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Home My WebLink AboutOrdinance-1988-0767INTRODUCED BY COUNCILMEMBER MERKL ORDINANCE NO. 767 SERIES OF 1988 TITLE: AN ORDINANCE PROVIDING FOR THE ISSUANCE BY THE CITY OF WHEAT RIDGE, COLORADO (THE "CITY") OF ITS SALES TAX REVENUE BONDS, SERIES 1988, DATED JULY 1, 19881 IN THE PRINCIPAL AMOUNT OF $2,990,000, FOR THE PURPOSES OF PROVIDING FUNDING FOR THE CONSTRUCTION OF VARIOUS DRAINAGE, STREET IMPROVEMENTS AND OTHER CAPITAL IMPROVEMENTS; PRESCRIBING THE FORM OF BOND; PROVIDING OTHER DETAILS AND COVENANTS CONCERNING THE BONDS AND THE CITY'S SALES TAX; AND RATIFYING ALL ACTIONS HERETOFORE TAKEN IN CONNECTION THEREWITH. BE IT ORDAINED BY THE CITY WHEAT RIDGE, COLORADO, THAT: Section 1. Definitions A. Definitions. In this terms have the following respective context hereof clearly requires oth COUNCIL OF THE CITY OF and Construction. Ordinance the following meanings unless the =_rwise: Average Annual Debt Service: for the Bonds, or a given issue of Parity Securities, the aggregate of all Debt Service Requirements (excluding any redemption premiums) due on the Bonds, or any other given issue of Parity Securities in question for all Bond Years beginning with the Bond Year in which Debt Service Requirements (excluding any redemption premiums) on the Bonds, or the Parity Securities are next payable and ending with the Bond Year in which the last of the Debt Service Requirements (excluding any redemption premiums) due on the Bonds, or the other given issue of Parity Securities in question are payable, divided by the number of such years. Bank: any depository permitted by law of the State to receive public funds for deposit. -1- Bond Counsel: any law firm of nationally recognized standing in the field of municipal law whose opinions are generally accepted by purchasers of municipal bonds. Bonds or Bond: those securities issued hereunder and designated as the "City of Wheat Ridge, Colorado, Sales Tax Revenue Bonds, Series 1988," dated July 1, 1988, in the aggregate principal amount of $2,990,000. Bond Register: the register maintained by the Registrar pursuant to Section 3E hereof. Bond Year: for the purpose of this Ordinance, the twelve (12) months commencing on the 15th day of December of any calendar year and ending on the 14th day of December of the next succeeding calendar year. Capital Improvement Fund: the special fund of the City into which one-half of the net revenues derived - from the Issuer's two percent Sales Tax is pledged and deposited and any successor fund into which such revenues are deposited. Capital Protect Fund: the special fund so designated in Section 5A hereof. Charter: the City Charter of the Issuer. City: the City of Wheat Ridge, Colorado, and its successors. City Clerk: the de jure or de facto City Clerk of the City or his or her successor in functions, if any. City Council: the governing body of the City of Wheat Ridge, Colorado. City Sales Tax Ordinance: Ordinance Nos. 3 and 185 of the City, as amended, under which the City imposed an aggregate 2% municipal sales taxes upon sales of certain property and services, subject to certain exceptions and exemptions. Code: the Internal Revenue Code of 1986, as amended, and regulations and rulings promulgated or proposed thereunder, including any rules or regulations applicable thereto promulgated under the Internal Revenue Code of 1954, as amended. -2- Commercial Bank: a state or national bank or trust company which is a member of the Federal Deposit Insurance Corporation and of the Federal Reserve System, which bank or trust company, or the bank holding company by which it is owned, has a capital and surplus of $100,000,000 or more (in the case of a bank holding company, figured on a consolidated basis), and which is located within the United States; and such term includes, without limitation, any Trust Bank, as herein defined. Debt Service Fund: the special fund created in Section 5B hereof. Debt Service Requirements: the principal of, interest on, and any premiums due in connection with the redemption of, the Bonds, Parity Securities and any other securities payable from the Pledged Revenues and heretofore or hereafter issued, if any, or such part of such securities as may be designated, as such principal, interest and premiums become due, whether at maturity or by mandatory sinking fund redemption. _ Event of Default: each of the events stated in Section 10 hereof. Federal Securities: bills, certificates of indebtedness, notes, bonds or similar securities which are direct obligations of, or the principal and interest of which obligations are unconditionally guaranteed by, the United States of America. Fiscal Year: the twelve (12) months commencing on the first day of January of any calendar year and ending on the thirty-first day of December of such calendar year or such other twelve (12) month period as may from time to time be designated by the City Council as the Fiscal Year of the Issuer. Holder or Registered Holder: the person in whose name a Bond is registered in the Bond Register. Independent Accountant: any certified public accountant, or any firm of such accountants, duly licensed to practice and practicing as such under the laws of the State, appointed and paid by the Issuer, who (a) is, in fact, independent and not under the domination of the Issuer or the City Council, (b) does not have any substantial interest, direct or indirect, in any of the affairs of the Issuer, and (c) is not connected with the Issuer as a member, officer or employee of the City -3- Council or the Issuer, but who may be regularly retained to make annual or similar audits of any books or records of the Issuer. Interest Payment Date: a date on which interest is due on any Bonds or Parity Securities. Issuer: the City. Mayor: the duly elected or appointed Mayor of the City or his or her successor in functions. Ordinance: this Ordinance which provides for the issuance and delivery of the Bonds. Outstanding or outstanding: when used with reference to the Bonds, Parity Securities, or any other designated securities of the Issuer and as of any particular date, all the Bonds, Parity Securities, or any such other securities payable in whole or in part from the Pledged Revenues in any manner theretofore and thereupon - being executed and delivered, except the following: (a) Any Bond, Parity Security, or other security cancelled by the Issuer, by the Registrar, or otherwise on the Issuer's behalf, at or before such date; (b) Any Bond or Parity Security held by or on behalf of the Issuer; (c) Any Bond, Parity Security, or other security of the Issuer for the payment or the redemption of which moneys or Federal Securities sufficient to meet all of the payment requirements of the principal of, the interest on, and any prior redemption premiums due in connection with such Bond, Parity Security, or other security to the date of maturing or any redemption date thereof, shall have theretofore been deposited in escrow or in trust with a Trust Bank for that purpose, as provided in and required by Section 9 hereof; and (d) Any lost, apparently destroyed, or wrongfully taken Bond, Parity Security, or other security of the Issuer in lieu of or in substitution for which another bond or other security shall have been executed and delivered pursuant to this Ordinance. -4- Parity Securities: bonds, securities, leases or other obligations payable from the Pledged Revenues equally or on a parity with the Bonds. Paying Agency Agreement: that agreement between the Issuer and the Registrar providing for the administration and disbursement of the Pledged Revenues for payment of the Bonds. Person or person: any individual, firm, partnership, corporation, company, association, trust, estate, joint-stock association, or body politic; and the term includes any trustee, receiver, assignee, or other similar representative thereof. Pledged Revenues: the gross receipts collected by the Issuer from the 1% Sales Tax pledged to the payment of the Bonds and any other Parity Securities deposited into the Capital Improvement Fund, net of all costs of collection, plus all amounts on deposit in the Debt Service Fund and the Reserve Fund, and excluding all amounts on deposit in the Capital Project Fund. Project: any capital improvements of the City financed from the proceeds of the Bonds and other proceeds in the Capital Project Fund. Purchaser: Coughlin & Company, Inc., as original purchasers of the Bonds. Record Date: the fifteenth day of the month prior to an Interest Payment Date (whether or not a business day). Redemption Date: the date fixed for the redemption prior to their maturity of any Bonds or other designated securities payable from the Pledged Revenues in any notice of prior redemption authorized by the Issuer, or otherwise fixed and designated by the Issuer. Redemption Price: when used with respect to a Bond or other designated security payable from the Pledged Revenues, the principal amount thereof, plus the applicable premium, if any, payable upon the redemption thereof prior to the stated maturity date of such Bond or other security, plus accrued interest to and on a Redemption Date in the manner contemplated in accordance with the terms of the Bond or other security. -5- Registrar: Central Bank of Denver, A Banking Corporation, named in the Paying Agency Agreement as the paying agent, transfer agent and registrar of the Bonds, or any successor thereto. Reserve Fund: the special fund created in Section 5C hereof. Sales Tax: the municipal sales tax imposed by the City Sales Tax ordinance, and any municipal sales tax which hereafter may be imposed by the City in addition thereto or in substitution therefor. Security or securities: when used with reference to securities of the Issuer, any bond or note issued by the Issuer or any other evidence of the advancement of money to the Issuer. Special Record Date: a special date fixed by the Registrar for the payment of defaulted interest to be preceded by not more than fifteen and not less than ten days notice. State: the State of Colorado. Subordinate Bonds or Subordinate Securities: bonds or securities payable from the Pledged Revenues having a lien thereon subordinate or junior to the lien thereon of the Bonds. Superior Bonds or Superior Securities: any bonds or securities payable from the Pledged Revenues having a lien thereon superior or senior to the lien thereon of the Bonds. Trust Bank: a Commercial Bank located within the State of Colorado, which bank is authorized to exercise and is exercising trust powers. B. Construction. This ordinance, except where the context by clear implication herein otherwise requires, shall be construed as follows: (1) Words in the singular number include the plural, and words in the plural include the singular. (2) Words in the masculine gender include the feminine and the neuter, and when the sense so indicates words of the neuter gender refer to any gender. -6- (3) Articles, sections, subsections, paragraphs and subparagraphs mentioned by number, letter, or otherwise, correspond to the respective articles, sections, subsections, paragraphs and subparagraphs of this Ordinance so numbered or otherwise so designated. (4) The titles and headlines applied to articles, sections and subsections of this Ordinance are inserted only as a matter of convenience and ease in reference and in no way define, or limit the scope or intent of, any provisions of this Ordinance. Section 2. Recitals; Authority. A. Findings. The Charter of the City provides that the City may issue revenue bonds or other securities without an election. B. Sales Tax. The City has imposed the Sales Tax as provided herein and in the City Sales Tax Ordinance. Pursuant to the City Sales Tax Ordinance, the City has developed a system of imposing and collecting the Sales Tax. The Bonds shall be payable solely from the net revenues generated by the Sales Tax collection system and pledged to the Capital Improvement Fund. C. Private Sale. The City hereby determines that it is to the best advantage of the City to sell the Bonds at private sale to the Purchaser, and the Mayor and the City Clerk are hereby authorized and directed to execute and deliver a Bond Purchase Agreement in connection therewith. D. Authority For Bonds. The City is authorized by the Constitution of the State and the Charter of the City to borrow money and issue sales tax revenue bonds to evidence such borrowing. Section 3. The Bonds. A. Authorization. The City of Wheat Ridge, Colorado, Sales Tax Revenue Bonds, Series 1988, in the aggregate principal amount of $2,990,000, payable as to all Debt Service Requirements solely out of Pledged Revenues, are hereby authorized to be issued, pursuant to the Constitution of the State, the Charter of the City and the terms of this Ordinance, and the Issuer assigns and pledges irrevocably, but not necessarily exclusively, the Pledged Revenues to the payment of the Debt Service Requirements for the Bonds, the proceeds of the Bonds authorized herein to be used solely as herein provided. -7- B. Bond Details. (1) Generally. The Bonds shall be issued in registered form only, without coupons, in the denomination of $5,000 each or any integral multiple thereof, numbered consecutively beginning with the number R-1, payable to the persons in whose name each Bond is registered in the Bond Register maintained by the Registrar as of each Record Date, as hereinafter provided. The Bonds will bear per annum interest from July 1, 1988 until their respective maturities or prior redemption, payable semi-annually on each June 15 and December 15 commencing December 15, 1988 (the "Interest Payment Dates"), at the rates and will mature in the amounts on the dates indicated below: Maturity Interest (December 15) Amount Rate 1997 $ 930,000 1998 995,000 1999 1,065,000 If upon presentation at maturity, payment of any Bond is not made as herein provided, interest shall continue thereon at the interest rate therein designated until the principal thereof is paid in full. The principal of, interest on and premium, if any, due in connection with the Bonds shall be payable in lawful money of the United States of America, without deduction for exchange or collection charges. The principal and premium are payable upon surrender and presentation of the Bond at the principal corporate trust office of the Registrar. The payment of interest on each Bond shall be made to the Holder of such Bond and shall be paid by the Registrar on behalf of the City by check or draft of the Registrar mailed to such Holder on each Interest Payment Date (unless such date is not a business day, whereupon mailing shall occur on the next succeeding business day) at his address as it appears on the Bond Register of the Registrar maintained for such purpose. Interest on each Bond shall be payable to the Holder thereof as set forth on the Bond Register as of the Record Date, regardless of any transfer or exchange of a Bond subsequent to such Record Date and prior to such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Registered Owner on such Record Date, and may be paid to the -8- Registered Owner at his address Register of the Registrar at the Special Record Date. as it appears on the Bond close of business on a The City and the Registrar may deem and treat the Registered owner (whether or not the Bond shall be overdue) on the Record Date or Special Record Date as the absolute owner of the Bond for the purpose of receiving payment of or on account of the principal thereof, any redemption premium and interest due thereon, and on any other date for all other purposes, and neither the City nor the Registrar shall be affected by any notice to the contrary. The Registrar shall evidence acceptance of the duties and obligations provided in this Ordinance by execution of the Paying Agency Agreement. The Bonds shall be subject to registration, transfer and exchange in the manner, and subject to the terms and conditions, set forth herein and in the Paying Agency Agreement. (2) Redemption of the Bonds. Bonds maturing on December 15, 1997 or thereafter shall be subject to redemption prior to maturity in whole or in part at the option of the Issuer on December 15, 199_, at a Redemption Price equal to the principal amount redeemed, plus accrued interest to the Redemption Date, plus a premium equal to the following percentage of the principal amount if redeemed on the following dates: Date of Call Premium If the Bonds are to be redeemed in part, the Bonds or portions of Bonds to be redeemed shall be redeemed in inverse order of maturity. If less than all of the Bonds in a maturity are to be redeemed, Bonds shall be selected and redeemed by lot in such manner as the Registrar shall determine. The portion of any Bonds to be redeemed shall be in the principal amount of $5,000, or any integral multiple thereof, and, in selecting Bonds for redemption, the Registrar shall treat each Bond as representing that number of Bonds which is obtained by dividing the principal amount of that Bond by $5,000. (3) Notice and Effect of Redemption. Notice of the call for redemption, identifying the Bonds or portions thereof to be redeemed, is to be given by the Registrar by -9- mailing a copy of the redemption notice by first-class mail, not more than forty-five or less than thirty days prior to the Redemption Date, to the Holders of Bonds to be redeemed at their addresses shown on the Bond Register. Failure to mail such notice to the owner of any Bond designated for redemption or any defect in any notice given, shall not affect the validity of any proceedings for the redemption of the Bonds. Any notice mailed as provided herein shall be conclusively presumed to have been duly given, whether or not the owner actually receives the notice. Each notice of redemption shall specify the Redemption Date, the Redemption Price, the place or places of payment, that payment will be made upon presentation and surrender of the Bonds to be redeemed, that interest accrued to the Redemption Date will be paid as specified in said notice, and that on and after said date interest thereon will cease to accrue. If less than all the outstanding Bonds are to be redeemed, the notice of redemption shall specify the series and numbers of the Bonds or portions thereof of such series to be redeemed. Prior to the Redemption Date, the Redemption Price shall be deposited with the Registrar. The deposit of the Redemption Price shall cause the discontinuation of accrual of interest on the Bonds to be called after the Redemption Date. (4) Net Effective Interest Rate. The terms of the Bonds shall be as specified herein. The maximum net effective interest rate on the Bonds is (5) Execution and Delivery. The Bonds shall be executed by and on behalf of the Issuer with the manual or facsimile signature of the Mayor of the City, shall bear an impression or a facsimile of the seal of the Issuer, shall be attested by the manual or facsimile signature of the City Clerk and shall be authenticated by the manual signature of the Registrar in the manner set forth in the Paying Agency Agreement. should any officer whose signature or facsimile signature appear on the Bonds cease to be such officer before delivery of the Bonds to the Purchaser or to any Holder, such signature or facsimile signature shall nevertheless be valid and sufficient for all purposes. The Mayor and the City Clerk are hereby authorized and directed to prepare and to execute the Bonds as herein provided. When the Bonds have been duly executed and sold, the officers of the Issuer are -10- authorized to, and shall, deliver the Bonds to the Purchaser thereof on receipt of the agreed purchase price. (6) Recitals in Bonds. Each Bond shall recite in substance that the Bond is payable solely from the Pledged Revenues, that the Bond does not constitute a general obligation debt of the Issuer within the meaning of the Colorado Constitution or the Charter of the City, that the Bond is not payable in whole or in part from the proceeds of general property taxes and that the full faith and credit of the Issuer is not pledged to pay the principal of or interest on such Bond. (7) Authentication. No Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Ordinance unless and until a certificate of authentication on such Bond, substantially in the form set forth in the form of Bond herein, shall have been duly executed by the Registrar. The executed certificate of authentication of each Bond shall be conclusive evidence that it has been authenticated and delivered under this Ordinance. (8) Form of Bond. Subject to the provisions of this Ordinance, each Bond shall be in substantially the following form, with such omissions, insertions, endorsements, and variations as to recitals of fact or other provisions as may be required by the circumstances and as may be required or permitted by this Ordinance, and as may be necessary or appropriate to carry out the purpose of this Ordinance and to conform to the rules and requirements of any governmental authority or to any custom, usage or requirement of law with respect thereto: -11- (Form of Bond) UNITED STATES OF AMERICA STATE OF COLORADO CITY OF WHEAT RIDGE SALES TAX REVENUE BOND SERIES 1988 No. R- INTEREST RATE: MATURITY DATE: % DECEMBER 15, REGISTERED HOLDER: PRINCIPAL AMOUNT: COUNTY OF JEFFERSON DATED: JULY 1, 1988 CUSIP NUMBER: DOLLARS The City of Wheat Ridge, in the County of Jefferson, State of Colorado (the Issuer), for value received, hereby promises to pay to the Registered Holder (named above), or registered assign, but solely from the source and in the manner hereinafter provided, the Principal Amount (stated above) on the Maturity Date (stated above) unless this Bond shall have been previously called for redemption and payment shall have been duly made prior to the Maturity Date, and in like manner and solely from said source to pay interest on said Principal Amount from the date hereof at the per annum Interest Rate (stated above) until the Principal Amount is paid in full or discharged. Interest on this Bond is payable semiannually on July 15 and December 15 each year (the "Interest Payment Dates") commencing December 15, 1988, to the Registered Holder hereof or registered assign. The principal of, interest on and premium, if any, on this Bond are payable in lawful money of the United States of America, without deduction for exchange or collection charges. The principal and any premium are payable upon presentation and surrender hereof at the principal corporate trust office of Central Bank of Denver, A Banking Corporation, Denver, Colorado, as paying agent, transfer agent and bond registrar (the "Registrar") or at the office of any successor paying agent appointed by the Issuer. Interest on this Bond shall be paid by the Registrar on behalf of the Issuer by check or draft of the Registrar mailed to the Registered Holder of this Bond on each Interest -12- Payment Date (unless such date is not a business day, whereupon mailing shall occur on the next succeeding business day) at his address as it appears on the Bond Register of the Registrar at the close of business on the fifteenth day of the month prior to each Interest Payment Date (whether or not a business day)(the „Record Date"), regardless of any transfer or exchange of this Bond subsequent to such Record Date and prior to such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Registered Holder on such Record Date, and may be paid to the Registered Holder at his address as it appears on the Bond Register at the close of business on a Special Record Date for the payment of defaulted interest to be fixed by the Registrar, with notice of such payment to be given to the Registered Owner not more than fifteen days and not less than ten days prior to such Special Record Date. If upon presentation at maturity payment of this Bond is not made as herein provided, interest shall continue hereon at the Interest Rate until the Principal Amount is paid in full. _ Bonds maturing on December 15, 1997 or thereafter shall be subject to redemption prior to maturity in whole or in part at the option of the Issuer on December 15, 199, at a redemption price equal to the principal amount redeemed, plus accrued interest to the redemption date, plus a premium equal to the following percentage of the principal amount if redeemed on the following dates: Date of Call Premium All Bonds subject to redemption prior to their respective maturity dates are redeemable in inverse order of maturity and by lot within a maturity. Bonds in a denomination of more than $5,000 may be redeemed in part from time to time in one or more units of $5,000, in the manner provided in an Ordinance of the Issuer pursuant to which the Bonds of the series of which this is one are issued (the "Ordinance"). Notice of redemption shall be given by mailing a copy of such notice by first-class mail, not more than forty-five and not less than thirty days prior to the Redemption Date specified in such notice, to the Registered Holders of each of the Bonds being redeemed at the names and addresses as they appear in the Bond Register. If this Bond shall have been -13- duly called for redemption and if on or before the Redemption Date there shall have been deposited with the Registrar funds sufficient to pay the Redemption Price for this Bond at the Redemption Date, then this Bond shall become due and payable upon such Redemption Date, and interest shall cease to accrue hereon after the Redemption Date. Failure to mail such notice to the Registered Holder of any Bond designated for redemption or any defect in any notice given shall not affect the validity of any proceedings for the redemption of the Bonds. Any notice mailed as provided in the Ordinance shall be conclusively presumed to have been duly given, whether or not the Registered Holder actually receives the notice. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF WHICH SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH HEREIN. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the proceedings of the Issuer authorizing the issuance of the - Bonds until the Certificate of Authentication hereon shall be signed on behalf of the Registrar. IN WITNESS WHEREOF, the City Council of the City of Wheat Ridge, Colorado has caused this Bond to be executed with the manual or facsimile signature of the Mayor of the City and to be attested by the manual or facsimile signature of the City Clerk under an impression of the seal of the City or a facsimile thereof, all as of the date set forth above. (FACSIMILE SEAL) CITY OF WHEAT RIDGE, COLORADO (Facsimile Signature) Mayor ATTEST: (Facsimile Signature) City Clerk -14- CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds of the issue described in the within-mentioned Ordinance. CENTRAL BANK OF DENVER, A Banking Corporation, as Registrar (Manual Signature) Authorized Officer -15- (Reverse of Bond) This Bond and the Bonds of the series of which this is one are limited and special obligations of the Issuer payable solely out of and secured by an irrevocable assignment and pledge (but not an exclusive assignment and pledge) of the Pledged Revenues, including the revenues collected by the Issuer from one-half of the net revenues derived from the Issuer's two percent sales tax (the "Sales Tax"), which amount is pledged to the payment of the Bonds and any parity securities of the Issuer, as more specifically provided in the Ordinance. The Issuer will deposit such net Sales Tax receipts, immediately upon their receipt or collection, into the Capital Improvement Fund. The Issuer shall make monthly deposits from the Capital Improvement Fund into the Debt Service Fund (defined below) equal to 1/6 of the next maturing installment of interest and 1/12 of the principal payable in the bond year in which such payment occurs for the Bonds and any parity securities. In December of each year, after making the monthly deposit into the Debt Service Fund and any required payments to the Reserve Fund (defined below), the Issuer shall transfer all proceeds of the Capital Improvement Fund to the Capital Project Fund created in the Ordinance. Proceeds of the Capital Project Fund are not pledged to the payment of the Bonds and shall be used to pay the costs of capital projects. This Bond does not constitute a general obligation debt or an indebtedness of the Issuer within the meaning of any constitutional or statutory provision or limitations of the State of Colorado. This Bond is not payable in whole or in part from the proceeds of general property taxes and the full faith and credit of the Issuer is not pledged to pay the principal of or interest on this Bond. Payment of the Debt Service Requirements of this Bond shall be made solely from, and as security for such payment there are irrevocably (but not exclusively) pledged, pursuant to the Ordinance, the City of Wheat Ridge, Colorado, Sales Tax Revenue Bonds, Debt Service Fund (the "Debt Service Fund"), the City of Wheat Ridge, Colorado, Sales Tax Revenue Bonds, Reserve Fund (the "Reserve Fund") and interest or investment income on such funds. The Issuer has covenanted in the Ordinance to pay into the Debt Service Fund, solely from the Pledged Revenues, sums sufficient to pay when due the Debt Service Requirements of the Bonds of the series of which this is one and any additional parity securities heretofore or hereafter issued and payable from such revenues. It is hereby recited, certified and warranted that for the payment of this Bond and of the interest hereon, the -16- Issuer has created and will maintain said special funds and will deposit the Pledged Revenues therein out of the amounts and revenues specified in the Ordinance referred to above authorizing the issuance of this Bond, and solely out of said special funds, as an irrevocable charge thereon, will pay this Bond and the interest hereon, in the manner provided by the Ordinance. The Bonds of the series of which this is one are ratably secured by a lien on the Pledged Revenues and such Bonds constitute an irrevocable and first lien (but not necessarily an exclusive first lien) upon the Pledged Revenues. Bonds and other types of securities, in addition to the Bonds of the series of which this is one, subject to expressed conditions, may be issued and made payable from the Pledged Revenues having a lien thereon subordinate and junior to the lien of the Bonds of the series of which this is one or, subject to additional expressed conditions, having a lien thereon on a parity with the lien of such Bonds in accordance with the provisions of the Ordinance. Except as otherwise expressly provided in this Bond and the Ordinance, the Pledged Revenues are assigned, pledged and set aside to the payment of this Bond, the series of which this Bond is one, and the interest hereon and thereon. The Issuer covenants and agrees with the Registered Holder of this Bond and with each and every person who may become the Registered Holder hereof that it will keep and will perform all of the covenants of this Bond and of the Ordinance. This Bond is one of a series of Bonds in the aggregate principal amount of $2,990,000, issued and authorized for governmental purposes of the Issuer, including providing funding for drainage, street improvements and other capital projects, under the authority of and in full conformity with the Constitution and laws of the State of Colorado, the Charter of the Issuer and pursuant to the Ordinance. Reference is hereby made to the Ordinance, and to any and all modifications and amendments thereof, for a description of the provisions, terms and conditions upon which the Bonds of the series of which this is one are issued and secured, including, without limitation, the nature and extent of the security for the Bonds, provisions with respect to the custody and application of the proceeds of the Bonds, the collection and disposition of the revenues and moneys charged with and pledged to the payment of the Debt Service Requirements of the Bonds, the terms and conditions on which -17- the Bonds are issued, a description of said special funds referred to above and the nature and extent of the security and pledge afforded thereby for the payment of the Debt Service Requirements, and the manner of enforcement of said pledge, as well as the rights, duties, immunities and obligations of the Issuer, and the members of its City Council and also the rights and remedies of the Registered Holders of the Bonds. To the extent and in the respects permitted by the ordinance, the provisions of the ordinance, or any instrument amendatory thereof or supplemental thereto, may be modified or amended by action of the Issuer taken in the manner and subject to the conditions and exceptions provided in the Ordinance. The pledge of revenues and other obligations of the Issuer under the Ordinance may be discharged at or prior to the maturity of the Bonds upon the making of provision for the payment of the Bonds on the terms and conditions set forth in the Ordinance. This Bond may be transferred or exchanged by the Registered Holder hereof upon surrender of this Bond for transfer or exchange at the principal corporate office of the Registrar or a successor transfer agent, duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Registrar and executed by the Registered Holder hereof or his attorney duly authorized in writing. Thereupon the Issuer shall execute and the Registrar shall authenticate and deliver, in exchange for this Bond, a new fully registered Bond in the name of the transferee, or, if exchanged, the Registered Holder, issued in a principal amount equal to the principal amount of this Bond, of the same maturity, and bearing interest at the same rate. The Issuer or the Registrar may require that the cost, if any, of preparing each new Bond upon such exchange or transfer and any other expenses of the Issuer or the Registrar, including counsel fees, and any tax or other governmental charge,- incurred in connection therewith shall be paid by the Registered Holder requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. If any requested transfer or exchange of a Bond shall necessitate the printing of additional Bonds, the Registrar may require that the cost of such printing be paid by the Issuer. The Issuer and the Registrar shall not be obligated to issue, exchange, authenticate or transfer any Bond (a) during a period beginning on the Record Date before any Interest Payment Date or Redemption Date and ending on such Interest Payment Date or Redemption Date, or (b) during a period beginning on the fifteenth day before the mailing of notice of redemption of Bonds and ending on the date of such mailing. -18- New Bonds, delivered upon any transfer or exchange shall be valid obligations of the Issuer, evidencing the same debt as the Bond surrendered, shall be secured by the ordinance, and shall be entitled to all of the security and benefits of the Ordinance to the same extent as the Bonds surrendered. The Issuer and the Registrar may deem and treat the Registered Holder hereof (whether or not this Bond shall be overdue) on the Record Date or Special Record Date as the absolute owner of this Bond for the purpose of receiving payment of or on account of the principal hereof, any redemption premium and interest due hereon, and on any other date for all other purposes, and neither the Issuer nor the Registrar shall be affected by any notice to the contrary. It is hereby recited, certified and warranted that all the requirements of law have been fully complied with by the proper officers of the Issuer in the issuance of this Bond. For the payment of this Bond and the interest hereon, the Issuer pledges the exercise of all its lawful corporate powers. [The following Legal Opinion Certificate and an approving Legal Opinion shall appear on the definitive Bonds.] LEGAL OPINION CERTIFICATE The undersigned City Clerk of the City of Wheat Ridge, Colorado, hereby certifies that in connection with the issuance of this Bond, an opinion in substantially the following form was delivered to the City. (Facsimile Signature] City Clerk of Wheat Ridge, Colorado -19- [FORM OF ASSIGNMENT FOR BONDS] ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (please print or type name and address of transferee) (Tax Identification or Social Security No. _ ) the within Bond and all rights and title hereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: (End of Form of Bond) -20- C. Bonds Ratably Secured. The covenants and agreements herein set forth to be performed on behalf of the Issuer shall be for the ratable benefit, protection and security of the Holders of any and all of the Bonds, all of which Bonds regardless of the time or times of their maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as otherwise expressly provided in or pursuant to this ordinance. D. Special Obligations. All of the Bonds, as to all Debt Service Requirements thereof, shall be payable and collectible solely out of the Pledged Revenues. The registered Holder or Holders of any of the Bonds may not look to any general or other fund of the Issuer for the payment of the Debt Service Requirements, except the herein designated special funds pledged therefor. The Bonds shall not constitute a general obligation or a debt of the Issuer within the meaning of any constitutional or statutory provision or limitation of the State of Colorado or the Charter of the Issuer. The Bonds and interest thereon shall not be considered or held to be general obligations of the Issuer but shall constitute the special and limited obligations of the Issuer. The Bonds are not payable in whole or in part from the proceeds of general property taxes and the full faith and credit of the Issuer is not pledged for payment of the Bonds. E. Registration, Transfer and Exchange of Bonds. The Issuer will cause to be kept at the principal corporate trust office of the Registrar a Bond Register in which, subject to such reasonable regulations as the Registrar may prescribe, the Issuer shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. Each of the Bonds may be transferred or exchanged by the Holder thereof upon surrender for transfer or exchange of such Bond at the principal corporate office of the Registrar, or any successor transfer agent, duly endorsed or accompanied by a written instrument of transfer or authorization for exchange in form satisfactory to the Registrar and executed by the Holder thereof or his or her attorney duly authorized in writing. Thereupon the Registrar shall authenticate and deliver, in exchange for such transferred or exchanged Bond, a new fully registered Bond in the name of the transferee, or, if exchanged, the Holder and issued in a principal amount equal to the principal amount of the transferred or exchanged Bond, of the same maturity, and bearing interest at the same rate. The Issuer or the Registrar may require that the cost, if any, of preparing each new Bond upon such exchange or -21- transfer and any other expenses of the Issuer or the Registrar, including counsel fees, and any tax or other governmental charge, incurred in connection therewith (except in the case of an exchange resulting from the redemption of the Bond exchanged) shall be paid by the Holder requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. If any requested transfer or exchange of a Bond shall necessitate the printing of additional Bonds, the Registrar may require that the cost of such printing be paid by the Issuer. The Issuer and the Registrar shall not be obligated to issue, exchange, authenticate or transfer any Bonds (a) during a period beginning on the Record Date before any Interest Payment Date or Redemption Date and ending on such Interest Payment Date or Redemption Date, or (b) during a period beginning on the fifteenth day before the mailing of notice of redemption of Bonds and ending on the date of such mailing. Section 4. Preliminary Official Statement; Official Statement. The City Council hereby approves the preparation and use of a Preliminary Official Statement relating to the issuance and sale of the Bonds. The use of a Final Official Statement by the Purchaser for the offering of the Bonds to the public is approved and the Mayor, on behalf of the City, is authorized to sign one or more copies of the Final Official Statement. Section 5. Special Funds. A. Disnosition of Bond Proceeds and Other Revenues; Security For Bonds. The proceeds from the sale of the Bonds and the Pledged Revenues shall be deposited by the Issuer in the funds described in this Section 5, to be accounted for in the manner and priority set forth in this Section 5. The Purchaser of the Bonds, any associate thereof, and any subsequent Holder of any Bonds shall in no manner be responsible for the application or disposal by the Issuer or by any of its officers, agents and employees of the moneys derived from the sale of the Bonds or of any other moneys designated in this Section 5. (1) A special fund is hereby created and designated as the City of Wheat Ridge, Colorado, Sales Tax Revenue Bond Capital Project Fund (the "Capital Project Fund"). The proceeds of the Bonds, except the sums required in Section 5B hereof to be deposited in the Debt Service Fund and the sum required in Section 5C hereof to be deposited in the Reserve Fund shall be deposited in the Capital Project Fund, and shall be used solely to pay costs of issuance of the Bonds and to -22- pay for or reimburse the Issuer for any Project costs paid after June 13, 1988. The proceeds of the Capital Project Fund shall not be pledged to payment of the Bonds. (2) Immediately upon the receipt or collection thereof, the Issuer shall deposit into the Capital Improvement Fund the revenues collected from the 1% Sales Tax pledged thereto. In December of each year, after the monthly deposit required to be made under Section 5B hereof and after any deposits required by Section 5C hereof, all proceeds in the Capital Improvement Fund shall be transferred to the Capital Project Fund. (3) The Pledged Revenues are hereby assigned and pledged to secure the payment of the Debt Service Requirements of the Bonds, subject to the application of the Pledged Revenues for payment of Debt Service Requirements of Parity Securities; and this assignment and pledge shall be valid and binding from and after the date of the first delivery of the Bonds, and the moneys, as received by the Issuer, and hereby assigned and pledged, shall immediately be subject to the lien of this assignment and pledge without any physical delivery thereof, any filing, or further act, and the lien of this assignment and pledge and the obligation to perform the contractual provisions hereby made shall have priority over any or all other obligations and liabilities of the Issuer (except as herein otherwise expressly provided), and the lien of this assignment and pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer (except as herein otherwise expressly provided), irrespective of whether such parties have notice thereof. B. Debt Service Fund. The Issuer hereby establishes a special fund designated as the City of Wheat Ridge, Colorado, Sales Tax Revenue Bonds, Debt Service Fund (the "Debt Service Fund"). The Issuer shall deposit forthwith upon receipt of the proceeds of the Bonds, interest accrued thereon from their date of issue to the date of delivery thereof to the Purchaser, to apply to the payment of interest on the Bonds as the same becomes due after their delivery. There shall be credited from the Capital Improvement Fund to the Debt Service Fund the following amount: (1) Interest Payments. Monthly, an amount in approximately equal monthly installments necessary, together with any moneys therein and available therefor, to pay 1/6 of the next maturing installment of interest on the Bonds and additional Parity Securities. -23- (2) Principal Payments. Monthly, an amount in approximately equal monthly installments necessary, together with any moneys therein and available therefor, to pay 1/12 of any installment of principal of the outstanding Bonds and additional Parity Securities payable in the Bond Year during which such payment occurs. The moneys credited to the Debt Service Fund shall be used solely to promptly pay when due the Debt Service Requirements of the Bonds, and any other Parity Securities then outstanding, except as otherwise provided in this Ordinance. Investment or interest income of the Debt Service Fund shall remain therein for payment of the Bonds. The Debt Service Fund (i) is established primarily to achieve a proper matching of revenues and debt service within each year and (ii) will be depleted at least once a year except for a reasonable carry-over amount (not to exceed the greater of (a) one year's earnings on the Debt Service Fund or (b) one-twelfth of annual debt service). The Issuer shall be entitled to credits against such payments for any sums on hand in the Debt Service Fund which are available for the payment of Debt Service Requirements, including investment income from the Debt Service Fund and the Reserve Fund. C. Reserve Fund. The Issuer hereby establishes a special fund designated as the City of Wheat Ridge, Colorado, Sales Tax Revenue Bonds, Reserve Fund. Forthwith upon receipt of the proceeds of the Bonds, the Issuer shall deposit the sum of $299,000 from proceeds of the Bonds. The Issuer shall maintain the Reserve Fund at a minimum amount equal to $299,000 plus those amounts hereafter or heretofore required to be deposited in the Reserve Fund. The moneys in the Reserve Fund shall be maintained as a continuing reserve to be used, except as hereinafter provided in this Section 5C and Sections 5D and 9 hereof, only to prevent deficiencies in payment of the Debt Service Requirements of the Bonds, any Additional Parity Bonds and any other Parity Securities, then outstanding, resulting from failure to deposit into the Debt Service Fund sufficient funds to pay such Debt Service Requirements as the same accrue. If at any time the Issuer shall for any reason fail to pay into the Debt Service Fund the full amount above stipulated, then the Issuer shall pay into the Debt Service Fund at such time from the Reserve Fund an amount equal to the difference between that paid from the Pledged Revenues and the -24- full amount so stipulated. For the purpose of maintaining the Reserve Fund at the minimum amount required to be maintained therein, the money so used shall be replaced and transferred to the Reserve Fund from the first Pledged Revenues credited to the Capital Improvement Fund thereafter received and not required to be otherwise applied by Section 5B hereof. In the event that said first moneys credited to the Capital Improvement Fund have been insufficient during a given Fiscal Year to rebuild the Reserve Fund to the minimum amount required to be maintained therein, then during the month of December of said Fiscal Year, the Issuer shall credit to the Capital Improvement Fund for transfer to the Reserve Fund, from legally available proceeds other than the Pledged Revenue, a sum equal to the difference between the minimum amount required to be maintained in the Reserve Fund and any lesser sum deposited therein. D. Termination of Deposits; Use of Moneys in Debt Service Fund and Reserve Fund. No payment need be made into the Bond Fund or the Reserve Fund if the amount in such funds totals a sum at least equal to all Debt Service Requirements of the Outstanding Bonds and any outstanding Parity Securities to their respective maturities or to any Redemption Date or Redemption Dates on which the Issuer shall have exercised or shall have obligated itself to exercise its option to redeem, prior to their respective maturities, and Bonds, any Additional Parity Bonds and any other Parity securities, then Outstanding, and thereafter maturing, both accrued and not accrued (provided that, solely for the purpose of this Section 5E, there shall be deemed to be a credit to the Reserve Fund of moneys, Federal Securities and bank deposits, or any combinations thereof, accounted for in any other account or accounts of the Issuer and restricted solely for the purpose of paying the Debt Service Requirements). In such case, moneys in the Debt Service Fund and the Reserve Fund (except for any known interest or other gain to accrue from any investment or deposit of moneys pursuant to Section 6B hereof from the time of any such investment or deposit to the time or respective times the proceeds of any such investment or deposit shall be needed for such payment, at least equal to such Debt Service Requirements) shall be used together with any such gain from such investments and deposits solely to pay such Debt Service Requirements as the same become due. Any moneys in excess thereof in the Debt Service Fund and the Reserve Fund and any other moneys derived from the Pledged Revenues may be used in any lawful manner determined by the Issuer. The moneys in the Debt Service Fund and the Reserve Fund shall be used solely and only for the purpose of paying -25- the Debt Service Requirements of the Bonds and any other Parity Securities authorized and outstanding from time to time; but any moneys at any time in excess of the minimum amount required to be maintained in the Reserve Fund may be withdrawn therefrom, and transferred from time to time to the Debt Service Fund and distributed in the same manner as other moneys in the Debt Service Fund. E. Payment of Additional Subordinate Securities. Subsequent to provision in full for the payments and fund maintenance transfers required by the foregoing provisions of this Section 5, any moneys remaining in the Capital Improvement Fund may be used by the Issuer for the payment of Debt Service Requirements of additional Subordinate Securities payable from the Pledged Revenues and hereafter authorized to be issued in accordance with this Ordinance and any other provisions herein supplemental thereto, including reasonable reserves for such Subordinate Securities, as the same accrue; but the lien of such Subordinate Securities on the Pledged Revenues and the pledge thereof for the payment of such Subordinate Securities shall be subordinate to the lien and pledge of the Bonds and any Parity Securities as herein provided. F. Use of Remaining Revenues. After the above- required payments have been made, and there shall have been credited to the Debt Service Fund and the Reserve Fund for the payment of the Bonds and any other securities payable from the Pledged Revenues all amounts required to be deposited therein, then any moneys remaining in the Capital Improvement Fund may be used by the Issuer in any manner authorized by law for said fund. G. Budget and Appropriation of Funds. The sums provided to make the payments specified in this Section 5 are hereby appropriated for said purposes, and said amounts for each year shall be included in the annual budget and the appropriation ordinance or measures to be adopted or passed by the City Council in each year respectively while any of the Bonds, either as to principal or interest, are outstanding and unpaid. No provisions of any constitution, statute, charter, ordinance, resolution, or other order or measure enacted after the issuance of the Bonds shall in any manner be construed as limiting or impairing the obligation of the Issuer to keep and perform the covenants contained in this Ordinance so long as any of the Bonds remain outstanding and unpaid. -26- Section 6. General Administration of Funds. A. Places and Times of Deposits. The Debt Service Fund and the Reserve Fund shall be maintained in a Bank as a book account kept separate and apart for accounting purposes from all other accounts or funds of the Issuer as trust accounts solely for the purposes herein designated therefor; provided that there may be established separate accounts and subaccounts of any fund or account in more than one Bank. For purposes of investment of moneys, nothing herein prevents the combination of such accounts with any other Bank account or accounts or other funds of the City. Each periodic payment shall be credited to the proper book account not later than the date therefor designated, except that when any such date shall be a Saturday, a Sunday or a legal holiday, then such payment shall be made on or before the next preceding business day. B. Investment of Funds. Any moneys in any fund designated herein may be invested as provided by law. The obligations so purchased as an investment of moneys in each such fund shall be deemed to be part of such fund, and the interest accruing thereon or investment income realized therefrom shall be credited to each such fund. Any loss resulting from such investment shall be charged to the fund from which the investment was made. The Issuer shall present for redemption or sale on the prevailing market any obligations so purchased as an investment of moneys in any fund whenever it shall be necessary to do so in order to provide moneys to meet any payment or transfer from such fund. C. No Liability for Losses Incurred in Performing Terms of Ordinance. Neither the Issuer nor any officer, employee or agent of the Issuer shall be liable or responsible for any loss resulting from any investment or reinvestment made in accordance with this Ordinance. Section 7. Priorities; Liens; Issuance of Additional Bonds. A. First Lien on Pledged Revenues; Issuance of Parity Securities. The Bonds constitute an irrevocable and first lien (but not necessarily an exclusive first lien) upon the Pledged Revenues. Nothing in this Ordinance shall be construed in such a manner as to prevent the issuance by the Issuer of Parity Securities, payable from and constituting a lien upon the Pledged Revenues on a parity with the lien of the Bonds, provided, however, that before any such Parity Securities are -27- authorized or actually issued (except as provided in Subsection F hereof) the following conditions must be satisfied: (1) Absence of Default. The Issuer is current in all payments required to have been accumulated in the Debt Service Fund as required herein. (2) Historic Revenues Test. The Pledged Revenues, as certified to the Issuer by an Independent Accountant, derived in the last complete Fiscal Year immediately preceding the date of the issuance of such Parity Securities, shall have been sufficient to pay an amount at least equal to 135% of the sum derived by adding the following (i) the Average Annual Debt Service for the Outstanding Bonds, and (ii) the Average Annual Debt Service for all other Outstanding Parity Securities and (iii) the Average Annual Debt Service for the Parity Securities proposed to be issued. For the purpose of the foregoing test, variable rate bonds shall be assumed to bear interest at a fixed rate equal to the greater of ten percent or the highest variable rate actually borne by such bonds over the previous twenty-four months, and proposed variable rate bonds shall be assumed to bear interest at the highest variable rate authorized for said bonds. (3) Projected Revenues Test. The estimated Pledged Revenues, as reasonably estimated and certified by the City Administrator of the Issuer, for the Fiscal Year of issuance of the proposed additional Parity Securities, shall be sufficient to pay an amount at least equal to 135% of the sum derived by adding: (1) the Average Annual Debt Service for the Outstanding Bonds, and (2) the Average Annual Debt Service for all other Outstanding Parity Securities and (3) the Average Annual Debt Service for the Parity Securities proposed to be issued. (4) Adjustment of Revenues. In the computation of the revenues test herein, the amount of the Pledged Revenues for such Fiscal Year may be increased by the amount of gain which is estimated by the City Administrator of the Issuer to result from any increase in the amount of the Pledged Revenue proceeds during the Fiscal Year as provided in an ordinance providing for increase in the Sales Tax rates contributed to the Capital Improvement Fund or additions of sources of Pledged Revenues if such ordinance is effective and the referendum period therefor has expired prior to the issuance of the Parity Securities. -28- (5) Adequate Reserves. The proceedings under which any such Parity Securities are issued must provide for the deposit of moneys to the Reserve Fund from any source legally available to the Issuer, and contain a covenant by the Issuer to maintain the Reserve Fund, in an amount at least equal to 10% of the amount of additional Parity Securities received by the Issuer (after payment of any underwriter's discount), which amount shall be in addition to the amounts required to be maintained in the Reserve Fund with respect to the Bonds or any other Parity Securities issued prior to the proposed Parity Securities; provided that such deposit need not be in excess of any amount which would result in the Bonds or any Parity Securities being considered "arbitrage bonds" within the meaning of the Code. B. Reduction of Annual Requirements. The aggregate Debt Service Requirements calculated in determining the respective Annual Average Debt Service set forth in Section 7A hereof shall be reduced to the extent such Debt Service Requirements are scheduled to be paid with moneys actually on hand in the Debt Service Fund or the Reserve Fund at the time of such calculation. C. Certification of Revenues. In the case of the computation of the revenues test provided in Section 7A(2) and (3), the specified and required written certification by the Independent Accountant or the City Administrator that such annual revenues are sufficient to pay such amounts as provided in Section 7A(2) and (3) hereof shall be conclusively presumed to be accurate in determining the right of the Issuer to authorize, issue, sell and deliver Parity Securities. D. Subordinate Securities Permitted. Nothing herein, subject to the limitations stated in this Ordinance, prevents the Issuer from issuing additional bonds or other additional securities for any lawful purpose payable from the Pledged Revenues and having a lien thereon subordinate, inferior and junior to the lien thereon of the Bonds. E. Superior Securities Prohibited. Nothing herein permits the Issuer to issue additional bonds or other additional securities payable from the Pledged Revenues and having a lien thereon prior and superior to the lien thereon of the Bonds. F. Refunding Bonds. (1) Generally. If at any time after the Bonds, or any part thereof, shall have been issued and remain outstanding, the Issuer shall find it desirable to refund any outstanding obligations payable from the Pledged Revenues, said obligations, or any part thereof, may be -29- refunded, subject to the provisions of this section, if (a) the obligations to be refunded, at the time of their required surrender for payment, shall then mature or shall then be callable for prior redemption at the Issuer's option upon proper call, or (b) the owners of the obligations to be refunded consent to such surrender and payment. (2) Protection of Obligations Not Refunded. Any refunding obligations payable from the Pledged Revenues shall be issued with such details as the City Council may provide, so long as there is no impairment of any contractual obligation imposed upon the Issuer by any proceedings authorizing the issuance of any unrefunded portion of such obligations; but so long as any Bonds are outstanding, refunding obligations payable from the Pledged Revenues may be issued on a parity with the refunded Bonds or Parity Securities only if: (i) Prior Consent. The Issuer first receives the consent of the owner or owners of the unrefunded Bonds or Parity Securities; or (ii) Requirements Not Increased. The refunding obligations do not increase, for any fiscal year prior to and including the last maturity date of any unrefunded Bonds, the aggregate principal and interest requirements evidenced by such refunding obligations and by any outstanding Parity Securities not refunded, and the lien of any refunding parity obligations on the Pledged Revenues is not raised to a higher priority than the lien thereon of any obligations thereby refunded; or (iii) Earnings Test. The refunding obligations are issued in compliance with Sections 7A through C hereof. Section 8. Covenants. The Issuer hereby particularly represents, covenants and agrees with the Holders of the Bonds that: A. Amendment of City Sales Tax Ordinance; Continuance and Collection of Taxes. The City Sales Tax Ordinance is now in full force and effect and has not been repealed. Subject to the limitations imposed by law, the Issuer will impose sufficient Sales Tax to pay the Debt Service Requirements of the Bonds and any Parity Securities and to pay any other obligations or amounts required hereunder. -30- If the City Sales Tax Ordinance, or any modifying or supplemental ordinance not contravening the limitations of this section, or any part of said ordinances, shall ever be held to be invalid or unenforceable, it shall be the duty of the Issuer to adopt immediately another ordinance, to seek such voter approval, if any, as may then be required by law, or take any action necessary to produce substantially the same Pledged Revenues as would be produced under the terms of the City Sales Tax ordinance as it exists at the time of the issuance of the Bonds. To the extent that any changes in the Sales Tax or the City Sales Tax Ordinance may lawfully be imposed on the City by the State, the City covenants to take such action as may be necessary or appropriate to produce substantially the same Pledged Revenues as would be produced under the terms of the City Sales Tax Ordinance as it exists at the time of the issuance of the Bonds. To the extent that the Sales Tax may lawfully be replaced or superseded by any other tax or revenue source (including, without limitation, any state-collected, locally-shared sales and/or use taxes), the revenues derived by the City from such replacement tax or revenue source shall become Pledged Revenues under this ordinance. The Issuer has established and shall maintain the Capital Improvement Fund as a fund of the Issuer separate and distinct from all other funds of the Issuer and immediately upon receipt or collection of Sales Tax shall deposit the necessary allocated proceeds into said fund. The Issuer shall take all reasonable action necessary to collect delinquent payments of the Sales Tax or to cause such delinquent payments to be collected. B. Impairment of Contract. The City agrees that any law, ordinance or resolution of the City, in any manner affecting the Sales Tax, the Pledged Revenues, or the Bonds, or otherwise appertaining thereto, shall not be repealed or otherwise directly or indirectly modified in such a manner as to materially adversely affect any Bonds outstanding, unless the required consent of the owners of sixty-six percent (66%) in aggregate principal amount of the then outstanding Bonds, all as provided in Section 11 of this ordinance. Notwithstanding any other provision of this section or this Ordinance, the City shall retain the right to make changes, without any consent of the Holders of the Bonds, in the City Sales Tax ordinance, or any ordinance supplemental thereto or in substitution therefor, concerning the use of proceeds of the Sales Tax remaining after the current requirements of all ordinances authorizing bonds or other -31- securities payable from th Sales Tax, or any portion thereof, have been met; or concerning changes in applicability, exemptions, administration, collection or enforcement of the Sales Tax, if such changes do not materially adversely affect the security for the Bonds; but the City shall not reduce the present rate of the allocated Sales Tax. C. Defense of Legality of Pledged Revenues; Application of Proceeds of Project; Use of Proceeds of Sales Tax. There is not pending or threatened any suit, action or proceeding against or affecting the Issuer before or by any court, arbitrator, administrative agency or other governmental authority which affects the validity or legality of this ordinance or the imposition and collection of the Sales Tax, any of the Issuer's obligations under this Ordinance or any of the transactions contemplated by this Ordinance. The Issuer shall, to the extent permitted by law, defend the validity and legality of the Sales Tax and this ordinance, and all amendments thereto against all claims, suits and proceedings which would diminish or impair the Pledged Revenue security for the Bonds. Except as specified in this Ordinance, the Issuer has not assigned or pledged the Pledged Revenues in any manner which would diminish the security for payment of the Bonds. D. Performance of Duties. The Issuer will faithfully and punctually perform, or cause to be performed, all duties with respect to the Pledged Revenues required by the Constitution and laws of the State and the Charter and the various ordinances and resolutions and contracts of the Issuer, including, without limitation, the proper segregation of the proceeds of the Bonds and the Pledged Revenues and their application from time to time to the respective funds provided therefor. E. Costs of Bond Issue and of Performance. Except as otherwise specifically provided herein, all costs and expenses incurred in connection with the issuance of the Bonds, payment of the Debt Service Requirements, or with the Issuer's performance of or compliance with any covenant or agreement contained in this Ordinance, shall be paid exclusively (but only from the appropriate special fund in the manner authorized herein) from the proceeds of the Bonds, or from the Pledged Revenues, or from other legally available moneys, and in no event shall any of such costs or expenses be required to be paid out of or charged to the general funds of the Issuer. -32- F. Contractual Obligations. The Issuer will perform all contractual obligations undertaken by it under the the Paying Agency Agreement, and any other agreements relating to the Bonds, this Ordinance or the Pledged Revenues. The Mayor and the City Clerk are hereby authorized to execute and deliver such agreements in connection with the issuance of the Bonds. G. Further Assurances. The Issuer shall, so far as it may be authorized by law, execute, and file or record all further instruments, and make all further assurances as may be necessary or desirable or as may be reasonable and required to carry out the purposes of this Ordinance. The Issuer, acting by and through its officers, or otherwise, shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Pledged Revenues and other funds and accounts pledged hereunder and all the rights of every Holder of any of the Bonds against all claims and demands of all Persons. H. Conditions Precedent. Upon the date of issuance of any of the Bonds, all conditions, acts and things required by the Constitution or laws of the United States, the Constitution or laws of the State, the Charter, or this Ordinance, to exist, to have happened, and to have been performed precedent to or in the issuance of the Bonds shall exist, have happened and have been performed, and the Bonds, together with all other obligations of the Issuer, shall not contravene any debt or other limitation prescribed by the Constitution or laws of the United States, the Constitution or laws of the State of Colorado, or the Charter. I. Records. The Issuer will keep proper books of record and account, separate and apart from all other records and accounts, showing complete and correct entries of all transactions relating to the proceeds of the Sales Tax and the funds established herein, and any Holder of any of the Bonds shall have the right at all reasonable times to inspect the same. J. Protection of Security. The Issuer, its officers, agents and employees, shall not take any action in such manner or to such extent as might prejudice the security for the payment of the Debt Service Requirements of the Bonds and any other securities payable from the Pledged Revenues according to the terms thereof. No contract shall be entered into nor any other action taken by which the rights of any Holder of any Bond or other security payable from Pledged Revenues might be prejudicially and materially impaired or diminished. -33- K. Accumulation of Interest Claims. In order to prevent any accumulation of interest or claims for interest after maturity, the Issuer shall not directly or indirectly extend or assent to the extension of the time for the payment of any interest or claim for interest on any of the Bonds or any other securities payable from Pledged Revenues; and the Issuer shall not directly or indirectly be a party to or approve any arrangements for any such extension or for the purpose of keeping alive any of such coupons or other claims for interest. If the item for the payment for any such installation of interest is extended in contravention of the foregoing provisions, such installment or installments of interest after such extension or arrangement shall not be entitled in case of default hereunder to the benefit or the security of this ordinance, except upon the prior payment in full of the principal of all of the Bonds and any such securities or interest the payment of which has not been extended. L. Prompt Payment of Bonds. The Issuer shall promptly pay the Debt Service Requirements of every Bond at the places, on the dates, and in the manner specified herein and in the Bonds according to the true intent and meaning hereof. M. Other Liens. Other than as provided herein, there are no other liens or encumbrances of any nature whatsoever on or against the Pledged Revenues. N. Special Tax Covenants. The Issuer covenants to and for the benefit of the Holders of the Bonds that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on the Bonds under section 103 of the Code, including, but not limited to, the following: (i) Arbitrage. The Issuer will not directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the Issuer in such a manner, or take or omit to take any action, that would cause the Bonds to be "arbitrage bonds" within the meaning of section 148(a) of the Code. To that end, the Issuer will comply with all requirements of section 148 of the Code to the extent applicable to the Bonds. In the event that at any time the Issuer is of the opinion that for purposes of this paragraph, it is necessary to restrict or limit the yield on the investment of any moneys held by the Issuer under this ordinance, the Issuer shall take such action as may be necessary. -34- (ii) Registration. The Issuer shall take all necessary action to have the Bonds registered within the meaning of section 149(a) of the Code and any regulations promulgated thereunder. (iii) Federal Guarantee Prohibition. The Issuer shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause the Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code and any regulations promulgated thereunder. (iv) Information Reporting. The Issuer shall timely file a federal information return with respect to the Bonds as required by section 149(e) of the Code. Notwithstanding any provision of this paragraph, the Issuer may rely conclusively on an opinion of Bond Counsel in complying, or in any deviation from complying, with the provisions hereof. The Issuer hereby designates all of the Bonds to be "qualified tax exempt obligations" for purposes of section 265(b)(3) of the Code. The Issuer hereby certifies that the reasonably anticipated amount of qualified tax-exempt obligations which will be issued by the Issuer during 1988 does not exceed $10,000,000.00. Section 9. Defeasance. When all Debt Service Requirements of the Bonds have been duly paid, the pledge and lien and all obligations hereunder shall thereby be discharged and the Bonds shall no longer be deemed to be outstanding within the meaning of this Ordinance. There shall be deemed to be such due payment when the Issuer has placed in escrow or in trust with a Trust Bank located within or without the State, moneys or Federal securities in an amount sufficient (including the known minimum yield available for such purpose from Federal securities in which such amount wholly or in part may be initially invested) to meet all Debt Service Requirements of the Bonds, as the same become due to the final maturities of the Bonds or upon any Redemption Date as of which the Issuer shall have exercised or shall have obligated itself to exercise its prior redemption option by a call of Bonds for payment then. The Federal Securities shall not be subject to prior redemption by the obligor thereof prior to the respective times at which the proceeds thereof shall be needed, but shall become due prior to the respective times at which the proceeds thereof shall be needed, in accordance with -35- a schedule established and agreed upon between the Issuer and such bank at the time of the creation of the escrow or trust, or the Federal Securities shall be subject to redemption at the option of the holder thereof to assure such availability as so needed to meet such schedule. Section 10. Default Provisions and Remedies. A. Events of Default. Each of the following events is hereby declared to be and to constitute an Event of Default: (1) Nonpayment of Principal. Payment of the principal of or the redemption premium due for any of the Bonds is not made when the same becomes due and payable, either at maturity or by proceedings for prior redemption or otherwise; (2) Nonpayment of Interest. Payment of any installment of interest on the Bonds is not made when the same becomes due and payable; (3) Incapable to Perform. The Issuer for any reason is, or is rendered, incapable of fulfilling its obligations hereunder. (4) Default of Any Provision. The Issuer makes any default in the due and punctual performance of any of the representations, covenants, conditions, agreements and other provisions contained in the Bonds or in this ordinance on its part to be performed, other than those provided in paragraphs (1), (2) and (3) of this Section and if such default continues for sixty days after written notice, specifying such default and requiring the same to be remedied, is given to the Issuer by Holders of at least twenty-five percent in aggregate principal amount of the Bonds then outstanding; provided that if such default cannot be cured within such sixty days, and during that period corrective action has commenced to remedy such default and subsequently is diligently pursued to the completion of such performance, an Event of Default shall not be deemed to have occurred. B. Remedies for Defaults. Upon the happening and continuance of any of the Events of Default, as provided in Section 10A hereof, then and in every case the Holders of not less than twenty-five percent in principal amount of the Bonds then outstanding, including, without limitation, a trustee or trustees therefor, may proceed against the Issuer to protect and to enforce the rights of any Holder of Bonds under this ordinance by mandamus or by other suit, action, or special -36- 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 for any proper legal or equitable remedy as such Holders, trustee or trustees may deem most effectual to protect and to enforce the rights aforesaid, or thereby to enjoin any act or thing which may be unlawful or in violation of any right of any Holder of any Bond, or to require the Issuer to act as if it were the trustee of an expressed trust, or any combination of such remedies, or as otherwise may be authorized by any statute or other provision of law. All such proceedings at law or in equity shall be instituted, had and maintained for the ratable benefit of all Holders of the Bonds. C. Rights and Privileges Cumulative. The failure of any Holder of any Outstanding Bond to proceed in any manner herein provided shall not relieve the Issuer, or any of its officers, agents or employees of any obligation to perform or carry out any duty, obligation or other commitment. Each right or privilege of any such Holder (or trustee thereof) is in addition and is cumulative to any other right or privilege, and the exercise of any right or privilege by or on behalf of any Holder shall not be deemed a waiver of any other right or privilege thereof. D. Duties Upon Default. Upon the happening of any of the Events of Default as provided in Section 10A hereof, the Issuer, in addition, will do and perform all proper acts on behalf of and for the Holders of the Outstanding Bonds to protect and to preserve the security created for the payment of their Bonds and to insure the payment of the Debt Service Requirements promptly as the same become due. Section 11. Amendment of Ordinance. A. Amendment of Ordinance Not Requiring Consent of Holders of Bonds. The Issuer may, without the consent of, or notice to, the Holders of the Bonds, adopt such ordinances supplemental hereto (which amendments shall thereafter form a part hereof) for any one or more or all of the following purposes: (1) To cure any ambiguity, or to cure, correct or supplement any defect or inconsistent provision contained in this Ordinance, or to make any provision with respect to matters arising under this Ordinance or for any other purpose if such provisions are necessary or desirable and do not adversely affect the interests of the Holders of the Bonds; or -37- (2) To subject to this Ordinance additional revenues, properties or collateral; or (3) To provide for the issuance of Additional Bonds. B. Amendment of Ordinance Requiring Consent of Holders of Bonds. This Ordinance may be amended or modified by Ordinance duly adopted by the City Council, without receipt by it of any additional consideration, with the written consent of the Holders of at least sixty-six percent (660) in aggregate principal amount of the Bonds and outstanding at the time of the adoption of such amendatory Ordinance or other instrument, including any outstanding refunding securities as may be issued for the purpose of refunding any of the Bonds, provided that no such amendatory or modifying instrument shall permit: (1) Chanting Payment. A change in the maturity or in the terms of redemption of the principal of any outstanding Bond or any installment of interest thereon; or (2) Reducing Return. A reduction in the principal amount of any Bond, the rate of interest thereon, or any prior redemption premium payable in connection therewith, without the consent of the Holder of the Bond; or (3) Prior Lien. The creation of a lien upon or a pledge of revenues ranking prior to the lien or to the pledge created by this Ordinance; or (4) Modifying Amendment Terms. A reduction of the principal amount or percentage of Bonds which may be required herein for any amendment hereto; or (5) Priorities Between Bonds. The establishment of priorities as between Bonds issued and outstanding under the provisions of this Ordinance; or (6) Partial Modification. Any modifications otherwise materially and prejudicially affecting the rights or privileges of the Holders of less than all of the Bonds then outstanding. Notwithstanding any other provision of this section or this ordinance, the Issuer shall retain the right to amend, without any consent of the Holders, the definition of the Project contained in this Ordinance, so long as any of the -38- Projects are lawful public capital projects of the Issuer, and so long as such amendments do not cause the Issuer to violate Section 8N hereof. The Issuer may also, without any consent of Bond owners, amend the City Sales Tax Ordinance to the extent permitted by Section 8A hereof. Whenever the Council proposes to amend or modify this Ordinance under the provisions of this Section 11B it shall give notice of the proposed amendment by certified mail, return receipt requested and to all Holders of the Bonds and Parity Securities. Such notice shall be mailed at least thirty days prior to the adoption of the proposed amendment, shall briefly set forth the nature of the proposed amendment and shall state that a copy of the proposed amendatory ordinance or other instrument is on file in the office of the City Clerk for public inspection. Section 12. Arbitrage Rebate Requirement. The Issuer hereby finds are warrants as follows: a. the Issuer has general taxing powers; b. no part of the proceeds of the Bonds shall be considered "private activity bonds" within the meaning of the Code; c. not less than 950 of the proceeds of the Bonds are to be used for governmental purposes of the Issuer; and d. the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the Issuer (and all subordinate entities thereof) during 1988 is not reasonably expected to exceed $5,000,000. Section 13. Miscellaneous. A. Delegated Duties. The officers of the Issuer are hereby authorized and directed to enter into such agreements and take all action necessary or appropriate to effectuate the provisions of this ordinance and to comply with the requirements of law. B. ordinance Irrepealable. This Ordinance is, and shall constitute, a legislative measure of the Issuer and after any of the Bonds are issued, this Ordinance shall constitute an irrevocable contract between the Issuer and the Holder or Holders of the Bonds; and this ordinance, subject to the provisions of Sections 9 and 11 hereof, if any Bonds are in fact issued, shall be and shall remain irrepealable until the Bonds, as to all Debt Service Requirements, shall be fully paid, cancelled and discharged, as herein provided. -39- C. Repealer. All ordinances, resolutions, bylaws, orders, and other instruments, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revive any ordinance, resolution, bylaws, order, or other instrument, or part thereof, heretofore repealed. D. Severability. If any section, subsection, paragraph, clause or other provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability thereof shall not affect any of the remaining sections, subsections, paragraphs, clauses or provisions hereof. E. Statutes Superseded. Pursuant to Article XX of the Colorado Constitution and to the Charter of the City, all statutes of the State which might otherwise apply in connection with the Sales Tax or the Bonds are hereby superseded except to the extent specifically held to be applicable. F. Second Reading. The Council will hold a public hearing on and consider said ordinance for final passage on second reading, on June 27, 1988, at the hour of 7:30 p.m., at 7500 West 29th Avenue, Wheat Ridge, Colorado, within the City. This Ordinance, including notice of the day, hour and place of the public hearing thereon shall be published in full in the Wheat Ridge Sentinel, a legal newspaper of general circulation in the City. G. Authentication and Final Publication; Effective Date. This ordinance, immediately on its final passage, shall be recorded in the City book of ordinances kept for that purpose, authenticated by the signatures of the Mayor and the City Clerk, and shall be published by title in the Wheat Ridge Sentinel, a legal newspaper of general circulation in the City; except that, if this ordinance is amended on second reading, final publication shall include such amendments. This ordinance shall take effect forty-five (45) days following its final publication. -40- INTRODUCED, READ, AND ADOPTED on first reading by a vote of 7 to 1 on this 13th day of June, 1988, ordered published in full in a newspaper of general circulation in the City of Wheat Ridge and Public Hearin and consideration on final passage set for Monday, June 27, 1988, at 7:30 o'clock p.m., in the Council Chambers, 7500 West 29th Avenue, Wheat Ridge, Colorado. READ, ADOPTED, AND ORDERED PUBLISHED on second and final reading by a vote of 7 to 0 this 27th day of June 1988. SIGNED by the Mayor on this 28th day of June , 1988. Z96 ~1 a~ Dan Wilde, Mayor ATTEST: Wanda Sang, City C k 1st Publication: June 16, 1988 2nd Publication: June 30, 1988 Wheat Ridge Sentinel Effective Date: August 15, 1988 APPROVED AS TO FORM BY OFFICE OF THE CITY ATTORNEY C~ John Hayes, City A me f -41-