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HomeMy WebLinkAbout06088ORDINANCE NO. 6088 AN ORDINANCE AUTHORIZING THE ISSUANCE BY THE CITY OF PUEBLO, COLORADO, OF ITS LIMITED TAX GENERAL OBLIGATION BONDS, SERIES 1996, IN THE AGGREGATE PRINCIPAL AMOUNT OF $12,850,000 FOR THE PURPOSE OF PROVIDING FUNDS TO FINANCE THE CITY'S HISTORIC ARKANSAS RIVERWALK PROJECT AND PAYING CERTAIN COSTS AND EXPENSES ASSOCIATED WITH THE ISSUANCE OF SUCH BONDS; PRESCRIBING THE FORM OF SAID BONDS; PROVIDING FOR THE SALE OF SAID BONDS AND APPROVING A BOND PURCHASE AGREEMENT AND A PAYING AGENCY AGREEMENT; PLEDGING CITY AD VALOREM PROPERTY TAXES, WITHOUT ANY INCREASE IN THE CURRENT RATE OF SUCH PROPERTY TAXES, TO THE REPAYMENT OF SAID BONDS; PROVIDING OTHER DETAILS IN CONNECTION WITH SAID BONDS; AND APPROVING THE FORM OF THE OFFICIAL STATEMENT. WHEREAS, the City of Pueblo, in the County of Pueblo and State of Colorado (the "City "), is a municipal corporation duly organized and existing as a home rule city pursuant to Article XX of the Constitution of the State of Colorado (the "Constitution ") and the home rule charter of the City (the "Charter "); and WHEREAS, the City has previously established a program for improving the area within the City immediately adjacent to the Arkansas River and commonly known as the Historic Arkansas Riverwalk Project ( "HARP "); and WHEREAS, the City has determined that the most appropriate mechanism for financing HARP is through the issuance by the City of limited tax general obligation bonds; and WHEREAS, the City anticipates that its revenues will exceed its normal spending limit, as set pursuant to Article X, Section 20 of the Colorado Constitution ( "Amendment One "), although such excess revenues cannot be assured; and WHEREAS, Section 7 -23 of the Charter provides in part that [n]o bonds or other evidences of indebtedness payable in whole or in part from the proceeds of general property taxes shall be issued to defray in whole or in part the cost of capital improvements except in pursuance of an ordinance of the City Council, nor until the question of their issuance shall, at a special or general 02/91270.4 election, be submitted to a vote of the qualified tax- paying electors of the City and approved by a majority of those voting on the question. ; and WHEREAS, Amendment One additionally provides that voter approval must be received in advance of the creation of any multiple - fiscal year direct or indirect district debt or other financial obligation whatsoever without adequate present cash reserves pledged irrevocably and held for payments in all future fiscal years; and WHEREAS, the following question regarding the issuance of limited tax general obligation bonds was submitted to the electors of the City at the City's general municipal election on November 7, 1995, and was approved by a majority of those voting on the question: QUESTION NO. B - SHALL CITY OF PUEBLO, COLORADO DEBT BE INCREASED BY UP TO $12,850,000, WITH A REPAYMENT COST OF UP TO $22,000,000, FOR THE PURPOSE OF FINANCING THE CITY'S HISTORIC ARKANSAS RIVERWALK PROJECT, BY THE ISSUANCE AND PAYMENT OF LIMITED TAX GENERAL OBLIGATION BONDS IN A PRINCIPAL AMOUNT NOT TO EXCEED $12,850,000, AT AN AVERAGE INTEREST RATE NOT TO EXCEED 6: 67 % PER ANNUM AND WITH A FINAL MATURITY DATE NOT TO EXCEED 20 YEARS FROM THE DATE OF ISSUANCE, SAID BONDS TO BE ISSUED, DATED AND SOLD AT SUCH TIME OR TIMES AND IN SUCH MANNER AND TO CONTAIN SUCH TERMS, NOT INCONSISTENT HEREWITH, AS THE CITY COUNCIL MAY DETERMINE, SAID BONDS TO BE PAID FROM AVAILABLE CITY FUNDS, WITHOUT ANY INCREASE IN THE CURRENT RATE OF PROPERTY TAXES; AND, IN CONNECTION THEREWITH, SHALL THE CITY'S AD VALOREM PROPERTY TAXES BE PLEDGED, WITHOUT ANY INCREASE IN THE CURRENT RATE OF SAID TAXES, FOR THE PURPOSE OF PAYING, AND AN AMOUNT THEREOF SUFFICIENT BE APPLIED TO PAY, THE PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON SAID BONDS WHEN DUE, AND SHALL THE CITY BE AUTHORIZED TO INCREASE ITS ANNUAL REVENUE AND SPENDING LIMIT UNDER ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION BY $1,100,000 PER YEAR FOR DEBT SERVICE ON SAID BONDS AND FOR INVESTMENT INCOME ON THE BOND PROCEEDS AND ON THE DEBT SERVICE, ALL FOR THE TERM OF SAID BONDS? ; and WHEREAS, in accordance with the authority above granted, the City Council hereby determines to issue its Limited Tax General Obligation Bonds, Series 1996 (the "Bonds "), in the principal amount of $12,850,000 pursuant to the Charter, for the purpose of providing funds for HARP and paying certain costs and expenses associated with the issuance of the Bonds; and ' 02/91270.4 2 WHEREAS, the Bonds shall constitute limited tax general obligation bonds and shall be secured by available City's funds, without any increase in the current rate of property taxes; and WHEREAS, the payment of the principal of and interest on the Bonds will be guaranteed by a municipal bond insurance policy (the "Bond Insurance Policy ") to be issued simultaneously with the delivery of the Bonds by MBIA Insurance Corporation (the "Bond Insurer "); and WHEREAS, it is now necessary by ordinance to authorize the issuance, sale and delivery of the Bonds, and to provide details of and the security for the Bonds; and BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that Section 1. Definitions. In addition to terms otherwise defined herein, the following terms shall have the following meanings, as used herein: "Annual Financial Information" shall mean the financial information, which shall be based on financial statements prepared in accordance with generally= accepted accounting principles ( "GAAP "), and operating data of the type contained in the Official Statement, including audited financial statements and financial information and operating data relating to the City, the City's general fund, and its outstanding debt and other obligations. "Bond Fund" shall mean the fund by that name created pursuant to Section 16 hereof. "Bond Insurance Policy" means one or more policies of insurance issued by the Bond Insurer insuring the timely payment of the principal of and interest on the Bonds without regard to acceleration or advancement of maturity or redemption prior to maturity, other than mandatory sinking fund redemption, if any. "Bond Insurer" means MBIA Insurance Corporation, and it successors and assigns. "Bond Proceeds Fund" shall mean the fund by that name created pursuant to Section 16 hereof. "Bond Purchase Agreement" shall mean the Bond Purchase Agreement, dated May 13, 1996 between the City and the Underwriter. "Code" shall mean the Internal Revenue Code of 1986, as amended and any Regulations promulgated thereunder. "Investment Instructions" shall mean the Investment Instructions, dated the date of delivery of the Bonds, delivered by Kutak Rock to the City, as the same may be superseded or amended. 02191270.4 3 "Material Event" shall mean any of the following events, if material, with respect to the :0 43 Bonds; and (a) Principal and interest payment delinquencies; (b) Non - payment related defaults; (c) Unscheduled draws on debt service reserves reflecting financial difficulties; (d) Unscheduled draws on credit enhancements reflecting financial difficulties; (e) Substitution of credit or liquidity providers or their failure to perform; (f) Adverse tax opinions or events affecting the tax- exempt status of the (g) Modifications to rights of owners of the Bonds; (h) Calls of Bonds; (i) Defeasances of Bonds; 0) Release, substitution, or sale of property securing repayment of the Bonds; (k) Rating changes. "Material Event Notice" shall mean written or electronic notice of a Material Event. "MSRB" shall mean the Municipal Securities Rulemaking Board. The current address of the MSRB is 1640 King Street, #300, Alexandria, Virginia 22314. "NRMSIR" shall mean a nationally recognized municipal securities information repository, as recognized from time to time by the Securities and Exchange Commission for the purposes referred to in the Rule (as defined in Section 24 hereof). The NRMSIRs as of the date of this Oridinance are as follows: Kenny Information Systems, 65 Broadway -16th Floor, New York, New York 10006 -2503; Thompson Financial Services, Attention: Municipal Disclosure, 395 Hudson Street, New York, New York 10014 -3669; Disclosure Inc., 5161 River Road, Bethesda, Maryland 20816 -1584; Moody's NRMSIR, 99 Church Street, New York, New York 10007; Bloomberg Municipal Repositories, P.O. Box 840, Princeton, New Jersey 08542 -0840; and R. R. Donnelley Financial Municipal Securities Disclosure Archive, 55 Main Street, Hudson, Massachusetts 01749. 02/91270.4 4 "Paying Agency Agreement" shall mean the Paying Agency Agreement, dated as of June 1, 1996, between the City and the Paying Agent, as amended. "Paying Agent" shall mean Norwest Bank Colorado, National Association, or any successor paying agent appointed by the City, acting as, among other things, paying agent, registrar and authenticating agent under this Ordinance. "Permitted Investments" means the following investments, so long as such investments are permitted under the laws of the State of Colorado, for funds of the City: (a) Direct obligations of the United States of America (including obligations issued or held in book -entry form on the books of the Department of the Treasury, and CATS and TGRS) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America. (b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): (i) Farmers Home Administration (FHA) Certificates of beneficial ownership (ii) Federal Housing Administration Debentures (FHA) (iii) General Services Administration Participation certificates (iv) Government National Mortgage Association (GNMA or "Ginnie Mae ") GNMA - guaranteed mortgage- backed bonds GNMA - guaranteed pass- through obligations (v) U.S. Maritime Administration Guaranteed Title )U financing (vi) U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds (c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non -full faith and credit U.S. government agencies (stripped securities are only permitted if they have been stripped by the agency itself): (i) Federal Home Loan Bank System Senior debt obligations (ii) Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac ") Participation Certificates 02/912'70.4 5 Senior debt obligations (iii) Federal National Mortgage Association (FNMA or "Fannie Mae ") Mortgage- backed securities and senior debt obligations (excluded are stripped mortgage securities which are valued greater than par on the portion of unpaid principal) (iv) Student Loan Marketing Association (SLMA or "Sallie Mae ") Senior debt obligations (v) Resolution Funding Corp. (REFCORP) Only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable (vi) Farm Credit System consolidated systemwide bonds and notes. (d) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by Standard & Poor's ( "S &P ") of "AAAm -G "AAAm "; or "AAm." (e) Certificates of deposit secured at all times by collateral described in (a) or (b) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks whose student loan obligations are rated "A -1 +" or better by S &P. The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral. (f) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC, including BIF and SAIF. (g) Investment Agreements, including GIC's, acceptable to the Bond Insurer. (h) Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's Investors Service ( "Moody's ") or "A -1 +" or better by S &P. (i) Bonds or notes issued by any state or municipality which are rated by Moody's or S &P in one of the two highest rating categories assigned by such agencies. 0) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime - 1" or "A3" or better by Moody's and "A -1 +" or better by S &P. (k) Repurchase agreements provide for the transfer of securities from a dealer bank or securities firm (seller /borrower) to a municipal entity (buyer /lender), and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date. 02/91270.4 6 Repurchase Agreements ( "repos ") must satisfy the following criteria or be approved by the Bond Insurer. (i) Repos must be between the municipal entity and a dealer bank or securities firm: (A) Primary dealers on the Federal Reserve reporting dealer list which fall under the jurisdiction of the SIPC and which are rated "A" or better by S &P and Moody's, or (B) Banks rated "A" or above by S &P and Moody's. (ii) The written repo contract must include the following: (A) Securities which are acceptable for transfer are: (1) Direct U.S. governments, or (2) Federal agencies backed by the full faith and credit of the U.S. government (and FNMA & FMAC) . (B) The term of the repo may be up to 30 days, or such longer period as may be approved by the Bond Insurer. (C) The collateral must be delivered to the municipal entity, trustee (if trustee is not supplying the collateral) or third party acting as agent for the trustee (if the trustee is supplying the collateral) before/ simultaneous with payment (perfection by possession of certificated securities). (D) The trustee has a perfected first- priority security interest in the collateral. (E) Collateral is free and clear of third -party liens and in the case of SIPC broker was not acquired pursuant to a repo or reverse repo. (F) Failure to maintain the requisite collateral percentage, after a two -day restoration period, will require the trustee to liquidate collateral. (G) Valuation of Collateral: 02191270.4 7 (1) The securities must be valued weekly, marked -to- market at current market price plus accrued interest. The value of collateral must be equal to 104% of the amount of cash transferred by the municipal entity to the dealer bank or security firm under the repo plus accrued interest. If the value of securities held as collateral slips below 104 % of the value of the cash transferred by municipality, then additional cash and /or acceptable securities must be transferred. If, however, the securities used as collateral are FNMA or FHLMC, then the value of collateral must equal 105 %. (iii) Legal opinion which must be delivered to the municipal entity and Paying Agent: Repo meets guidelines under state law for legal investment of public funds. (1) Pre- refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S &P. If, however, the issue is only rated by S &P (i,e., there is no Moody's rating), then the pre - refunded bonds must have been pre - refunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA rated pre - refunded municipals to satisfy this condition. "Project" means the Historic Arkansas Riverwalk Project and similar or related capital improvements. "Rebate Fund" shall mean the fund by that name created pursuant to Section 17 hereof. "Regular Record Date" shall mean the 15th day of the month (whether or not a business day) prior to each interest payment date with respect to the Bonds. "Registered Owner" shall mean any person or persons in whose name or names a Bond shall be registered on the registration books of the City maintained by the Paying Agent. hereof. "Special Record Date" shall have the meaning ascribed to such term in Section 3(e) "SID" shall mean any state information depository as operated or designated by the State of Colorado as such for the purposes referred to in the Rule (as defined in Section 24 hereof). As of the date of this Ordinance, no SID exists within the State. "Underwriter" shall mean Principal Financial Securities, Inc. Section 2. Authorization of Bonds. For the.purpose of providing funds for the Project and paying all necessary incidental and appurtenant costs and expenses in connection therewith, 02/91270.4 8 the City shall issue its "Limited Tax General Obligation Bonds, Series 1996," in the aggregate principal amount of $12,850,000. The Bonds shall be limited tax general obligation bonds of the City, and the principal of and interest on the Bonds shall be payable from available City funds, without an increase in the current rate of property taxes, as more particularly hereinafter set forth. In addition, the City's ad valorem taxes are hereby pledged, without any increase in the current rate of such property taxes, for the purpose of paying the principal of and premium, if any, and interest on the Bonds when due. Section 3. Bond Details. (a) The Bonds shall be issued as fully registered bonds without coupons in the denominations of $5,000 and any integral multiple thereof. (b) The Bonds shall be dated June 1, 1996, and shall bear interest from their date; provided that if interest on the Bonds shall be in default, Bonds issued in exchange for Bonds surrendered for transfer or exchange shall bear interest from the date to which interest has been paid in full on the Bonds surrendered or if no interest has been paid thereon, then from June 1, 1996. Interest on the Bonds shall be payable on June 1 and December 1 of each year, commencing December 1, 1996. Interest on the Bonds shall be calculated on the basis of 360 -day year, assuming twelve 30 -day months. (c) The Bonds shall be consecutively numbered, shall mature on the 1st day of each June in the principal amounts and years, and shall bear interest at the rates per annum, as shown in the following schedule: Maturity Principal Interest June 1 Amount Rate 1997 $ 380,000 4.000% 1998 395,000 4.300 1999 415,000 4.500 2000 435,000 4.650 2001 455,000 4.750 2002 475,000 4.850 2003 500,000 4.950 2004 525,000 5.050 2005 555,000 5.150 2006 585,000 5.250 2011 3,465,000 5.800 2016 4,665,000 6.000 (d) If upon presentation of a Bond to the Paying Agent at maturity, payment of any Bond is not made as herein provided, interest shall continue to accrue thereon at , the interest rate designated in the Bond until the principal thereof is paid in full. 02/91270.4 9 (e) Principal of the Bonds shall be payable in lawful money of the United States of America at the principal operations office of the Paying Agent, presently located at Norwest Bank Minnesota, National Association, in Minneapolis, Minnesota. Interest on the Bonds shall be payable by check or draft of the Paying Agent mailed on the interest payment date to the Registered Owners thereof as of the Regular Record Date (or, so long as Cede & Co. shall be the Registered Owner, such amount may be paid by wire transfer); provided, however, any such interest not so timely paid or duly provided for shall cease to be payable to the person who is the Registered Owner thereof at the close of business on the Regular Record Date and shall be payable to the person who is the registered owner thereof at the close of business on a Special Record Date for the payment of any such defaulted interest. Such Special Record Date shall be fixed by the Paying Agent whenever moneys become available for payment of the defaulted interest, and notice of the Special Record Date shall be given to the Registered Owners of the Bonds not less than ten days prior thereto by first -class mail to each such registered owner as shown on the registration books on a date selected by the Paying Agent, stating the date of the Special Record Date and the date fixed for the payment of such defaulted interest.. (f) For purposes of this Section, "Agent Member" means a member of, or participant in, the Securities Depository; "Person" means any individual, corporation, partnership, joint venture, association, joint -stock company, trust, unincorporated organization or government or any agency or political subdivision thereof; and "Securities Depository" means The Depository Trust Company and its successors and assigns, or if (i) the then Securities Depository resigns from its functions as depository of the Bonds or (ii) the City discontinues use of the Securities Depository pursuant to Section 3(i) hereof, any other securities depository which agrees to follow procedures required to be followed by a securities depository in connection with the Bonds and which is selected by the City with the consent of the Paying Agent. (g) Except as otherwise provided in this Section, the Bonds in the form of one global bond for each stated maturity date shall be registered in the name of the Securities Depository or its nominee and ownership thereof shall be maintained in book -entry form by the Securities Depository for the account of the Agent Members. Initially, each Bond shall be registered in the name of Cede & Co., as the nominee of The Depository Trust Company. Except as provided in subsection (i) of this Section, the Bonds may be transferred, in whole but not in part, only to the Securities Depository or a nominee of the Securities Depository or to a successor Securities Depository selected or approved by the City or to a nominee of such successor Securities Depository. Each global bond shall bear a legend substantially to the following effect: "Except as otherwise provided in the Ordinance, this global bond may be transferred, in whole but not in part, only to another nominee of the Securities Depository (as defined in the Ordinance) or to a successor Securities Depository or to a nominee of a successor Securities Depository." 02/91270.4 10 (h) Except as otherwise provided in this Section, the City and the Paying Agent shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Securities Depository or any Agent Member with respect to any beneficial ownership interest in the Bonds, (ii) the delivery to any Agent Member, beneficial owner of the Bonds or other Person, other than the Securities Depository, of any notice with respect to the Bonds or (iii) the payment to any Agent Member, beneficial owner of the Bonds or other Person, other than the Securities Depository, of any amount with respect to the principal of or interest on the Bonds. So long as the certificates for the Bonds issued under this Ordinance are not issued pursuant to subsection (i) of this Section, the City and the Paying Agent may treat the Securities Depository as, and deem the Securities Depository to be, the absolute owner of the Bonds for all purposes whatsoever, including, without limitation, (i) the payment of principal of and interest on such Bonds, (ii) giving notices of redemption and other matters with respect to such Bonds and (iii) registering transfers with respect to such Bonds. In connection with any notice or other communication to be provided to the Registered Owners of the Bonds pursuant to this Ordinance by the City or the Paying Agent with respect to any consent or other action to be taken by such Registered Owners, the City or the Paying Agent, as the case may be, shall establish a record date for such consent or other action and, if the Securities Depository shall be the sole Registered Owner of all of the Bonds, give the Securities Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible. The notice to the Securities Depository provided for in the preceding sentence shall be given only when the Securities Depository is the sole Registered Owner of the Bonds. (i) If at any time the Securities Depository notifies the City and the Paying Agent that it is unwilling or unable to continue as Securities Depository with respect to any or all of the Bonds or if at any time the Securities Depository shall no longer be registered or in good standing under the Securities Exchange Act of 1934 or other applicable statute or regulation and a successor Securities Depository is not appointed by the City with the consent of the Paying Agent within 90 days after the City receives notice or becomes aware of such condition, as the case may be, then subsection (g) of this Section shall no longer be applicable and the City shall execute and the Paying Agent shall authenticate and deliver certificates representing the Bonds as provided below. In addition, the City may determine at any time that the Bonds shall no longer be represented by global certificates and that the provisions of subsections (g), (h) and (i) of this Section shall no longer apply to the Bonds. In such event, the City shall execute and the Paying Agent shall authenticate and deliver certificates representing the Bonds as provided below. Certificates for the Bonds issued solely in exchange for a global certificate pursuant to this subsection (e) shall be registered in such names and authorized denominations as the Securities Depository, pursuant to instructions from the Agent Members or otherwise, shall instruct the City and the Paying Agent. The Paying Agent shall promptly deliver such certificates representing the Bonds to the Persons in whose names such Bonds are so registered. 02/91270.4 11 (j) Until the Bonds in definitive form are ready for delivery, the Paying Agent may execute and deliver, subject to the provisions, limitations and conditions set forth above, one or more Bonds in temporary form, whether printed, typewritten, lithographed or otherwise produced, substantially in the form of the definitive Bonds, with appropriate omissions, variations and insertions, and in authorized denominations. Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the lien and benefit of this Ordinance. Upon the presentation and surrender of any Bonds in temporary form, the Paying Agent shall, without unreasonable delay, prepare, execute and deliver, in exchange therefor, a Bond or Bonds in definitive form. Such exchange shall be made without making any charge therefor to the Registered Owner of such Bond in temporary form. Section 4. Paying Agent; Transfer and Exchange. The Paying Agent shall act as paying agent, bond registrar and authenticating agent hereunder for purposes of the Bonds unless the City shall designate and appoint a successor Paying Agent. Any Paying Agent shall be a commercial bank with trust powers. The Paying Agent shall maintain on behalf of the City books for the purpose of registration and transfer of the Bonds, and such books shall specify the person entitled to the Bonds and the rights evidenced thereby, and all transfers of Bonds and the rights evidenced thereby. Bonds may be transferred or exchanged upon payment of a transfer fee, any tax or governmental charge required to be paid with respect to such transfer or exchange and any cost of typing or printing bonds in connection therewith, at the principal operations office of the Paying Agent. Bonds may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity and interest rate. Upon surrender for transfer of any Bond, duly endorsed for transfer or accompanied by an assignment duly executed by the Registered Owner or his or her attorneys duly authorized in writing, the City shall execute and the Paying Agent shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds of the same maturity and interest rate for a like aggregate principal amount. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, whether or not payment on any Bond shall be overdue, and neither the City nor any Paying Agent shall be affected by any notice to the contrary. Section 5. Redemption. (a) Optional Redemption. The Bonds maturing on or after June 1, 2007 shall be subject to redemption prior to maturity at the option of the City, in whole or in part, in the manner directed by the City and by lot within any maturity, on June 1, 2006 or on any date thereafter at a redemption price equal to their principal amount plus accrued interest to the redemption date. (b) Mandatory Sinking Fund Redemption. The Bonds maturing on June 1, 2011 and June 1, 2016 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 02/912 '70.4 12 redemption date. Such Bonds shall be redeemed on June 1 in the following years in the following aggregate principal amounts: Bonds Maturing June 1, 2011 Years June 1 Principal Amount 2007 $615,000 2008 650,000 2009 690,000 2010 735,000 2011' 775,000 'Final Maturity Bonds Maturing June 1, 2016 Years June 1 Principal Amount 2012 $ 825,000 2013 875,000 2014 930,000 2015 985,000 2016` 1,050,000 'Final Maturity At its option, to be exercised on or before the 45th day next preceding each sinking fund redemption date, the City may (i) deliver to the Paying Agent for cancellation Bonds of the same series subject to redemption pursuant to the terms of the mandatory sinking funds in an aggregate principal amount desired and (ii) receive a credit in respect of its sinking fund redemption obligation for any Bonds which prior to said date have been redeemed (otherwise than through the operation of the sinking fund) and cancelled by the Paying Agent and not theretofore applied as a credit against any sinking fund redemption obligation. Each Bond so delivered or previously redeemed shall be credited by the Paying Agent at the principal amount thereof to the obligation of the City on such sinking fund redemption date, and the principal amount of Bonds to be redeemed by operation of such sinking fund on such date shall be accordingly reduced. 02191270.4 13 The City will on or before the 45th day next preceding such sinking fund redemption date furnish the Paying Agent with its certificate indicating whether or not and to what extent the provisions of (i) and (ii) of the preceding paragraph are to be availed of with respect to such sinking fund payment. (c) Notice of Redemption. Notice of any redemption of Bonds shall be given by the Paying Agent in the name of the City by sending a copy of such notice by first- class, postage prepaid mail, at least 30 days prior to the redemption date specified in such notices, to the Registered Owners of each of the Bonds being redeemed. Such notice shall specify the number or numbers of the Bonds so to be redeemed (if redemption shall be in part), the CUSIP numbers of the Bonds to be redeemed and the redemption date. If any of the Bonds shall have been duly called for redemption, then said Bonds shall become due and payable at such redemption date, and from and after such date (if on or before the redemption date there shall have been deposited with the Paying Agent funds sufficient to pay the redemption price of such Bonds at the redemption date) interest will cease to accrue thereon. Any Bond redeemed prior to its maturity by call for prior redemption or otherwise shall not be reissued and shall be canceled. If a Bond is of a denomination larger than $5,000, a portion of such Bond ($5,000 or any multiple thereof) may be redeemed, but Bonds shall be redeemed only in the principal amount of $5,000 each or any integral multiple thereof. 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 Registered Owner thereof shall receive a new Bond or Bonds of the same series or subseries and authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond surrendered. Any notice mailed as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Registered Owner of such Bonds receives such notice. Section 6. Bond Insurance Policy. As long as the Bond Insurance Policy shall be in full force and effect, the Paying Agent shall comply with the following provisions: (a) In the event that, on the second Business Day, and again on the Business Day, prior to the payment date on the Bonds, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Bonds due on the second following or following, as the case may be, Business Day, the Paying Agent shall immediately notify the Bond Insurer or its designee on the same Business Day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency. 02/91270.4 14 (b) If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify the Bond Insurer or its designee. (c) In addition, if the Paying Agent has notice that any Registered Owner has been required to disgorge payments of principal or interest on the Bonds to a trustee in bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such Registered Owner within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify the Bond Insurer or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. (d) The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney -in -fact for the Registered Owners of the Bonds as follows: (i) If and to the extent there is a deficiency in amounts required to pay interest on the Bonds, the Paying Agent shall (a) execute and deliver to State Street Bank and Trust Company, N.A., or its successors under the Bond Insurance Policy (the "Insurance Paying Agent "), in form satisfactory to the Insurance Paying Agent, an instrument appointing the Bond Insurer as agent for such Registered Owners in any legal proceeding related to the payment of such interest and an assignment to the Bond Insurer of the claims for interest to which such deficiency relates and which are paid by the Bond Insurer, (b) receive as designee of the respective Registered Owners (and not as Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective Registered Owners; and (ii) If and to the extent of a deficiency in amounts required to pay principal of the Bonds, the Paying Agent shall (A) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing the Bond Insurer as agent for such Registered Owner in any legal proceeding relating to the payment of such principal and an assignment to the Bond Insurer of any of the Bonds surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (B) receive as designee of the respective Registered Owners (and not as Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment therefor from the Insurance Paying Agent, and (C) disburse the same to such Registered Owners. (e) Payments with respect to claims for interest on and principal of Bonds ' disbursed by the Paying Agent from proceeds of the Bond Insurance Policy shall not be 02/91270.4 15 considered to discharge the obligation of the City with respect to such Bonds, and the Bond Insurer shall become the owner of such unpaid Bonds and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. (f) Irrespective of whether any such assignment is executed and delivered, the City and the Paying Agent hereby agree for the benefit of the Bond Insurer that: (i) They recognize that to the extent the Bond Insurer makes payments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the Bonds, the Bond Insurer will be subrogated to the rights of such Registered Owners to receive the amount of such principal and interest from the City, with interest thereon as provided and solely from the sources stated in this Ordinance and the Bonds; and (ii) They will accordingly pay to the Bond Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Bond Insurance Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in this Ordinance and the Bonds, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Bonds to Registered Owners, and will otherwise treat the Bond Insurer as the owner of such rights to the amount of such principal and interest. (g) In connection with the issuance of further general obligation or limited general obligation bonds of the City, the City shall deliver to the Bond Insurer a copy of the disclosure document, if any, circulated with respect to such Additional Bonds. (h) Copies of any amendments made to the documents executed in connection with the issuance of the Bonds which are consented to by the Bond Insurer shall be sent to Standard & Poor's Corporation. (i) The Bond Insurer shall receive notice of the resignation or removal of the Paying Agent and the appointment of a successor thereto. 0) The Bond Insurer shall receive copies of all notices required to be delivered to the Registered Owners and, on an annual basis, copies of the City's audited financial statements and annual budget. (k) Any notice that is required to be given to a Registered Owner of the Bonds or to the Paying Agent pursuant to this Ordinance shall also be provided to the Bond Insurer. All notices required to be given to the Bond Insurer under this Ordinance shall be in writing and shall be sent by registered or certified mail addressed to Municipal 02191270.4 16 Bond Investors Assurance Corporation, 113 King Street, Armonk, New York 10504, Attention: Insurer Portfolio Management. Section 7. Execution of Bonds. The Bonds shall be executed in the name and on behalf of the City with the manual or facsimile signature of the President or Vice President of the City Council, shall bear a manual or facsimile of the seal of the City and shall be attested by the manual or facsimile signature of the City Clerk or Deputy or Assistant City Clerk. Should any officer whose manual or facsimile signature appears on the Bonds cease to be such officer before delivery of any Bond, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes. The President or Vice President of the City Council and the City Clerk or Deputy or Assistant City Clerk are hereby authorized and directed to prepare and to execute the Bonds in accordance with the requirements of this Ordinance. When the Bonds have been duly executed, the Paying Agent is authorized to, and shall, authenticate the Bonds as Paying Agent. No Bond shall be secured by this Ordinance or entitled to the benefit hereof, or shall be valid or obligatory for any purpose, unless the certificate of authentication of the Paying Agent, in substantially the form set forth in this Ordinance, has been duly executed by the Paying Agent. Such certificate of the Paying Agent upon any Bond shall be conclusive evidence and the only competent evidence that such Bond has been authenticated and delivered hereunder. The Paying Agent's certificate of authentication shall be deemed to have been duly executed by it if manually signed by an authorized representative of the Paying Agent, but it shall not be necessary that the same representative sign the certificate of authentication on all of the Bonds issued hereunder. Section 8. Delivery of the Bonds. Upon the original issuance, execution and authentication of the Bonds, the Paying Agent shall deliver the Bonds as described in Section 11 herein upon receipt of the purchase price therefor. Section 9. Replacement of Bonds. If any outstanding Bond shall become lost, apparently destroyed or wrongfully taken, it may be reissued in the form and tenor of the lost, destroyed or taken bond upon the Registered Owner furnishing, to the satisfaction of the Paying Agent: (i) proof of ownership (which shall be shown by the registration books of the Paying Agent), (ii) proof of loss, destruction or theft, (iii) an indemnity to the City and the Paying Agent with respect to the Bond lost, destroyed or taken, and (iv) payment of the cost of preparing and issuing the new security, in which case the Paying Agent shall then authenticate the Bonds required for reissuance. Section 10. Form of Bonds. The Bonds shall be in substantially the form attached hereto as Exhibit A, with such omissions, insertions, endorsements and variations as may be required by the circumstances and allowed by this Ordinance, Colorado law and the Charter. Section 11. Sale; Official Statement. The Bonds, when executed as provided by law, shall be delivered to the Underwriter. The Bonds shall be sold to the Underwriter at a price of $12,745,881.30 (representing the par amount of the Bonds, less an original issue discount of $39,868.70 and an underwriting discount of $64,250.00), plus accrued interest, if any, from 02/91270.4 17 June 1, 1996 to the date of delivery thereof. Such sale of the Bonds is hereby found to be to the best advantage of the City and is hereby approved, subject to the Bond Purchase Agreement. The proceeds of the Bonds shall be used exclusively for payment of the cost of the Project and to pay all necessary incidental and appurtenant costs and expenses incurred in connection therewith. Neither the Underwriter nor the subsequent Registered Owner or Registered Owners of any of the Bonds shall be responsible for the application or disposal of the funds derived from the sale thereof by the City or any of its officers. The issuance of the Bonds by the City shall constitute a warranty by and on behalf of the City, for the benefit of each and every Registered Owner of the Bonds, that the Bonds have been issued for a valuable consideration in full conformity with law. The Preliminary Official Statement relating to the Bonds is hereby approved and the use thereof by the Underwriter is hereby approved. The President or Vice President of the City Council is authorized and directed to execute and deliver a final Official Statement in substantially the form of the Preliminary Official Statement, but with such changes therein as shall be deemed necessary, within seven business days from the date of execution and delivery of the Bond Purchase Agreement. Section 12. Security for the Bonds. The Bonds constitute limited tax general obligations of the City, payable from all available City funds, without any increase in the current rate of property taxes and secured by a pledge of the City ad valorem property taxes, without any increase in the current rate of such property taxes; thus, if the funds available to the City at any time are insufficient to pay the principal of, premium, if any, or interest on the Bonds, the City is not authorized to levy additional ad valorem property taxes to make such payments without prior voter approval by a majority of the electorate of the City voting on such a ballot issue pursuant to the Charter and Colorado law. It shall be the duty of the City Council annually, at the time and in the manner provided by law for levying other taxes, to take such action as is necessary with reference to the levy and collection of such taxes to provide for the prompt payment of the principal and interest on the Bonds, and the City Council shall require the officers of and for the City to levy, extend and collect such taxes in the manner provided by law for the purpose of providing funds for the payment of the principal of and interest on the Bonds promptly as the same respectively become due. The Director of Finance is hereby authorized and directed to pay or cause to be paid the interest on the Bonds as the same falls due and the principal of the Bonds at their respective maturities, without further warrant or order. Section 13. Disposition of the Bond Proceeds. The Bond proceeds shall be paid as follows: (a) Accrued interest, if any, shall be credited to the Bond Fund; 02/91270.4 18 (b) An amount equal to $12,745,881.30 shall be deposited into the Bond Proceeds Fund, of which amount $12,597,881.30 shall be used for costs of the Project and $148,000.00 shall be used to pay the costs of issuing the Bonds. Section 14. Investments. The proceeds of the Bonds shall be used exclusively for the purposes recited herein and in the Bonds; provided, however, that all, or any proper portion of, the proceeds of the Bonds in the Bond Fund and the Bond Proceeds Fund and other moneys therein may be invested in Permitted Investment. All earnings, income, profits and losses with respect to the Bond Fund shall be retained in the Bond Fund; all earnings, income, profits and losses with respect to the Bond Proceeds Fund shall be retained in the Bond Proceeds Fund. Section 15. Covenant Upon Deficiency in Bond Fund. In furtherance of the pledge of City's ad valorem property taxes, without any increase in the current rate of such property taxes, to the repayment of the Bonds, it is hereby irrevocably covenanted and agreed that in the event that at any time while any of the Bonds remain outstanding the payments required to be made from the Bond Fund are not made in strict accordance with the terms thereof (unless other moneys sufficient to pay the principal of and interest on the Bonds when due shall be on deposit in the Bond Fund), the City Council shall promptly transfer moneys in an amount sufficient to pay the principal of and interest on the Bonds from the general funds of the City to the Bond Fund from moneys previously appropriated, and shall promptly pass and adopt supplemental or emergency appropriation ordinances or resolutions and make such allocations and deposits of moneys from general funds of the City to the Bond Fund. Thereafter said appropriations, allocations and deposits shall continue to be made in such amounts and with sufficient frequency to assure that the sums of money required to be deposited in the Bond Fund, together with other moneys on deposit in the Bond Fund, shall be sufficient to pay the principal of and interest on the Bonds when due. Section 16. Bond Fund and Bond Proceeds Fund. There are hereby created and established by the City the separate special funds of the City to be designated the "Limited Tax General Obligation Bonds, Series 1996 Bond Fund" and the "Limited Tax General Obligation Bonds, Series 1996 Bond Proceeds Fund. " The City shall credit to the Bond Fund at least three business days prior to each interest payment date an amount equal to the principal of and interest on the Bonds coming due on such date. Moneys credited to the Bond Fund shall be used solely for the payment of the principal of, premium, if any, and interest on the Bonds. The net proceeds of the Bonds shall be deposited in the Bond Proceeds Fund. Moneys on deposit in the Bond Proceeds Fund shall be used for payment of the costs of issuing the Bonds and for costs of the Project. Section 17. Rebate Fund. There is hereby created and ordered established with the Paying Agent, at such time as the City is subject to the rebate requirements of the Code as such 02/91270.4 19 requirements pertain to the Bonds, a trust fund to be designated the "Limited Tax General Obligation Bonds, Series 1996 Rebate Fund. The Paying Agent shall make deposits to and the disbursements from the Rebate Fund in accordance with the Investment Instructions, shall invest the Rebate Fund pursuant to said Investment Instructions and shall deposit income from said investments immediately upon receipt thereof in the Rebate Fund, all as set forth in the Investment Instructions. The City shall employ, at its own expense, a firm of independent certified public accountants or other recognized experts in the field, which firm shall make the calculations, deposits, disbursements and investments as may be required by the immediately preceding sentence. The City shall attach the report of such firm to any direction given by the City to the Paying Agent in connection with this Section. The Investment Instructions may be superseded or amended by new Investment Instructions drafted by, and accompanied by, an opinion of bond counsel addressed to the City and the Paying Agent to the effect that the use of said new Investment Instructions will not cause the interest on the Bonds to become taxable to the recipients thereof. The Paying Agent shall make the rebate deposit described in the Investment Instructions at the time set forth in the Investment Instructions. The City shall attach the report of the rebate analyst required by this Section of any directions concerning such rebate deposit. If a withdrawal from the Rebate Fund is permitted as a result of such computation, the amount withdrawn shall be deposited into the Bond Fund. Record of the determinations required by this Section and the Investment Instructions must be retained by the City until six (6) years after the final retirement of the Bonds. Not later than 30 days after the end of the fifth Bond Year (as defined in the Investment Instructions) and every five years thereafter, the Paying Agent shall pay to the United States (but only from funds provided by the City), 90 % of the amount on deposit in the Rebate Fund. Not later than 60 days after the final retirement of the Bonds, the Paying Agent shall pay to the United States (but only from funds provided by the City) 100% of the balance remaining in the Rebate Fund. Each payment required to be paid to the United States pursuant to this Section shall be filed with the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255. Each payment shall be accompanied by Internal Revenue Form 8038 -T and, if required, a statement summarizing the determination of the amount to be paid to the United States. Section 18. Additional Tax Covenants. (a) The City covenants that it shall not use or permit the use of any proceeds of the Bonds or any other funds of the City from whatever source derived, directly or indirectly, to acquire any securities or obligations and shall not take or permit to be taken any other action or actions, which would cause any of the Bonds to be an "arbitrage bond" within the meaning of Section 148 of the Code, or would otherwise cause the interest on the Bonds to be includible in gross income for federal income tax purposes. The City covenants that it shall at all times do and perform all acts and things permitted by law and which are necessary in order to assure that interest paid by the City on the 02/91270.4 20 Bonds shall, for purposes of federal income taxation, not be includible in gross income under the Code or any other valid provision of law. (b) In particular, but without limitation, the City further represents, warrants and covenants to comply with the following restrictions of the Code, unless it receives an opinion of nationally recognized bond counsel stating that such compliance is not necessary: (i) Gross proceeds of the Bonds shall not be used in a manner which will cause the Bonds to be considered "private activity bonds" within the meaning of the Code. (ii) The Bonds are not and shall not become directly or indirectly "federally guaranteed." (iii) The City shall timely file Internal Revenue Form 8038 -G which shall contain the information required to be filed pursuant to subsection 149(e) of the Code. (iv) The City shall comply with the Investment Instructions delivered to it on the date of issue of the Bonds with respect to the application and investment of Bond proceeds. Section 19. Defeasance. The Bonds may be refunded at the discretion and by action of the City Council, subject to provisions concerning their payment and any other contractual limitations contained in this Ordinance, as authorized and permitted by law. A Bond shall not be deemed to be outstanding hereunder if it shall have been paid and cancelled or if cash funds or direct general obligations of, or obligations the payment of the principal of and interest on which are unconditionally guaranteed by, the United States of America, or evidences of interest in any such obligations ( "Governmental Obligations "), shall have been deposited in trust for the payment thereof. In computing the amount of the deposit described above, the City may include interest to be earned on the Governmental Obligations. Section 20. Approval of Bond Purchase Agreement. The Bond Purchase Agreement, in substantially the form presented to the City Council, is hereby authorized and approved, and the President or Vice President of the City Council and the City Clerk or any Deputy or Assistant City Clerk are hereby directed to execute and deliver the Bond Purchase Agreement in substantially the form approved, but with such changes therein as shall be deemed necessary or desirable by the officers executing the same, their execution to be conclusive evidence of the City's approval of any changes from the form hereby approved. Section 21. Approval of Paying Agency Agreement. The Paying Agency Agreement, in substantially the form presented to the City Council, is hereby authorized and approved, and the President or Vice President of the City Council and the City Clerk or any Deputy or 02/91270.4 21 Assistant City Clerk are hereby directed to execute and deliver the Paying Agency Agreement in substantially the form approved, but with such changes therein as shall be deemed necessary or desirable by the officers executing the same, their execution to be conclusive evidence of the City's approval of any changes from the form hereby approved. Section 22. Miscellaneous Documents. The President or Vice President of the City Council and the City Clerk or Deputy or Assistant City Clerk, are hereby authorized and directed to execute and deliver any and all closing documents necessary or desirable in connection with the issuance of the Bonds. Section 23. Exercise of Home Rule Power. Pursuant to Article XX of the State Constitution and the Charter, the City hereby determines and declares the issuance of the Bonds to be a local matter, and therefore all statutes of the State of Colorado which might otherwise apply in connection with the issuance of the Bonds are hereby superseded. Section 24. Undertaking to Provide Ongoing Disclosure. (a) This Section constitutes the written undertaking of the City for the benefit of the owners of the Bonds required by Section (b)(5)(i) of Securities and Exchange Commission Rule 15c2 -12 under the Securities Exchange Act of 1934, as amended (17 CFR Part 240, § 240. 15c2 -12) (the "Rule "). The owners of the Bonds for purposes of this Section shall be the beneficial owners as well as the Registered Owners. This Section is for the benefit of the owners of Bonds and that each owner of a Bond be a beneficiary of this Section with the right to enforce this Section directly against the City. (b) The City, as an "obligated person" within the meaning of the Rule, undertakes to provide the following information: (i) Annual Financial Information; and (ii) Material Event Notices. (c) The City shall while any Bonds are Outstanding provide Annual Financial Information within 188 days after the end of the City's fiscal year (the "Submission Date "), beginning with the City's fiscal year ending December 31, 1996, to each then existing NRMSIR and the SID, if any, such Annual Financial Information within two days of the day it receives it (the "Report Date ") while any Bonds are Outstanding. It shall be sufficient if the City provides to each then existing NRMSIR and the SID, if any, the Annual Financial Information by specific reference to documents previously provided to each NRMSIR and the SID, if any, or filed with the Securities and Exchange Commission and, if such a document is a final official statement within the meaning of the Rule, available from the MSRB. 02/91270.4 22 (d) If a Material Event occurs while any Bonds are Outstanding, the City shall promptly provide to the MSRB and the SID, if any, such Material Event Notice. Each Material Event Notice shall be so captioned and shall prominently state the date, title, and CUSIP numbers of the Bonds. (e) Unless otherwise required by law and subject to technical and economic feasibility, the City shall employ such methods of information transmission as shall be reasonably requested or recommended by the designated recipients of the City's information. (f) The undertaking in this Section will be in effect from the date of delivery of the Bonds until the earliest of (i) the date all principal and interest on the Bonds has been legally defeased pursuant to the terms of this Ordinance; (ii) the date that the City shall no longer constitute an "obligated person" within the meaning of the Rule; or (iii) the date on which those portions of the Rule which required this written undertaking are held to be invalid by a court of competent jurisdiction in a non - appealable action, have been repealed retroactively or otherwise do not apply to the Bonds. (g) This Section may be amended without the consent of the owners of the Bonds, in compliance with the Rule and any interpretive guidance related to the Rule. The Paying Agent shall provide notice of such amendment to each NRMSIR. (h) Any failure by the City to perform in accordance with this Section shall not constitute an "Event of Default" under this Ordinance, and the rights and remedies provided by this Ordinance upon the occurrence of an "Event of Default" shall not apply to any such failure. The owners of Bonds may enforce specific performance of the undertakings herein by any available judicial proceeding. Unless otherwise required by law, no owner of a Bond shall be entitled to damages for the City's non - compliance with its obligations under this Section. Section 25. Events of Default. Each of the following events is hereby declared an "Event of Default": (a) Nonpayment of Principal. If payment of the principal of any of the Bonds herein authorized to be issued shall not be made when the same shall become due and payable at maturity or earlier redemption; or (b) Nonpayment of Interest. If payment of any installment of interest shall not be made when the same becomes due and payable or within thirty days thereafter; or (c) Incapable to Perform. If the City shall for any reason be rendered incapable of fulfilling its obligations hereunder; or 02/91270.4 23 (d) Default of any Provision. If the City shall make default in the due and punctual performance of its covenants or conditions, agreements and provisions contained in the Bonds or in this Ordinance on its part to be performed, other than those delineated in Paragraphs (a), (b) and (c) of this Section or a default under Section 24 hereof , and if such default shall continue for thirty (30) days after written notice specifying such default and requiring the same to be remedied shall have been given to the City by the Bond Insurer or the registered owners of twenty -five percent (25 %) in aggregate principal amount of the Bonds then outstanding and the Bond Insurer; or (e) Bankruptcy. The City shall file a petition for bankruptcy or shall be declared insolvent by a court of competent jurisdiction. Section 26. Remedies for Defaults. Upon the happening and continuance of any of the Events of Default as provided in Section 25 of this Ordinance, then and in every case the Bond Insurer or the Registered Owners of not less than twenty -five percent (25 %) in aggregate principal amount of the Bonds then outstanding, with the consent of the Bond Insurer, including but not limited to a trustee or trustees therefor, may proceed against the City, its council, and its agents, officers and employees to protect and enforce the rights of the Bond Insurer or any Registered Owner of Bonds under this Ordinance by mandamus or other suit, action or special proceedings in equity or at law, in any court of competent jurisdiction, either for the specific performance of any covenant or agreement contained herein or in an award of execution of any power herein granted for the enforcement of any proper legal or equitable remedy as the Bond Insurer or such Registered Owners may deem most effectual to protect and enforce the rights aforesaid, or thereby to enjoin any act or thing which may be unlawful or in violation of any right of the Bond Insurer or any Registered Owner, or to require the governing body of the City to act as if it were the trustee of an express trust, or any combination of such remedies. All such proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Registered Owners of the Bonds then outstanding. The failure of the Bond Insurer or any such Registered Owner so to proceed shall not relieve the City or any of its officers, agents or employees of any liability for failure to perform any duty. Each right or privilege of any such Registered Owner (or trustee thereof) is in addition and cumulative to any other right or privilege, and the exercise of any right or privilege by or on behalf of the Bond Insurer or any Registered Owner shall not be deemed a waiver of any other right or privilege thereof. Section 27. Amendment. This Ordinance may be amended or supplemented by ordinance adopted by the City Council in accordance with law, without receipt by the City of additional considerations and without the consent of the Registered Owners but with the written consent of the Bond Insurer, to make any amendment or supplement to this Ordinance which, in the opinion of nationally recognized bond counsel, is not to the material prejudice of the Registered Owner. This Ordinance may be amended or supplemented for any other reason by ordinance adopted by the City Council in accordance with law, without receipt by the City of any additional consideration but with the written consent of the Bond Insurer and the Registered Owners of seventy -five percent (75 %) in aggregate principal amount of the Bonds authorized by 02/91270.4 24 this Ordinance and outstanding at the time of the adoption of such amendatory or supplemental ordinance; provided, however, that no such ordinance shall have the effect of permitting: (a) An extension of the maturity of any Bond authorized by this Ordinance; or (b) A reduction in the principal amount of any Bond, or the rate of interest thereon; (c) A reduction of the principal amount of Bonds required for consent to such amendatory or supplemental Ordinance; or (d) The establishment of priorities as between Bonds issued and outstanding under the provisions of this Ordinance; or (e) The modification of or otherwise affecting adversely the rights of the Registered Owners of less than all of the Bonds then outstanding. Section 28. Severability. If any provision of this Ordinance shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions hereof or render the same invalid, inoperative or unenforceable to any extent whatever. Section 29. Governing Law. This Ordinance will be governed by and construed in accordance with the laws of the State of Colorado. Section 30. Repeals. All ordinances, or parts thereof, in conflict with this Ordinance, are hereby repealed. After the Bonds have been issued, this Ordinance shall be and remain irrepealable until the Bonds and the interest thereon shall be fully paid, satisfied and discharged in the manner herein provided, or sufficient provision shall have been made for such payment, satisfaction and discharge. After any of the Bonds are issued, this Ordinance shall be and remain irrepealable until the Bonds and interest thereon shall be fully paid or provided for. Section 31. Records. A true copy of this Ordinance, as adopted by the City Council of the City, shall be numbered and recorded, and its adoption and publication shall be authenticated by the signatures of the President or Vice President of the City Council and City Clerk or Deputy or Assistant City Clerk. 02/91270.4 25 INTRODUCED AND PRESENTED FOR A FIRST TIME ON APRIL 22, 1996 ORDERED PUBLISHED BY TITLE ONLY, PRESENTED A SECOND TIME AND FINALLY PASSED AND ADOPTED ON MAY 13, 1996. ATTEST: -1 mW I - �� • i. APPROVED AS TO FORM BY CITY ATTORNEY: City Attorney INTRODUCED: April 22, 1996 By gamnc -1 ('nr s P ntinn Councilperson APPROVED: Presid t of the City Council 02/91270.4 26 $12,850,000 City of Pueblo, Colorado Limited Tax General Obligation Bonds, Series 1996 BOND PURCHASE AGREEMENT May 13, 1996 City of Pueblo One City Hall Place Pueblo, Colorado 81002 Ladies and Gentlemen: Principal Financial Securities, Inc., acting on behalf of itself and such participating underwriters as have been approved by the City Finance Director (collectively, the "Underwriter "), offers to enter into the following agreement with the City of Pueblo, Colorado (the "City ") which, upon the City's acceptance of this offer, will be in full force and effect in accordance with its terms and shall be binding upon the City and upon the Underwriter. This offer is made subject to acceptance by the City pursuant to a duly adopted ordinance of the City Council of the City (the "Council ") authorizing this Bond Purchase Agreement (the "Purchase Contract ") and its execution on behalf of the City and its delivery to the undersigned at or before 11:00 p.m., Denver time, on May 13, 1996. 1. Agreement to Purchase and Sell Upon the terms and conditions and upon the basis of the representations and warranties set forth herein, the Underwriter hereby agrees to purchase from the City for offering to the public, and the City hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the $12,850,000 aggregate principal amount "City of Pueblo, Colorado Limited Tax General Obligation Bonds, Series 1996" (the "Bonds "). The purchase price of the Bonds to be paid at Closing (defined herein) is the par amount of the Bonds, less an underwriting discount of $64,250, less any original issue discount approved by the City Finance Director, plus accrued interest to the date of Closing. 2. Terms of the Bonds The Bonds shall be in substantially the form described in, shall mature and bear interest, shall be subject to redemption, shall have such other provisions and details and shall be issued and secured pursuant to the ordinance authorizing the issuance of the Bonds, finally passed and adopted by the Council on May 13, 1996 (the "Bond Ordinance "). 3. Authority of Underwriter The Underwriter represents that it is authorized to enter into this Purchase Contract. 4. Offerine The Underwriter agrees to make a bona fide public offering of all the Bonds. The prices of the Bonds shall not be in excess of the initial offering prices set forth on the cover page of the Official Statement relating to the Bonds. The Bonds may be offered and sold to certain dealers (including underwriters and other dealers depositing such Bonds into investment trusts or mutual funds) at prices lower than such public offering prices. 5. Representations. Warranties and Agreements of the City The City represents and warrants to, and agrees with the Underwriter, as follows: A. The City is a municipal corporation, duly organized and existing under the Constitution and laws of the State of Colorado and its home rule charter (the "Charter "). B. The City has, and at the Closing Date will have, full legal right, power and authority (i) to issue limited tax general obligation bonds for the purposes described in the Official Statement; (ii) to enter into this Purchase Contract; (iii) to issue, sell and deliver the Bonds to the Underwriter as provided herein; and (iv) to carry out and consummate all other transactions contemplated thereby and hereby. C. The Council has duly adopted the Bond Ordinance and has duly approved (i) the execution, delivery and performance by the City of this Purchase Contract, (ii) the execution, delivery and performance by the City of the Paying Agency Agreement (the "Paying Agency Agreement ") dated as of June 1, 1996 between the City and Norwest Bank Colorado, National Association, as Registrar and Paying Agent (the "Registrar "), (iii) the furnishing and use of the information contained in the Preliminary Official Statement dated April 16, 1996 relating to the Bonds (the "Preliminary Official Statement ") and the preparation, distribution and execution of the final Official Statement relating to the Bonds (the "Official Statement "), and (iv) the taking of any and all such actions as may be required on the part of the City to carry out, give effect to and consummate the transactions contemplated by this Purchase Contract, the Official Statement and the Bond Ordinance. With respect to the City, all consents, approvals, authorizations and orders of governmental or regulatory authorities which are required for the consummation of the transactions contemplated hereby or by the foregoing documents and proceedings have been or by Closing will have been obtained, except as may be required pursuant to the Blue Sky laws of any state in connection with the offering and sale of the Bonds. D. As of its date, the Preliminary Official Statement did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except for any statements or omissions which have been brought to the attention of the Underwriter and corrected in the Official Statement with respect to the Bonds; provided, however, that the City makes no representation as to information in the Preliminary Official Statement under the headings "THE BONDS- -2- - Book -Entry Only Form," "SECURITY FOR THE BONDS -- Municipal Bond Insurance" and "UNDERWRITING." E. As of its date, the Official Statement did not contain any untrue statement of a material fact or omit to state a material fact, and at all times during the period from its date to and including the End of the Underwriting Period (as determined in accordance with Paragraph 11 hereof), such Official Statement, as supplemented or amended in accordance with Paragraph 11 hereof, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the City makes no representation as to information in such Official Statement under the headings "THE BONDS- - Book -Entry Only Form," "SECURITY FOR THE BONDS -- Municipal Bond Insurance" and "UNDERWRITING." F. When delivered to and paid for by the Underwriter in accordance with the terms of this Purchase Contract and the Bond Ordinance, the Bonds will have been duly authorized, executed, issued and delivered by the City and will constitute the validly issued and outstanding limited tax general obligations of the City entitled to the benefit of the Bond Ordinance. G. The adoption of the Bond Ordinance, the execution and delivery by the City of this Purchase Contract, the Paying Agency Agreement and the Bonds, and compliance with the provisions thereof and hereof, do not and will not conflict with or constitute on the part of the City a violation of, breach of or default under the Charter or any statute, indenture, mortgage, deed of trust, ordinance, resolution or other agreement or instrument to which the City is a party or by which the City is bound, or any order, rule or regulation of any regulatory body or court having jurisdiction over the City or any of its activities or properties. H. Except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public council or body which is pending or known to be threatened against or affecting the City, nor to the knowledge of the City is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds, the Bond Ordinance, the Paying Agency Agreement, this Purchase Contract or any other agreement or instrument to which the City is a party, and used or contemplated for use in the consummation of the transactions contemplated by this Purchase Contract or by the Official Statement. I. The City will cooperate with the Underwriter in arranging for the qualification of the Bonds for sale, for application for exemption from such qualification and for the determination of their eligibility for investment under the -3- laws of such juri sdictions as the Underwriter designates and will cooperate with the Underwriter in the continuance of such qualifications or exemptions in effect for so long as required for the initial distribution of the Bonds; provided, however, that the City shall not be required to appoint an agent for service of process in a particular jurisdiction or to qualify as a foreign corporation in any state. J. From the time of the City's acceptance hereof through the Closing (defined herein), the City will not have incurred any material liabilities, direct or contingent. or entered into any material transaction, in either case other than in the ordinary course of its business, and there shall not have been any materially adverse change in the financial condition of the City, in each such case except as set forth in or contemplated by the Official Statement. K. The issuance and delivery of the Bonds was authorized by the registered electors of the City at an election held on November 7, 1995. 6. Closin At 9:00 a.m., Denver time, on June 13, 1996 (the "Closing Date "), or at such other time or on such other business day as shall have been mutually agreed upon by the City and the Underwriter, the City will deliver the Bonds for the account of the Underwriter at The Depository Trust Company. The Bonds shall be delivered in definitive form as fully registered bonds, in authorized denominations, duly executed and authenticated and registered in the name of Cede & Co.. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Paragraph 1 hereof in immediately available funds to the order of the City. Payment for the Bonds and delivery of the documents as aforesaid shall be made at the offices of Kutak Rock, Denver, Colorado or at such other location as shall have been agreed upon by the City and the Underwriter. 7. Conditions Precedent to Closing The obligations of the Underwriter hereunder are conditioned upon the accuracy in all material respects of the representations and warranties of the City contained herein as of the date hereof and the day of the Closing (as if made on such Closing date), and to the following additional conditions: A. At the time of the Closing, the Bond Ordinance shall be duly authorized and in full force and effect and shall be in a form satisfactory to the Underwriter, and the City shall have duly adopted and there shall be in full force and effect such additional ordinances, resolutions and agreements, as shall, in the opinion of Kutak Rock, Denver, Colorado, Bond Counsel for the City, be necessary in connection with the transactions contemplated hereby. B. The Bonds shall have been duly authorized, executed and authenticated in accordance with the provisions of the Bond Ordinance. -4- C. At or prior to the Closing, the Underwriter shall receive the following documents: (1) two copies of the Official Statement executed on behalf of the City by the President of the City Council; (2) a copy of the Bond Ordinance duly executed and delivered by the City with such amendments, modifications or supplements as may have been agreed to by the Underwriter; (3) a copy of the duly executed Paying Agency Agreement; (4) a certificate or certificates of the City, dated the date of the Closing, to the effect that: (a) the City has duly performed all of its obligations to be performed at or prior to the Closing, and each of its representations and warranties in this Purchase Contract is true as of the date of the Closing; (b) the City has authorized, by all necessary action, the execution, delivery, and due performance of the Bond Ordinance, the Bonds, the Paying Agency Agreement and this Purchase Contract; (c) to the City's knowledge, no litigation is pending or threatened against the City to restrain or enjoin the issuance and sale of the Bonds or in any way affecting any authority for or the validity of the Bonds, the Bond Ordinance, the Paying Agency Agreement, this Purchase Contract, or the City's corporate existence or its right to levy and collect the ad valorem property taxes; (d) to the City's knowledge, the execution, delivery, receipt and due performance of the Bond Ordinance, the Paying Agency Agreement and this Purchase Contract and the authentication and delivery of the Bonds and the City's compliance with the provisions of those instruments, will not conflict with or constitute on its part a breach of or default under any existing administrative or court order or decree against the City or any agreement, indenture, mortgage, lease or other instrument to which the City is subject or by which it is bound; and (e) to the City's knowledge, the information set forth in the Official Statement (other than the information set forth therein under the captions "THE BONDS -- Book -Entry Only System," "SECURITY FOR THE BONDS -- Municipal Bond Insurance" "UNDERWRITING," and "TAX EXEMPTION," as to which no belief need be expressed) does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; -5- (5) The approving opinion of Kutak Rock, as Bond Counsel, that the interest paid on the Bonds (A) is excludable from gross income for purposes of federal income taxation, (B) is not treated as a specific preference item for purposes of the federal alternative minimum tax imposed on individuals and corporations, and (C) is not includible in gross income for purposes of income taxation by the State of Colorado, and a letter from Bond Counsel, dated the date of Closing and addressed to the Underwriter, to the effect that such opinion may be relied upon by the Underwriter to the same extent as if such opinion were addressed to the Underwriter; (6) The supplemental opinion of Kutak Rock, as Special Counsel to the City, that (1) the Bonds are exempt from the registration requirements of the Securities Act of 1933, as amended and (2) the information set forth in the Official Statement under the captions "INTRODUCTION- -The Bonds; Prior Redemption," " -- Security; Limited Tax," "- -Tax Status of Interest on the Bonds, " -- Continuing Disclosure Undertaking ", "SECURITY FOR THE BONDS -- General," "THE BONDS" (excluding " -- Estimated Sources and Uses of Funds," " -- Book -Entry Only System" and "- -Debt Service Requirements "), and "TAX EXEMPTION," is accurate; (7) The opinion of Sherman & Howard L.L.C., as Underwriter's Counsel, that in assisting with the preparation of the Official Statement, nothing has come to their attention which would lead them to believe that the Official Statement as of its date (other than the information set forth therein with respect to financial statements, demographic, economic, and statistical data and any statements of trends, forecasts, estimates and assumptions, any expressions of opinion, information concerning the Insurance Policy and the Insurer provided by MBIA Insurance Corporation and information concerning The Depository Trust Company ( "DTC ") provided by DTC contained in the Official Statement and its Appendices, and information contained in the caption "TAX EXEMPTION," as to which no belief need be expressed), contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (8) The opinion of the City Attorney, addressed to the City, the Underwriter, Sherman & Howard L.L.C. and Kutak Rock relating to due organization of the City, due authorization, execution and enforceability of the Bond Ordinance and the election ordinance submitting the question of issuance of the Bonds to the City's electors, the Paying Agency Agreement, and this Purchase Contract, certain sections of the Official Statement, absence of litigation and such other matters as the Underwriter determines should be covered; In (9) an executed copy of the Representations Letter relating to the Bonds between the City and The Depository Trust Company; (10) A certificate of the Paying Agent reasonably satisfactory to the Underwriter as to the authorization of the Registrar to act as Registrar and Paying Agent, acceptance of the duties of registrar and paying agent pursuant to the Bond Ordinance and the Paying Agency Agreement and the due registration and authentication of the Bonds; (11) Evidence that the Bonds have been insured by MBIA Insurance Corporation ( "MBIA "); and (12) Such additional legal opinions, certificates, instruments and other documents as the Underwriter or their counsel may deem necessary or desirable to evidence the truth and accuracy as of the time of the Closing of the representations and warranties contained herein and in any other supporting documents and the due performance or satisfaction by the City and the other parties thereto at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by each of them. All the opinions, affidavits, letters, evidences, certificates and other documents mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof only if they are in form and substance recited herein or otherwise satisfactory to Sherman & Howard L.L.C., Counsel to the Underwriter. If the City shall be unable to satisfy the conditions to the obligations of the Underwriter contained in this Purchase Contract, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contact shall terminate and neither the Underwriter nor the City shall be under further obligation hereunder, except that the respective obligations of the City and the Underwriter for the payment of expenses, as provided in Paragraph 10 hereof, shall continue in full force and effect. 9. Right of Underwriter to Cancel The Underwriter may terminate this Purchase Contract by notification to the City, and such termination shall not constitute a default for purposes of paragraph 10 hereof, if at any time on or after the date hereof and at or prior to the Closing: A. Except as described in the Official Statement, a tentative decision with respect to legislation shall be reached by a committee of the House of Representatives or the Senate of the Congress of the United States, or legislation shall be favorably reported by such a committee or be introduced, by amendment or otherwise, in, or be passed by the House of Representatives or the Senate, or recommended to the Congress of the United States for passage by the President of -7- the United States, or be enacted by the Congress of the United States, or a decision by a court established under Article III of the Constitution of the United States, or the Tax Court of the United States, shall be rendered, or a ruling, regulation or order of the Treasury Department of the United States or of the Internal Revenue Service shall be made or proposed having the purpose or effect of imposing federal income taxation, or any other event shall have occurred which results, or if enacted or adopted would result, in the inclusion in gross income or alternative minimum taxable income (other than as part of adjusted net book income and adjusted current earnings), for federal income tax purposes, of revenues or other income of the general character to be derived by the City or any similar body or upon interest received on the Bonds or obligations of the general character of the Bonds, which, in the opinion of the Underwriter, materially adversely affects the market price of the Bonds. B. Any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by, any governmental body, department or agency of the State of Colorado, or a decision by any court of competent jurisdiction within the State of Colorado shall be rendered which, in the opinion of the Underwriter, materially adversely affects the market price of the Bonds. C. A stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offer or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all the underlying obligations, as contemplated by this Purchase Contract or the Official Statement, is in violation or would be in violation of any provision of the federal securities laws, the Securities Act of 1933, as amended and as then in effect, or the provisions of the Securities Exchange Act of 1934, as amended and as then in effect, or the qualification provisions or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect. D. Legislation shall be enacted by the Congress of the United States of America, or a decision by a court of the United States of America shall be rendered, to the effect that obligations of the general character of the Bonds, or the Bonds, including all the underlying obligations, are not exempt from registration under or other requirements of the federal securities laws, the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect. E. Any event shall have occurred or information become known which, in the opinion of the Underwriter, makes untrue in any material respect any statement or information contained in the Preliminary Official Statement or the Official Statement in as originally circulated, or has the effect that the Preliminary Official Statement or the Official Statement as originally circulated contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. F. Any other event or circumstance which, in the reasonable opinion of the Underwriter, would materially and adversely affect the ability of the Underwriter to market the Bonds or to enforce contracts for the sale of the Bonds. F. Additional material restrictions not in force as of the date of this Purchase Contract shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange. G. The New York Stock Exchange or other national securities exchange, or any governmental authority, shall impose, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter. H. A general banking moratorium shall have been established by federal, New York or Colorado authorities. I. A war involving the United States shall have been declared, or any conflict involving the armed forces of the United States shall have escalated, or any other national emergency relating to the effective operations of government or the financial community shall have occurred which, in the opinion of the Underwriter, materially adversely affects the market price of the Bonds. J. The MBIA Financial Guaranty Insurance Policy shall have been withdrawn or canceled. 10. Expenses The Underwriter shall be under no obligation to pay any costs of issuance and other expenses incident to the issuance of the Bonds, including but not limited to (a) the cost of printing and preparation for printing or other reproduction (for distribution on or prior to the date of execution of this Purchase Contract) of the Bond Ordinance or the Preliminary Official Statement and drafts thereof, together with a reasonable number of copies thereof; (b) the cost of preparation for printing or other reproduction of the final Official Statement for distribution and use in connection with the public offering of the Bonds, as well as any postage or courier costs incurred in connection with such distribution; (c) the cost of preparing the definitive Bonds; and (d) the fees and disbursements of Bond Counsel, special counsel, underwriter's counsel and any other experts, accountants, counsel or consultants retained by the City; all of which expenses are to be paid by the City out of Bond proceeds. M The Underwriter shall pay (a) the cost of printing or other reproduction of this Purchase Contract and the cost of printing Blue Sky and legal investment memoranda, if any, to be used by them; (b) all advertising expenses in connection with the public offering of the Bonds; and (c) all other expenses incurred by them or any of them in connection with their public offering and distribution of the Bonds. If the Bond are not executed and delivered, the City will not have any obligation with respect to such expenses unless the City has otherwise specifically contracted therefor. 11. Delivery and Use of Official Statement A. As soon as may be reasonably possible after the execution of this Purchase Contract, the City will deliver or cause to be delivered to the Underwriter, two copies of the Official Statement executed by the President of the City Council. B. The City agrees, pursuant to Rule 15c2 -12 promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as amended ( "Rule 15c2 -12 "), to make available to the Underwriter at Merrill Denver, Denver, Colorado, the financial printer of the Official Statement, reasonable quantities of copies of the Official Statement within seven business days after the date hereof, at the sole cost and expense of the City. The City confirms that with respect to the Bonds, the Preliminary Official Statement is the official statement which the City deems "final" within the meaning of Rule 15c2- 12(b). C. The City authorizes the use by the Underwriter of the Official Statement and the information contained therein in connection with the initial public offering and sale of the Bonds by the Underwriter and agrees not to supplement or amend or cause to be supplemented or amended the Bond Ordinance or the Official Statement at any time prior to the Closing without the prior written consent of the Underwriter. The City ratifies and confirms the use by the Underwriter, prior to the date hereof, of the Preliminary Official Statement in connection with the public offering of the Bonds. D. The Underwriter agrees (i) to provide the Official Statement and any amendments or supplements thereto furnished by the City to at least one "nationally recognized municipal securities information repository" (within the meaning of Rule 15c2 -12) upon receipt of the Official Statement and any such amendments or supplements thereto from the City and (ii) to comply with the applicable provisions of Municipal Securities Rulemaking Board Rule G -36. E. If after the Closing and during the period ending on the date which is 25 days following the "end of the underwriting period," as such term is used in Rule 15c2 -12 (the "End of the Underwriting Period," which End of the Underwriting -10- Period shall be deemed to be the Closing unless the City is informed at or before the Closing by the Underwriter in writing that not all of the Bonds have been sold, in which case the Underwriter shall inform the City of the End of the Underwriting Period), any event affecting the City or the Bonds shall occur of which the City has actual knowledge and which would cause the Official Statement to contain an untrue statement of a material fact or to be misleading in the light of the circumstances existing at the time, the City will notify the Underwriter and, at the written request of the Underwriter, will forthwith prepare and furnish to the Underwriter, at the expense of the City, a reasonable number of copies of an amendment of or supplement to the applicable Official Statement which will amend or supplement the applicable Official Statement so that it will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time, not misleading. 12. Notices All notices or other communications to be given under this Purchase Contract shall be sufficiently given when mailed by registered mail, return receipt requested, postage prepaid, with proper address as indicated below. All notices shall be deemed effective as of the date of delivery. All notices and communications shall be addressed as follows: To the City: City of Pueblo One City Hall Place P.O. Box 1427 Pueblo, Colorado 81002 Attention: City Manager To the Underwriter: Principal Financial Securities, Inc. 1200 - 17th Street, Suite 750 Denver, Colorado 80202 -5807 Attention: Mr. Scott Peterson 13. Parties in Interest This Purchase Contract is made solely for the benefit of the City and the Underwriter (including the successors or assigns of any Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. All the City's representations, warranties and agreements in this Purchase Contract shall remain operative and in full force and effect, regardless of (a) any investigation made by or on behalf of the Underwriter, (b) delivery of and payment for the Bonds pursuant to this Purchase Contract, and (c) any termination of this Purchase Contract (except that the obligations to sell and purchase the Bonds shall not survive termination of this Purchase Contract). 15. Headines The headings of the sections of this Purchase Contract are inserted for convenience only and shall not be deemed to be a part hereof. see 16. Governing Law This Purchase Contract shall be governed by and interpreted under the laws of the State of Colorado. 17. Counterparts This Purchase Contract may be executed in one or more counterparts, any one of which shall be authoritative, and which together shall constitute one and the same agreement. 18. Effective Date This Purchase Contract shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City, and shall be valid and enforceable as of the time of such acceptance. Very truly yours, PRINCIPAL FINANCIAL SECURITIES, INC. 0 AL By: �? Title: V /° Accepted by the City this May 13, 1996. CITY OF PUEBLO, COLORADO By. Presiden , City Coun it (SEAL) Attest: City C1 k -12-