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HomeMy WebLinkAbout026 - 07/06/1993 - AUTHORIZING THE ISSUANCE OF SALES AND USE TAX REVENUE REFUNDING BONDS SERIES 1993, IN THE AMOUNT OF � f t r w ORDINANCE NO. 26, 1993 AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF FORT COLLINS, COLORADO, SALES AND USE TAX REVENUE REFUNDING BONDS, SERIES 1993, DATED JUNE 1, 1993, IN THE AGGREGATE PRINCIPAL AMOUNT OF $26,210, 000. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO, THAT: Section 1. Definitions and Construction. A. Definitions. In this Ordinance the following terms have the following respective meanings unless the context hereof clearly requires otherwise: (1) Act: part 1 of article 56 of title 11, Colorado Revised Statutes, as amended. (2) Additional Parity Bonds: any Parity Securities issued after the 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 given 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 Parity Securities or any portion thereof 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 Purchase Agreement: the Bond Purchase Agreement, dated June 10, 1993, between the City and the Purchaser. (6) Bonds: the City of Fort Collins, Colorado, Sales and Use Tax Revenue Refunding Bonds, Series 1993 , dated June 1, 1993, in the aggregate principal amount of $26,210, 000. 1 { (7) Bond Insurance Policy: the municipal bond new issue insurance policy issued by the Bond Insurer that guarantees payment of principal of and interest on the Bonds. (8) Bond Insurer: Financial Guaranty Insurance Company, a New York stock insurance company, or its successors. (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) Charter: the Home Rule Charter of the City, as amended. (11) City: the City of Fort Collins, Colorado. (12) Code: the Code of the City. (13) Combined Average Annual Debt Service Requirements: the sum of the Average Annual Debt Service Requirements for all issues of Bonds or Parity Securities or portions thereof for which the computation is being made. (14) Combined Maximum Annual Debt Service Requirements: the Maximum Annual Debt Service Requirements for all issues of Bonds or Parity Securities or portions thereof for which the computation is being made, treated as a single issue. (15) Commercial Bank: a state or national bank or trust company which is an eligible public depository under the laws of the State, a member of the Federal Deposit Insurance Corporation and a member of the Federal Reserve System, which (unless otherwise approved by the Bond Insurer) has a combined capital and surplus of $3, 000, 000 or more, and which is located within the United States of America. (16) Commitment: the Commitment for Municipal Bond Insurance, dated May 19, 1993, from the Bond Insurer to the City. (17) Comparable Bond Year: in connection with any Fiscal Year, the Bond Year which ends in such Fiscal Year. 2 For example, for the Fiscal Year commencing on January 1, 1994, the Comparable Bond Year for the Bonds commences on December 2, 1993, and ends on December 1, 1994 . (18) Council: the governing body of the City. (19) 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. (20) Escrow Account: the special fund created in Section 5A hereof. (21) Escrow Agreement: the Escrow Agreement, dated as of June 1, 1993, between the City and the Escrow Bank. (22) Escrow Bank: Colorado National Bank, Denver, Colorado, or its successors. (23) Event of Default: one of the events described in Section 10A hereof. (24) Excess Investment Earnings Account: the special fund created and referred to in Section 5I hereof. (25) Federal Securities: bills, certificates of indebtedness, notes, bonds or similar securities which are direct obligations of 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. (26) Fiscal Agent: Citibank, N.A. , New York, New York, or its successors. (27) Fiscal Year: the twelve (12) months commencing on the first day of January of any calendar year and ending on the last day of December of such calendar year or such other twelve-month period as may from time to time be designated by the Council as the Fiscal Year of the City. (28) Independent Accountant: any certified public accountant, or any firm of such accountants, duly licensed to 3 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 or the Council, (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 of the Council, but who may be regularly retained to make annual or similar audits of any books or records of the City. (29) Interest Payment Date: a date designated by ordinance for the payment of interest on the Bonds or any other designated security. (30) Letter of Representations: the letter of representations, dated as of June 1, 1993, from the City and the Paying Agent to the Securities Depository. (31) Maturity Date: a date designated by ordinance for the payment of principal on the Bonds or any other designated securities. (32) Maximum Annual Debt Service Requirements: the maximum aggregate amount of Debt Service Requirements (excluding redemption premiums) due on the Bonds or any other given issue of Parity Securities or any portion thereof in any Bond Year beginning with the Bond Year in which Debt Service Requirements of the Bonds or such Parity Securities or any portion thereof are first payable after the computation date and ending with the Bond Year in which the last of the Debt Service Requirements are payable. (33) Net Revenue: the amount of Sales and Use Tax collected by the City (after deduction by the retailer or vendor of the 3% collection expense allowance) . (34) Ordinance: this Ordinance No. 26, 1993, of the City. (35) Ordinance No. 58 , 1967: Ordinance No. 58, 1967, of the City which provides for the imposition of the initial one percent (1%) Sales and Use Tax within the City. (36) Ordinance No. 140, 1979: Ordinance No. 140, 1979, of the City, which provides for the imposition of the additional one percent (1%) Sales and Use Tax within the City. 4 a (37) Ordinance No. 149, 1981: Ordinance No. 149, 1981, of the City, which provides for the imposition of the additional twenty-five hundredths percent ( . 25%) Sales and Use Tax within the City. (38) 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 which have been authorized, executed and delivered except the following: (a) Any Bond, Additional Parity Bond, Parity Security or other security cancelled by the City, by the Paying Agent or otherwise on the behalf of the City on 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 specified Redemption Date thereof shall have theretofore been deposited in escrow or in trust with a Trust Bank for that purpose; and (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. (39) Owner: the holder of any bearer instrument or registered owner of any registered instrument. (40) Parity Securities: bonds, warrants, notes, securities, leases or other contracts evidencing borrowings and payable from the Pledged Revenues equally or on a parity with the Bonds. 5 (41) Participants: underwriters, securities brokers or dealers, banks, trust companies, closing corporations or other Persons for which or whom the Securities Depository holds the Bonds. (42) Paying Agent: Colorado National Bank, Denver, Colorado, or its successors. (43) Permitted Investments: to the extent permitted by the ordinances of the City and, to the extent applicable, the laws of the State, any of the following obligations: (a) Direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, provided that the full faith and credit of the United States of America must be pledged to any such direct obligation or guarantee (collectively, "Direct Obligations") ; (b) Direct obligations and fully guaranteed certificates of beneficial interest of the Export-Import Bank of the United States; consolidated debt obligations and letter of credit-backed issues of the Federal Home Loan Banks; participation certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation ("FHLMCs") , debentures of the Federal Housing Administration; mortgage-backed securities (except stripped mortgage securities which are valued greater than par on the portion of unpaid principal) and senior debt obligations of the Federal National Mortgage Association ("FNMAs") ; participation certificates of the General Services Administration; guaranteed mortgage-backed securities and guaranteed participation certificates of the Government National Mortgage Corporation ("GNMAs") ; guaranteed participation certificates and guaranteed pool certificates of the Small Business Administration; debt obligations and letter of credit-backed issues of the Student Loan Marketing Association; local authority bonds of the U.S. Department of Housing and Urban Development; guaranteed Title XI financings of the U.S. Maritime Administration; guaranteed transit bonds of the Washington Metropolitan Area Transit Authority; and Resolution Funding 6 r � � t a Corporation securities (collectively, "Agency Obligations") ; (c) Direct obligations of any state of the United States of America or any subdivision or agency thereof whose unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, "A" or better by Moody's Investors Service, Inc. and "A" or better by Standard & Poor's Corporation, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, "A" or better by Moody's Investors Service, Inc. and "A" or better by Standard & Poor's Corporation; (d) Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase, "P-1" by Moody's Investors Service, Inc. and "A-1" or better by Standard & Poor's Corporation; (e) Federal funds, unsecured certificates of deposit, time deposits or bankers acceptances (in each case having maturities of not more than 365 days) of any domestic bank including a branch office of a foreign bank which branch office is located in the United States, provided legal opinions are received to the effect that full and timely payment of such deposit or similar obligation is enforceable against the principal office or any branch of such bank, which, at the time of purchase, has a short-term "Bank Deposit" rating of 11P-1" by Moody's Investors Service, Inc. and a "Short-Term CD" rating of "A-1" or better by Standard & Poor's Corporation; (f) Deposits of any bank or savings and loan association which has combined capital, surplus and undivided profits of not less than $3, 000, 000, provided such deposits are continuously and fully insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation; (g) Investments in money-market funds rated "AAAm" or "AAAm-G" by Standard & Poor's Corporation; 7 (h) Repurchase agreements collateralized by Direct Obligations, GNMAs, FNMAs, or FHLMCs with any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction or any Commercial Bank insured by the Federal Deposit Insurance Corporation, if such broker/dealer or Commercial Bank has an uninsured, unsecured and unguaranteed obligation rated "P-1" or 11A3" or better by Moody's Investors Service, Inc. and "A-1" or "A-" or better by Standard & Poor's Corporation, provided: 1. a master repurchase agreement or specific written repurchase agreement governs the transaction, and 2. the securities are held free and clear of any lien by the City or an independent third party acting solely as agent ("Agent") for the City, and such third party is a Federal Reserve Bank, a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than $50, 000, 000, or a bank approved in writing for such purpose by the Bond Insurer, and the City shall have received written confirmation from such third party that it holds such securities, free and clear of any lien, as agent for the City, and 3 . a perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 CFR 306. 1 et sea. or 31 CFR 350.0 et sea. in such securities is created for the benefit of the City, and 4. the repurchase agreement has a term of one hundred eighty (180) days or less, and the City or the Agent will value the collateral securities no less frequently than weekly and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two (2) business days of such valuation, and 8 r' 5. the fair market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least one hundred three percent (103%) . (44) Person: any individual, f irm, partnership, corporation, company, association, joint-stock association, or body politic or any trustee, receiver, assignee, or other similar representative thereof. (4 5) Pledged Revenues: the Net Revenue collected by the City from the Sales and Use Tax plus any amounts designated as "supplemental user fees" under that certain Master Agreement, dated December 31, 1982, as amended, between the City and Anheuser-Busch, Incorporated which are payable on account of obligations issued by the City and payable from the Net Revenue plus all income or gain, if any, from any investment of the foregoing and of the proceeds of Securities payable from the Pledged Revenues (except any income or gain from investment of the proceeds of Securities deposited in the Escrow Account or other similar fund or account or required to be deposited in the Excess Investment Earnings Account) . (46) Preliminary Official Statement: the Preliminary Official Statement, dated March 18, 1993, relating to the Bonds. (47) Principal and Interest Account: the special fund created by Ordinance No. 87, 1981, of the City and referred to in Section 5C hereof. (48) Prior Bonds: the City of Fort Collins, Colorado, Sales and Use Tax Revenue Refunding and Improvement Bonds, Series 1986, dated August 1, 1986, in the original aggregate principal amount of $30, 060, 000. (49) Purchaser: the syndicate managed by George K. Baum & Company, Denver, Colorado. (50) Redemption Date: the date fixed for the redemption prior to maturity of any Bonds or other designated securities payable from the Pledged Revenues in any notice of prior redemption given by or on behalf of the City. 9 f i i (51) Registrar: Colorado National Bank, Denver, Colorado, or its successors. (52) Regular Record Date: the fifteenth day of the calendar month next preceding an Interest Payment Date for the Bonds. (53) Reserve Account: the special fund created by Ordinance No. 87, 1981, of the City and referred to in Section 5D hereof. (54) Sales and Use Tax: the sales and use tax established by Ordinance No. 58, 1967, Ordinance No. 140, 1979, and Ordinance No. 149, 1981, upon sales and purchases of tangible personal property at retail and storage, use, distribution and consumption of tangible personal property purchased or acquired at retail, within the City, in such percentages as set forth in such Ordinances or any supplements or amendments thereof. (55) Sales and Use Tax Fund: the special fund created by Ordinance No. 87, 1981, of the City and referred to in Section 5B hereof. (56) Securities Depository: The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York. (57) Security or securities: any bond issued by the City or any other evidence of the advancement of money to the City. (58) Special Record Date: the date fixed by the Paying Agent for the determination of ownership of Bonds for the purpose of paying interest not paid when due or interest accruing after maturity. (59) State: the State of Colorado. (60) 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. 10 1 � i (6) In the event that any Bond issued under this Ordinance is not insured by the Bond Insurer, no provision of this Ordinance referring to the Bond Insurer or the Bond Insurance Policy or making covenants or agreements for the benefit of the Bond Insurer shall be applicable to such Bond, unless the context thereof clearly requires otherwise, and all such provisions shall be read as applicable only to the insured Bonds. Section 2 . Recitals. 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 $23,530, 000, maturing on the following dates in the following years in the following aggregate principal amounts and bearing interest at the following per annum interest rates: Principal Dates Amounts Interest Rates December 11 1993 $ 615, 000 6.550% June 11 1994 635, 000 6.750 December 11 1994 655, 000 6.750 June 11 1995 680, 000 7. 000 December 11 1995 700, 000 7. 000 June 11 1996 725, 000 7. 150 December 1, 1996 755, 000 7. 150 June 11 1997 780,000 7 . 350 December 11 1997 810, 000 7. 350 June 11 1998 840, 000 7.450 December 11 1998 870, 000 7 .450 June 11 1999 900, 000 7.450 December 11 1999 935, 000 7.450 June 11 2000 970, 000 7. 500 December 11 2000 11005, 000 7 .500 December 1, 2004 6, 155, 000 7. 625 December 11 2009 51500, 000 6.500 The Prior Bonds maturing in the years 1993 through 1996 are not subject to optional redemption prior to their respective Maturity Dates. The Prior Bonds maturing in the year 1997 and 12 "^ A 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, 1996, 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 plus a premium expressed as a percentage of the principal amount of each Prior Bond so redeemed, depending on the Redemption Date, as follows: Redemption Dates Premiums December 1, 1996, and June 1, 1997 2 . 0% December 1, 1997, and June 1, 1998 1. 0 December 1, 1998, and Thereafter None The City wishes 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 or the principal and interest payable in any particular year or years, or effect other economies; or any combination of the foregoing. B. Authority. Pursuant to art. XX, sec. 6 of the State Constitution, Art. V, Sections 19.3 and 19.4 of the Charter, and the Act, the City is authorized by Council action and without an election to issue the Bonds for the purpose of refunding, paying and discharging the Prior Bonds. Pursuant to art. X, sec. 2 0 (4) (b) of the State Constitution, the Bonds may be issued without voter approval for the purpose of refinancing the Prior Bonds at a lower interest rate. Section 3 . The Bonds. A. Authorization. The Bonds are hereby authorized to be issued for the aforesaid purposes. B. Bond Details. (1) Generally. The Bonds shall be issuable 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 Bonds. No Bond 13 shall be issued in any denomination larger than the aggregate principal amount maturing on the Maturity Date of such Bond, and no Bond shall be made payable on more than one Maturity Date. The Bonds shall be initially issued so that a single Bond shall evidence the obligation of the City to pay all principal due on each of the Maturity Dates set forth herein. Pursuant to the recommendations of the Committee on Uniform Security Identification Procedures, CUSIP numbers may be printed on the Bonds. The Bonds shall mature on the following dates in the following aggregate principal amounts and shall bear interest from June 1, 1993, 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 Dates Amounts Interest Rates December 11 1993 860, 000 2 .400% June 11 1994 820, 000 2 .700 December 11 1994 890, 000 2 .700 June 11 1995 840, 000 3 .400 December 11 1995 915, 000 3 .400 June 11 1996 870, 000 3 .800 December 11 1996 945, 000 3 .800 June 11 1997 905, 000 4. 100 December 11 1997 980,000 4 . 100 June 11 1998 945, 000 4.400 December 11 1998 11025,000 4.400 June 11 1999 985, 000 4. 600 December 1, 1999 11065, 000 4. 600 June 11 2000 11030, 000 4.750 December 11 2000 11115, 000 4 .750 June 11 2001 11080, 000 4.900 December 11 2001 11175, 000 4.900 June 11 2002 11135, 000 5. 000 December 1, 2002 11230, 000 5. 000 June 11 2003 435,000 5. 000 14 i December 11 2003 470, 000 5. 000 June 11 2004 455, 000 5. 100 December 11 2004 490, 000 5. 100 December 11 2006 21045, 000 5.375 December 11 2009 31505, 000 5.375 Said interest shall be payable on December 1, 1993 , 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 any Bond is not paid as provided herein, interest shall continue thereon at the same interest rate until the principal is 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 such Owner at the address appearing on the registration books of the City maintained by the Registrar or by wire transfer to such bank or other depository as the Owner shall designate in writing to the Paying Agent. Except as hereinbefore and hereinafter provided, the interest shall be payable to the Owner of each Bond determined as of the close of business on the Regular Record Date, irrespective of any transfer of ownership of the Bond subsequent to the Regular Record Date and prior to such Interest Payment Date, by check or draft or wire transfer directed to such Owner as aforesaid. Any interest not paid when due and any interest accruing after maturity shall be payable to the Owner of each Bond entitled to receive such interest determined as of the close of business on the Special Record Date, irrespective of any transfer of ownership of the Bond subsequent to the Special Record Date and prior to the date fixed by the Paying Agent for the payment of such interest, by check or draft or wire transfer directed to such Owner as aforesaid. Notice of the Special Record Date and of the date fixed for the payment of such interest shall be given by sending a copy thereof by certified or registered first-class, postage-prepaid mail, at least fifteen (15) days prior to the Special Record Date, to the 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 15 i 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 the Debt Service Requirements of the Bonds shall be made in the manner provided in the Letter of Representations. (2) Payments Under the Bond Insurance Policy. If on the third day preceding any Interest Payment Date there is not on deposit with the Paying Agent sufficient moneys available to pay all principal of and interest on the Bonds due on such date, the Paying Agent shall immediately notify the Bond Insurer and its Fiscal Agent of the amount of such deficiency. If by said Interest Payment Date the City has not provided the amount of such deficiency, the Paying Agent shall notify the Registrar which shall simultaneously make available to the Bond Insurer, to the Paying Agent and to the Fiscal Agent the registration books for the Bonds maintained by the Registrar. 16 In addition, the Paying Agent shall provide the Bond Insurer with a list of the Owners entitled to receive principal or interest payments from the Bond Insurer under the terms of the Bond Insurance Policy and shall make arrangements for the Bond Insurer and its Fiscal Agent to mail checks or drafts to Owners entitled to receive full or partial interest payments from the Bond Insurer and to pay principal of the Bonds surrendered to the Fiscal Agent by the Owners entitled to receive full or partial principal payments from the Bond Insurer. In addition, the Paying Agent shall, at the time the registration books are made available to the Bond Insurer, notify Owners entitled to receive the payment of principal of or interest on the Bonds from the Bond Insurer as to the fact of such entitlement, that the Bond Insurer will remit to them all or part of the interest payments coming due subject to the terms of the Bond Insurance Policy, that, except as provided below, in the event that any Owner is entitled to receive full payment of principal from the Bond Insurer, such Owner must tender his Bond with the instrument of transfer in the form provided on the Bond executed in the name of the Bond Insurer, and that, except as provided below, in the event that such Owner is entitled to receive partial payment of principal from the Bond Insurer, such Owner must tender his Bond for payment first to the Paying Agent, which shall note on such Bond the portion of principal paid by the Paying Agent, and then, with an acceptable form of assignment executed in the name of the Bond Insurer, to the Fiscal Agent, which will then pay the unpaid portion of principal to the Owner subject to the terms of the Bond Insurance Policy. In the event that the Paying Agent has notice that any payment of principal of or interest on a Bond has been recovered from an Owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Paying Agent shall, at the time it provides notice to the Bond Insurer, notify all Owners that in the event that any Owner's payment is so recovered, such Owner will be entitled to payment from the Bond Insurer to the extent of such recovery, and the Paying Agent shall furnish to the Bond Insurer its records evidencing the payments of principal, of and interest on the Bonds which have been made by 17 the Paying Agent and subsequently recovered from Owners and the dates on which such payments were made. The Bond Insurer shall, to the extent it makes payment of principal of 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 and, to evidence such subrogation, in the case of subrogation as to claims for past due interest, the Paying Agent shall note the Bond Insurer's rights as subrogee on the registration books maintained by the Registrar upon receipt from the Bond Insurer of proof of the payment of interest thereon to the Owners of such Bonds and, in the case of subrogation as to claims for past due principal, the Paying Agent shall note the Bond Insurer's rights as subrogee on the registration books for the Bonds maintained by the Registrar upon receipt of proof of the payment of principal thereof to the Owners of such Bonds. Notwithstanding anything in this Ordinance or the Bonds to the contrary, the Paying Agent shall make payment of such past due interest and past due principal directly to the Bond Insurer to the extent that the Bond Insurer is a subrogee with respect thereto. (3) Redemption. Bonds maturing on or before June 1, 2003, shall not be subject to optional redemption prior to their respective Maturity Dates. Bonds maturing on or after December 1, 2003, shall be subject to optional redemption prior to their respective Maturity Dates, in whole or in part in such order as may be determined by the City, on June 1, 2003, 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 plus a premium expressed as a percentage of the principal amount of each Bond so redeemed, depending on the Redemption Date, as follows: Redemption Dates Premiums June 1, 2003, and December 1, 2003 1. 0% June 1, 2004, and December 1, 2004 0.5 June 1, 2005, and Thereafter None Bonds maturing in the year 2006 shall also be subject to mandatory sinking fund redemption prior to their Maturity Date, by lot, on the dates specified below at a price 18 M equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the Redemption Date. Such Bonds shall be redeemed on the following dates in the following aggregate principal amounts: Dates Principal Amounts June 1, 2005 $480, 000 December 1, 2005 515, 000 June 1, 2006 505, 000 December 1, 2006 545, 000 Bonds maturing in the year 2009 shall also be subject to mandatory sinking fund redemption prior to their Maturity Date, by lot, on the dates specified below at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the Redemption Date. Such Bonds shall be redeemed on the following dates in the following aggregate principal amounts: Dates Principal Amounts June 11 2007 $530, 000 December 11 2007 575, 000 June 11 2008 560, 000 December 1, 2008 610, 000 June 11 2009 590, 000 December 11, 2009 640, 000 Bonds which 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. 19 i ram ., Notice of redemption shall be given by the Paying Agent in the name of the City by sending a copy thereof by certified or registered first-class postage-prepaid mail, not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date, to the Bond Insurer (except in the case of mandatory sinking fund redemption) and 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 with respect to the Bonds to be redeemed, whether in whole or in part, the numbers and the CUSIP numbers thereof, the principal amounts and the Maturity Dates thereof and the date fixed for redemption and shall further state that on the Redemption Date there will be due and payable upon each Bond or part thereof so to be redeemed the principal amount or part thereof plus accrued interest thereon to the Redemption Date plus any premium due and that from and after such date interest will cease to accrue. In addition, the Paying Agent is hereby authorized to comply with any operational procedures and requirements of the Securities Depository relating to redemption of Bonds and notice thereof. Notice of optional redemption as provided herein (except any such notice with respect to Bonds to be redeemed in connection with an advance refunding) shall be given only if moneys on deposit with the Paying Agent and legally available for redemption of Bonds are sufficient therefor as of the date of such notice. Failure to mail any notice as aforesaid or any defect in any notice so mailed with respect to any Bond shall not affect the validity of the redemption proceedings with respect to any other Bond. Any Bonds redeemed prior to their respective Maturity Dates by call for prior redemption or otherwise shall not be reissued and shall be cancelled the same as Bonds paid at or after maturity. 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. (4) Interest Rates. The maximum net effective interest rate authorized for the Bonds is 15% per annum. The 20 weighted average interest rate for the Prior Bonds is 7. 0813% per annum. The net effective interest rate for the Bonds is 5.0941% 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 any security or benefit under this Ordinance unless and until the certificate of authentication on such Bond shall have been duly executed by the Registrar, and such executed certificate upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Ordinance. (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 by 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 21 r ' 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 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 Register shall authenticate and the Transfer Agent shall deliver to the new Owner a new Bond or Bonds of the same aggregate principal amount, maturing in the same year, and bearing interest at the same per annum interest rate as the Bond or Bonds surrendered. Such Bond or Bonds shall be dated as of their date of authentication. New 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 22 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 a f f ected by any notice to the contrary. 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 its Participants regarding any ownership interest in the Bonds or transfers thereof. 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. (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 its duties under this Ordinance, the City may, upon notice mailed to the Bond Insurer and to the Owners of the Bonds at the addresses shown on the registration books of the City, 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. It shall not be required that the same institution serve as paying agent, registrar, transfer agent and escrow bank, but the City shall have the right to have the same institution serve as paying agent, registrar, transfer agent and escrow bank. Any such resignation or removal shall become effective only upon the appointment of a successor. (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 23 ,.. 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 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 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 Sec. 8-41 of the Code. (10) Recitals in Bonds. Each Bond shall recite in substance that the Bond is payable solely from the Pledged Revenues and that the Bond 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 24 i interest on such Bond. Each Bond shall further recite that it is issued under the authority of the State Constitution, the Charter, the Act and this Ordinance. The Act provides that such recital conclusively imparts full compliance with all of the provisions and limitations thereof 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: 25 (Form of Bond] (Text of Face) UNITED STATES OF AMERICA STATE OF COLORADO COUNTY OF LARIMER CITY OF FORT COLLINS SALES AND USE TAX REVENUE REFUNDING BOND SERIES 1993 No. R- $ Interest Maturity Original Rate Date Date CUSIP 10, June 1, 1993 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 December 1, 1993, or the first such date after the date hereof, whichever is later, in the manner provided herein. If upon 26 � h 1 I presentation at maturity payment of the Principal Sum is not made as provided herein, interest continues at the Interest Rate until the Principal Sum is paid in full. Bonds maturing or on before June 1, 2003, are not subject to optional redemption prior to their respective maturity dates. Bonds maturing on or after December 1, 2003 , are subject to optional redemption prior to their respective maturity dates, in whole or in part in such order as may be determined by the City, on June 1, 2003, 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 plus a premium expressed as a percentage of the principal amount of each Bond so redeemed, depending on the redemption date, as follows: Redemption Dates Premiums June 1, 2003 , and December 1, 2003 1. 0% June 1, 2004, and December 11 2004 0.5 June 1, 2005, and Thereafter None Bonds maturing in the year 2006 are also subject to mandatory sinking fund redemption prior to their maturity date, by lot, on the dates specified below at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the redemption date. Such Bonds are to be redeemed on the following dates in the following aggregate principal amounts: Dates Principal Amounts June 1, 2005 $480, 000 December 1, 2005 515, 000 June 1, 2006 505, 000 December 1, 2006 545, 000 Bonds maturing in the year 2009 are also subject to mandatory sinking fund redemption prior to their maturity date, by lot, on the dates specified below at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the redemption date. Such Bonds are to be redeemed on the following dates in the following aggregate principal amounts: 27 Dates Principal Amounts June 11 2007 $530, 000 December 11 2007 575,000 June 11 2008 560, 000 December 11 2008 610, 000 June 11 2009 590, 000 December 11 2009 640, 000 Bonds which 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. 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 (3 0) nor more than sixty (60) days prior to the redemption date, to Financial Guaranty Insurance Company (except in the case of mandatory sinking fund redemption) and 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 with respect to the Bonds to be redeemed, whether in whole or in part, the numbers and the CUSIP numbers thereof, the principal amounts and the maturity dates 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 comply with any operational procedures and requirements of The Depository Trust Company relating to redemption of Bonds and notice thereof. Notice of optional redemption as provided herein (except any such notice with respect to Bonds to be redeemed in connection with any advance refunding) is to be given only if moneys on deposit with the paying agent and legally available for redemption of Bonds are sufficient therefor as of the date of such notice. 28 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 Pledged Revenues, as more specifically provided in the Ordinance. This Bond does not constitute a debt or an indebtedness of the City within the meaning of any constitutional, statutory or City charter 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 herein described. Printed on the reverse hereof is the complete text of the opinion of bond counsel, Ballard Spahr Andrews & Ingersoll, Denver, Colorado, a signed copy of which, dated the date of the f irst delivery of the Bonds herein described, is on file with the undersigned. COLORADO NATIONAL BANK as registrar By: Manual Signature) Authorized Officer Dated: 30 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. 31 (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 Colorado National Bank, Denver, Colorado, or its 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 Colorado National Bank, Denver, Colorado, or its 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, 32 i 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) pledged, pursuant to the Ordinance authorizing the issuance of this Bond, two special funds identified as the "City of Fort Collins, Colorado, Sales and Use Tax Revenue Bonds, Principal and Interest Account" and the "City of Fort Collins, Colorado, Sales and Use Tax Revenue Bonds, Reserve Account, " into which funds the City has covenanted in the Ordinance to pay from Pledged Revenues consisting of net receipts from the City's sales and use tax and certain other revenues sums sufficient to pay when due the principal of, interest on and any premium due in connection with the redemption of the Bonds and any other parity securities payable therefrom and to accumulate and maintain a specified reserve for such purposes. It is hereby recited, certified and warranted that for the payment of the principal of, interest on and any premium due in connection with the redemption of this Bond the City has created and will maintain said special funds and will deposit the Pledged Revenues therein out of the amounts and revenues specified in the Ordinance and out of said special funds, as an irrevocable charge thereon, will pay the principal of, interest on and any premium due 33 in connection with the redemption of this Bond in the manner provided by the Ordinance. The Bonds are equitably and ratably secured by a lien on the Pledged Revenues, and such Bonds constitute an irrevocable and first lien (but not necessarily an exclusive first lien) upon the Pledged Revenues. . Bonds and other types of securities, in addition to the Bonds, .subject to expressed conditions, may be issued and made payable from the Pledged Revenues having a lien thereon subordinate and junior to the lien of the Bonds 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 Pledged Revenues are assigned, pledged and set aside to the payment of the principal of and interest on the Bonds in anticipation of the collection of the Pledged 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 and refinancing at a lower interest rate certain outstanding sales and use tax revenue refunding and improvement bonds of the City pursuant to, by virtue of and in full conformity with the Constitution of the State of Colorado, the City Charter, 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 above-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 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 34 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, as well as the rights, duties, immunities and obligations of the City and the members of its Council and also the rights and remedies of the registered owners of the Bonds. To the extent and in the respects permitted by the Ordinance, the provisions of the Ordinance, or any instrument amendatory thereof or supplemental thereto, may be modified or amended by action of the City taken in the manner and subject to the conditions and exceptions provided in the Ordinance. The pledge of revenues and other obligations of the City under the Ordinance may be discharged at or prior to the maturity or prior redemption of the Bonds upon the making of provision for the payment of the Bonds on the terms and conditions set forth in the Ordinance. It is hereby recited, certified and warranted that all the requirements of law have been fully complied with by the proper officers of the City in the issuance of this Bond; that it is issued pursuant to and in strict conformity with the Constitution and all other laws of the State of Colorado, including the City Charter, and with the Ordinance; that this Bond does not contravene any constitutional or statutory limitation of the State of Colorado or any limitation of the City Charter; and that this Bond is issued under the authority of the Ordinance. For the payment of the principal of, interest on and any premium due in connection with the redemption of this Bond the City pledges the exercise of all its lawful corporate powers. This Bond is transferable only upon the registration books of the City by Colorado National Bank, Denver, Colorado, or its 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 35 settlors and the beneficiaries of the trust. The transfer agent is not required to transfer ownership of this Bond during the f if teen (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 entity or upon his, her or its order will be valid and effective to satisfy and discharge the liability of the City upon this Bond to the extent of the sum or sums so paid, and the City will not be affected by any notice to the contrary. 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 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 36 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. 37 STATEMENT OF INSURANCE Financial Guaranty Insurance Company ("Financial Guaranty") has issued a policy containing the following provisions with respect to the City of Fort Collins, Colorado, Sales and Use Tax Revenue Refunding Bonds, Series 1993 (the "Bonds") , such policy being on file at the principal office of Colorado National Bank, or its successors, as paying agent (the "Paying Agent") : Financial Guaranty hereby unconditionally and irrevocably agrees to pay for disbursement to the Bondholders that portion of the principal of and interest on the Bonds which is then due for payment and which the City of Fort Collins, Colorado (the "City") , shall have failed to provide. Due for payment means, with respect to the principal, the stated maturity date thereof, or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which the payment of principal of the Bonds is due by reason of call for redemption (other than mandatory sinking fund redemption) , acceleration or other advancement of maturity, and with respect to interest, the stated date for payment of such interest. Upon receipt of telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail, from a Bondholder or the Paying . Agent to Financial Guaranty that the required payment of principal or interest has not been made by the City to the Paying Agent, Financial Guaranty on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds in an account with Citibank, N.A. , or its successors, as its agent (the "Fiscal Agent") , sufficient to make the portion of such payment not paid by the City. Upon presentation to the Fiscal Agent of evidence satisfactory to it of the Bondholder's right to receive such payment and any appropriate instruments of assignment required to vest all of such Bondholder's right to such payment in Financial Guaranty, the Fiscal Agent will disburse such amount to the Bondholder. As used herein the term "Bondholder" means the person other than the City who at the time of nonpayment of a Bond is entitled under the terms of such Bond to payment thereof. The policy is non-cancellable for any reason. FINANCIAL GUARANTY INSURANCE COMPANY 38 (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 alteration or enlargement or any change whatever. (End of Form of Bond] 39 C. Bonds Equally Secured. The covenants and agreements herein set forth to be performed on behalf of the City shall be for the equal benefit, protection and security of the Owners of the Bonds, all of which, regardless of the time or times of their maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as otherwise expressly provided in or pursuant to this Ordinance. D. Special Obligations. All of the Bonds, as to all Debt Service Requirements thereof, shall be payable solely out of the Pledged Revenues. The Owners of the Bonds may not look to the general or any other fund of the City for the payment of the Debt Service Requirements thereof, except the special 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. The Purchaser has submitted a proposal for the purchase of the Bonds, together with the disclosures, comparisons and other information required by the Act, 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 Purchaser's proposal 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 Financial 40 Officer of 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 Adopted or Created by Ordinance; Security For Bonds. The proceeds of the sale of the Bonds and the Pledged Revenues received by the City shall be deposited by the City in the funds described in this Section 5, to be accounted for in the manner and priority set forth in this Section 5. Neither the Purchaser nor any subsequent Owner of any Bond shall be responsible for the application or disposal by the City or by any of its officers, agents and employees of the moneys derived from the sale of the Bonds or of any other moneys designated in this Section 5. The Pledged Revenues and all moneys and securities paid or to be paid to or held or to be held in any fund or account hereunder (except the 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 and any other 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 and trust account hereby created and designated as the "City of Fort Collins, Colorado, Sales and Use Tax Revenue Refunding Bonds, Series 1993, Escrow Account, " forthwith upon receipt of the proceeds of the Bonds, proceeds of the Bonds in the approximate amount of $25, 629,901.26 to be used only as provided in this Section 5A. The City shall apply said sum to the purchase of the Federal Securities in which the moneys in 41 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 Federal Securities, to pay the principal of, interest on and any premium due in connection with the redemption 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 principal of, interest on and any premium due in connection with the redemption of the Prior Bonds at 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 principal of, interest on and any premium due in connection with the redemption of the Prior Bonds as herein provided. The City hereby exercises its option to redeem the Prior Bonds maturing in the year 1997 and thereafter, prior to their respective Maturity Dates, on December 1, 1996, at a price equal to the principal amount of each such Prior Bond so redeemed plus accrued interest thereon to the Redemption Date plus a premium equal to 2 . 0% of the principal amount of each such Prior Bond so redeemed. The Financial Officer of the City is hereby authorized and directed to give forthwith and again not later than October 31, 1996, 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 certified or registered first-class postage-prepaid mail to Kemper Securities Group, Inc. , Denver, Colorado, and to the Owners of the Prior Bonds determined as of the close of business on the day preceding the first mailing of such notice 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: 42 i (Form of Notice] NOTICE OF REFUNDING AND REDEMPTION OF CITY OF FORT COLLINS, COLORADO SALES AND USE TAX REVENUE REFUNDING AND IMPROVEMENT BONDS SERIES 1986 . DATED AUGUST 1, 1986 - $30, 060, 000 NOTICE IS HEREBY GIVEN to the registered owners of all outstanding City of Fort Collins, Colorado, Sales and Use Tax Revenue Refunding and Improvement Bonds, Series 1986, dated August 1, 1986, in the original aggregate principal amount of $30, 060, 000 (the "Prior Bonds")- that the City of Fort Collins, Colorado (the "City") , has issued- Sales and Use Tax Revenue Refunding Bonds, Series 1993, dated June 1, 1993, in the aggregate principal amount of $26,210, 000, and deposited a portion of the proceeds thereof in escrow with Colorado National Bank, Denver, Colorado, which proceeds have been invested in 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 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 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 the Prior Bonds maturing in the year 1997 and thereafter, which are numbered , prior to their respective maturity dates, on December 1, 1996, at a price equal to the principal amount of each such Prior Bond so redeemed plus accrued interest thereon to the redemption date plus a premium equal to 2. 0% of the principal amount of each such Prior Bond so redeemed. 43 On the redemption date there will become due and payable at the office of the Financial Officer of the City in Fort Collins, Colorado, the principal amount of each such Prior Bond so redeemed plus accrued interest thereon to the redemption date plus a premium equal to 2 . 0% of the principal amount of each such Prior Bond so redeemed, 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. GIVEN BY ORDER OF THE CITY COUNCIL this day of 19 . CITY OF FORT COLLINS, COLORADO Financial Officer [End of Form of Notice] 44 ,�+, �.. B. Sales and Use Tax Fund. 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 their receipt from time to time by the City, shall be set aside and credited immediately to a separate special fund heretofore created and designated as the "City of Fort Collins, Colorado, Sales and Use Tax Fund. " For so long as any of the Bonds shall be Outstanding as to any Debt Service Requirements, the Sales and Use Tax Fund shall be accumulated and administered, and the moneys on deposit therein shall be applied, in the following order of priority: (1) First, to the Principal and Interest Account 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 5C hereof; (2) Second, to the Reserve Account, in the manner set forth in Section 5D hereof; (3) Third, to the payment of Debt Service Requirements of Subordinate Bonds or other Subordinate Securities in accordance with Section 5F hereof; and (4) Fourth, to be used in accordance with Section 5G hereof. C. Principal and Interest Account. The City shall deposit in a separate special fund heretofore created as a restricted account within the Sales and Use Tax Fund and designated as the "City of Fort Collins, Colorado, Sales and Use Tax Revenue Bonds, Principal and Interest Account" 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 Account from the Pledged Revenues on the date of issue of the Bonds and on or before the last day of each month beginning July, 1993, and ending October, 1993 , and on or before the twenty-fifth day of November, 1993, the following amounts (with credits for amounts on deposit in the Principal and Interest Account on account of the Prior Bonds and the amount of any accrued interest on the Bonds deposited in the Principal and Interest Account and not theretofore 45 credited) and on or before the last day of each month beginning in December, 1993 (except for the months of May and November, in which months the deposits shall be made on the twenty-fifth day of the month) , the following amounts: (1) Interest Payments. One-sixth (1/6) of the aggregate amount of the next installment of interest due 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 Bonds and any other Parity Securities then Outstanding. (2) Principal Payments. One-sixth (1/6) of the aggregate amount of the next installment of principal due on the next principal payment 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. Such interest and principal shall be promptly paid when due. The moneys credited to the Principal and Interest Account 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. The Principal and Interest Account shall be maintained as a sinking fund for the mandatory redemption of Bonds maturing in the years 2006 and 2009. Any mandatory sinking fund redemption shall be treated as an installment of principal for purposes of this Section 5C. Nothing herein shall be construed so as to prevent the City from creating separate subaccounts within the Principal and Interest Account 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 exclusion from gross income for federal income tax purposes of interest on any such Additional Parity Bonds, provided that any such separate subaccounts shall have claims to the Pledged Revenues 46 i 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 Account. D. Reserve Account. The City shall retain in a separate special fund heretofore created as a restricted account within the Sales and Use Tax Fund and designated as the "City of Fort Collins, Colorado, Sales and Use Tax Revenue Bonds, Reserve Account, " an amount equal to the Average Annual Debt Service on the Bonds. Subject to the payments required by Section 5C hereof, except as provided in Section 5E hereof, from and to the extent of any moneys remaining in the Sales and Use Tax Fund, there shall be credited as hereinafter provided and from time to time thereafter to the Reserve Account moneys sufficient to accumulate in and maintain the Reserve Account at an amount at least equal to the Combined Average Annual Debt Service Requirements of all Outstanding Bonds, Additional Parity Bonds and other Parity Securities for which the Reserve Account is maintained. For purposes of this Section 5D, the Debt Service Requirements of any Additional Parity Bonds and other Parity Securities bearing interest at a variable or adjustable rate shall be computed on the following assumptions: If interest on such Additional Parity Bonds or other Parity Securities is excludible from gross income for federal income tax purposes under the Tax Code, such Additional Parity Bonds or other Parity Securities shall be assumed to bear interest at a rate equal to one-half percent (0. 5%) over the most recently published Bond Buyer 25 Revenue Bond Index (or if no longer published, a comparable index) . If interest on such Additional Parity Bonds or other Parity Securities is not excludible from gross income for federal income tax purposes under the Tax Code, such Additional Parity Bonds or other Parity Securities shall be assumed to bear interest at a rate equal to one-half percent (0.5%) over U.S. Treasury obligations of comparable maturities. 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 Account is maintained. No payment need be made into the Reserve Account so long as the moneys therein shall equal not less than said amount. In the event that the amount of the Reserve Account falls below the minimum amount required to be maintained therein, the City shall credit to the Reserve Account that sum of money needed to accumulate or reaccumulate the amount therein so 47 that at all times the amount of the Reserve Account equals said minimum amount. The moneys in the Reserve Account 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 5E and Section 9 hereof, only to prevent deficiencies in the Principal and Interest Account resulting from failure to deposit therein suf f icient sums to pay such Debt Service Requirements of the Bonds, any Additional Parity Bonds and any other Parity Securities for which the Reserve Account 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 Account the full amount above stipulated, then an amount shall be paid into the Principal and Interest Account at such time from the Reserve Account equal to the difference between that paid from the Pledged Revenues in the Sales and Use Tax Fund and the full amount so stipulated. The money so used shall be replaced to the Reserve Account from the first moneys credited to the Sales and Use Tax Fund thereafter received and not required to be otherwise applied by Section 5C hereof. If Additional Parity Bonds are Outstanding and a separate reserve fund or account is maintained therefor, then the moneys replaced in the Reserve Account and such separate reserve fund or account shall be replaced on a pro rata basis, as moneys become available therefor. If at any time the City shall for any reason fail to pay into the Reserve Account the full amount stipulated herein from the moneys credited to the Sales and Use Tax Fund, the difference between the amount paid and the amount stipulated shall in a like manner be paid therein from the first moneys credited to the Sales and Use Tax Fund thereafter received and not required to be applied otherwise by Section 5C 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 made in conformity with the requirements of Exhibit E to the Commitment and shall be submitted to Fitch Investors Service, Inc. , Moody's Investors Service, Inc. and 48 Standard & Poor's Corporation and shall not cause the then-current ratings of the Bonds to be adversely affected. Any such credit instrument shall be deposited with the Paying Agent, which shall ascertain the necessity for a claim against or draw upon the credit instrument and provide notice to the issuer of such credit instrument in accordance with its terms not later than three (3) days (or such longer period as may be necessary, depending on the permitted time period for honoring claims or draws thereunder) prior to each Interest Payment Date. If a letter of credit is substituted for the cash deposit required to be maintained hereunder, the Paying Agent shall draw upon such letter of credit prior to its expiration or termination unless an alternate credit instrument conforming with the provisions hereof has been substituted therefor or the amount otherwise required to be maintained hereunder is on deposit in the Reserve Account. E. Termination of Deposits. No payment need be made into the Principal and Interest Account or the Reserve Account if the amount in the Principal and Interest Account and the amount in the Reserve Account total a sum at least equal to the entire principal 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 or 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 Account 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 the Bonds, any Additional Parity Bonds or any other Parity Securities) , in which case moneys in the Principal and Interest Account and the Reserve Account 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 Account and the Reserve Account and any other moneys derived from 49 the Pledged Revenues may be used in any lawful manner determined by the City. F. Payment of Additional Subordinate Securities. After there has been deposited to the Principal and Interest Account an amount sufficient to pay all the Debt Service Requirements due or to become due during the current Bond Year on all Bonds, Additional Parity Bonds and other Parity Securities then Outstanding and after the accumulations to and replenishments of the Reserve Account to be made in the current Bond Year have been made, any moneys remaining in the Sales and Use Tax Fund in any Bond Year may be used by the City for the payment of Debt Service Requirements of Subordinate Securities payable from the Pledged Revenues and authorized to be issued in accordance with this Ordinance, 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 be subordinate to the lien and pledge of the Bonds, any Additional Parity Bonds and any other Parity Securities as herein provided. G. Use of Remaining Revenues. After the payments hereinabove required to be made by Sections 5C through 5F hereof are made, at the end of any month, or whenever in any month there shall have been credited to the Principal and Interest Account and to the Reserve Account for the payment of the Bonds and any other securities payable from the Pledged Revenues all amounts required to be deposited in those funds at that time, as herein provided, any remaining Pledged Revenues shall be transferred to such fund of the City as the City shall determine. H. Budget and Appropriation of Sums. The sums provided 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 50 ti purpose to the Sales and Use Tax Fund or the Principal and Interest Account for the purpose of providing for the Debt Service Requirements of the Bonds. I. Excess Investment Earnings Account. The Financial Officer shall transfer into and pay from a separate special fund hereby created as a restricted account within the Sales and Use Tax Fund and designated as the "City of Fort Collins, Colorado, Sales and Use Tax Revenue Refunding Bonds, Series 1993, Excess Investment Earnings 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 Financial Officer 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 Account, 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 Account, including income earned from investment thereof, shall be held by the Financial Officer free and clear of any lien created by this Ordinance, and the Financial Off icer shall pay over to the federal government from time to time as the Financial Officer shall determine provided that the Financial Officer 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 and kept separate and apart from all other accounts or funds of the City as trust accounts solely for the purposes herein designated therefor. For purposes of investment of moneys, nothing, except as specifically provided herein, prevents the commingling of moneys accounted for in any two or more such funds or accounts pertaining to the Pledged Revenues or to such fund and 51 AIM- account and any other funds or accounts of the City adopted or created under this Ordinance. Such funds or accounts shall be continuously secured to the fullest extent required and permitted by the laws of the State for the securing of public funds and shall be irrevocable and not withdrawable by anyone for any purpose other than the respective designated purposes of such funds and accounts. Each periodic payment shall be credited to the proper fund or account not later than the date therefor herein designated, except that when any such date shall be a Saturday, a Sunday or a legal holiday, then such payment shall be made on or before the next preceding business day. B. Investment of Funds and Accounts. Any moneys in any fund or account described in this Ordinance with the exception of the Escrow Account may be deposited, invested, or reinvested only in Permitted Investments. Securities or obligations purchased as such an investment shall either be subject to redemption at any time at face value by the Owner thereof at the option of such Owner or shall mature at such time or times as shall most nearly coincide with the expected need for moneys from the fund or account in question. Securities or obligations so purchased as an investment of moneys in any such fund or account shall be deemed at all times to be a part of the applicable fund or account; provided that, with the exception of the Escrow Account, the Reserve Account and the Excess Investment Earnings Account, the interest accruing on such investments and any prof it realized therefrom shall be credited to the Sales and Use Tax Fund, 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 Account shall be credited to the Reserve Account, provided that, so long as the amount in the Reserve Account equals at least the minimum amount specified in Section 5D 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 Account shall be charged to the Reserve Account. Investments in the Reserve Account shall have a term to maturity not greater than five (5) years, except that Direct Obligations and Agency Obligations may have a term in excess of five (5) years but not longer than the final maturity of the Bonds. Investments in the Reserve Account shall be valued by the City as frequently as deemed necessary by the Bond Insurer, but not less often than quarterly, at the market value thereof, exclusive of accrued interest. If on any valuation date the market value of investments in the Reserve Account is less than the amount required by Section 52 1 5D hereof to be maintained therein due to market fluctuations, the deficiency shall be remedied no later than the next quarterly valuation date. 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 concerning arbitrage 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 laws of the State, shall be deemed lawful money of the United States of America. E. Accelerated Payments Optional. Nothing contained herein prevents the accumulation in any fund or account herein designated of any monetary requirements at a faster rate than the rate or minimum rate, as the case may be, provided therefor, but no payment shall be so accelerated if such acceleration shall cause a default in the payment of any obligation of the City pertaining to the Pledged Revenues. Section 7. Priorities; Liens; Issuance of Additional Bonds. 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 53 c , 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 following provisions must first be satisfied: (1) Absence of Default. At the time of the adoption of the supplemental ordinance or other instrument authorizing the issuance of the Additional Parity Bonds as provided in Section 7F hereof, the City shall not be in default in making any payments required by Section 5 hereof and there shall not have occurred and be continuing any Event of Default. (2) Historic 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 Net Revenue collected by the City from the Sales and Use Tax, as certified by an Independent Accountant, derived in the last complete Fiscal Year immediately preceding the date of the issuance of such Additional Parity Bonds shall have been sufficient to pay an amount at least equal to one hundred fifty percent (150%) of the Combined Average Annual Debt Service Requirements or, if the Combined Average Annual Debt Service Requirements are less than seventy-f ive percent (7 5%) of the Combined Maximum Annual Debt Service Requirements, an amount at least equal to one hundred fifty percent (150%) of the Combined Maximum Annual Debt Service Requirements of the Outstanding Bonds, any Additional Parity Bonds, any other Parity Securities and the Additional Parity Bonds proposed to be issued. If additional Sales and Use Taxes in excess of those authorized as of the date hereof have been imposed during such Fiscal Year, the 54 amount of such Net Revenue may be adjusted by adding the additional Net Revenue that would have been received by the City from the imposition of such additional Sales and Use Taxes as if such additional Sales and Use Taxes had been in effect during the entire Fiscal Year. For purposes of this Section 7B(2) , the Debt Service Requirements of any Additional Parity Bonds, any other Parity Securities and any Additional Parity Bonds proposed to be issued bearing interest at a variable or adjustable rate shall be assumed to bear interest at the maximum interest rate permitted by the ordinance, supplemental ordinance or other instrument of the Council authorizing the issuance thereof. 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 7B(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 does not exceed the Debt Service Requirements payable on all Bonds and other Parity Securities Outstanding prior to the issuance of such Additional Parity Bonds on such Interest Payment Dates. (3) Adequate Reserves. The Reserve Account shall be fully funded in accordance with Section 5D hereof, and the proceedings under which any such Additional Parity Bonds are issued must provide for the deposit of moneys to the Reserve Account on substantially the same terms as provided in Section 5D hereof and contain a covenant by the City to maintain the Reserve Account in an amount at least equal to the minimum amount required by Section 5D 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 exclusion from gross income for federal income tax purposes 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 Account) established and maintained for any such Additional Parity Bonds on substantially the same terms as provided in Section 5D hereof and contain a covenant by the City to maintain such reserve fund or account in an amount at least equal to the minimum amount required by Section 5D 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 Account. 55 The City shall not issue any Additional Parity Bonds bearing interest at a variable or adjustable rate which is not fixed for the entire term thereof without the prior written approval of the Bond Insurer. C. Certification of Historic Revenues. In the case of the computation of the historic revenues test provided in Section 7B hereof, the specified and required written certifications by the Independent Accountant that such annual revenues are sufficient to pay such amounts as provided in Section 7B hereof shall be conclusively presumed to be accurate in determining the right of the City to authorize, issue, sell and deliver Additional Parity 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 Parity Bonds or Subordinate Securities 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 or maturities, maximum rate or rates of interest, and prior redemption privileges of the City with respect thereto, and providing for payments to and from the Sales and Use Tax Fund in accordance with this Ordinance. All additional securities shall bear such date, shall be payable as to principal on June 1 or December 1 or both and as to interest on June 1 and December 1 and shall be subject to 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. Nothing herein shall be construed to prohibit the issuance of additional securities payable from the Pledged Revenues, the interest on which is payable more frequently than semiannually. 56 Section 8. Covenants. The City hereby particularly covenants and agrees with the Bond Insurer and with 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 have been fully paid and discharged: A. Continuance and Collection of Sales and Use Taxes. (1) Ordinance No. 58, 1967, Ordinance No. 140, 1979, and Ordinance No. 149, 1981, as originally adopted, have not been repealed or amended, except by Ordinance No. 4, 1968, Ordinance No. 6, 1968, Ordinance No. 23, 1974, Ordinance No. 137, 1977, Ordinance No. 87, 1981, Ordinance No. 113, 1984, Ordinance No. 122, 1986, Ordinance No. 192, 1987, Ordinance No. 8, 1988, Ordinance No. 60, 1988, and Ordinance No. 132, 1991, and are now in full f orce and of f ect. The City will not repeal or amend said ordinances in any manner which would diminish the Pledged Revenues. (2) The City shall continue to levy, impose, administer, enforce and collect the Sales and Use Tax on sales and purchases of tangible personal property at retail and storage, use, distribution and consumption of tangible personal property purchased or acquired at retail, within the City, in accordance with Ordinance No. 58, 1967, Ordinance No. 140, 1979, and Ordinance No. 149, 1981, without reduction in the percentage rate of the Sales and Use Tax as set forth therein. (3) The City shall maintain the Sales and Use Tax Fund as a fund of the City separate and distinct from all other funds of the City and shall place the Pledged Revenues therein. The Sales and Use Tax Fund shall be subject to appropriation only as authorized by this Ordinance. (4) All of the Pledged 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. 57 B. Defense of Legality 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, Ordinance No. 58, 1967, Ordinance No. 140, 1979, or Ordinance No. 149, 1981, the imposition and collection of the Sales and Use Tax, or any of the City's obligations under such Ordinances. The City shall, to the extent permitted by law, defend the validity and legality of the Sales and Use Tax and Ordinance No. 58, 1967, Ordinance No. 140, 1979, and Ordinance No. 149, 1981, and all amendments thereto against all claims, suits and proceedings which would diminish or impair the Pledged Revenues. Furthermore, the City shall, to the extent permitted by law, amend from time to time the provisions of Ordinance No. 58, 1967, Ordinance No. 140, 1979, and Ordinance No. 149, 1981, as necessary to prevent impairment of the Pledged Revenues as required to meet the Debt Service Requirements of the Bonds when due. 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 and the various ordinances, resolutions and contracts of the City, including, without limitation, the proper segregation of the proceeds of the Bonds and the Pledged Revenues and their application from time to time to the respective funds provided therefor. D. Contractual 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 58 "All 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 United States of America, the Constitution or laws of the State, the Charter, or this Ordinance, to exist, to have happened, and to have been performed precedent to or in the issuance of the Bonds shall exist, have happened and have been performed, and the Bonds do not contravene any debt or other limitation prescribed by the Constitution or laws of the United States of America, the Constitution or laws of the State or the Charter. G. Records. The City will keep proper books of record and account, separate and apart from all other records and accounts, showing complete and correct entries of all transactions relating to the funds and accounts described herein. H. Protection of Security. The City, its officers, agents and employees, shall not take any action in such manner or to such extent as might prejudice the security for the payment of the Debt Service Requirements of the Bonds and any other securities payable from the Pledged Revenues according to the terms thereof. No contract shall be entered into nor any other action taken by which the rights of any Owner of any Bond or other security payable from Pledged Revenues might be materially impaired or diminished. I. Accumulation of Interest Claims. In order to prevent any accumulation of claims for interest after maturity, the City shall not directly or indirectly extend or assent to the extension of the time for the payment of any claim for interest on any of the Bonds or any other securities payable from the Pledged Revenues; and the City shall not directly or indirectly be a party to or approve any arrangements for any such extension or for the purpose of keeping alive any of such other claims for interest. If the time for the payment of any such installment of interest is 59 , t extended in contravention of the foregoing provisions, such installment or installments of interest after such extension or arrangement shall not be entitled in case of default hereunder to the benefit or the security of this Ordinance, except upon the prior payment in full of the principal of all of the Bonds and any such securities the payment of which has not been extended. J. Prompt Payment of Bonds. The City shall promptly pay the Debt Service Requirements of every Bond on the dates and in the manner specified herein and in the Bonds according to the true intent and meaning hereof. K. Use of Principal and Interest Account and Reserve Account. The Principal and Interest Account and the Reserve Account 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 5E hereof and subject to Section 9 hereof. L. Additional Securities. The City shall not hereafter issue any bonds or securities payable from the Pledged Revenues without compliance with the requirements with .respect to the issuance of Additional Parity Bonds set forth herein to the extent applicable. M. Other Liens. There are no liens or encumbrances of any nature whatsoever on or against any of the Pledged Revenues, except to secure payment of the principal of and interest on the City's Downtown Development Authority Tax Increment Revenue Refunding Bonds, Series 1992, dated March 15, 1992, in the aggregate principal amount of $11,380,000 (subordinate lien) . N. Surety Bonds. Each official or other person having custody of any Pledged Revenues, or responsible for their handling, shall be fully bonded at all times, which bond shall be conditioned upon the proper application of said moneys. O. Arbitrage. The City shall make no investment or other use of the 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 the Bonds are issued, would have caused the Bonds to be arbitrage bonds within the meaning of the Tax Code and the regulations thereunder and shall comply with all the 60 requirements of the Tax Code and said regulations throughout the term of the Bonds. P. 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, a statement of the amount on deposit in the Reserve Account as of the last valuation date and (if not included in the City's audited financial statements) a statement of the Pledged Revenues for the Fiscal Year most recently completed; within thirty (30) days after the sale of any obligations payable from the Pledged Revenues, any official statement or other disclosure document prepared in connection therewith; notice of any draw upon or deficiency due to market fluctuation in the amount on deposit in the Reserve Account; 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 respective Maturity Dates or to any Redemption Date as of which the City shall have exercised or shall have obligated itself to exercise its option to redeem Bonds prior to their respective Maturity Dates. The Federal Securities shall be non-callable and non-prepayable and shall become due prior to the respective times at which the proceeds thereof shall be needed, in accordance with a schedule established and agreed upon between the City and such Trust Bank at the time of the creation of the escrow or trust, or the Federal Securities shall be subject to redemption at the option of the Owner thereof to assure such availability as so needed to meet such schedule. The City shall cause a copy of the report verifying the sufficiency of such escrow or trust prepared by a certified public accountant licensed to practice in the State and acceptable to the Bond Insurer to be 61 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. 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 an Event of Default by the City: (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 is not made from sources 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 installment of interest on any of the Bonds is not made from sources other than the Bond Insurance Policy when the same becomes due and payable; (3) Incapacity to Perform. The City for any reason becomes incapable of fulfilling its obligations hereunder; (4) Nonperformance of Duties. The City shall have failed to carry out and to perform (or in good faith to begin the performance of) all acts and things lawfully required to be carried out to be performed by it under any contract relating to the Bonds or the Pledged Revenues, or to all or any combination thereof, or otherwise including, without limitation, this Ordinance, and such failure shall continue for sixty (60) days after receipt of notice from the Owners of ten percent (10%) in aggregate principal amount of the Bonds then Outstanding; (5) Appointment of Receiver. An order or decree is entered by a court of competent jurisdiction, with the consent or acquiescence of the City, appointing a receiver or receivers for the Pledged Revenues and any other moneys 62 subject to the lien to secure the payment of the Bonds, or if any order or decree, having been entered without the consent or acquiescence of the City, is not vacated or discharged or stayed on appeal within sixty (60) days after entry; (6) Default of Any Provision. The City makes any default in the due and punctual performance of any other of the representations, covenants, conditions, agreements and other provisions contained in the Bonds or in this Ordinance on its part to be performed, and such default continues for sixty (60) days after written notice, specifying such default and requiring the same to be remedied, is given to the City by the Owners of ten percent (10%) in aggregate principal amount of the Bonds then Outstanding. B. Remedies for Defaults. The City shall give notice to the Bond Insurer of any Event of Default under Section 10A(1) or (2) hereof immediately upon the occurrence thereof and of any Event of Default under Section 10A(3) , (4) , (5) or (6) hereof known to the City within thirty (30) days of obtaining knowledge thereof. Upon the happening and continuance of any of the 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, the Owner or Owners of not less than ten percent (10%) in aggregate principal amount of the Bonds then Outstanding, including, without limitation, a trustee or trustees therefor, may proceed against the City and its agents, officers and employees to protect and to enforce the rights of any Owner of Bonds under this Ordinance by mandatory injunction or by other suit, action, or special proceedings in equity or at law, in any court of competent jurisdiction, either for the appointment of a receiver or an operating trustee or for the specific performance of any covenant or agreement contained herein or for any proper legal or equitable remedy as such Owner or Owners may deem most effectual to protect and to enforce the aforesaid rights, 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 benef it of all Owners of the Bonds, and any Parity Securities then 63 Outstanding. Any receiver or operating trustee appointed in any proceedings to protect the rights of such Owners hereunder, the consent to any such appointment being hereby expressly granted by the City, may collect, receive and apply all Pledged Revenues arising after the appointment of such receiver or operating trustee in the same manner as the City itself might do. Notwithstanding the foregoing or any other applicable provisions of law, no Event of Default shall result in acceleration of any obligation of the City represented by the Bonds. C. 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 any trustee thereof is in addition and is cumulative to any other right or privilege, and the exercise of any right or privilege by or on behalf of any Owner shall not be deemed a waiver of any other right or privilege thereof. Each Owner of any Bond shall be entitled to all of the privileges, rights, and remedies provided or permitted in this Ordinance and as otherwise provided or permitted by law or in equity or by statute, except as provided in Section 12A and Section 12B hereof, and subject to the applicable provisions concerning the Pledged Revenues and the proceeds of the Bonds. Nothing herein affects or impairs the right of any Owner of any Bond to enforce the payment of the Debt Service Requirements due in connection with his, her or its Bond or the obligation of the City to pay the Debt Service Requirements of each Bond to the Owner thereof at the time and the place expressed in such Bond. D. Duties Upon Defaults. Upon the happening of any of the Events of Default as provided in Section 10A hereof, the City, in addition, shall do and perform all proper acts on behalf of and for the Owners of the Outstanding Bonds to protect and to preserve the security created for the payment of their Bonds and to insure the payment of the Debt Service Requirements of the Bonds promptly as the same become due. During any period of' default, so long as any of the Bonds, as to any Debt Service Requirements, are Outstanding, except to the extent it may be unlawful to do so, all Pledged Revenues shall be paid into the Principal and Interest Account, 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 64 t . prorated basis, and used for the purposes therein provided. If the City fails or refuses to proceed as in this Section 10D provided, the Owner or Owners of not less than ten percent (10%) in principal amount of the Bonds then Outstanding, after demand in writing, may proceed to protect and to enforce the rights of the Owners of the Bonds as hereinabove provided; and to that end any such Owners of Outstanding Bonds shall be subrogated to all rights of the City under any agreement or contract involving the Pledged Revenues entered into prior to the effective date of this Ordinance or thereafter while any of the Bonds are Outstanding. Nothing herein requires the City to proceed as provided herein if it determines in good faith and without any abuse of its discretion that such action is likely materially and prejudicially to affect the Owners of the Outstanding Bonds and any Outstanding Parity Securities. 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 he or she purports to act that the individual signing such request or other instrument acknowledged to him or her the execution, duly sworn to before such notary public or other officer; the authority of the individual or individuals executing any such instrument on behalf of a corporate Owner of any securities may be established without further proof if such instrument is signed by an individual purporting to be the president or vice-president of such corporation with the corporate seal affixed and attested by an individual purporting to be its secretary or an assistant secretary; and the authority of any Person or Persons executing any such 65 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, dates and other identification thereof, together with the dates of his ownership of the Bonds, shall be determined from the registration books of the City. The amount of other securities, if applicable, owned by any Person executing any instrument as an Owner of such securities, and the numbers, dates and other identification thereof, together with the dates of his ownership, if in bearer form, may be proved by a certificate which need not be acknowledged or verified, in form satisfactory to the City Clerk, executed by a member of a financial firm or by an officer of a bank or trust company, insurance company or financial corporation or other depository satisfactory to the City Clerk, or by any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he or she purports to act, showing at the date therein mentioned that such Person exhibited to such member, officer, notary public or other officer so authorized to take acknowledgments of deeds or had on deposit with such depository the securities described in such certificate or if in registered form shall be determined from the related registration books; but the City Clerk may nevertheless in his or her discretion require further or other proof in cases where he or she deems the same advisable. F. Warranty Upon 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 Bond Owner. So long as the Bond Insurer is not then in default under the Bond Insurance Policy, the Bond Insurer shall be deemed to be the Owner of all Bonds insured by it for purposes of exercising remedies, waiving defaults, or granting consents pursuant to this Section 10. 66 H. Immunities of Purchaser. The Purchaser is under no obligation to any Owner of the Bonds for any action that they may not take or in respect of anything that it 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 hereunder extend to its officers, directors, successors, assigns, employees and agents. 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, 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 or Escrow Bank as provided in Section 3B(6) hereof; (3) To designate a trustee for the Owners of the Bonds, to transfer custody and control of the Pledged Revenues to such trustee, and to provide for the rights and obligations of such trustee; (4) To add to the covenants and agreements of the City or the limitations and restrictions on the City set forth herein; (5) To pledge additional revenues, properties or collateral to the payment of the Bonds; (6) To cause this Ordinance to comply with the Trust Indenture Act of 1939, as amended from time to time; or (7) To effect any such other changes hereto which do not in the opinion of nationally recognized bond counsel materially adversely affect the interests of the Owners of the Bonds. 67 The City may adopt such ordinances supplemental hereto for any one or more of the purposes specified in Section 11A(2) , (3) , (4) , (5) and (6) hereof without the consent of, or notice to, the Bond Insurer. The City may adopt such ordinances supplemental hereto for either or both of the purposes specified in Section 11A(1) or (7) only with the prior written consent of the Bond Insurer. Whenever the Council proposes to supplement or amend this Ordinance under the provisions of this Section 11A, it shall give notice of the proposed supplement or amendment and provide a copy thereof to Fitch Investors Service, Inc. , Moody's Investors Service, Inc. and Standard & Poor's Corporation at least fifteen (15) 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 of any additional consideration but with the written consent of the Owners of sixty-six percent (66%) in aggregate principal amount of the Bonds Outstanding at the time of the adoption of such amendatory ordinance and of the Bond Insurer, provided that no such amendatory ordinance shall permit: (1) Changing Payment. A change in the maturity or in the terms of redemption of the principal of any Outstanding Bond or any installment of interest thereon; or (2) Reducing Return. A reduction in the principal amount of any Bond, the rate of interest thereon, or any premium payable in connection with the redemption thereof, without the consent of the Owner of the Bond; or (3) Prior Lien. The creation of a lien upon or a pledge of revenues ranking prior to the lien or to the pledge created by this Ordinance; or (4) Modifying Amendment Terms. A reduction of the principal amount or percentages of Bonds, or any modification otherwise affecting the description of Bonds, otherwise changing the consent of the Owners of Bonds, which may be required herein for any amendment hereto; or 68 (5) Priorities Among Bonds or Parity Securities. The establishment of priorities as among Bonds issued and Outstanding under the provisions of this Ordinance or as among Bonds and other Parity Securities.; or (6) Partial Modification. Any modifications otherwise materially and prejudicially affecting the rights or privileges of the Owners of less than all of the Bonds then Outstanding. Whenever the Council proposes to supplement or amend this Ordinance under the provisions of this Section 11B, it shall give notice of the proposed supplement or amendment by mailing such notice to the Purchaser, or to any successor thereof known to the City Clerk, to all Owners of Bonds at the addresses appearing 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. It shall also give notice of the proposed supplement or amendment and provide a copy thereof to Fitch Investors Service, Inc. , Moody's Investors Service, Inc. and Standard & Poor's Corporation at least fifteen (15) 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 11B 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, 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 69 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 and 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 11C hereof; and no notice to Owners of Bonds shall be required as provided in Section 11B hereof, nor shall the time of consent be limited except as may be provided in such consent. E. Exclusion of Bonds. At the time of any consent or of other action taken hereunder the Registrar shall furnish to the City Clerk a certificate, upon which the City Clerk may rely, describing all Bonds to be excluded for the purpose of consent or of other action or of any calculation of Outstanding Bonds provided for hereunder, and, with respect to such excluded Bonds, the City shall not be entitled or required with respect to such Bonds to give or obtain any consent or to take any other action provided for hereunder. F. Notation on Bonds. Any of the Bonds delivered after the effective date of any action taken as provided in Section 11B 70 hereof, or Bonds Outstanding at the effective date of such action, may bear a notation thereon by endorsement or otherwise in form approved by the Council as to such action; and if any such Bonds so delivered after such date does not bear such notation, then upon demand of the Owner of any Bond Outstanding at such effective date and upon presentation of his Bond for such purpose at the principal office of the City, suitable notation shall be made on such Bond by the City Clerk as to any such action. If the Council so determines, new Bonds so modified as in the opinion of the Council to conform to such action shall be prepared, executed and delivered; and upon demand of the Owner of any Bond then Outstanding, shall be exchanged without cost to such Owner for Bonds then Outstanding upon surrender of such Outstanding Bonds. G. Proof of Instruments and Bonds. The fact and date of execution of any instrument under the provisions of this Section 11, the amount and number of the Bonds owned by any Person executing such instrument, and the date of his registering the same may be proved as provided by Section 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 Bonds is not secured by an encumbrance, mortgage or other pledge of property of the City except for the Pledged Revenues. No property of the City, subject to such exception with respect to the Pledged Revenues, pledged for the payment of the Bonds, shall be liable to be forfeited or taken in payment of the Bonds. C. Statute of Limitations. No action or suit based upon any Bond or other obligation of the City shall be commenced after it is barred by any statute of limitations pertaining thereto. Any trust or fiduciary relationship between the City and the Owner of any Bond or the obligee regarding any such obligation 71 • c 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 Sales and Use Tax Fund, 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 and 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) Printing. 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, bond counsel, duly certified by the Registrar, and, if necessary or desirable, the preparation of typewritten Bonds as provided herein; (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 (5) Closing Documents and Certificates. The execution of the Letter of Representations, the Escrow 72 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; (f) The accuracy and completeness of information provided in the official statement prepared for prospective buyers of the Bonds. 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 any 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 hereof. All the covenants, stipulations, promises and agreements herein contained by and on behalf of the City shall be for the sole and exclusive 73 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 or any other ordinance or instrument pertaining thereto, against any individual member of the Council, or any officer or other agent of the City, past, present or future, either directly or indirectly through the City, or otherwise, whether by virtue of any constitution, statute or rule of law or by the enforcement of any penalty or otherwise, all such liability, if any, being by the acceptance of the Bonds and as a part of the consideration of their issuance specially waived and released. G. Notices. Any notices required or permitted to be given to the Bond Insurer or the Fiscal Agent hereunder shall be addressed as follows: Financial Guaranty Insurance Company 115 Broadway New York, New York 10006 Attention: Managing Counsel Citibank, N.A. 20 Exchange Place - 16th Floor New York, New York 10005 Attention: Municipal Trust and Agency Services Administration 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; and this Ordinance, subject to the provisions of Sections 9 and it hereof, if any Bonds are in fact issued, shall be 74 and shall remain irrepealable until the Bonds, as to all Debt Service Requirements, shall be fully paid, cancelled or discharged, as herein provided. J. Statutory Limitations Met. The Council hereby determines that the provisions and limitations of the Act and any other applicable law imposed on the issuance of the Bonds have been met. 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 for that purpose, 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 for any reason be held to be invalid or unenforceable, the invalidity or unenforceability thereof shall not affect any of the remaining sections, subsections, paragraphs, clauses or provisions of this Ordinance. READ, AMENDED, FINALLY PASSED AS AMENDED ON SECOND READING, AND ORDERED PUBLISHED ONCE BY NUMBER AND TITLE ONLY this 6th day of July, 1993 . CITY OF F OLLINS, ORADO y By:, yor (SEAL) ATTEST: �NA 11 t.�� A�& I"-'An I City Clerk 75 (61) 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. (62) Tax Code: the Internal Revenue Code of 1986, as amended. (63) Transfer Agent: Colorado National Bank, Denver, Colorado, or its successors. (64) Trust Bank: a Commercial Bank which (unless otherwise approved by the Bond Insurer) has a combined capital and surplus of $25, 000, 000 or more and 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 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. 11