, without limitation, the nature and extent of
the security for 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, interest on and any premium due in connection with
the redemption of the Bonds, the terms and conditions on which the Bonds are issued, a
description of the special funds referred to above and the nature and extent of the security and
pledge afforded thereby for the payment of the principal of, interest on and any premium due in
connection with the redemption of the Bonds, and the manner of enforcement of said pledge and
the rights, duties, immunities and obligations of the City and the members of its Council and also
the rights and remedies of the Registered Owner hereof.
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 investment income and other obligations
of the City under the Ordinance may be discharged at or prior to the maturity or prior redemption
33
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 laws of the State of
Colorado, including the Home Rule Charter of the City, 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 Home Rule Charter of the City; 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 attorney-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
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 registrar is to authenticate and 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, interest on and any premium due in connection with the redemption of this Bond
and for all other purposes, and all such payments so made to such person 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.
Neither the City nor the transfer agent has any responsibility or obligation with
respect to the accuracy of the records of the securities depository or its participants regarding any
ownership interest in the Bonds or transfers thereof.
The City may remove the securities depository and the securities depository may
resign by giving sixty (60) days' written notice to the other of such removal or resignation.
Additionally, the securities depository is to be removed sixty (60) days after receipt by the City of
34
written notice from the securities depository to the effect that the securities depository has
received written notice from participants having interests, as shown in the records of the
securities depository, in an aggregate principal amount of not less that fifty percent (50%) of the
aggregate principal amount of the then outstanding Bonds to the effect that the securities
depository is unable or unwilling to discharge its responsibilities or a continuation of the
requirement that all of the outstanding Bonds be registered in the name of the securities
depository or a nominee therefor is not in the best interests of the beneficial owners. Upon the
removal or resignation of the securities depository, the securities depository is to take such action
as may be necessary to assure the orderly transfer of the computerized book-entry system with
respect to the Bonds to a successor securities depository or, if no successor securities depository
is appointed as herein provided, the transfer of the Bonds in certificate form to the beneficial
owners or their designees. Upon the giving of notice by the City of the removal of the securities
depository, the giving of notice by the securities depository of its resignation or the receipt by the
City of notice with respect to the written notice by participants referred to herein, the City may,
within sixty (60) days after the giving of such notice, appoint a successor securities depository
upon such terms and conditions as the City shall impose. Any such successor securities
depository must at all times be a registered clearing agency under the Securities and Exchange
Act of 1934, as amended, or other applicable statute or regulation and in good standing
thereunder. If the City fails to appoint a successor securities depository within such time period,
the Bonds are no longer to be restricted to being registered in the name of the securities
depository or a nominee therefor, but may be registered in whatever name or names registered
owners transferring or exchanging Bonds shall designate.
35
STATEMENT OF INSURANCE
Financial Security Assurance Inc. ("Financial Security"), New York,New York,
has delivered its municipal bond insurance policy with respect to the scheduled payments due of
principal of(or, in the case of Capital appreciation Bonds, the accreted value) and interest on this
Bond to the Financial Officer of the City, or its successors, as paying agent for the Bonds (the
"Paying Agent"). Said policy is on file and available for inspection at the office of the Paying
Agent, and a copy thereof may be obtained from Financial Security or the Paying Agent.
36
(Assignment)
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
alternation or enlargement or any change
whatever.
[End of Form of Capital Appreciation Bond]
37
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 any and all 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 this Ordinance.
D. Special Obligations. All of the Bonds, as to all Debt Service
Requirements thereof, shall be payable solely out of the Pledged Revenues. The Owner or
Owners of any of the Bonds may not look to any general or other fund of the City for the
payment of the Debt Service Requirements thereof, except the special funds pledged therefor,
and the Bonds shall not be considered or held to be general obligations of the City but shall
constitute special and limited obligations of the City. The Bonds are not payable in whole or in
part from ad valorem taxes of the City, and the full faith and credit of the City is not pledged for
payment of the Bonds.
Section 4. Sale of Bonds.
A. Purchaser's Proposal. A proposal for the purchase of the Bonds upon
terms favorable to the City, together with the disclosures, comparisons and other information
required by the Refunding Act, has been received from the Purchaser, and the Financial Officer
of the City has recommended that said proposal be accepted by the Council.
B. Award of Contract; Execution of Bond Purchase Agreement. The contract
for the purchase of the Bonds is hereby awarded to the Purchaser at the price specified in the
Bond Purchase Agreement and upon the terms set forth in this Ordinance. The City Manager is
hereby authorized to execute the Bond Purchase Agreement on behalf of the City immediately
following the marketing of the Bonds, subject to ratification by the Council by final adoption of
this Ordinance.
C. Approval of Preliminary Official Statement. The Council hereby approves
the Preliminary Official Statement and ratifies the use and distribution thereof by the Purchaser
in marketing the Bonds.
D. Delivery. After the Bonds have been duly executed, authenticated and
registered as provided herein, the City shall cause the Bonds to be delivered to the Purchaser
upon receipt of the agreed purchase price.
Section 5. Disposition of Bond Proceeds and Pledged Revenues; Funds and
Accounts Created by Ordinance; Security For Bonds. The proceeds 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 Bonds shall in any
manner be responsible for the application or disposal by the City or 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.
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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 Escrow Account and the Excess
Investment Earnings Account) are hereby assigned and pledged to secure the payment of the
Debt Service Requirements of the Bonds subject to the application of the Pledged Revenues for
the payment of Debt Service Requirements of Parity Securities. This assignment and 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 assigned and pledged, shall immediately be subject to
the lien of this assignment and pledge without any physical delivery thereof, any filing, or further
act. The lien of this assignment and 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 assignment and 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.
A. Escrow Account; Redemption of Prior Bonds; Notice of Refunding and
Redemption of Prior Bonds. The City shall deposit in a separate special fund hereby created and
designated as the "City of Fort Collins, Colorado, Highway Users Tax Fund Revenue Refunding
Bonds, Series 1998, Escrow Account," forthwith upon receipt of the proceeds of the Bonds,
proceeds of the Bonds in the approximate amount of$3,447,964.93, together with other funds of
the City in the amount of$252,207.50, to be used only as provided in this Section 5A. The City
shall apply said sums to the purchase of the Federal Securities in which the moneys in the
Escrow Account are to be invested and the funding of any required cash balance as provided in
the Escrow Agreement and in accordance with the proposal submitted by the Purchaser. The
Escrow Account shall be maintained in an amount at the time of the deposit therein, and at all
times subsequently, at least sufficient, together with the known minimum yield to be derived
from the investment of the deposit therein or any part thereof in such Federal Securities, to pay
the Debt Service Requirements of the Prior Bonds as the same become due. Moneys shall be
withdrawn by the Escrow Bank from the Escrow Account in sufficient amounts and at times to
permit the payment of the Debt Service Requirements of the Prior Bonds on each payment date.
Any moneys remaining in the Escrow Account after provision has been made for the payment of
the Prior Bonds may be applied to any lawful purpose of the City. If for any reason the amount
in the Escrow Account shall at any time be insufficient for the purposes hereinbefore set forth,
the City shall forthwith from the first Pledged Revenues available therefor deposit therein such
additional moneys as shall be necessary to permit the payment in full of the Debt Service
Requirements of the Prior Bonds as herein provided.
The City hereby exercises its option to redeem the Prior Bonds maturing in the
year 2003 and thereafter, prior to their respective maturity dates, on December 1, 2002, at a price
equal to the principal amount of each Prior Bond so redeemed plus accrued interest thereon to the
Redemption Date.
The Escrow Bank, on behalf of the paying agent for the Prior Bonds, is hereby
authorized and directed on behalf of the City to give forthwith and again not later than
October 31, 2002, notice of refunding and redemption of the Prior Bonds. The notice of
refunding and redemption of the Prior Bonds shall be given by sending a copy of such notice by
39
certified or registered first-class postage prepaid mail to the Owners of the Prior Bonds at the
addresses appearing on the registration books of the City. The notice of refunding and
redemption of the Prior Bonds shall be in substantially the following form:
40
Form of Notice
NOTICE OF REFUNDING AND REDEMPTION
OF
CITY OF FORT COLLINS, COLORADO
HIGHWAY USERS TAX REVENUE BONDS
SERIES 1992
DATED AUGUST 15, 1992 - $4,055,000
CUSIP NUMBER
NOTICE IS HEREBY GIVEN to the registered owners of all outstanding City of
Fort Collins, Colorado, Highway Users Tax Revenue Bonds, Series 1992, dated August 15, 1992,
in the original aggregate principal amount of$4,055,000 (the "Prior Bonds"), that the City of Fort
Collins, Colorado (the "City") has issued Highway Users Tax Revenue Refunding Bonds, Series
1998, dated November 1, 1998, in the aggregate principal amount of$3,399,729.20, and
deposited a portion of the proceeds thereof and other funds of the City in escrow with U.S. Bank
National Association, which proceeds have been invested in bills, certificates of indebtedness,
notes, bonds or similar securities which are direct obligations of the United States of America or
are obligations the principal and interest of which are unconditionally guaranteed by the United
States of America for the payment of the principal of. interest on and any premium due in
connection with the redemption of the Prior Bonds as the same become due.
According to a report pertaining to such escrow prepared by a firm of certified
public accountants licensed to practice in the State of Colorado, the escrow, including the known
minimum yield from such investments, is fully sufficient at the time of the deposit and at all
times subsequently to pay the principal of, interest on and any premium due in connection with
the redemption of the Prior Bonds as such payments become due.
NOTICE IS FURTHER HEREBY GIVEN that the City has exercised its option to
redeem in whole the Prior Bonds maturing in the year 2003 and thereafter, prior to their
respective maturity dates, on December 1, 2002, at a price equal to the principal amount of each
Prior Bond so redeemed plus accrued interest thereon to the redemption date.
On the redemption date there will become due and payable at the office of the
Financial Officer of the City, the principal amount of each Prior Bond so redeemed plus accrued
interest thereon to the redemption date, and from and after the redemption date interest will cease
to accrue. Each such Prior Bond will be redeemed on or after the redemption date upon
presentation and surrender thereof.
41
GIVEN BY ORDER OF THE COUNCIL OF THE CITY OF FORT COLLINS,
COLORADO this_day of , 199 .
U.S. BANK NATIONAL ASSOCIATION
as escrow bank
[End of Form of Notice]
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B. Costs of Issuance Subaccount. There shall be deposited in the Costs of
Issuance Subaccount hereby created within the Highway Users Tax Revenue Account an amount
equal to the Costs of Issuance. If any amounts remain on deposit in the Costs of Issuance
Subaccount after payment of all the Costs of Issuance, such amounts shall be transferred to the
Highway Users Tax Revenue Account.
C. Disposition of Pledged Revenues. For so long as any of the Bonds shall be
Outstanding, as to any Debt Service Requirements, except as otherwise provided herein, the
entire Pledged Revenues, upon receipt thereof from time to time by the City, shall be set aside
and credited immediately to the Highway Users Tax Revenue Account. For so long as any of the
Bonds shall be Outstanding, as to any Debt Service Requirements, the Pledged Revenues in the
Highway Users Tax Revenue Account shall be accumulated and administered, and the moneys
on deposit therein shall be applied, in the following order of priority:
(1) First, to the Principal and Interest Subaccount to pay any Debt
Service Requirements of the Bonds, any Additional Parity Bonds and any other Parity
Securities then Outstanding in the manner set forth in Section 5D hereof,
(2) Second, to the Reserve Subaccount, in the manner set forth in
Section 5E hereof,
(3) Third, to the payment of Debt Service Requirements of
Subordinate Bonds or other Subordinate Securities in accordance with Section 5G hereof,
and
(4) Fourth, to be used in accordance with Section 5H hereof.
D. Principal and Interest Subaccount Pavments. The City shall deposit in the
Principal and Interest Subaccount, forthwith upon receipt of the proceeds of the Bonds, interest
accrued thereon from their date of issue to the date of delivery thereof to the Purchaser, to apply
to the payment of interest first due on the Bonds.
The City shall deposit in the Principal and Interest Subaccount from the Pledged
Revenues on or before the last day of November, 1998, the amount of interest accruing on the
Bonds during November, 1998 (with a credit for the amount of any accrued interest deposited in
the Principal and Interest Subaccount and not theretofore credited), and on or before the last day
of each month beginning December, 1998, the following amounts (with a credit for the amount
of any accrued interest deposited in the Principal and Interest Subaccount and not theretofore
credited):
(1) Interest Payments. One-sixth (1/6) of the aggregate amount of the
interest due on the Current Interest Bonds or accruing on the Capital Appreciation Bonds
on the next Interest Payment Date in the then-current Bond Year plus any other amounts
due for interest on the Bonds, any Additional Parity Bond and any other Parity Securities
then Outstanding.
43
(2) Principal Payments. One-twelfth (1/12) of the aggregate amount of
the principal due on the Bonds on the next Maturity Date in the then-current Bond Year
plus any other amounts due for principal of the Bonds, any Additional Parity Bonds and
any other Parity Securities then Outstanding.
The moneys credited to the Principal and Interest Subaccount shall be used to pay
the Debt Service Requirements of the Bonds, any Additional Parity Bonds and any other Parity
Securities then Outstanding, as such Debt Service Requirements become due, except as
otherwise provided in this Ordinance.
Nothing herein shall be construed so as to prevent the City from creating separate
subaccounts within the Principal and Interest Subaccount for the Bonds and any Additional
Parity Bonds and accounting separately for any deposits made thereto on account of the Bonds
and any Additional Parity Bonds or from creating separate principal and interest accounts for
additional Parity Bonds, if such action is deemed by the City to be necessary or desirable in order
to comply with any statute or regulation governing the tax treatment of interest on any such
Additional Parity Bonds, provided that any such separate subaccounts shall have claims to the
Pledged Revenues equal to and on a parity with those of the other such subaccounts and any such
separate principal and interest account shall have a claim to the Pledged Revenues equal to and
on a parity with that of the Principal and Interest Subaccount.
E. Reserve Subaccount Pa, ments. Subject to the payments required by
Section 5D hereof, except as provided in Section 5F hereof, from and to the extent of any
Pledged Revenues remaining in the Highway Users Tax Revenue Account, there shall be credited
as hereinafter provided and from time to time thereafter to the Reserve Subaccount Pledged
Revenues sufficient to accumulate in and maintain the Reserve Subaccount at an amount equal to
ten percent (10%) of the proceeds (but not more than one hundred twenty-five percent (125%) of
the Combined Average Annual Debt Service Requirements or one hundred percent(100%) of the
Combined Maximum Annual Debt Service Requirements) of all Outstanding Bonds, Additional
Parity Bonds and other Parity Securities for which the Reserve Subaccount is maintained. Said
amount shall be maintained as a continuing reserve for the payment of the Debt Service
Requirements of the Bonds, any Additional Parity Bonds and any other Parity Securities for
which the Reserve Subaccount is maintained. The amount, if any, by which ten percent (10%) of
the proceeds of the Bonds exceeds the sum held in the Reserve Subaccount on the date of
issuance of the Bonds shall be accumulated by depositing such difference to the Reserve
Subaccount in five approximately equal annual installments payable no later than December 1,
1999, and on the same date in each of the years 2000 through 2003, inclusive. No payment need
be made into the Reserve Subaccount so long as the moneys therein shall equal not less than said
amount. In the event that the amount of the Reserve Subaccount falls below the minimum
amount required to be maintained therein, then the City shall credit to the Reserve Subaccount
from the Pledged Revenues that sum of money needed to accumulate or reaccumulate the amount
therein so that at all times the amount of the Reserve Subaccount equals said minimum amount.
The moneys in the Reserve Subaccount shall be set aside, accumulated, and, if necessary,
reaccumulated as provided herein, from time to time, and maintained as a continuing reserve to
be used, except as hereinafter provided in Section 5F and Section 9 hereof, only to prevent
deficiencies in the Principal and Interest Subaccount resulting from failure to deposit therein
44
sufficient sums to pay the Debt Service Requirements on the Bonds, any Additional Party Bonds
and any other Parity Securities for which the Reserve Subaccount is maintained as the same
become due.
If at any time the City shall for any reason fail to pay into the Principal and
Interest Subaccount the full amount above stipulated, then an amount shall be paid into the
Principal and Interest Subaccount at such time from the Reserve Subaccount equal to the
difference between that paid from the Pledged Revenues in the Highway Users Tax Revenue
Account and the full amount so stipulated. The money so used shall be replaced to the Reserve
Subaccount from the first Pledged Revenues credited to the Highway Users Tax Revenue
Account thereafter received and not required to be otherwise applied by Section 5 hereof. If
Additional Parity Bonds are Outstanding and a separate reserve fund or account is maintained
therefor, then the moneys replaced in the Reserve Subaccount and such separate reserve fund or
account shall be replaced on a pro rata basis, as Pledged Revenues becomes available therefor.
If at any time the City shall for any reason fail to pay into the Reserve Subaccount
the full amount stipulated herein from the Pledged Revenues credited to the Highway Users Tax
Revenue Account, the difference between the amount paid and the amount so stipulated shall in a
like manner be paid therein from the first Pledged Revenues credited to the Highway Users Tax
Revenue Account thereafter received and not required to be applied otherwise by Section 5D
hereof.
Nothing in this Ordinance shall be construed as limiting the right of the City to
substitute for the cash deposit required to be maintained hereunder a letter of credit, surety bond,
insurance policy, agreement guaranteeing payment or other undertaking by a financial institution
to ensure that cash in the amount otherwise required to be maintained hereunder will be available
to the City as needed, provided that any such substitution shall be approved in writing by the
Bond Insurer and shall be submitted to Moody's Investors Service, Inc. and Standard & Poor's
Rating Services and shall not cause the then-current rating of the Bonds to be adversely affected.
After the delivery of the Reserve Insurance Policy, any Policy Costs incurred by
the City shall be paid by the City to the Bond Insurer as provided in the Insurance Agreement.
The obligation of the City to make such payments shall have the same priority as the obligation
to make payments to and replenishments of the Reserve Subaccount as provided in this
Section 5E. The Reserve Insurance Policy shall be held in the custody of the Paying Agent. The
Paying Agent shall prior to each Interest Payment Date ascertain whether a claim must be made
on the Reserve Insurance Policy. If such a claim must be made, the Paying Agent shall provide
notice to the Bond Insurer in accordance with the terms of the Reserve Insurance Policy at least
two (2) days prior to the Interest Payment Date. If and to the extent that cash or Permitted
Investments are deposited in the Reserve Subaccount after the delivery of the Reserve Insurance
Policy, all such cash shall be used, and all such Permitted Investments shall be sold and the
proceeds thereof shall be applied, for the purposes of the Reserve Subaccount before the Paying
Agent may make a claim on the Reserve Insurance Policy, and payment of any Policy Costs
incurred by the City shall be paid by the City to the Bond Insurer before any such cash or
Permitted Investments are replenished to the Reserve Subaccount.
45
F. Termination of Deposits. No payment need be made into the Principal and
Interest Subaccount or the Reserve Subaccount if the amount in the Principal and Interest
Subaccount and the amount in the Reserve Subaccount equal a sum at least equal to the entire
amount of the Outstanding Bonds and any Outstanding Additional Parity Bonds or other Parity
Securities, as to all Debt Service Requirements, to their respective Maturity Dates or to any
Redemption Date or Redemption Dates on which the City shall have exercised or shall have
obligated itself to exercise its option to redeem prior to their respective Maturity Dates, any
Bonds, any Additional Parity Bonds and any other Parity- Securities then Outstanding, and
thereafter maturing, both accrued and not accrued, provided that, solely for the purpose of this
Section 5E, there shall be deemed to be a credit to the Reserve Subaccount of moneys, Federal
Securities and bank deposits, or any combination thereof, accounted for in any other account or
accounts of the City and restricted solely for the purpose of paying the Debt Service
Requirements of Bonds, Additional Parity Bonds or other Parity Securities), in which case
moneys in the Principal and Interest Subaccount and the Reserve Subaccount in an amount,
except for any known interest or other gain to accrue from any investment or deposit of moneys
pursuant to Section 6B hereof from the time of any such investment or deposit to the time or
respective times the proceeds of any such investment or deposit shall be needed for such
payment, at least equal to such Debt Service Requirements, shall be used together with any such
gain from such investments and deposits solely to pay such Debt Service Requirements as the
same become due; and any moneys in excess thereof in the Principal and Interest Subaccount and
the Reserve Subaccount and any other moneys derived from the Pledged Revenues may be used
in any lawful manner determined by the City.
G. Payment of Subordinate Securities. After there has been deposited to the
Principal and Interest Subaccount an amount sufficient to pay all installments of principal and
interest then due on all Bonds, Additional Parity Bonds and any other Parity Securities then
Outstanding and after the accumulations to and replenishments of the Reserve Subaccount
required by Section 5E hereof have been made, any Pledged Revenues remaining in the Highway
Users Tax Revenue Account may be used by the City for the payment or accumulation of Debt
Service Requirements of Subordinate Securities payable from the Pledged Revenues and
authorized to be issued in accordance with the Charter, this Ordinance and any other provisions
herein supplemental thereto, including reasonable reserves for such Subordinate Securities; but
the lien of such Subordinate Securities on the Pledged Revenues and the pledge thereof for the
payment of such Subordinate Securities shall subordinate to the lien and pledge of the Bonds, any
Additional Parity Bonds and any other Parity Securities as herein provided.
H. Use of Remaining Revenues. After there has been deposited to the
Principal and Interest Subaccount an amount sufficient to pay all the Debt Service Requirements
due or to become due during the current Bond Year on all Bonds, Additional Parity Bonds and
any other Parity Securities then Outstanding and after the accumulations to and replenishments of
the Reserve Subaccount required by Section 5E hereof have been made and after payment or
provision for payment of Subordinate Securities has been made in accordance with any ordinance
authorizing the issuance thereof, any remaining Pledged Revenues may be used for any lawful
purpose of the Highway Users Tax Revenue Account.
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I. Budget and Appropriation of Sums. The sums required to make the
payments specified in this Section 5 are hereby appropriated for said purposes, and said amounts
for each year shall be included in the annual budget and the appropriation ordinance or measures
to be adopted or passed by the Council in each year 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. Nothing herein shall prohibit the Council from appropriating other funds of the City
legally available for this purpose to the Principal and Interest Subaccount or the Reserve
Subaccount for the purpose of providing for the Debt Service Requirements of the Bonds.
J. Excess Investment Earnings Subaccount. The City shall transfer into and
pay from the Excess Investment Earnings Subaccount hereby created within the Highway Users
Tax Revenue Account the amount of required arbitrage rebate, if any, due to the federal
government under Sections 103 and 148(f)(2) of the Tax Code, and regulations promulgated
thereunder. The City shall determine such amounts in the manner required by said sections and
related regulations. Transfer of the required arbitrage rebate amounts shall be made from the
Principal and Interest Account and the Reserve Subaccount, provided, however, that required
arbitrage rebate payments shall be made to the federal government from legally available funds
regardless of whether there are any remaining proceeds or other funds attributable to the Bonds
that are available for the purpose.
All amounts in the Excess Investment Earnings Subaccount, including income
earned from investment thereof, shall be held by the City free and clear of any lien created by this
Ordinance, and the City shall pay over to the federal government from time to time as the City
shall determine provided that the City shall so pay over to the federal government not less
frequently than once each five (5)years after the date of issuance of the Bonds, an amount equal
to ninety percent (90%) of the required arbitrage rebate amount earned during such period (and
not theretofore paid to the federal government) and not later than sixty (60) days after the
redemption of the last Bond, one hundred percent (100%) of the required arbitrage rebate
amount.
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 maintained in a Commercial Bank and kept separate and
apart from all other funds and accounts of the City as trust accounts solely for the purposes
herein designated therefor. For purposes of investment of moneys, nothing 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 or 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
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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 any fund or account
described in Section 5 hereof(excluding the Escrow Account) may be invested, reinvested or
deposited only in Permitted Investments. Permitted Investments 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. Permitted Investments 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 (with the exception of the Reserve Subaccount and the Excess
Investment Earnings Subaccount) the interest accruing on such investments and any profit
realized therefrom shall be credited to the Highway Users Tax Fund Account, and any loss
resulting from such investments shall be charged to the particular fund or account in question.
Interest and profit realized from investments in the Reserve Subaccount shall be credited to the
Reserve Subaccount, provided that, so long as the amount in the Reserve Subaccount equals at
least the amount specified in Section 5E hereof, such interest and profit may be transferred to the
Principal and Interest Account and distributed in the same manner as other moneys in the
Principal and Interest Account. Any loss resulting from such investments in the Reserve
Subaccount shall be charged to the Reserve Subaccount. Permitted Investments purchased with
funds on deposit in the Reserve Subaccount shall have an average aggregate weighted term to
maturity not greater than five (5) years. 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. The City shall not invest any
moneys accounted for hereunder if any such investment would contravene the covenant
contained in Section 80 hereof.
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 ordinances of the City, and to the
extent applicable, 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. Nothing herein contained requires in connection with
the Pledged Revenues received in any Fiscal Year the accumulation in any fund or account for
the payment of Debt Service Requirements due in connection with any bonds or other securities
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payable from the Pledged Revenues and heretofore, herein or hereafter authorized, in excess of
any reserves required to be accumulated and maintained therefor, and of any existing
deficiencies, and payable from such fund or account, as the case may be, except as may be
otherwise provided herein.
Section 7. Priorities; Liens; Issuance of Additional Bonds and Additional
Securities.
A. First Lien on Pledged Revenues. Except as expressly provided in this
Ordinance with respect to the issuance of Additional Parity Bonds, Parity Securities or
Subordinate Securities, the Pledged Revenues shall be and hereby are irrevocably assigned,
pledged and set aside to pay the Debt Service Requirements of the Bonds. The Bonds constitute
an irrevocable and first lien(but not necessarily an exclusive first lien) upon the Pledged
Revenues. The Bonds, any Additional Parity Bonds and any other Parity Securities authorized to
be issued and from time to time Outstanding are equitably and ratably secured by a lien on the
Pledged Revenues and shall not be entitled to any priority one over the other in the application of
the Pledged Revenues regardless of the time or times of the issuance of the Bonds, any
Additional Parity Bonds and any other Parity Securities, it being the intention of the Council that
there shall be no priority among the Bonds, any Additional Parity Bonds and any other Parity
Securities, regardless of the fact that they may be actually issued and delivered at different times.
B. Issuance Of Additional Parity Bonds. Nothing herein, subject to the
limitations stated in Section 7F hereof, prevents the issuance by the City of Additional Parity
Bonds payable from the Pledged Revenues and constituting a lien on the Pledged Revenues on a
parity with, but not prior or superior to, the lien thereon of the Bonds; but before any such
Additional Parity Bonds are authorized or actually issued the City shall satisfy the following
conditions:
(1) Absence of Default. At the time of the issuance of the Additional
Parity Bonds, the City shall not be in default in making any payments required by Section
5 hereof.
(2) Pledged Revenues Test. Except as hereinafter provided in the case
of Additional Parity Bonds issued for the purpose of refunding less than all of the Bonds
and other Parity Securities then Outstanding, the Pledged Revenues for the last complete
Fiscal Year prior to the issuance of the proposed Additional Panty Bonds, as certified by
the Financial Officer of the City, must have been equal to at least two hundred percent
(200%) of the Combined Average Annual Debt Service Requirements of the Bonds then
Outstanding, any Additional Parity Bonds then Outstanding, and the Additional Parity
Bonds proposed to be issued. In the case of Additional Parity Bonds issued for the
purpose of refunding less than all of the Bonds and other Parity Securities then
Outstanding, compliance with this Section 713(2) shall not be required so long as the Debt
Service Requirements payable on all Bonds and other Parity Securities Outstanding after
the issuance of such Additional Parity Bonds on each Interest Payment Date do not
exceed the Debt Service Requirements payable on all Bonds and other Parity Securities
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Outstanding prior to the issuance of such Additional Parity Bonds on such Interest
Payment Dates.
(3) Adequate Reserves. The proceedings under which any such
Additional Parity Bonds are issued must provide for the deposit of moneys to the Reserve
Subaccount on substantially the same terms as provided in Section 5E hereof and contain
a covenant by the City to maintain the Reserve Subaccount in an amount at least equal to
the amount required by Section 5E hereof. Alternatively, if such action is deemed by the
City to be necessary or desirable in order to comply with any statute or regulation
governing the exemption from federal income taxes of interest on any such Additional
Parity Bonds, the proceedings under which any such Additional Parity Bonds are issued
may provide for the deposit of moneys to a reserve fund or account (other than the
Reserve Subaccount) established and maintained for such Additional Parity Bonds on
substantially the same terms as provided in Section 5E hereof and contain a covenant by
the City to maintain such reserve fund or account in an amount at least equal to the
amount required by Section 5E hereof, except as may be necessary to comply with such
statute or regulation. Any such reserve fund or account shall have a claim to the Pledged
Revenues equal to and on a parity with the Reserve Subaccount.
(4) Consent of the Bond Insurer. No Additional Parity Bonds may be
issued without the prior written consent of the Bond Insurer if the City is delinquent in
the payment of any Policy Costs due under the Insurance Agreement.
C. Certification of Pledged Revenues. In the case of the computation of the
Pledged Revenues test provided in Section 7B(2) hereof, the specified and required written
certifications by the Financial Officer of the City that such annual revenues are sufficient to pay
such amounts as provided in Section 7B(2) hereof shall be conclusively presumed to be accurate
in determining the right of the City to authorize, issue. sell and deliver Additional Party Bonds.
D. Subordinate Securities Permitted. Nothing herein, subject to the
limitations stated in Section 7F hereof, prevents the City from issuing Subordinate Bonds or
Subordinate Securities for any lawful purpose.
E. Superior Securities Prohibited. Nothing herein permits the City to issue
Superior Bonds or Superior Securities.
F. Supplemental Ordinances. Additional bonds or other additional securities
payable from any Pledged Revenues shall be issued only after authorization thereof by ordinance,
supplemental ordinance or other instrument of the Council in substantially the same form as this
Ordinance, stating the purpose or purposes of the issuance of such additional securities, directing
the application of the proceeds thereof to such purpose or purposes, directing the execution
thereof and fixing and determining the date, series designation, principal amount, Maturity Date
or Maturity Dates, rate or rates of interest, and any prior redemption privileges of the City and
providing for payments to and from the Highway Users Tax Revenue Account in accordance
with this Ordinance. All additional securities shall bear such date, shall be payable as to
principal on December 1 and as to interest on June 1 and December 1 an shall be subject to
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redemption prior to maturity on such terms and conditions as may be provided, and shall bear
interest at such rate or rates as may be fixed, by ordinance, instrument or other document of the
Council.
Section 8. Covenants. The City hereby particularly covenants and agrees with the
Bond Insurer and the Owners of the Bonds from time to time, and makes provisions which 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 and the interest thereon have been fully paid and
discharged:
A. Collection of Highway Users Tar Revenues.
(1) The City shall (a) supply the State treasurer with all required
information regarding the number of vehicles registered in the City on or before the dates
required by the Act, (b) spend all Bond proceeds and Pledged Revenues for purposes
authorized under the Act or the Refunding Act and (3) comply with all other statutory
requirements of the Act necessary to avoid any forfeiture of the Highway Users Tax
Revenues or violation of the Act or the Refunding Act.
(2) The City shall maintain the Highway Users Tax Revenue Account
as a fund of the City separate and distinct from all other funds of the City and shall place
the Pledged Revenues therein. The Highway Users Tax Revenue Account shall be
subject to appropriation only as authorized by the Charter and this Ordinance.
(3) All of the Pledged Revenues resulting from the collection of the
Highway Users Tax Revenues shall be subject to the payment of the Debt Service
Requirements of all securities payable from the Pledged Revenues, including reserves
therefor as provided herein or in any instrument supplemental or amendatory hereto.
B. Defense of Pledged Revenues. There is not pending or threatened any suit,
action or proceeding against or affecting the City before or by any court, arbitrator,
administrative agency or other governmental authority which affects the validity or legality of
this Ordinance, the collection of the Highway Users Tax Revenues, or any of the City's
obligations under this Ordinance.
Except as permitted in this Ordinance, the City has not assigned or pledged the
Pledged Revenues in any manner which would diminish the security for payment of the Bonds.
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,
the Act, the Refunding Act 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.
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D. Contractual Obligations. The City will perform all contractual obligations
undertaken by it under the Bond Purchase Agreement 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 assigned, or intended so to be, or which the City may hereafter
become bound to pledge or to assign, 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 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 exist, have happened and have been performed, and the Bonds, together with all
other obligations of the City, shall not contravene any debt or other limitation prescribed by 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 referred to 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 prejudicially and 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 Pledged Revenues, and the City shall not directly or indirectly be a party
to or approve any arrangements for any such extension or the purpose of keeping alive 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
and interest on all of the Bonds and any such securities the payment of which have not been
extended.
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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 Principal and Interest Subaccount and Reserve Subaccount. The
Principal and Interest Subaccount and the Reserve Subaccount shall be used solely and only, and
the moneys credited to such accounts are hereby pledged, for the purpose of paying the Debt
Service Requirements of the Bonds, any Additional Parity Bonds or any other Parity Securities at
maturity or upon prior redemption, subject to the provisions concerning surplus moneys in
Section 5F and subject to Section 9 hereof.
L. Additional Contracts or Securities. The City shall not hereafter enter into
any contracts or issue any bonds or securities payable from Pledged Revenues other than the
Bonds without compliance with the requirements with respect to the issuance of Additional
Parity Bonds or additional Panty Securities set forth herein to the extent applicable.
M. Other Liens. There presently are no liens or encumbrances of any nature
whatsoever on or against the Pledged Revenues.
N. Sure , 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.
O. Tax Matters. The City shall make no investment or other use of proceeds
of the Bonds at any time during the term thereof which, if such investment or other use had been
reasonably expected on the date of issue of the Bonds, would have caused the Bonds to be
"arbitrage bonds" within the meaning of Sections 103 and 148 of the Tax Code and the
regulations thereunder.
P. Annual Financial Reports: Event Reports. The City shall deliver to each
NRMSIR and the SID, if any, within two hundred fortv (240) days after the end of each fiscal
year of the City:
(1) a copy of the City's annual financial statements prepared in
accordance with generally accepted accounting principles applicable to governmental
entities and audited by an Independent Accountant; and
(2) to the extent not contained in the City's annual financial statements,
an update of the financial information and operating data in the final official statement of
the type contained under the section entitled "FINANCIAL INFORMATION
CONCERNING THE STATE FUND" pertaining to the information under the subheading
"Citv's Historical State Fund Revenues."
In a timely manner, the City shall deliver to the MSRB and to the SID, if any,
notice of any of the following events with respect to the Bonds, if material:
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(a) Principal and interest payment delinquencies;
(b) Non-payment related defaults;
(c) Unscheduled draws on any debt service reserve reflecting financial
difficulties;
(d) Unscheduled draws on any credit enhancement reflecting financial
difficulties;
(e) Substitution of any credit or liquidity provider, or its failure to
perform;
(f) Adverse tax opinions or events affecting the tax-exempt status of
the Bonds;
(g) Modifications to rights of Beneficial Owners of the Bonds;
(h) Bond calls;
(i) Defeasances;
0) Release, substitution or sale of property securing payment of the
Bonds; or
(k) Rating changes.
In a timely manner, the City shall give to the MSRB and to the SID, if any, notice
of any failure by the City to provide any information required pursuant hereto within the time
limit specified herein.
All information required by this Section 8P to be given as provided herein shall be
given by the City's Financial Officer or his designee. Any information given in any manner by
any other officer of the City not authorized or given pursuant hereto may not be relied upon by
any Beneficial Owner of Bonds or any other person.
The City agrees that the provisions of this Section 8P shall be for the benefit of
the Beneficial Owners of the Bonds and shall be enforceable by any Beneficial Owner in an
action for specific performance against the City. No money damages or attorneys' fees shall be
recoverable against the City for breach of any covenant contained in this Section 8P.
This Section 8P may be amended to the extent required or permitted by SEC Rule
15c2-12, provided that any such amendment either does not, in the determination of the City
(which may be based on an opinion of counsel), materially impair the interests of the Beneficial
Owners of the Bonds or is approved by the Beneficial Owners of a majority in aggregate
principal amount of the Bonds.
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This Section 8P shall be in effect from the date of delivery of the Bonds until the
earlier of(a) the date all Debt Service Requirements of the Bonds has been legally defeased; (b)
the date that the City shall no longer constitute an "obligated person" within the meaning of SEC
Rule 15c2-12; or(c) the date on which those portions of SEC Rule 15c2-12 that require this
Section 8P are held to be invalid by a court of competent jurisdiction in a non-appealable action
have been repealed retroactively or otherwise do not apply to the Bonds.
Q. Information and Notices. The City shall provide to the Bond Insurer the
following: within one hundred eighty (180) days after the end of each Fiscal Year, the City's
budget for the current Fiscal Year, the City's audited financial statements for the Fiscal Year most
recently ended, notice of redemption as provided in Section 3B(3) hereof; notice of the
resignation or removal of the Paying Agent, Registrar, Transfer Agent or Escrow Bank and the
appointment of, and acceptance of duties by, any successor thereto as provided in Section 3B(7)
hereof; notice of the commencement of any proceeding by or against the City commenced under
the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law; notice of the making of any claim in connection with any such
insolvency proceeding seeking the avoidance as a preferential transfer of any payment of
principal of or interest on the Bonds; all reports, notices and correspondence to be delivered
under the terms of any document described herein; and such additional information as the Bond
Insurer may reasonably request from time to time.
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 final Maturity Date or any
Redemption Date as of which the City shall have exercised or shall have obligated its itself to
exercise its prior redemption option. The Federal Securities 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 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. The City shall
cause a copy of the report verifying the sufficiency of such escrow or trust prepared by an
Independent Accountant acceptable in form and substance and addressed to the Bond Insurer, a
copy of the escrow agreement in form and substance acceptable to the Bond Insurer and an
opinion of nationally recognized bond counsel acceptable in form and substance and addressed to
the Bond Insurer that the Bonds are no longer Outstanding to be delivered to the Bond Insurer.
Any Debt Service Requirements of the Bonds paid by the Bond Insurer shall not be deemed paid
pursuant to this Ordinance until paid by the City in accordance herewith. In the event that a
forward purchase agreement for Federal Securities is used in connection with any such escrow,
such agreement shall be acceptable in form and substance to the Bond Insurer and shall be
accompanied by such opinions of counsel as may reasonably be required by the Bond Insurer.
Final drafts of all documents required hereby shall be provided to the Bond Insurer not later than
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five (5) days prior to the deposit required under the escrow agreement. Nothing herein shall be
construed to prohibit a partial defeasance of the Outstanding Bonds in accordance with the
provisions of this Section 9.
Section 10. Default Provisions and Remedies of Bond Owners.
A. Events of Default. Each of the following events is hereby declared to be
and to constitute an Event of Default:
(1) Nonpayment of Principal or Premium. Payment of the principal of
any of the Bonds or any premium due in connection with the redemption thereof, or both,
is not made from source other than the Bond Insurance Policy when the same becomes
due and payable, either at maturity or upon prior redemption, or otherwise;
(2) Nonpayment of Interest. Payment of any interest on any of the
Bonds is not made from source other than the Bond Insurance Policy when the same
becomes due and payable;
(3) Incapacity to Perform. The City for any reason is, or is rendered,
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 an 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 twenty-five percent (25%) in 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 money 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 if 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
Bond Insurer or the Owners of twenty-five percent (25%) in principal amount of the
Bonds then Outstanding.
B. Remedies for Defaults. The City shall give notice to the Bond Insurer of
any Event of Default under Section IOA(1) or (2) hereof immediately upon the occurrence
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thereof and of any Event of Default under Section I OA(3), (4), (5) or(6) hereof known to the
City within five (5) business days of obtaining knowledge thereof. Upon the happening and
continuance of any Event of Default, provided that the Bond Insurer has made all payments of
principal and interest on the Bonds as required by the Bond Insurance Policy, the Bond Insurer,
acting alone, shall have the right to direct all remedies against the City with respect to the Bonds,
and no such remedies shall be exercised without the consent of the Bond Insurer. Subject to the
foregoing, upon the happening and continuance of any of the Events of Default, as provided in
Section I OA hereof, then and in every case the Owner or Owner of not less than twenty-five
percent (25%)in 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 rights aforesaid, or thereby to enjoin any act or thing which may be unlawful or in violation
of any right of 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. Upon a failure
of the City to reimburse the Bond Insurer for any Policy Costs incurred by the City, the Bond
Insurer shall be entitled to exercise any and all remedies available at law or hereunder other than
remedies which might adversely affect the Owners of the Bonds.
C. Rights 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 carry out any duty,
obligation or other commitment. Each right or privilege of any such Owner or 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 other statutes, except as provided in Sections 12A and 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 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 I OA hereof, the City, in addition, will do and perform all proper
acts on behalf of and for the Owners of the Outstanding Bonds to protect and to preserve the
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security created for the payment of their Bonds 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 Principal and
Interest Subaccount, or, in the event of securities hereafter or heretofore issued and Outstanding
during such period of time on a parity with the Bonds, shall be applied as provided in Section 5C
hereof for all Parity Securities, including the Bonds, 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 I OD
provided,the Owner or Owners of not less than 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 to affect materially and prejudicially the Owners of the Outstanding Bonds and any
Outstanding Parity Securities.
E. Evidence of Security Owners. Any request, consent or other instrument
which 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 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 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 the officer purports to act,that the
individual signing such request or other instrument acknowledged to him 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 Ownership. The amount of Bonds owned by any Person
executing any instrument as an Owner of Bonds, and the numbers, date and other identification
thereof, together with the date 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
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Person executing any instrument as an owner of such securities, and the numbers, date and other
identification thereof, together with the date 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 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 the officer 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 pon 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 the Bonds that the Bonds have been issued for a valuable consideration in full
conformity with law.
G. Bond Insurer as Owner. So long as the Bond Insurance Policy is in effect
and the Bond Insurer is not asserting that the Bond Insurance Policy is not in effect and the Bond
Insurer is not then in default in its payment obligations under the Bond Insurance Policy (except
to the extent of amounts previously paid by the Bond Insurer and due and owing to the Bond
Insurer), the Bond Insurer shall be deemed to be the Owner of all Bonds insured by it for
purposes of exercising any voting right or privilege or giving any consent or direction or taking
any other action that Owners of the Bonds are entitled to take pursuant to this Section 10, unless
the Bond Insurer has provided written notice to the Enterprise that it waives such rights. The
rights granted to the Bond Insurer under this Ordinance and the Escrow Agreement to request,
consent to or direct any action are rights granted to the Bond Insurer in consideration of its
issuance of the Bond Insurance Policy. Any exercise by the Bond Insurer of its contractual rights
shall not be construed or deemed to be taken for the benefit or on behalf of the Owners of the
Bonds nor shall such action evidence any position of the Bond Insurer, affirmative or negative, as
to whether consent of the Owners is required in addition to consent of the Bond Insurer.
H. Immunities of Purchaser. The Purchaser and any associate thereof are
under no obligation to any Owner of the Bonds for any action that they may not take or in respect
of anything that they may or may not do by reason of any information contained in any reports or
other documents received by them under the provisions of this Ordinance. The immunities and
exemption from liability of the Purchaser and any associate thereof hereunder extend to their
partners, directors, officers, successors, assigns, employees and agents.
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Section 11. Amendment of Ordinance.
A. Amendment of Ordinance Not Requiring Consent of Bond Owners and
Bond Insurer. The City may, without the consent of, or notice to, the Owners of the Bonds or the
Bond Insurer, 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, Transfer
Agent, Escrow Bank or Securities Depository;
(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
of 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 which do not in the
opinion of nationally recognized bond counsel materially adversely affect the interests of
the Owners of the Bonds.
The City may adopt such ordinances supplemental hereto for any one or more of
the purposes specified in Section I IA(2), (3), (4), (5) and (6) hereof without the consent of, or
notice to, the Bond Insurer. The Enterprise may adopt such ordinances supplemental hereto for
either or both of the purposes specified in Section 11 A(1) or (7) only with the prior written
consent of the Bond Insurer.
Whenever the Board proposes to supplement or amend this Ordinance under the
provisions of this Section 1 IA, it shall give notice of the proposed supplement or amendment
and provide a copy thereof to Moody's Investors Service, Inc. and Standard & Poor's Ratings
Services at least ten (10) days prior to its adoption and execution and shall provide a complete
transcript of all proceedings relating to such supplement or amendment to the Bond Insurer.
B. Amendment of Ordinance Requiring Consent of Bond Owners and Bond
Insurer. Exclusive of the amendatory ordinances covered by Section 11A hereof, this Ordinance
may be amended or modified by ordinances or other instruments duly adopted by the Council,
without receipt by it or any additional consideration, but with the written consent of the Bond
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Insurer and 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, including any Outstanding
refunding securities as may be issued for the purpose of refunding any of the Bonds, provided
that no such amendatory ordinance shall permit:
(1) Changing Pa ment. A change in the maturity or in the terms of
redemption of the principal of any Outstanding Bond or any interest thereon; or
(2) Reducing Return. A reduction in the principal amount of any
Bond,the rate of interest thereon or any premium due in connection with the redemption
thereof, without the consent of the Owner of the Bond; or
(3) Creating 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, or otherwise changing the consent of the Owners of Bonds, which may be
required herein for any amendment hereto; or
(5) Establishing Priorities Between Bonds. The establishment of
priorities as between Bonds issued and Outstanding under the provisions of this
Ordinance; or
(6) Making Modifications. The making of 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 registered Owners of Bonds whose names appear on the registration books of the
City and to the Bond Insurer. 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. The City shall also give notice of
the proposed supplement or amendment and provide a copy thereof to Moody's Investors Service,
Inc. and Standard& Poor's Ratings Services at least ten (10) days prior to its adoption and
execution and shall provide a complete transcript of all proceedings relating to such supplement
or amendment to the Bond Insurer.
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 I I 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 and the Bond Insurer, 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,
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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 and the Bond Insurer, shall
have consented to and approved the adoption thereof as herein provided, 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 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) upon the adoption by the City and upon the filing
with the City Clerk of an instrument to that effect an with the consent of the Owners of all the
then Outstanding Bonds and the Bond Insurer, such consent to be given in the manner provided
in Section 1 IC hereof, and no notice to Owners of Bonds shall be required as provided in Section
1 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 City 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 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 I IB, 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
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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 10E hereof.
Section 12. Miscellaneous.
A. 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 or
out of any funds derived from general property taxes. Neither shall the covenants, agreements,
representations, or warranties contained herein or in the Bonds impose or be construed as
imposing any liability, obligation, or charge against the Bond Insurer.
B. No Pledge of Property. The payment of the Bond 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, shall be
liable to be forfeited or taken in payment of the Bonds.
C. Statute of Limitations. No action or suit base 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 the Highway Users Tax
Revenue Account, unless the Council shall otherwise 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 an
orders such payment to be made.
D. 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, including the printing upon
each such Bond of a copy of the approving legal opinion of Ballard Spahr Andrews &
Ingersoll, LLP, bond counsel, duly certified by the Registrar, and, if necessary or
desirable, the preparation of typewritten Bonds as provided herein;
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(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;
(3) Information. The assembly and dissemination of financial and
other information concerning the City and the Bonds;
(4) Official Statement. The preparation of a final official statement in
substantially the same form as the Preliminary Official Statement for the use of
prospective buyers of the Bonds, including, without limitation, the Purchaser and its
associates, if any; and
(5) Closing Documents and Certificates. The execution of the Escrow
Agreement, the Commitment, the Reserve Insurance Policy Commitment, the Insurance
Agreement and 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 litigation, pending
or threatened, affecting the validity of the Bonds;
(d) The tax treatment of interest on the Bonds under federal
and State income tax laws;
(e) The delivery of the Bonds and the receipt of the Bond
purchase price and of the Bonds;
(f) The information contained in the official statement.
E. 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 right, 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.
F. 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
an Person, other than the City, the Bond Insurer 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
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hereof. All the covenants, stipulations, promises and agreements herein contained by and on
behalf of the City shall be for the sole and exclusive benefit of the City, the Bond Insurer 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
of 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.
G. Notices. Any notices required or permitted to be given to the Bond Insurer
hereunder shall be addressed as follows:
Financial Security Assurance Inc.
350 Park Avenue
New York, New York 10022-6022
Attention: Managing Director - Surveillance
Re: Policy No.
Telephone: (212) 826-0100
Telecopier: (212) 339-3529
In each case in which notice or other communication refers to an Event of Default, then a copy of
such notice or other communication shall also be sent to the attention of General Counsel and
shall be marked to indicate "URGENT MATERIAL ENCLOSED."
H. 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 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.
I. 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 of
which the Bond Insurer shall be a third party creditor beneficiary; and this Ordinance, subject to
the provisions of Sections 9 and 11 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,
canceled or discharged, as herein provided.
J. Statutory Limitations Met. The Council hereby determines that the
provisions and limitations of the Refunding Act and any other applicable law imposed on the
issuance of the Bonds have been met.
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K. Ratification. All action not inconsistent with the provisions of this
Ordinance heretofore taken by the City or its officers and otherwise by the City directed toward
the sale and delivery of the Bonds shall be, and the same hereby is, ratified, approved and
confirmed.
L. 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.
M. Severability. If any section, subsection, paragraph, clause or other
provision of this Ordinance shall or 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.
READ, AMENDED, FINALLY PASSED AS AMENDED ON SECOND
READING, AND ORDERED PUBLISHED BY NUMBER AND TITLE ONLY this 3rd day of
November, 1998.
CITY OF FORT EOLLP IS, COLORADO
By
(CITY) Mayor
(SEAL)
ATTEST:
City Clerk
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