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-
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- 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
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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.
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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;
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(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
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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
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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
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