HomeMy WebLinkAbout1997 Ordinance No. 077''
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ORDINANCE NO.fJ!/_
SERIES OF 1997
BY AUTHORITY
COUNCIL BILL NO. 84
INTRODUCED BY COUNCIL
MEMBER WIGGINS
AN ORDINANCE OF THE CITY OF ENGLEWOOD , COLORADO, ACTING BY
AND THROUGH ITS WATER UTILITY ENTERPRISE, APPROVING A LOAN
BETWEEN THE COLORADO WATER RESOURCES AND POWER
DEVELOPMENT AUTHORITY AND THE CITY IN THE AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $15,500 ,000 FOR THE PURPOSE OF
FINANCING IMPROVEMENTS TO THE SYSTEM COMPRISING THE WATER
UTILITY; AUTHORIZING THE FORM AND EXECUTION OF A LOAN
AGREEMENT AND A GOVERNMENTAL AGENCY BOND EVIDENCING THE
LOAN; PROVIDING THAT THE GOVERNMENTAL AGENCY BOND BE
PAYABLE FROM REVENUES OF THE WATER UTILITY ENTERPRISE; AND
PRESCRIBING OTHER DETAILS IN CONNECTION THEREWITH.
WHEREAS , the City of Englewood, acting hereunder by and through its Water
Utility Enterprise heretofore established by the City and reaffirmed under the
provisions of Title 37, Article 45.1, Colorado Revised Statutes, is a home rule
municipality of the State of Colorado (the "State") duly organized and operating
under the City Charter (the "Charter") and the Constitution and laws of the State; and
WHEREAS, the Water Utility Enterprise consists of the business represented by all
of the City's water facilities and properties, now owned or hereafter acquired, whether
situated within or without the City boundaries, including all present or future
improvements, extensions , enlargements , betterments, replacements, or additions
thereof or thereto (the "System"); and
WHEREAS, the City Council of the City (the "City Council") has heretofore
determined and does hereby determine that it is necessary to improve the System
through, among other things, the improvement of the City's water treatment facilities
and water distribution system (the "Project"); and
WHEREAS, to finance the estimated costs of the Project, the City Council has
determined to enter into a loan agreement (the "Loan Agreement") with the Colorado
Water Resources and Pow er Development Authority (the "Authority"), a body
corporate and political subdivision of the State, pursuant to which the Authority shall
loan the City an amount not to exceed $15,500,000 (the "Loan"); and
WHEREAS, the Authority will obtain moneys to fund the Loan to the City through
the issuance of its Drinking Water Revenue Bonds, 1997 Series A (the "Authority
Bonds"); and
WHEREAS , the City's repayment obligations under the Loan Agreement shall be
evidenced by a governmental agency bond (the "Bond") to be issued by the City to the
Authority which shall be payable solely from and secured by a pledge of and an
irrevocable and nonexclusive lien on the net income and revenue of the System; and
WHEREAS, the City's obligations under the Loan Agreement and the Bond shall
not constitute a debt or indebtedness of the City within the meaning of any
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constitutional or statutory provision or limitation, nor shall it be considered or held to
be a general obligation of the City; and
WHEREAS, as stated in the Water Activity Law, any water activity enterprise
maintained pursuant to the provisions thereof are excluded from the provisions of
Section 20 of Article X of the State Constitution, including without limitation the
requirement that the City have voter approval in advance prior to the creations of any
multiple-fiscal year direct or indirect debt or other financial obligation whatsoever;
and
WHEREAS, in accordance with Section 110 of the Charter, prior to the final
approval of this Ordinance the City shall conduct a public sale for the issuance of the
City obligation authorized hereby, such obligation to be sold to the highest and best
bidders for cash, and to the best advantage of the City; and
WHEREAS, prior to the final approval of this Ordinance there has been presented
to the City Council , a form of Loan Agreement and a form of the Bond (collectively,
the "Financing Documents"), and other documents referenced therein; and
WHEREAS, the City Council desires to approve the form of the Financing
Documents and other documents reference therein, authorize the execution thereof,
and authorize the issuance of the Bond; and
WHEREAS, neither the Mayor, nor any member of the City Council has any
financial interest or other potential conflicting interests in connection with the
authorization, issuance, or sale of the obligation authorized hereby, or the use of the
proceeds thereof;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF ENGLEWOOD, COLORADO, AS FOLLOWS:
Section 1. Approvals. Authorizations. and Amendments . In accordance with the
Constitution of the State of Colorado, the Charter, Title 31, Article 35, Part 4, C.R.S.,
Title 37, Article 45.1, C.R.S., and all other laws of the State of Colorado enabling,
there shall be issued by the City, acting by and through the its Enterprise, the Bond.
The form of the Financing Documents, setting forth inter alia the terms, conditions
and details of the Bond and the procedures relating thereto, are incorporated herein
by reference and are hereby approved; and the City shall enter into the Financing
Documents and deliver the Bond, and perform its obligations thereunder, in
substantially the form presented at this meeting with only such changes as are not
inconsistent herewith; provided that such documents may be completed, corrected, or
revised as deemed necessary by the parties thereto in order to carry out the purposed of
this Ordinance .
Section 2 . Bond Details. The Bond shall be in the principal amount not to exceed
$15,500 ,000, shall be subject to repayment in the amounts and on the dates, and shall
be subject to prior redemption as set forth in the Financing Documents. The
maximum net effective interest rate authorized for the Bond is 5.5% per annum, and
the actual net effective interest rate of the Bond shall not exceed such rate. The final
terms and conditions regarding the Bond shall be established by resolution of the City
after the marketing of the Authority Bonds. The City shall execute and deliver the
Bond to the Authority as evidence of the Loan Repayments (as defined in the Loan
Agreement). The Bond shall be substantially in the form set forth in the Loan
Agreement.
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Section 3. Limited Obligation. The principal of and the interest on the Bond shall
be payable solely from the net revenue derived from the operation of the System, as set
forth in EXHIBIT A to the Loan Agreement (The "Pledged Property"). The City
irrevocably pledges the Pledged Property for the payment of the Bond and the amounts
due under the Loan Agreement. Neither the Authority nor any holder of the Authority
Bonds may look to any general or other fund of the City for the payment of the
principal of or interest on the Bond, except the funds and accounts pledged thereto by
this Ordinance, and shall not constitute a debt or an indebtedness of the City within
the meaning of any constitutional or statutory provision or limitation; nor shall they
be considered or held to be a general obligation of the City.
No elected or appointed officers or agents of the City shall be subject to any
pecuniary liability in connection with any agreement, covenant, or undertaking by
the City, or by them in their official capacity, contained in any document executed in
connection with the authorization, execution, and delivery of the Financing
Documents or this Ordinance, or with respect to any action taken or omitted to be
taken in good faith with reference thereto.
Section 4 . Authority's Official Statement. The appropriate officers and employees
of the City are hereby authorized and directed to furnish and supply information
concerning the System to the Authority for use in the Authority's Official Statement
prepared in connection with the offering and sale of the Authority Bonds.
Section 5 . Bond Account. There is hereby created and established as a book
account of the City's Water Utility Fund the "Colorado Water Resources and Power
Development Authority 1997 Bond Account" (the "Bond Account"). The City shall
credit to the Bond Account each year from the Pledged Property an amount sufficient,
together with other moneys available therefore in the Bond Account or otherwise
available as provided in the Financing Documents, to pay when due the principal of
and the interest on the Bond.
Monies held in the Bond Account may be invested or deposited in accordance with
the State of Colorado . Any investment income earned on amounts on deposit in the
Bond Account shall remain in the Bond Account until the Bond is fully paid,
satisfied, and discharged.
Section 6. Disposition of Proceeds from Loan: Authorization of Project. The
proceeds of the Authority Bonds allocable to the City shall be applied only to pay the
costs of the Project (as defined in the Loan Agreement) which are permitted pursuant
to the terms of the Loan Agreement and Section 31-35-403(2), C.R.S .. Neither the
Authority nor any subsequent owner(s ) of the Bond shall be responsible for the
application or disposal by the City or any of its officers of the funds derived from the
Bond. In the event that all of the proceeds of the Bond are not required to pay such costs
and expenses, any remaining amount shall be used for the purpose of paying the
principal and interest on the Bond.
The Project is hereby authorized and approved , and the appropriate officers and
employees of the City shall and are hereby authorized and directed to take all actions
necessary to the acquisition, construction, reconstruction, improvement, betterment,
or extension of the Project from the proceeds of the Bond and, to the extent necessary,
from any other legally available moneys of the System. It is hereby determined that
the Bond matures at such time not exceeding the estimated life of the Project.
Section 7. Authorization to Execute Documents and City Representative. The
Mayor and City Clerk are hereby authorized and directed to execute the Financing
Documents, to execute amendments to any contracts with System users to the extent
necessary to comply with the City's covenants and representations set forth in the
Financing Documents, and to authenticate and affix the seal of the City thereto, and
further to execute and authenticate such other documents , instruments, or certificates
as are deemed necessary or desirable in connection therewith . The execution of any
documents, instruments, or certificates by said officials shall be conclusive evidence
of the approval by the City of such documents, instruments , or certificates in
accordance the terms thereof and this Ordinance. Pursuant to EXHIBIT B of the
Loan Agreement, the Mayor, the City Manager, and the City Finance Director are
hereby designated as the Authorized Officers (as defined in the Loan Agreement) for
the purpose of performing any act or executing any document relating to the Bond, the
City, or the Loan Agreement. A copy of this Ordinance shall be furnished to the
Authority as evidence of such designation .
Section 8. Ratification and Approval of Prior Actions . All actions (not
inconsistent with the provisions of this Ordinance ) heretofore taken by the officers
and of the City, and the members of the City Council , relating to the Financing
Documents, or actions to be taken in respect thereof, are hereby ratified, approved and
confirmed .
Section 9. Incontestability Recital. The Bond may recite that it is issued under the
authority of Title 31 , Article 35, Part 4, C.R.S .. Such recital shall conclusively
impart compliance with all provisions and limitations of said Part 4, and such Bond
issued containing such recital shall be incontestable for any cause whatsoever after
its delivery for value.
Section 10 . Repealer. All ordinances , resolutions , bylaws , orders and other
instruments , or parts thereof, inconsistent or in conflict herewith are hereby repealed
to the extent only of such inconsistency or conflict. This repealer shall not be
construe to revive any ordinance, resolution, bylaw, order or other instrument, or
part thereof, heretofore repealed.
Section 11. Severability. If any section, subsection, paragraph, clause or other
provision of this Ordinance shall for any reason be held to be invalid or
unenforceable, the invalidity or unenforceability thereof shall not affect any of the
remaining sections, subsections, paragraphs , clauses or provisions of this
Ordinance, the intent being that the same are severable .
Section 12. Publication and Effective Date. This Ordinance, after its final
passage , shall be numbered and recorded, and the adoption and publication shall be
authenticated by the signature of the Mayor and the City Clerk and by the Certificate
of Publication. This Ordinance shall be come effective thirty (30) days after
publication following final passage .
Introduced, read in full, and passed on first reading on the 2nd day of September,
1997.
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Published as a Bill for an Ordinance on the 4th day of September, 1997 .
Read by title and passed on final reading on the 15th day of September, 1997.
Published by title as Ordinance No . 7!}, Series of 1997, on the 18th day of
September, 1997 .
I, Loucrishia A. Ellis, City Clerk of the City of Englewood, Colorado, hereby
certify that the above and foregoing is a true copttJ., the Ordinance passed on final
reading and published by title as Ordinance No . ./f-' Series of 997.
Loucrishia A. Ellis
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COLORADO WATER RESOURCES &
POWER DEVELOPMENT AUTHORITY
Logan Tower Bldg . -Suite 620 , 1580 Logan Street , Denver, Colorado 80203-1942
TO:
FROM:
RE:
303/830-1550
MEMORANDUM
August29, 1997
Borrowers, General Counsels and Bond Counsels
Michael Brod , Finance Manager
Colorado Water Resources & Power Development Authority
Drinking Water Revenue Bonds 1997 Series A (the "Bonds")
Please find enclosed a financing schedule and the initial draft of the loan agreement relating
to the issuance of the above-captioned Bonds . Review the financing schedule and verify
that you are able to meet the deadlines outlined in the schedule. Please note that the
Authority plans to sell the bonds on or around October 1 and execute the bond
resolution and bond purchase agreement on October 3. Closing on the Bonds is
scheduled for October 22.
The draft form of the loan agreement has been used for a number of years , therefore,
changes to the main body will be cons idered only where there are legal conflicts . Review
focus should be on the information contained in the exhibits (A -F). Comments on this first
draft should be truced or e-mailed to the Authority by September 12 at (303) 832-8205
or cwrpda@rmi.net. A second draft of the loan agreements will be distributed September
15. Final comments on the loan agreements should be provided by September 19.
Draft legal opinions from general counsel and bond counsel should be forwarded to the
Authority by September 19.
If you have questions or need additional information, please call me at (303) 830-1550 , Ext.
15 or John Wahl at Ext. 16. We appreciate your cooperation and look forward to the
successful complet ion of this financ ing .
Encl : (2)
firdraft.ltr/dwrf97 A
FAX 303/832-8205
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10 11 12
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Colorado Water Resources and Power Development Authority
Drinking Water Revenue Bonds, 1997 Series A
Financing Schedule
Auoust September I October
w T F s s M T w T F s s M T w T F s
1 2 1 2 3 4 5 6 1 2 3 4
6 7 8 9 7 8 9 10 11 12 13 5 6 7 8 9 10 11
13 14 15 16 14 15 16 17 18 19 20 12 13 14 15 16 17 18
. 20 21 22 23 21 22 23 24 25 26 27 19 20 21 22 23 24 25
27 28 29 30 28 29 30 26 27 28 29 30 31
Action Responsible Party Description
[Actions Completed To Date
Due Diligence CWR&PDA, UC
Questionnaire Sent to
Borrowers
Distribute Draft Documents CWR&PDA
to Financing Team and
Rating Agencies
First Draft of POS w/o UC
Appendices Sent Out
First Draft of Appendices to UC
Borrowers
Date Action Responsible Party Description
I Week 1
Mon., August25 Distribute Financing CWR&PDA
Schedule
Wed ., August27 Draft Loan Agreements CWR&PDA, OM
Sent to Borrowers
Fri., August29 Comments Due on First Bond Group
Draft of POS
iweek2
Wed., September 3 Distribute Second Draft of UC
POS
Fri., September 5 Due Diligence UC
Questionnaires Due Back
to Ballard Spahr
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Date
f week.3
Mon., September 8
Mon., September 8
Wed., September 10
Wed. September 10
Wed., September 10
Fri., September 12
~.week4
Mon ., September 15
Wed., September 17
Wed ., September 19 • Fri., September 19
Colorado Water Resources and Power Development Authority
Drinking Water Revenue Bonds, 1997 Series A
Financing Schedule
August September October
w T F s s M T w T F s s M T w T F s
1 2 1 2 3 4 5 6 1 2 3 4
6 7 8 9 7 8 9 . 10 11 12 13 5 6 7 8 9 10 11
13 14 15 16 14 15 16 17 18 19 20 12 13 14 15 16 17 18
20 21 22 23 21 22 23 24 25 26 27 19 20 21 22 23 24 25
27 28 29 30 28 29 30 26 27 28 29 30 31
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Action Responsible Party Description
Borrowers Prov ide UC
Comments to Draft
Appendices
Confirm Schedule with CWR&PDA, UC
Printer
Mailing of Revised UC
Appendices to Borrowers
with Certificates of
Accuracy and
Completeness
Comments Due on Second Bond Group
Draft of POS
Comments Due on Draft of CWR&PDA, UC
Loan Agreements
Second Draft Loan CWR&PDA
Agreements Sent to
Borrowers
Distribute Third Draft of UC
POS
Borrowers Provide UC
Comments to Draft
Appendices
Prepare Blue Sky Survey UC
Final Comments Due on Bond Group
Third Draft of POS
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3 4 5
10 11 12
17 18 19
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31
Colorado Water Resources and Power Development Authority
Drinking Water Revenue Bonds, 1997 Series A
Financing Schedule
AUQUSI September October
w T F s s M T w T F s s M T w T F s
1 2 1 2 3 4 5 6 1 2 3 4
6 7 8 9 7 8 9 10 11 12 13 5 6 7 8 9 . 10 11
13 14 15 16 14 15 16 17 18 19 20 12 13 14 15 16 17 18
20 21 22 23 21 22 23 24 25 26 27 19 20 21 22 23 24 25
27 28 29 30 28 29 30 26 27 28 29 30 31
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Date
lweek.6 -co~tfnued
Fri., October 3
e Fri., October 3
I· Week 7 · .. ·
Mon., October 6
Mon., October 6
Mon., October 6
Mon ., October 6
Tues., October 7
Wed ., October 8
Wed., October 8
• Mon ., October 13
Mon., October 13
Colorado Water Resources and Power Development Authority
Drinking Water Revenue Bonds, 1997 Series A
Financing Schedule
Auoust September October
w T F s s M T w T F s s M T w T F
1 2 1 2 3 4 5 6 1 2 3
6 7 8 9 7 8 9 10 11 12 13 5 6 7 8 9 10
13 14 15 16 14 15 16 17 18 19 20 12 13 14 15 16 17
20 21 22 23 21 22 23 24 25 26 27 19 20 21 22 23 24
27 28 29 30 28 29 30 26 27 28 29 30 31
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Action Responsible Party Description
Board Meeting: Adopt
Bond Resolution; Approval
of Sale and Bond Purchase
Agreement
Draft of Final Official
Statement Distributed
Final Revisions to Official
Statement
Bonds Delivered to
Trustee
Distribute Index to Closing
Documents
Deliver Final OS to Printer
Print Official Statement
Mail Official Statement
Final Loan Agreements &
Closing Documents Sent
to Borrowers
Distribute Closing
Memorandum
Distribute Financial
Advisory Memorandum
CWR&PDA, OM, FA , UN,
&UC
UC
Bond Group
OM
OM .
UC
Printer
Printer
OM , CWR&PDA
OM
FA
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11
18
25
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3 4 5
10 11 12
17 18 19
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Date
i Week9
Fri., October 17
Fri., October 17
Week 10
Mon ., October 20
Tues., October 21
Tues., October 21
Wed . October 22
Colorado Water Resources and Power Development Authority
Drinking Water Revenue Bonds , 1997 Series A
Financing Schedule
Auqust September October
w T F s s M T w T F s s M T w T F s
1 2 1 2 3 4 5 6 1 2 3 4
6 7 8 9 7 8 9 10 11 12 13 5 6 7 8 9 10 11
13 14 15 16 14 15 16 17 18 19 20 12 13 14 15 16 17 18
20 21 22 23 21 22 23 24 25 26 27 19 20 21 22 23 24 25
27 28 29 30 28 29 30 26 27 28 29 30 31
Action Responsible Party Description
Borrower's Closing Borrowers
Documents to Authority
Review Borrower's CWR&PDA, UC
Documents for Sionature
Bonds Delivered to OTC Trustee
Rating Letter Received
Pre-Clos in g Bond Group
Closinq Bond Group
. FINANCING PARTICIPANTS
CWR&PDA
CH&P
FAC
TRUSTEE
OM
UC
UN
C:\DOCUMENT\OWRF\DWRF37A.CAL
Colorado Water Resources & Power Development Authority
Carlson Hammond & Paddock. LLC (Authority's Counsel)
First Albany Corporation (Financial Advisor)
O'Melveny & Myers , LLP (Bond Counsel)
Underwriter's Counsel -Ballard Spahr Andrews & Ingersoll
Underwriter -PaineWebber. Inc.
August 29. 1997
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DRINKING WATER REVOLVING FUND
(Revenue Obligation)
LOAN AGREEMENT
BETWEEN
DRAFT OF
AUGUST 28, 1997
COLORADO WATER RESOURCES AND POWER DEVELOPMENT AUTHORITY
AND
CITY OF ENGLEWOOD, COLORADO
Acting By And Through Its Water Enterprise
Dated as of October 1, 1997
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NYl-512953 .Vl August. 29, 1997
THIS LOAN AGREEMENT, made and entered into as of this 1st
day of October, 1997, by and between COLORADO WATER RESOURCES AND
POWER DEVELOPMENT AUTHORITY (the "Authority"), a body corporate and •
political subdivision of the State of Colorado, and CITY OF
ENGLEWOOD, COLORADO Acting By And Through Its Water Enterprise (the
"Governmental Agency"), a quasi-municipal corporation of the State
of Colorado;
WITNESSETH THAT:
WHEREAS, the United States of America, pursuant to the
federal Safe Drinking Water Act Amendments of 1996, requires each
state, as a condition to the receipt of certain funds, to establish
a drinking water revolving fund to be administered by an
instrumentality of the state before the state may receive
capitalization grants to finance the costs of infrastructure needed
to achieve or maintain compliance with federal drinking
requirements;
WHEREAS, the Authority was created to initiate, acquire,
construct, maintain, repair and operate or cause to be operated
water management projects which include water facilities and to
issue its bonds to pay the cost of such projects;
WHEREAS, Section 37-95-107. 8 of the Colorado Revised
Statutes has created a drinking water revolving fund to be
administered by the Authority which will enable the State of
Colorado to comply with the provisions of said federal Safe
Drinking Water Act Amendments of 1996;
WHEREAS, the Authority has determined to issue its bonds
and to loan the proceeds of such bonds to public entities in
Colorado to finance the costs of water facilities, and to use
moneys on deposit in the drinking water revolving fund to assist
such public entities in connection with the financing of such
facilities;
WHEREAS, the Authority, in accordance with the Act and
the Bond Resolution (as such terms are hereinafter defined), will
issue its bonds for the purpose of making loans from the proceeds
thereof to public entities, including the Governmental Agency, to
finance a portion of the cost of water facilities;
WHEREAS the Governmental Agency has made timely
application to the Authority for a loan to finance a portion of the
cost of water facilities;
WHEREAS, the General Assembly of the State of Colorado
has approved a project eligibility list which includes the water
facilities proposed to be financed hereunder;
NYl-312953 . Vl August: 29, 199 7
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WHEREAS, the Authority has approved the Governmental
Agency's application for a loan from available proceeds of the
bonds of the Authority in an amount not to exceed the amount of the
loan commitment set forth in paragraph (4) of Exhibit B hereto to
finance a portion of the cost of water facilities of the
Governmental Agency;
WHEREAS, the Governmental Agency will issue its bond to
the Authority to evidence said loan from the Authority;
NOW, THEREFORE, for and in consideration of the award of
the loan by the Authority and of the mutual covenants herein, the
Authority and the Governmental Agency each agree to perform their
respective obligations under ·this Loan Agreement in accordance with
the conditions, covenants and procedures set forth herein and
attached hereto as a part hereof, as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Definitions. The following terms as used
in this Loan Agreement shall, unless the context clearly requires
otherwise, have the following meanings:
"Act" means the
Development Authority Act,"
Colorado Revised Statutes,
amended and supplemented.
"Colorado Water Resources and Power
being Section 37-95-101 et. seq. of the
as the same may from time to time be
"Administrative Fee" means an annual fee of eight-tenths
of one percent (.8%) of the initial principal amount of the Loan or
such lesser amount, if any, as the Authority may approve from time
to time.
"Allocable Investment Income" means the Governmental
Agency's Allocable Percentage of the interest earnings, if any, on
the Project Loan Subaccount which are to be credited to the Loan
Repayments in accordance with subsection (c) of Section 3.03 .
"Allocable Percentage" means the percentage allocated to
the Governmental Agency under the definition of "Allocable Share"
contained in Section 1.01 of the Bond Resolution.
"Annual Information" means the information specified in
Section 2.03 in this Loan Agreement.
"Authority" means the Colorado Water Resources and Power
Development Authority, a body corporate and political subdivision
of the State of Colorado with corporate succession duly created and
validly existing under and by virtue of the Act.
NYl-512953 . Vl 2 Auqusc 29 , 1997
"Authority Bonds" means bonds authorized by the Bond
Resolution, together with any refunding bonds authenticated and
delivered pursuant to the Bond Resolution, in each case in order to
provide the source of funding of the Loan, including the particular
Project Loan Subaccount from which the amounts loaned to the
Governmental Agency pursuant to this Loan Agreement are taken.
"Authorized Officer" means, in the case of the
Governmental Agency, the person whose name is set forth in Exhibit
B hereto or such other person or persons authorized pursuant to a
resolution or ordinance of the governing body of the Governmental
Agency to act as an Authorized Officer of the Governmental Agency
to perform any act or execute any document relating to the Loan,
the Governmental Agency Bond or this Loan Agreement whose name is
furnished in writing to the Authority.
"Bond Resolution" means the Drinking Water Revolving Fund
1997 Series A Revenue Bond Resolution, as adopted by the Authority
on ~~' 1997, authorizing the issuance of the Authority
Bonds, and all further amendments and supplements thereto adopted
in accordance with the provisions thereof.
"Code" means the Internal Revenue Code of 1986, as the
same may from time to time be amended and supplemented, including
any regulations promulgated thereunder and any administrative or
judicial interpretations thereof.
"Commencement Date" means the date of commencement of the
term of this Loan Agreement, as set forth in Exhibit B attached
hereto and made a part hereof, which date shall be the dated date
of the Authority Bonds authorized by the Bond Resolution.
"Cost" means those costs that are eligible to be funded
from draws under the Federal Capitalization Agreement and are
reasonable, necessary and allocable to the Project and are
permitted by GAAP to be costs of the Project. Cost shall also
include Costs of Issuance (as defined in the Bond Resolution) .
"Event of Default" means any occurrence or event
specified in Section 5.01 hereof.
"Federal Capitalization Agreement" means the instrument
or agreement established or entered into by the United States of
America Environmental Protection Agency with the Authority to make
capitalization grant payments pursuant to the federal Safe Drinking
Water Act Amendments of 1996, as amended (Pub. L. 104-182).
"Fiscal Year" means the fiscal year of the Governmental
Agency.
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"GAAP" means generally accepted accounting principles as •
in effect from time to time in the United States.
NYl-512953 .Vl 3 August 29 , 1997
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"Governmental Agency" means the public entity that is a
party to and is described in the first paragraph of this Loan
Agreement, and its successors and assigns.
"Governmental Agency Bond" means the bond executed and
delivered by the Governmental Agency to the Authority to evidence
the Loan, the form of which is attached hereto as Exhibit D and
made a part hereof.
RGovernmental Agencies" means the Governmental Agency and
any other governmental agencies permitted by the Act that have
entered into Loan Agreements with the Authority pursuant to which
the Authority will make Loans· to such Governmental Agencies from
moneys on deposit in the Project Account financed with the proceeds
of the Authority Bonds.
•Holder" means any holder of Authority Bonds as defined
under the Bond Resolution and, for the purposes of Section 2.03 of
this Loan Agreement, shall also mean any beneficial owner of
Authority Bonds within the meaning of Rule 13-d under the
Securities Exchange Act of 1934.
"Loan" means the loan made by the Authority to the
Governmental Agency to finance or refinance a portion of the Cost
of the Project pursuant to this Loan Agreement. For all purposes
of this Loan Agreement, the principal amount of the Loan at any
time shall be equal to the amount of the loan commitment set forth
in paragraph (4 ) of Exhibit B attached hereto and made a part of
this Loan Agreement (which l oan commit~ent amount equals the sum of
(i ) the amount actually deposited in the Project Loan Subaccount
from the proceeds of the Authority Bonds and moneys of the
Authority, (ii) the Governmental Agency 's Allocable Percentage of
the costs of issuance, original issue discount and underwriter's
discount for all Bonds issued in connection with the making of the
Loan and (iii) capitalized interest during the Project construction
period to be paid with the proceeds of Bonds), less any portion of
such principal amount as has been repaid by the Governmental Agency
under this Loan Agreement.
"Loan Agreement" means this Loan Agreement, including the
Exhibits attached hereto, as it may be supplemented, modified or
amended from time to time i n accordance with the terms hereof and
of the Bond Reso l ution.
"Loan Agreements" means this Loan Agreement and any other
loan agreements entered into between the Authority and one or more
of the Governmental Agencies pursuant to which the Authority will
make Loans to such Governmental Agencies from moneys on deposit in
the Project Account financed with certain of the proceeds of the
Authority Bonds and funds of the Aut h ority.
NYl-5 1 2 95 3. Vl 4 Aug u st 29 , 1997
"Loan Closing" means the date upon which the Authority
shall issue and deliver the initial Authority Bonds.
"Loan Repayments" means the payments payable by the
Governmental Agency pursuant to Section 3.03 of this Loan
Agreement, including payments payable under the Governmental Agency
Bond.
"Loan Servicer" means the Loan Servicer for the Loans,
duly appointed and designated as such pursuant to the Loan
Servicing Agreement, dated as of the dated date of the Authority
Bonds, between the Authority and the Loan Servicer, and its
successors as Loan Servicer under the Loan Servicing Agreement.
"Loan Tenn" means the period commencing on the
Commencement Date, and terminating on the final Loan Repayment Date
set forth in Exhibit C.
"Loans" means the Loan and loans made by the Authority to
other Governmental Agencies under Loan Agreements from moneys on
deposit in the Project Account financed with the proceeds of
certain of the Authority Bonds and funds of the Authority.
"MSRB" means the Municipal Securities Rulemaking Board
established in accordance with the provisions of Section lSB(b} (1)
of the Securities Exchange Act of 1934.
"Pledged Property" means the defined term of this Loan
Agreement set forth in paragraph (4) of Exhibit A attached hereto
and made a part hereof.
"Prime Rate" means the prevailing commercial interest
rate announced by the Trustee from time to time as its prime
lending rate.
"Project" means the water facilities of the Governmental
Agency described in paragraph (1) of Exhibit A attached hereto and
made a part hereof, all or a portion of the Cost of which is
financed or refinanced by the Authority through the making of the
Loan under this Loan Agreement.
"Project Account" means the 1997 Series A Project Account
created under the Bond Resolution.
"Project Loan Subaccount" means the 1997 Series A Project
Loan Subaccount established on behalf of the Governmental Agency in
the Project Account in accordance with the Bond Resolution.
•
"Repository" means any nationally recognized municipal
securities information repository within the meaning of Rule 15c2-
12. •
NYl-512953.Vl 5 Auqusc 29, 19.97
•
•
•Rule 15c2-12" means Rule 15c2-12 under the Securities
Exchange Act of 1934, as amended through the date of adoption of
the Bond Resolution, together with all interpretive guidances or
other official interpretations and explanations thereof that are
promulgated by the SEC.
•1997 Series A Matching Account" means the 1997 Series A
Matching Account created under the Bond Resolution.
•state Information Depository" means any public or
private repository designated by the State of Colorado, and
recognized as such by the SEC for the purposes of Rule 15c2-12.
•sEc• means the United States Securities and Exchange
Commission.
"System" means the water system of the Governmental
Agency, including the Project, described in paragraph ( 2) of
Exhibit A attached hereto and made a part hereof for which the
Governmental Agency is making the borrowing under this Loan
Agreement, as such System may be modified or expanded from time to
time.
"Trustee" means the Trustee appointed by the Authority
pursuant to the Bond Resolution and its successor or successors and
any other corporation which may at any time be substituted in its
place as Trustee pursuant to the Bond Resolution.
Terms not otherwise defined herein shall have the
meanings ascribed to them in the Bond Resolution.
Except where the context otherwise requires, words
importing the singular numbe= shall include the plural number and
vice versa, and words importing persons shall include firms,
associations, corporations, agencies and districts. Words
importing one gender shall include the other gender.
ARTICLE II.
REPRESENTATIONS AND COVENANTS OF GOVERNMENTAL
AGENCY
SECTION 2.01. Representations of Governmental Agency.
The Governmental Agency represents for the benefit of the Authority
and the holders of the Authority Bonds as follows:
(a) Organization and Authority.
(i) The Governmental Agency is a governmental agency as
defined in the Act and as described in the first paragraph of
this Loan Agreement.
N'll-512953 .Vl 6 Auqust 29. 1997
(ii) The System is a system for the provision to the
public of water for human consumption through pipes or other
constructed conveyances which has at least fifteen service
connections or regularly serves at least twenty-five
individuals.
(iii) The Governmental Agency has full legal right and
authority and all necessary licenses and permits required as
of the date hereof to own, operate and maintain the System
(other than licenses and permits relating to the construction
and acquisition of the Project which the Governmental Agency
expects to receive in the ordinary course of business), to
execute, deliver and perform its obligations under this Loan
Agreement and the Governmental Agency Bond. The Project is on
the project eligibility list approved by the General Assembly
of the State of Colorado pursuant to the Act.
(iv) This Loan Agreement and the Governmental Agency
Bond when delivered at the Loan Closing will have been, duly
authorized, executed and delivered by an Authorized Officer of
the Governmental Agency; and, assuming that the Authority has
all the requisite power and authority to authorize, execute
and deliver, and has duly authorized, executed and delivered,
this Loan Agreement, this Loan Agreement constitutes, and the
Governmental Agency Bond when delivered to the Authority will
constitute, the legal, valid and binding obligations of the
Governmental Agency in accordance with their respective terms,
and the information contained under "Desc:::-iption of the Loan"
on Exhibit B attached hereto and made a part hereof is true
and accurate in all respects.
(b) Full Disclosure.
There is no fact that the Gcvernmental Agency has not
disclosed to the Authority in writing on the Governmental Agency's
application for the Loan or otherwise that materially adversely
affects the properties, activities, prospects or condition
(financial or otherwise) of the Governmental Agency or the System,
or the ability of the Governmental Agency make all Loan Repayments
and otherwise to observe and perform its duties, covenants,
obligations and agreements under this Loan Agreement and the
Governmental Agency Bond.
(c) Pending Litigation .
•
There are no proceedings pending, or , to the knowledge of
the Governmental Agency threatened, against or affecting the
Governmental Agency, in any court or before any governmental
authority or arbitration board or tribunal that, if adversely
determined, would materially adversely af feet the properties,
activities, prospects or condition (financial or otherwise) of the •
Governmental Agency or the System, or the ability of the
NY'l-512953.Vl 7 August: 29 , 1997
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Governmental Agency to observe ar..d perform its covenants,
obligations and agreements under this Loan Agreement and the
Governmental Agency Bond, that have not been disclosed in writing
to the Authority in the Governmental Agency's application for the
Loan to the Authority.
(d) Compliance with Existing Laws and Agreements.
The authorization, execution and delivery of this Loan
Agreement and the Governmental Agency Bond by the Governmental
Agency, the observation and performance by the Governmental Agency
of its duties, covenants, obligations and agreements thereunder
will not result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Governmental Agency pursuant to any
existing ordinance or resolution, trust agreement, indenture,
mortgage, deed of trust, loan agreement or other instrument (other
than the lien and charge of ( i) this Loan Agreement and the
Governmental Agency Bond and (ii) any ordinance, resolution or
indenture which authorized outstanding debt obligations of the
Governmental Agency which are at parity with, or superior to, the
Governmental Agency Bond as to lien on, and source and security
for, payment thereon from the Pledged Property) to which the
Governmental Agency is a party or by which the Governmental Agency,
the System or any of its property or assets may be bound, nor will
such action result in any violation of the provisions of the
charter or other document pursuant to which the Governmental Agency
was established or any laws, ordinances, resolutions, governmental
rules, regulations or court orders to which the Governmental
Agency, the System or its properties or operations is subject.
(e) Governmental Consent.
The Governmental Agency has obtained all permits and
approvals required to date by any governmental body or officer (and
reasonably expects to receive all permits and approvals required in
the future by any governmental agency) for the making, observance
and performance by the Governmental Agency of its duties,
covenants, obligations and agreements under this Loan Agreement and
the Governmental Agency Bond; and the Governmental Agency has
complied with all applicable provisions of law requiring any
notification, declaration, filing or registration with any
governmental body or officer in connection with the making,
observance and performance by the Governmental Agency of its
duties, covenants, obligations and agreements under this Loan
Agreement and the Governmental Agency Bond. No consent, approval
or authorization of, or filing, registration or qualification with,
any governmental body or officer that has not been obtained (or
that is not reasonably expected to be obtained ) is required on the
part of the Governmental Agency as a condition to the
authorization, execution, delivery and performance of this Loan
NYl-Sl295J .V'1. 8 Auqusc: 29, 1997
Agreement and the Governmental Agency Bond. The City and the
Governmental Agency agree that the City has duly adopted in
accordance with the provisions of C.R. S. 37-60-126 a Water Use
Efficiency Plan satisfying the provisions of C.R.S. 37-60-126 prior
to submitting its loan application to the Authority.
SECTION 2.02. Particular Covenants of the Governmental
Agency.
(a) Source of Repayment Pledge.
The Governmental Agency irrevocably pledges the Pledged
Property for the punctual payment of the principal of and the
interest on the Loan, and all other amounts due under this Loan
Agreement and the Governmental Agency Bond according to their
respective terms.
(b) Performance Under Loan Agreement.
The Governmental Agency covenants and agrees ( i) to
maintain the System in good repair and operating condition; (ii) to
cooperate with the Authority in the observance and performance of
the respective duties, covenants, obligations and agreements of
such Governmental Agency and the Authority under this Loan
Agreement; and (iii) to comply with the covenants described in the
Exhibits to this Loan Agreement.
( c) Completion of Project and Provision of Moneys
Therefor.
The Governmental Agency covenants and agrees ( i) to
exercise its best efforts in accordance with prudent water utility
practice to complete the Project and to so accomplish such
completion on or before the estimated Completion Date set forth in
Exhibit B hereto and made a part hereof; and (ii) subject to
appropriation, to provide from its own fiscal resources all moneys,
in excess of the total amount of loan proceeds it receives under
the Loan, required to complete the Project.
(d) Disposition of the Svstem.
•
Other than facilities which the Governmental Agency
determines are no longer necessary for the operation of the System,
the Governmental Agency shall not sell, lease, abandon or otherwise
dispose of all or substantially all of the System, or any other
component of the System which provides revenues to provide for the
payment of this Loan Agreement or the Governmental Agency Bond
except on ninety (90) days' prior written notice to the Authority
and, in any event, shall not so sell, lease, abandon or otherwise
dispose of the same unless the following conditions are met: (i)
the Governmental Agency shall assign this Loan Agreement in •
accordance with Section 4.02 hereof and its rights and interests
NYl-512953 .Vl 9 August 29. 1997
•
•
hereunder to the purchaser or lessee of the System and such
purchaser or lessee shall assume all duties, covenants, obligations
and agreements of the Governmental Agency under this Loan
Agreement; and (ii) the Authority shall by appropriate action
determine , in its sole discre tion, that such sale, lease,
abandonment or other disposition will not adversely af feet the
Authority's ability to meet its duties, covenants, obligations and
agreements under the Bond Resolution, and will not adversely affect
the value of this Loan Agreement as security for the payment of
Authority Bonds and interest thereon, adversely affect the
eligibility of interest on Authority Bonds then outstanding for
exclusion from gross income for purposes of Federal income taxation
or adversely affect any agreement entered into by the Authority or
the State with, or condition of any grant received by the Authority
or the State from, the United States of America, which is related
to the Federal Capitalization Agreement or any capitalization grant
received by the Authority or the State under the federal Safe
Drinking Water Act Amendments of 1996 (Pub. L. 104-182), as
amended.
(e) Exclusion of Interest from Federal Gross Income and
Compliance with Code.
(i) The Governmental Agency covenants and agrees that it
shall not take or permit any action or fail to take any action
which action or omission would result in the loss of the exclusion
of the interest on any Authority Bonds (assuming solely for this
purpose that the proceeds of the Authority Bonds loaned to the
Governmental Agency represent all of the proceeds of the Authori t y
Bonds) from gross income for Federal income tax purposes pursuant
to Section 103(a) of the Code.
(ii) The Governmental Agency covenants and agrees that
it shall not take or permit any action or fail to take any action,
which action or omission would cause the Authority Bonds (assuming
solely for this purpose that the proceeds of the Authority Bonds
loaned to the Governmental Agency represent all of the proceeds of
the Authority Bonds) to be "private activi t y bonds" within the
meaning of section 141 (a) of the Code. Accordingly, unless the
Governmental Agency receives the prior written approval of the
Authority, and subject to the conditions of Section 2.02(d) (ii),
the Governmental Agency shall neither (A) permit in excess of 10
percent of either (i) the proceeds (as such term is used in Section
141 of the Code) of the Authority Bonds loaned to the Governmental
Agency or (ii) the Project financed (or refinanced) with the
proceeds of the Authority Bonds loaned to the Governmental Agency,
to be used directly or indirectly in any manner that would
constitute "private business use" within the meaning of Section
141(b) (6) of the Code, nor (B) use directly or indirectly any of
the proceeds of the Authority Bonds loaned to the Governmental
Agency to make or finance loans to persons other than governmental
units (as such term is used in section 14 1 (c ) of the Code);
NYl-512953 .Vl 10 August: 29 , 199 7
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provided further, that more than one half of the private business
use permitted by clause (A) shall be neither (i) disproportionate
related business use, nor (ii) private business use not related to •
the government use of such proceeds of the Authority Bonds, as
those terms are used in Section 141(b) (3) of the Code.
(iii) The Governmental Agency covenants and agrees that
it shall not directly or indirectly use or permit the use of any
proceeds of the Authority Bonds (or amounts treated as replaced
with such proceeds) or any other funds, or take or permit any
action or fail to take any action, which use, action or omission
would cause the Authority Bonds (assuming solely for this purpose
that the proceeds of the Authority Bonds in the hands of the
Governmental Agency represent all of the proceeds of the Authority
Bonds) to be "arbitrage bonds" within the meaning of Section 148(a)
of the Code.
(iv) The Governmental Agency covenants and agrees that
it shall not use or permit the use of any portion of the proceeds
of the Authority Bonds to retire any other obligations of the
Governmental Agency or any other entity, unless the Governmental
Agency obtains the written consent of the Authority, which consent
may be given or withheld in the Authority 's sole discretion.
(v) The Governmental Agency covenants and agrees to
maintain records of its investments, if any, of proceeds of the
Authority Bonds loaned to the Governmental Agency and earnings
thereon, and will maintain records of expenditures of such amounts.
The Governmental Agency will pay to the Authority any earnings on
proceeds of the Authority Bonds loaned to the Governmental Agency
(including earnings on such earnings) which, in the opinion of the
Authority, are required to be rebated to the United States Treasury
Department. The Governmental Agency will provide copies of all
records of its investment of such moneys and of its expenditures to
the Authority on a periodic basis upon request by the Authority and
will furnish to the Authority, in writing, information regarding
any facilities financed or refinanced therewith.
(vi) Notwithstanding anything to the contrary, as long
as is necessary to maintain the exclusion of interest on the
Authority Bonds from gross income for Federal income tax purposes,
the covenants contained in this subsection (e) shall survive the
payment of the Authority Bonds and the interest thereon, including
any payment pursuant to section 12.01 of the Bond Resolution or
prepayment pursuant to Section 3. 07 of this Loan Agreement,
respectively.
(vii) Neither the Governmental Agency nor any of its
agencies shall, ·pursuant to any arrangement formal or informal,
purchase Authority Bonds in an amount related to the amount of the •
Loan.
NYl-512953 .Vl 11 August: 29, 1997
•
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(viii) The Governmental Agency hereby certifies and
represents that it has complied with the requirements of Treasury
Regulation Section 1.150-2 in its authorizing resolution or other
official action with regard to proceeds of the Authority Bonds, if
any, to be used to reimburse the Governmental Agency for expenses
incurred by the Governmental Agency prior to the issuance of the
Authority Bonds. In the event that any of the proceeds of the
Authority Bonds are to be used to pay debt service on any prior
issue of the Governmental Agency, and any of the proceeds of such
prior issue (or any obligations refinanced by such prior issue)
were used to reimburse the Governmental Agency for expenditures
incurred prior to the issuance of the prior issue (or refinanced
obligations, as the case may be), the Governmental Agency hereby
certifies and represents that the allocation of such proceeds to
the reimbursed expenditure was a valid expenditure under the
applicable law on reimbursement expenditures on the date of issue
of the prior issue (or the refinanced obligations), as required by
Federal Income Tax Regulation Section l,150-2(g) (2). In the case
of refunding of a prior issue issued before July l, 1993, the
proceeds of which were used to reimburse original expenditures, the
Governmental Agency (A) made an official intent prior to July l,
1993 which satisfied the applicable provisions of Treasury
Regulation Section 1.103-B(a) (5) as in effect prior to July l, 1993
or (B) made an official intent between January 27 , 1992 and June
30, 1993 which satisfied the applicable provisions of Treasury
Regulation Section 1.103-18 as in effect during such period.
(ix) By executing this Loan Agreement, the Governmental
Agency hereby certifies, represents and agrees that:
NY!.-512953 .Vl
(1) The proceeds of the Authority Bonds to be
loaned to the Governmental Agency pursuant to this Loan
Agreement do not, taking into account available earnings
thereon, exceed the amount necessary to pay for the costs
of the Project, including costs of issuance of the
Authority Bonds allocated to the Loan.
(2) The Governmental Agency has entered into (or
will enter into within six months from the date hereof)
a binding commitment for the acquisition, construction or
accomplishment of the Project, and will, within six
months from the date of delivery of the Authority Bonds
by the Authority, expend at least five percent of the
proceeds of the Authority Bonds loaned to the
Governmental Agency.
(3) The Governmental Agency reasonably expects that
all of the proceeds of the Loan will be expended within
3 years from the date of this Loan Agreement. Work on
the acquisition, construction or accomplishment of the
Project will proceed with due diligence to completion.
12 .\ugust: 29, 1997
NYl-512953.Vl
(4) The total proceeds of the sale of all
obligations issued to date for the Project do not exceed
the total costs of the Project, taking into account
available earnings thereon.
(5) The Governmental Agency does not expect that
the Project will be sold, leased or otherwise disposed of
in whole or in part during the term of the Loan or of the
Authority Bonds or for any portion of the term of the
Loan or of the Authority Bonds. The Governmental Agency
.shall not sell, lease or otherwise dispose of the Project
in whole or in part during the term of the Loan or of the
Authority Bonds or for any portion of the term of the
Loan or of the Authority Bonds unless the conditions of
Section 2.02(d) (ii) have been satisfied.
(6) Any fund established, utilized or held by or on
behalf of the Governmental Agency to pay debt service on
the Loan will be used to achieve a proper matching of
revenues and debt service and will be depleted at least
annually except for a reasonable carryover amount not to
exceed earnings on the fund for the immediately preceding
year or 1 /12 of annual debt service on the Loan for the
immediately preceding year.
( 7) No portion of the amounts received from the
Loan will be used as a substitute for other funds which
were otherwise to be used as a source of financing for
the Project and which have been or will be used to
acquire, directly or indirectly, obligations producing a
yield in excess of the yield on the Authority Bonds. The
Governmental Agency does not expect to receive any
amounts in the future that are intended to finance the
portion of the Project being financed with proceeds of
the Loan. No portion of the amounts received from the
Loan will be used to rinance working capital
expenditures. The Loan has a weighted average maturity
that does not exceed 120 percent of the average
reasonably expected economic life of the capital projects
financed or refinanced by the Loan.
(8) No portion of the proceeds of the Loan will be
invested, directly or indirectly, in federally insured
deposits or accounts, or federally guaranteed
investments, other than amounts of unexpended Loan
proceeds invested in t:ie debt service fund, in any
reasonably required reserve or replacement fund, or
investments of unexpended Loan proceeds for any remaining
initial temporary period (e .g., no later than 3 years
•
after the date hereof) until the proceeds are needed for •
the Project.
13 .>.ugust. 29, 1997
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(9) No other obligations of the Governmental Agency
(1) are reasonably expected to be paid out of
substantially the same source of funds (or will have
substantially the same claim to be paid out of
substantially the same source of funds) as will be used
to pay the Loans; and (2) are being sold at substantially
the same time as the Loans (i.e. , less than 15 days
apart); and (3) were sold pursuant to the same plan of
financing with the Loan.
(10) The Governmental Agency has neither
received notice that its certifications as to
expectations may not be relied upon with respect to its
obligations nor has it been advised that any adverse
action by the Commissioner of the Internal Revenue is
contemplated.
(11) To the best of the knowledge and belief of
the undersigned officer of the Governmental Agency, the
facts and estimates set forth in this subsection of the
Loan Agreement on which the Governmental Agency's
expectations as to the application of the proceeds of the
Authority Bonds loaned to the Governmental Agency are
based, are reasonable.
( 12) None of the proceeds of the Authority
Bonds loaned to the Governmental Agency will be invested
in investments having a substantially guaranteed yield of
four years or more.
(f) Operation and Maintenance of the System.
The Governmental Agency covenants and agrees that it
shall, in accordance with prudent water utility practice, (i) at
all times operate the properties of the System and any business in
connection therewith in an efficient manner, (ii) maintain the
System in good repair, working order and operating condition, (iii)
from time to time make all necessary and proper repairs, renewals,
replacements, additions, betterments and improvements with respect
to the System so that at all times the business carried on in
connection therewith shall be properly and advantageously
conducted; provided, however, this covenant shall not be construed
as requiring the Governmental Agency to expend any funds which are
derived from sources other than the operation of the System or
other receipts of the System which are not Pledged Property, and
provided further that nothing herein shall be construed as
preventing the City or Governmental Agency from doing so .
NYl-512953.Vl 14 .\uqusc. 29, 1997
(g) Records; Accounts.
The City shall keep accurate records and accounts for the •
System (the "System Records"), separate and distinct from its other
records and accounts (the "General Records"). Such System Records
shall be maintained in accordance with GAAP and shall be audited
annually by an independent accountant, which audit may be part of
the annual audit of the General Records of the City. Such System
Records and General Records shall be made available for inspection
by the Authority at any reasonable time, and a copy of such annual
audit(s) therefor, including all written comments and
recommendations of such accountant, shall be furnished to the
Authority within 180 days of the close of the fiscal year being so
audited. Upon delivery of its annual audited financial statements,
the City shall furnish to the Authority a certificate of an
Authorized Officer stating that, to the best of such individual's
knowledge following reasonable inquiry, no Event of Default has
occurred, or if an Event of Default has occurred, specifying the
nature thereof and, if the Governmental Agency has a right to cure
pursuant to Section 5.01, stating in reasonable detail the steps,
if any, being taken by the Governmental Agency to cure such Event
of Default.
(h) Inspections; Information.
The City shall permit the Authority, and any party
designated by the Authority to examine, visit and inspect, at any
and all reasonable times, the property, if any, constituting the
Project, and to inspect and make copies of any accounts, books and
records, including (without limitation) its records regarding
receipts, disbursements, contracts, investments and any other
matters relating thereto and to its financial standing, and shall
supply such reports and information as the Authority may reasonably
require in connection therewith. The Governmental Agency shall
advise the Authority in writing of the issuance of any debt payable
from Pledged Property at least 30 days prior to the issue of such
debt. In addition, the City and the Governmental Agency shall
provide the Authority with copies of any official statements or
other forms of offering prospectus relating to any other bonds,
notes or other indebtedness of the City or the Governmental Agency
which are payable from the Pledged Property at least 30 days after
the date of issuance of such debt.
(i) Insurance.
The Governmental Agency agrees to have the City maintain
or cause to be maintained, in force, insurance policies with
responsible insurers or self insurance programs providing against
risk of direct physical loss, damage or destruction of the System,
at least to the extent that similar insurance is usually carried by •
utilities constructing, operating and maintaining water system
facilities of the nature of the System, including liability
NYl-512953.Vl 15 August:. 29, 1997
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coverage, all to the extent available at reasonable cost. Nothing
herein shall be deemed to preclude the Governmental Agency from
exerting against any party, other than the Authority, a defense
which may be available to the Governmental Agency, including,
without limitation, a defense of sovereign immunity.
(j) Cost of Project.
The Governmental Agency certifies that the Cost of the
Project, as listed in paragraph (3) of Exhibit B hereto and made a
part hereof, is a reasonable and accurate estimation and upon
direction of the Authority will supply the same with a certificate
from its engineer stating that such Cost is a reasonable and
accurate estimation, taking into account investment income to be
realized during the course of the Project and other money that
would, absent the Loan, have been used to pay the Cost of the
Project.
(k) Notice of Material Adverse Change.
The Governmental Agency shall promptly notify the
Authority of any material adverse change in the activities,
prospects or condition (financial or otherwise) of the City or the
Governmental Agency relating to the System, or in the ability of
the Governmental Agency to make all Loan Repayments and otherwise
observe and perform its duties, covenants, obligations and
agreements under this Loan Agreement and the Governmental Agency
Bond from the Pledged Property. The Governmental Agency and the
City shall each provide such financial information relating to the
Governmental Agency as the Authority may require in connection with
the issuance of Authority Bonds pursuant to the Bond Resolution.
(1) Reimbursement for Ineligible Costs.
The Governmental Agency shall promptly reimburse the
Authority for the portion of the Loan which is determined to be a
Cost of the Project which is not eligible for funding from draws
under the Federal Capitalization Agreement. Such reimbursement
shall be promptly repaid to the Authority upon written request of
the Authority with interest on the amount to be reimbursed at the
rate borne by the Authority Bonds from the date of the Loan. Any
such reimbursement shall be applied by the Authority to reduce the
Loan Repayments due pursuant to Section 3.03(a). Eligible costs
are costs associated with the approved scope of work, the plans and
specifications and any change of orders.
(m) Advertising.
To the extent required by the Colorado Department of
Public Health and Environment, the Governmental Agency shall not
make any award for construction bids until plans and
specifications, for the Project have been approved by the Colorado
Department of Public Health and Environment.
N'l l -512953.Vl 16 August: 29, 1997
(n) Plan of Qoeration. ·.
To the extent required by the Colorado Department of
Public Health and Environment, the Governmental Agency agrees that •
the City will submit to the Colorado Department of Public Health
and Environment a preliminary plan of operation, which shall
provide a concise, sequential description of an implementation
schedule for those activities necessary to assure efficient and
reliable start-up and continual operation of Project. The
Governmental Agency agrees that the City will implement the
approved plan of operation.
To the extent required by the Colorado Department of
Public Health and Environment, a final operations and maintenance
manual must be submitted prior to 90 percent of the Project being
constructed.
To the extent required by the Colorado Department of
Public Health and Environment, one year after commencement of
operation, the Governmental Agency agrees that the City will submit
to the State, certification of achievement of the applicable
Project performance certification standards.
(o) Commencement of Construction.
Within twelve (12) months after the Loan Closing, the
Governmental Agency agrees that the City will initiate construction
of the Project.
(p) Interest in Project Site.
As a condition of the Loan, the Governmental Agency will
demonstrate to the satisfaction of the Authority before advertising
bids for construction that the City has or will have a fee simple
or such other estate or interest in the site of the Project,
including necessary easements and rights-of-way, as the Authority
finds sufficient to assure undisturbed use and possession for the
purpose of construction and operation of the Project for the
estimated life of the Project.
(q) Archeological Artifacts.
In the event that archaeological artifacts or historical
sources are unearthed during construction excavation of the
Project, the Governmental Agency agrees that the City will stop or
cause to be stopped, construction activities and will notify the
State Historic Conservation Office and the Authority of such
unearthing.
N'll-5 1 2953 . Vl 17 Auqust 29 , 199 7
•
•
(r) No Lobbving.
No portion of the Loan may be used for lobbying or
propaganda as prohibited by 18 U.S.C. § 1913 or Section 607(a) of
Public Law 96-74.
(s) Federal Safe Drinking Water Act.
The Governmental Agency covenants to meet the
requirements of or otherwise be treated under Section 130 of the
federal Safe Drinking Water Act as amended. By the execution and
delivery of this Loan Agreement, the Governmental Agency
acknowledges receipt from the Colorado Water Quality Control
Division a list of federal laws and executive orders (known as
federal "Cost-Cutters") which the Governmental Agency may be
subject. The Governmental Agency agrees to comply with such laws
and executive orders which are applicable to the Governmental
Agency.
(t) Continuing Representations.
The representations of the City and the Governmental
Agency contained herein shall be true at the time of the execution
of this Loan Agreement and at all times during the term of this
Loan Agreement.
(u) Additional Covenants and Requirements.
If necessary in connection with the Authority's issuance
of the Authority Bonds or the making of the Loan, additional
covenants and requirements will be included on Exhibit F hereto and
made a part hereof. The Governmental Agency agrees to it and the
City will observe and comply with each such additional covenant and
requirement, if any, included on Exhibit F on the date of the Loan
Closing.
SECTION 2.03. Obligation to Provide Continuing Disclosure.
(a) If the Governmental Agency supplies information for
inclusion in the Official Statement described in subsection (d)
hereof or is otherwise advised in writing by the Authority that the
Governmental Agency is required to comply with the provisions of
this Section 2.03, the Governmental Agency shall undertake, for the
benefit of Holders of the Authority Bonds, to provide or cause to
be provided through the Authority:
(1) to each Repository and to the State Information
Depository, no later than 180 days after the end of each
Fiscal Year, commencing with the Fiscal Year ending December
30, 1997, the Annual Information relating to such Fiscal Year;
NYl-512953 .Vl 18 August: 29·, 1997
(2) if not submitted as part of or with the Annual
Information, to each Repository and to the State Information
Depository, if any, audited financial statements of the •
Governmental Agency for such Fiscal Year when and if they
become available; provided that if the Governmental Agency's
audited financial statements are not available by the date set
for th in ( 1) above, the Annual Information shall contain
unaudited financial statements in a format similar to the
Governmental Agency's audited financial statements prepared
for its most recent Fiscal Year, and the audited financial
statements shall be filed in the same manner as the Annual
Information when and if they become available; and
(3) to each Repository or to the MSRB and to the
State Information Depository, in a timely manner, notice of a
failure to provide any Annual Information required by
subsections (d), (e) and (f) of this Section 2. 03.
(b) The obligations of the Governmental Agency pursuant
to subsection (a) of this Section 2.03 may be terminated as to such
Governmental Agency pursuant to subsection (k) of this Section
2.03. Upon any such termination, the Governmental Agency shall
provide notice of such termination to each Repository, the State
Information Depository and the MSRB.
(c) Nothing herein shall be deemed to prevent the
Governmental Agency from disseminating or require the Governmental
Agency to disseminate any other information in addition to that
required hereby in the manner set forth herein or in any other
manner. If the Governmental Agency disseminates any such
additional information, the Governmental Agency shall have no
obligation to update such information or include it in any future
materials disseminated hereunder.
(d) The required Annual Information shall consist of
the Governmental Agency's audited financial statements for the most
recent Fiscal Year as provided in subsection (a) (2) of this Section
2.03, and the information contained in Appendix D to the Official
Statement of the Authority relating to the Authority Bonds dated
April 25, 1997, under the heading "THE SYSTEM Customer
Information and -System Financial Information."
(e) All or any portion of the Annual Information may be
incorporated in the Annual Information by cross reference to any
other documents which have been filed with (i) the Repositories,
the State Information Depository and, ir: the document is an
official statement, the MSRB or (ii) the SEC.
(f} Annual Information for any Fiscal Year containing
any modified operating data or financial information (as
contemplated by subsection (j) (5) of this Section 2.03) for such •
Fiscal Year shall explain, in narrative form, the reasons for such
NYl-51 2 953 .Vl 19 Auqusc 29 , 1997
•
•
modification and the effect of such modification on the Annual
Information being provided for such Fiscal Year. If a change in
accounting principles is included in any such modification, such
Annual Information shall present a comparison between the financial
statements or information prepared on the basis of the modified
accounting principles and those prepared on the basis of the former
accounting principles.
(g) The Governmental Agency's annual financial
statements for each Fiscal Year shall be prepared in accordance
with GAAP as in effect from time to time. Such financial
statements shall be audited by an independent accounting firm.
(h) If the Governmental Agency shall fail to comply
with any provision of this Section 2.03, then the Authority or any
Holder of the Authority's Bonds may enforce, for the equa l benefit
and protection of all Holders similarly situated, by mandamus or
other suit or proceeding at law or in equity, this Section 2.03
against the Governmental Agency and any of the officers, agents and
employees of the Governmental Agency, and may compel the
Governmental Agency or any such officers, agents or employees to
perform and carry out their duties under this Section 2. 03;
provided that the sole and exclusive remedy for breach of this
Section 2.03 shall be an action to compel specific performance of
the obligations of the Governmental Agency hereunder and no person
or entity shall be entitled to recover monetary damages hereunder
under any circumstances, and, provided further, that any challenge
to the adequacy of any information provided pursuant to subsection
(a) of this Section 2.03 shall be brought only by the Authority or
the Holders of 25% in aggregate principal amount of the Authority 's
Bonds at the time outstanding which are affected thereby. The
failure o f the Governmental Agency to comply with the provisions of
this Section 2.03 shall not be deemed an Event of Default hereunder
and the only remedies available to the Holders or the Authority for
such failure to comply are the remedies contained in this
subsection (h) .
(i) The provisions of this Section 2.03 are executed
and delivered solely for the benefit of the Holders. No other
person (other than the Authority) sha l l have any right to enforce
the provisions this Section 2.03 or any other rights under this
Section 2.03.
(j) Without the consent of any Holders of Authority
Bonds, the Authority and the Governmental Agency at any time and
from time to time may enter into any amendments or changes to this
Section 2.03 for any of the following purposes:
(i) to comply with or conf o rm to Rule 15c2-12 or
any amendments thereto (whether required or optional);
NYl-5 1 2953 .Vl 20 Au gust: 29 , 1997
(ii) to add a dissemination agent for the
information required to be provided hereby and to make any
necessary or desirable provisions with respect thereto;
(iii) to evidence the succession of another person
to the Governmental Agency and the assumption by any such
successor of the covenants of the Governmental Agency under
this Section 2.03;
(iv) to add to the covenants of the
Governmental Agency for the benefit of the Holders, or to
surrender any right or power conferred upon the Governmental
Agency pursuant to this Section 2.03;
(v) to modify the contents, presentation and format
of the Annual Information from time to time as a result of a
change in circumstances that arises from a change in legal
requirements, change in law, or change in the identity, nature
or status of the Governmental Agency, or type of business
conducted; provided that, (a) there is filed with the Trustee
an opinion of counsel having expertise with respect to
securities laws of the United States of America or expertise
with respect to the issuance of indebtedness by states and
political subdivisions thereof, that (i) this Section 2.03, as
amended, would have complied with the requirements of Rule
15c2-12 at the time of the offering of the Authority Bonds,
after taking into account any amendments or authoritative
interpretations of the Rule 1Sc2-12, as well as any change in
circumstances; and (ii) the amendment or change does not
materially impair the interests of Holders, or (b) such change
or amendment is approved by the vote or consent of Holders of
a majority in outstanding principal amount of the Authority
Bonds affected thereby at or prior to the. time of such
amendment or change.
(k) This Section 2.03 shall remain in full force and
effect until the earlier of (i) the Authority provides notice to
each Depository, the State Information Depository and the MSRB that
the Governmental Agency is no longer an "obligated person" within
the meaning of Rule 15c2-12 or (ii ) all principal, redemption
premiums, if any, and interest on the Authority Bonds shall have
been paid in full or the Authority Bonds shall have otherwise been
paid in full or legally defeased pursuant to Section 12.01 of the
Bond Resolution. In the event of such payment or legal defeasance,
the Authority shall promptly give written notice thereof to the
Governmental Agency.
NYl-512953 . Vl 21 Auqusi:: 29 , 1997
•
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ARTICLE III .
LOAN TO GOVERNMENTAL AGENCY; AMOUNTS PAYABLE;
GENERAL AGREEMENTS
SECTION 3.01. The Loan. The Authority hereby agrees to
loan and disburse to the Governmental Agency in accordance with
Section 3.02 hereof, and the Governmental Agency agrees to borrow
and accept from the Authority , the Loan in the principal amount
equal to the loan commitment set forth in paragraph (4) of Exhibit
B attached hereto and made a part hereof; provided, however, that
(i) the Authority shall be under no obligation to make the Loan if
the Governmental Agency does not deliver a Governmental Agency Bond
to the Authority on the Loan Closing or an Event of Default has
occurred and is continuing under the Bond Resolution or this Loan
Agreement, and (ii) the proceeds of Authority Bonds shall be
available for disbursement, as determined solely by the Authority,
to finance the Cost of the Project. The Governmental Agency shall
use the proceeds of the Loan strictly in accordance with Section
2.0l(h) hereof, to finance the cost of the Project.
SECTION 3. 02. Disbursement of Loan Proceeds. The
Trustee, as the agent of the Authority, shall disburse the amounts
on deposit in the Project Loan Subaccount to the Governmental
Agency upon receipt of a requisition executed by an Authorized
Officer thereof and approved by the Authority, and if deemed
necessary by the Authority, approved by the Colorado Water Quality
Control Division, in the form set forth in the Bond Resolution.
The Authority covenants to direct the Trustee to provide
all periodic written reports (as required by the provisions of the
Bond Resolution) of all moneys on deposit under the Bond Resolution
and to furnish such reports to the Governmental Agency as soon as
practicable after receipt by the Authority.
The Authority hereby agrees that in the event that moneys
on deposit in the Project Loan Subaccount are lost due to the
negligence or misconduct of the Trustee, the Authority on behalf of
the Governmental Agency, shall, upon the written request of the
Governmental Agency, pursue its remedies against t:ie Trustee,
including, but not limited to, equitable actions or actions for
money damages.
If there are moneys on deposit in the Project Loan
Subaccount upon completion of the Project, the Governmental Agency
shall advise the Authority in writing that no further requisitions
are to be submitted to the Authority for disbursement of moneys
from the Project Loan Subaccount. Upon receipt of such written
advice, the Authority shall file with the Trustee the Certificate
required by Section 5.03 of the Bond Resolution and use such moneys
to redeem, purchase or provide for the payment of the Authority
Bonds. The Authority shall credit ensuing Loan Repayments or
NY1.-512953.Vl 22 August: 29 , 1997
(ii) to add a dissemination agent for the
information required to be provided hereby and to make any
necessary or desirable provisions with respect thereto;
(iii) to evidence the succession of another person
to the Governmental Agency and the assumption by any such
successor of the covenants of the Governmental Agency under
this Section 2.03;
(iv) to add to the covenants of the
Governmental Agency for the benefit of the Holders, or to
surrender any right or power conferred upon the Governmental
Agency pursuant to this Section 2.03;
(v) to modify the contents, presentation and format
of the Annual Information from time to time as a result of a
change in circumstances that arises from a change in legal
requirements, change in law, or change in the identity, nature
or status of the Governmental Agency, or type of business
conducted; provided that, (a) there is filed with the Trustee
an opinion of counsel having expertise with respect to
securities laws of the United States of America or expertise
with respect to the issuance of indebtedness by states and
political subdivisions thereof, that (i) this Section 2 .03, as
amended, would have complied with the requirements of Rule
15c2-12 at the time of the offering of the Authority Bonds,
after taking into account any amendments or authoritative
interpretations of the Rule 15c2-12, as well as any change in
circumstances; and (ii) the amendment or change does not
materially impair the interests of Holders, or (b) such change
or amendment is approved by the vote or consent of Holders of
a majority in outstanding principal amount of the Authority
Bonds affected thereby at or prior to the . time of such
amendment or change.
(k) This Section 2 .03 shall remain in full force and
effect until the earlier of (i) the Authority provides notice to
each Depository, the State Information Depository and the MSRB that
the Governmental Agency is no longer an "obligated person" within
the meaning of Rule 15c2-12 or (ii ) all principal, redemption
premiums, if any , and interest on the Authority Bonds shall have
been paid in full or the Authority Bonds shall have otherwise been
paid in full or legally defeased pursuant to Section 12.01 of the
Bond Resolution. In the event of such payment or legal defeasance,
the Authority shall promptly give written notice thereof to the
Governmental Agency.
NYl-5 1 2953 .Vl 21 Auqusc 29, 199 7
•
•
obligations, as set forth in each billing statement to be mailed by
the Loan Servicer to the Governmental Agency approximately thirty
• (30) days prior to each Loan Repayment due date.
•
(d) In addition to the payments required by subsections
(a) and (b) of this Section 3.03, the Governmental Agency shall pay
a late charge for any payment that is received by the Loan Servicer
later than the fifth (5th) day following its due date, in an amount
equal to the greater of twelve percent (12%) per annum or the Prime
Rate plus one half of one percent per annum on such late payment
from its due date to the date it is actually paid; provided,
however, that the interest rate payable on the Loan including such
late charge shall not be in excess of the maximum rate permitted by
law as of the date hereof.
(e) The Governmental Agency acknowledges that payment
of the Authority Bonds by the Authority, including payment from
moneys drawn by the Trustee from the 1997 Series A Matching
Account, other than from the investment income thereon, does not
constitute payment of the amounts due under this Loan Agreement or
the Governmental Agency Bond. If at any time the amounts on
deposit in the 1997 Series A Matching Account shall be less than
the requirement of such Account, as the result of any transfer of
moneys from the 1997 Series A Matching Account to the Debt Service
Fund as the result of a failure by the Governmental Agency to make
any Loan Repayments required hereunder, the Governmental Agency
agrees to ( i) replenish such moneys so transferred, and (ii)
replenish any deficiency arising from losses incurred in making
such transfer as the result of the liquidation by the Authority of
investment securities acquired as an investment of moneys in the
1997 Series A Matching Account, by making payments to the Authority
in equal monthly installments for the lesser of six (6) months or
the remaining term of the Loan at an interest rate to be determined
by the Authority necessary to make up any loss caused by such
deficiency.
SECTION 3.04. Unconditional Obligations. The obligation
of the Governmental Agency to make the Loan Repayments and all
other payments required hereunder and the o bligation to perform and
observe the other duties, covenants, obligations and agreements on
its part contained herein is payable solely from the Pledged
Property and shall be absolute and unconditional and shall not be
abated, rebated, set-off, reduced, abrogated, terminated, waived,
diminished, postponed or otherwise modified in any manner or to a~y
extent whatsoever, while any Authority Bonds remain outstanding or
any payments under this Loan Agreement remain unpaid, regardless of
any contingency, act of God, event or cause whatsoever, including
(without limitation) any acts or circumstances that may constitute
failure of consideration, eviction or constructive eviction, the
taking by eminent domain or destruction of or damage to the Project
or the System, commercial f=ustration of the purpose, any change in
the laws of the United States of America or of the State of
NYl-512953 .Vl 24 August: 29 , 1997
portions thereof of the Governmental Agency chosen by the Authority
as a result of the use of such to purchase, redeem or pay Authority
Bonds .
SECTION 3.03. Amounts Payable. (a) The Governmental
Agency shall repay the principal of and interest on the Loan in
accordance with the schedule set forth on Exhibit C attached hereto
and made a part hereof, as the same may be amended or modified.
The Governmental Agency shall execute the Governmental
Agency Bond to evidence the Loan and the obligations of the
Governmental Agency under the Governmental Agency Bond shall be
deemed to be amounts payable under subsections (a) and (b) of this
Section 3.03. Each portion of the Loan Repayment payable under
this subsection (a), whether satisfied entirely through a direct
payment by the Governmental Agency to the Loan Servicer or through
a combination of a direct payment and the use of Allocable
Investment Income as described in subsection (c) of this Section
3.03 to pay interest on the Authority Bonds (and to the extent
moneys are available therefore, principal of the Authority Bonds),
shall be deemed to be a credit against the corresponding obligation
of the Governmental Agency under this subsection (a) and shall
fulfill the Governmental Agency's obligation to pay such amount
hereunder and under the Governmental Agency Bond. Each payment
made to the Loan Servicer pursuant to this subsection shall be
applied first to interest then due and payable on the Loan, then to
the principal of the Loan.
In the event the Authority issues refunding bonds
pursuant to the Bond Resolution in order to refinance the
particular Project Account or Project Loan Subaccount from which
amounts loaned to the Governmental Agency pursuant to this Loan
Agreement are taken which refunding results in a decrease in total
aggregate Loan Repayments, the Authority shall amend Exhibit C to
reflect such decrease in tota l aggregate Loan Repayments.
(b) In addition to the Loan Repayments payable under
subsection (a) of this Section 3.03, the Governmental Agency shall
pay on the dates set forth in Exhibit C attached hereto and made a
part hereof one-half of the Administrative Fee, if any. Each
payment made pursuant to this subsection (b) shall, for purposes of
the Loan and the Governmental Agency Bond, be considered as
interest on the principal amount thereof.
•
(c) The Governmental Agency shall receive as a credit
against each cf its semiannual interest payment obligations set
forth on Exhibit C attached hereto and made a part hereof (and, as
applicable under the Bond Resolution, its annual principal
obligati o ns to the extent moneys are available therefor), (i) the
amount of capitalized interest available to be applied against such
obligations, as footnoted on such Exhibit C, and (ii) the amount of •
Allocable Investment Income , if any, to be credited against such
NYl-5 129 53 .Vl 23 Au gust: 29, 1 99 7
•
•
SECTION 3.07. Option to Prepay Loan Repayments. Subject
in all instances to the prior written approval of the Authority and
satisfaction of the requirements, if any, of the Bond Resolution
relating to Loan prepayments, the Governmental Agency may prepay
the portion of the Loan Repayments set forth in Exhibit C, in whole
or in part (but if in part, in the amount of $100, 000 or any
integral multiple of $100,000), upon prior written notice not less
than ninety (90) days in addition to the number of days advance
notice to the Trustee required for any optional or special
redemption of the Authority Bonds, to the Authority and the Trustee
and upon payment by the Governmental Agency to the Trustee of the
principal amount of the Loan Repayments to be prepaid, plus the
interest to accrue on such amount to the date of the optional or
special redemption of the Authority Bonds allocable to such Loan
Repayment to be prepaid; provided, however, that ( i) if the
Governmental Agency proposes to prepay in full the Exhibit C Loan
Repayments, such prepayment shall be conditioned upon the
simultaneous prepayment in full of all Administrative Fees due to
and including the final year of the Loan Term or (ii) if the
Governmental Agency proposes to prepay a portion of the Exhibit C
Loan Repayments, such prepayment shall be conditioned upon the
simultaneous prepayment of such portion of the Administrative Fees
due to and including the final year of the Loan Term as shall be
determined by the Authority. In addition, if at the time of such
prepayment, the Authority Bonds may only be redeemed at the option
of the Authority upon payment of a redemption premium, the
Governmental Agency shall add to its prepayment: an amount, as
determined by the Authority, equal to such redemption premium
allocable to such Authority Bonds to be redeemed as a result of the
Governmental Agency's prepayment. In addition, any prepayments
shall include an amount, which when added to the interest portions
of the Loan Repayments, shall equal the interest payable on the
Authority Bonds allocable to the Loan to the date of redemption or
maturity, as the case may be, of the Authority Bonds. Prepayments
shall be applied first to accrued interest on the portion of the
Loan to be prepaid and then to the payment of Administrative Fees
and then to principal payments (including redemption premium, if
any) on the Loan in inverse order of Loan Repayments .
SECTION 3. 08. Source of Payment of Governmental Agency's
Obligations. The Authority and the Governmental Agency agree that
the amounts payable by the Governmental Agency under this Loan
Agreement, including, without limitation, the amounts payable by
the Governmental Agency pursuant to Section 3.03, Section 3.06,
Section 3.07 and Section 5.04 of this Loan Agreement are payable
solely from the Pledged Property.
SECTION 3.09. Delivery of Documents. Concurrently with
the execution and delivery of this Loan Agreement, the Governmental
Agency will cause to be delivered to the Authority each of the
following items:
NYl-512953 .Vl 26 August:. 29, 1997
Colorado or any political subdivision of either or in the rules or
regulations of any governmental authority , any failure of the
Authority or the Trustee to perform and observe any agreement, •
whether express or implied, or any duty, liability or obligation
arising out of or connected with the Project, this Loan Agreement
or the Bond Resolution or any rights of set off, recoupment,
abatement or counterclaim that the Governmental Agency might
otherwise have against the Authority, the Trustee, the Loan
Servicer or any other party or parties; provided, however, that
payments hereunder shall not constitute a waiver of any such
rights. The Governmental Agency shall not be obligated to make any
payments required to be made by any .other Governmental Agencies
under separate Loan Agreements or the Bond Resolution.
SECTION 3.05. Loan Agreement to Survive Bond Resolution
and Authority Bonds. The Governmental Agency acknowledges that its
duties, covenants, obligations and agreements hereunder shall
survive the discharge of the Bond Resolution and payment of the
principal of, redemption premium, if any, and interest on the
Authority Bonds. The Authority acknowledges that all duties,
covenants, obligations and agreements of the Governmental Agency
shall (except as and to the extent preserved in subsection (e) (vi)
of Section 2.02 hereof) terminate upon the date of payment of all
amounts payable to the Authority hereunder.
SECTION 3.06. Disclaimer of Warranties and
Indemnification. The Governmental Agency acknowledges and agrees
that (i) neither the Authority nor the Trustee makes any warranty
or representation, either express or implied, as to the value,
design, condition, merchantability or fitness for particular
purpose or fitness for any use of the System or the Project or any
portions thereof or any other warranty or representation with
respect thereto; (ii) in no event shall the Authority or the
Trustee or their respective agents be liable or responsible for any
direct, incidental, indirect, special or consequential damages in
connection with or arising out of this Loan Agreement or the
Project or the existence, furnishing, funccioning or use of the
System or the Project or any item or products or services provided
for in this Loan Agreement; and (iii) to the extent authorized by
law, the Governmental Agency sha l l indemnify, save and hold
harmless the Authority against any and all claims, damages,
liability and court awards including costs, expenses and attorney
fees incurred as a result of any act or omission by the
Governmental Agency, or its employees, agents or subcontractors
pursuant to the terms of this Loan Agreement, provided however that
the provisions of this clause (iii ) are not intended to and shall
not be construed as a waiver of any defense or limitation on
damages provided for unde= and pursuant to the Colorado
Govern.mental Immunity Act (Section 24-10-101, et seq., C.R.S.), or
unde= the laws of the United States or other laws of the State of
Colorado.
NYl-5 12 953 .Vl 25 .\Uq'..l SC: 29 , 199 7
.e
•
•
•
shall the Authority have the right to accelerate the Governmental
Agency Bond solely for the enforcement of the payment of
Administrative Fees or the enforcement of Section 3.06 or Section
5.04.
(b) The Governmental Agency hereby approves and
consents to any assignment or transfer of this Loan Agreement and
the Governmental Agency Bond that the Authority deems to be
necessary in connection with any refunding of the Authority Bonds
or the issuance of additional bonds under the Bond Resolution or
otherwise, in connection with the water pooled loan program of the
Authority.
SECTION 4. 02. Assignment by Governmental Agency. Neither
this Loan Agreement nor the Governmental Agency Bond may be
assigned by the Governmental Agency for any reason, unless the
following conditions shall b e satisfied: (i) the Authority and the
Trustee shall have approved said assignment in writing; (ii) the
assignee shall be a governmental unit within the meaning of Section
141(c) of the Code and the assignee shall have expressly assumed in
writing the full and faithful observance and performance of the
Governmental Agency's duties , covenants, agreements and obligations
under the Loan Agreement; (iii ) immedi ately after such assignment,
the assignee shall not be in default in the performance or
observance of any duties, covenants, obligations or agreements of
the Governmental Agency under the Loan Agreement; (iv) the
Authority shall have received an opini o n of bond counsel to the
effect that such assignment will not adversely affect the exclusion
of interest on the Authority Bonds from gross income for purposes
of Federal income taxation under Section 1 0 3 (a) of the Code; and
(v) the Authority shall receive an opinion of counsel to the effect
that such assignment will not violate the prov isions of the Bond
Resolution or any agreement entered into by the Authority with, or
condition of any grant received by the Authority from, the United
States of America relating to the Federal Capitalization Agreement
or any capitalization grant received by the Authority or the State
under the federal Safe Drinking Water Act Amendments of 1996 (Pub.
L. 104-182), as amended.
No assignment shall relieve the Governmental Agency from
primary liability for any of its obligations under this Loan
Agreement and in the event of such assignment, the Governmental
Agency shall continue to remain primarily liable for the
performance and observance of its obligations to be performed and
observed under this Loan Agreement .
NYl-5 1 2953.Vl 28 August 29 , 1997
(a) opinions of the Governmental Agency's counsel
substantially in the form set forth in Exhibit E-1 and E-2 hereto
(such opinion may be given by one or more counsel); provided,
however, that the Authority may permit variances in such opinion
from the form or substance of such Exhibit E if such variances are
not to the material detriment of the interests of the holders of
the Authority Bonds;
(b} executed counterparts of this Loan Agreement;
( c) copies of the resolutions or ordinances of the
governing body of the Governmental Agency authorizing the execution
and delivery of this Loan Agreement and the Governmental Agency
Bond, certified by an Authorized Officer of the Governmental
Agency; and
(d) such other certificates, documents, opinions and
information as the Authority may require.
Concurrently with the delivery at the Loan Closing of
this Loan Agreement, the Governmental Agency shall also deliver its
Governmental Agency Bond to the Authority upon the receipt of a
written certification of the Authority that the moneys to be
deposited in the Project Loan Subaccount to fund the Loan shall be
so deposited simultaneously with the delivery of the Governmental
Agency Bond.
ARTICLE IV.
ASSIGNMENT
SECTION 4.01. Assignment and Transfer by Authority.
(a) The Governmental Agency expressly acknowledges that, other than
Administrative Fees payable pursuant to subsection (b) of Section
3. 03 and the right, title and interest of the Authority under
Sections 3.06, 5.04 and 5.07, all right, title and interest of the
Authority in, to and under this Loan Agreement and the Governmental
Agency Bond has been assigned to the Trustee as security for the
Authority Bonds, as applicable, as provided in the Bond Resolution,
and that if any Event of Default shall occur, the Trustee, pu~suant
to the Bond Resolution, shall be entitled to act hereunder in the
place and stead of the Authority. The Governmental Agency hereby
acknowledges the requirements of the Bond Resolution applicable to
the Authority Bonds and consents to such assignment and
appointment.
•
The Authority shall retain the right to compel or
otherwise enforce observance and performance by the Governmental
Agency of its du~ies, covenants , obligations and agreements under
subsection (b) of Section 3.03 to pay Administrative Fees and under •
Section 3.06 and Section 5.04; provided, nowever, that in no event
NYl-512953.Vl 27 Au quse. 29 , 1997
•
•
shall become insolvent or bankrupt or make an assignment for the
benefit of its creditors; or a custodian (including, without
limitation, a receiver, liquidator or trustee of the Governmental
Agency or any of its property ) shall be appointed by court order or
take possession of the Governmental Agency or its property or
assets if such order remains in effect or such possession continues
for more than thirty (30) days.
SECTION 5.02. Notice of Default. The Governmental Agency
shall give the Trustee and the Authority prompt te-ephonic notice
of the occurrence of any Event of Default ref erred to in Section
5. O 1 ( e) hereof, and of the occurrence of any other event or
condition that constitutes an Event of Default at such time as any
senior administrative or financial officer of the Governmental
Agency becomes aware of the existence thereof. Any telephonic
notice pursuant to this Section 5.02 shall be confirmed i n writing
by the end of the next Business Day (as defined in the Bond
Resolution) .
SECTION 5.03. Remedies on Default. Whenever an Event of
Default referred to in Section 5.01 hereof shall have occurred and
be continuing, the Authority shall have the right to take or to
direct the Trustee to take any action permitted or required
pursuant to the Bond Resolution or the Loan Agreement and to take
whatever other action at law or in equity may appear necessary or
desirable to collect the amounts then due and thereafter to become
due hereunder or to enforce the performance and observance of any
duty, covenant, obligation or agreement of the Governmental Agency
hereunder, including, without limi tation, to obtain ex parte the
appointment of a receiver of the System.
In addition, if an Event of Default referred to in
Section 5.0l (a ) hereof shall have occurred and be continu ~ng, the
Authority shall have the right to declare, or to direct the Trustee
to declare, all Loan Repayments (including, without limitation,
payments under the Governmental Agency Bond) together with the
prepayment premium, if any, calcu lated pursuant :o Section 3.07
hereof to be immediately due and pay able, and upon notice to the
Governmental Agency the same shall become due and payable without
further notice or demand.
SECTION 5.04. Attorney's Fees and Other Expenses. The
Governmental Agency shall on demand pay to the Authority or the
Tr.istee the reasonable fees and expenses of attorneys and other
reasonable fees and expenses (including without limitation the
reasonably allocated costs of in-house counsel and legal staff )
incurred by either of them in the collection of Loan Repayments or
any other sum due hereunder or in the enforcement of performance or
observation of any other duties , covenants, obligations or
agreements of the Governmental Agency .
NY l -51295 3.Vl 30 August: 29 , 199 7
ARTICLE V.
DEFAULTS AND REMEDIES
SECTION 5.01. Event of Default. If any of the following
events occurs, it is hereby defined as and declared to be and to
constitute an "Event of Default":
(a) failure by the Governmental Agency to pay, or cause
to be paid, any Loan Repayment, required to be paid hereunder when
due, which failure shall continue for a period of five (5) days;
(b) failure by the Governmental Agency to make, or cause
to be made, any required payments of principal of, redemption
premium, if any, and interest on any bonds, notes or other
obligations of the Governmental Agency for borrowed money (other
than the Loan and the Governmental Agency Bond), after giving
effect to the applicable grace period, the payments of which are
secured by the Pledged Property;
(c) failure by the Governmental Agency to pay, or cause
to be paid, the Administrative Fee or any portion thereof when due
or to observe and perform any duty, covenant, obligation or
agreement on its part to be observed or performed under this Loan
Agreement, other than as referred to in paragraph (a) of this
Section and other than a failure to comply with the provisions of
Section 2.03 hereof, which failure shall continue for a period of
thirty (30) days after written notice, specifying such failure and
requesting that it be remedied, is given to the Governmental Agency
by the Trustee, unless the Trustee shall agree in writing to an
extension of such time prior to its expiration; provided, however,
that if the failure stated in such notice is correctable but cannot
be corrected within the applicable period the Trustee may not
unreasonably withhold its consent to an extension of such time up
to sixty (60) days from the delivery of the written notice referred
to above if corrective action is instituted by the Governmental
Agency within the applicable period and diligently pursued until
the Event of Default is corrected;
(d) any representation made by or on behalf of the
Governmental Agency contained in this Loan Agreement, or in any
instrument furnished in compliance with or with reference to this
Loan Agreement or the Loan or in connection with the Authority
Bonds, is false or misleading in any material respect; and
•
(e) a petition is filed by or against the Governmental
Agency under any federal or state bankruptcy or insolvency law or
other similar law in effect on the date of this Loan Agreement or
thereafter enacted, unless in the case of any such petition filed
against the Governmental Agency such petition shall be dismissed
within thirty (30) days after such filing and such dismissal shall •
be final and not subject to appeal; or the Governmental Agency
NYl-512953 .Vl 29 Augusi: 29 , 1997
•
•
ARTICLE VI.
MISCELLANEOUS
SECTION 6.01. Notices. All notices, certificates or
other conununications hereunder shall be sufficiently given and
shall be deemed given when hand delivered or mailed by registered
or certified mail, postage prepaid, to the Governmental Agency at
the address specified on Exhibit B attached hereto and made a part
hereof and to the Authority, the Trustee and the Loan Servicer at
the following addresses:
(a) Authority:
(b) Trustee:
(c) Loan Servicer:
Colorado Water Resources and
Power Development Authority
1580 Logan Street --Suite 620
Denver, Colorado 80203
Attention: Executive Director
Any of the foregoing parties may designate any further or
different addresses to which subsequent notices, certificates or
other conununications shall be sent, by notice in writing given to
the others.
SECTION 6.02. Binding Effect. This Loan Agreement shall
inure to the benefit of and shall be binding upon the Authority and
the Governmental Agency and their respective successors and
assigns.
SECTION 6.03. Severability. In the event any provision
of this Loan Agreement shall be held illegal , ·invalid or
unenforceable by any court of competent jurisdiction, such holding
shall not invalidate, render unenforceable or otherwise affect any
other provision hereof.
SECTION 6. 04. Amendments, Supplements and Modifications .
This Loan Agreement may not be amended, supplemented or modified
without the prior written consent of the Authority and the
Governmental Agency .
NY!.-512953.Vl 32 Augusc. 29, 1997
ARTICLE VI.
MISCELLANEOUS
SECTION 6.01. Notices. All notices, certificates or
other communications hereunder shall be sufficiently given and
shall be deemed given when hand delivered or mailed by registered
or certified mail, postage prepaid, to the Governmental Agency at
the address specified on Exhibit B attached hereto and made a part
hereof and to the Authority, the Trustee and the Loan Servicer at
the following addresses:
(a) Authority:
(b) Trustee:
(c) Loan Servicer:
Colorado Water Resources and
Power Development Authority
1580 Logan Street --Suite 620
Denver, Colorado 80203
Attention: Executive Director
Any of the foregoing parties may designate any further or
different addresses to which subsequent notices, certificates or
other communications shall be sent, by notice in writing given to
the others.
SECTION 6.02. Binding Effect. This Loan Agreement shall
inure to the benefit of and shall be binding upon the Authority and
the Governmental Agency and their respective successors and
assigns.
SECTION 6.03. Severability. In the event any provision
of this Loan Agreement shall be held illegal, ·invalid or
unenforceable by any court of competent jurisdiction, such holding
shall not invalidate, render unenforceable or otherwise affect any
other provision hereof.
SECTION 6. 04. Amendments, Supplements and Modifications.
This Loan Agreement may not be amended, supplemented or rnodif ied
without the prior written consent of the Authority and the
Governmental Agency.
NYl-512953 .Vl 32 August: 29, 1997
•
•
•
•
IN WITNESS WHEREOF , the Authority and the Governmental
Agency have caused this Loan Agreement to be executed , sealed and
delivered , as of the Commencement Date set forth on Exhibit B
hereto.
(SEAL )
ATTEST:
Secretary
(SEAL)
ATTEST:
Secretary
NYl -51295 3 .Vl 34
COLORADO WATER RESOURCES AND
POWER DEVELOPMENT AUTHORITY
Chairman
CITY OF ENGLEWOOD, COLORADO
ACTING BY AND THROUGH ITS
WATER ENTERPRISE
Chairman
Augu s t 2 9 , 1997
EXHIBIT A
SECURITY DESCRIPTION
(1) Description of Project
The Project consists of construction of improvements to
the Governmental Agency's drinking water treatment plant including
but not limited to, the installation of flocculation/sedimentation
process, disinfection facilities, solids handling facilities,
chemical feed facilities and new filters.
(2) Description of System
"System" shall mean, (i) any facility, plant, works,
system, building, structure, improvement, machinery, equipment,
fixture or other real or personal property, relating to the
provision of water to the public which is owned, operated or
controlled by the Governmental Agency, including, without
limitation, the Project (ii) any renewal, replacement, addition,
modification or improvement to (i) above, and (iii) all real or
personal property and rights therein and appurtenances thereto
necessary or useful or convenient for the effectiveness of the
purposes of the Governmental Agency in the provision of water to
the public.
(3) Lien Representation
The Pledged Property will be free and clear of any
pledge, lien, charge or encumbrance thereon or with respect thereto
prior to the obligation of the Governmental Agency to pay this Loan
Agreement and the Governmental Agency Bond, and all corporate or
other action on the part of the Governmental Agency to that end has
been and will be duly and validly taken. As of the date of this
Loan Agreement there are no outstanding bonds, notes or evidences
of indebtedness or contractual obligations payable from the Pledged
Property with a lien on the Pledged Property which is on a parity
with the lien of the Loan Agreement and Governmental Agency Bond on
the Pledged Property. Except as permitted by Exhibit F hereto, the
Governmental Agency shall not issue any bonds or other evidences of
indebtedness of a similar nature payable out of or secured by a
pledge, lien or assignment on the Pledged Property or create a lien
or charge thereon.
(4) Pledged Property
•
"Pledged Property" means the Net Revenues (as defined in •
this paragraph (4) of Exhibit A of this Loan Agreement) .
NYl-512953.Vl A-1 August 29, 1997
•
•
"Net Revenues" for any period shall mean the Revenues (as
defined in this paragraph (4 ) of Exhibit A of this Loan Agreement)
during such period minus Operating Expenses (as defined in this
paragraph (4) of Exhibit A of this Loan Agreement) during such
period.
"Revenues" shall mean (i) all revenues, income, rents and
receipts earned by the Governmental Agency from or attributable to
the ownership and operation of the System, (ii) the proceeds of any
insurance covering business interruption loss relating to the
System, and (iii) interest earned on any moneys or investments
which are required to be paid into any fund or account pledged to
the payment of this Loan Agreement and the Governmental Agency Bond
pursuant to this Loan Agreement.
"Operating Expenses" shall mean all actual maintenance
and operation costs of the System incurred by the Governmental
Agency in any particular period or charges made therefor during
such period, but only if such charges are made in conformity with
Generally Accepted Accounting Principles (as defined in paragraph
(4) of Exhibit A of this Loan Agreement) including amounts
reasonably required to be set aside in reserves for items of
Operating Expenses the payment of which is not then immediately
required.
Such Operating Expenses include, but are not limited to,
expenses for ordinary repairs, renewals and replacements of the
System, salaries and wages, employees' health , hospitalization,
pension and retirement expenses, fees for services, materials and
supplies, rents, administrative and general expenses, insurance
expenses, legal, engineering, accounting, trustee, paying agent and
financial advisory fees and expenses and costs of other consulting
and technical services, taxes (except as set forth in the following
paragraph) , payments in lieu of taxes and other governmental
charges, payments to the United States Treasury pursuant to Section
148 (f) of the Code or similar requirement to pay rebate, fuel
costs, and any other current expenses or obligations required to be
paid by the Governmental Agency by law, all to the extent properly
allocable to the System.
Such Operating Expenses do not include depreciation or
obsolescence charges or reserves, amortization of intangibles or
other bookkeeping entries of a similar nature, interest charges and
charges for the payment of principal, or amortization, of bonded or
other indebtedness of the Governmental Agency, costs, or charges
made therefor , for capital additions, replacements, betterments,
extensions or improvements to or retirements from the System which
under Generally Accepted Accounting Principles are properly
chargeable to the capital account or the reserve f o r depreciation,
and do not include losses from the sale , abandonment,
reclassification, revaluation or other disposition of any
properties of the System nor such property items, including taxes
NY l -51235 3. V'-A-2 .\u gust::. 29 , 1997
J'
"Net Revenues" for any period shall mean the Revenues (as
defined in this paragraph (4) of Exhibit A of this Loan Agreement)
during such period minus Operating Expenses (as defined in this •
paragraph (4) of Exhibit A of this Loan Agreement) during such
period.
"Revenues" shall mean (i) all revenues, income, rents and
receipts earned by the Governmental Agency from or attributable to
the ownership and operation of the System, (ii) the proceeds of any
insurance covering business interruption loss relating to the
System, and (iii) interest earned on any moneys or investments
which are required to be paid into any fund or account pledged to
the payment of this Loan Agreement and the Governmental Agency Bond
pursuant to this Loan Agreement.
"Operating Expenses" shall mean all actual maintenance
and operation costs of the System incurred by the Governmental
Agency in any particular period or charges made therefor during
such period, but only if such charges are made in conformity with
Generally Accepted Accounting Principles (as defined in paragraph
(4) of Exhibit A of this Loan Agreement) including amounts
reasonably required to be set aside in reserves for items of
Operating Expenses the payment of which is not then immediately
required.
Such Operating Expenses include, but are not limited to,
expenses for ordinary repairs, renewals and replacements of the
System, salaries and wages, employees' health, hospitalization,
pension and retirement expenses, fees for services, materials and
supplies, rents, administrative and general expenses, insurance
expenses, legal, engineering, accounting, trustee, paying agent and
financial advisory fees and expenses and costs of other consulting
and technical services, taxes (except as set forth in the following
paragraph) , payments in lieu of taxes and other governmental
charges, payments to the United States Treasury pursuant to Section
148(f) of the Code or similar requirement to pay rebate, fuel
costs, and any other current expenses or obligations required to be
paid by the Governmental Agency by law, all to the extent properly
allocable to the System.
Such Operating Expenses do not include depreciation or
obsolescence charges or reserves, amortization of intangibles or
other bookkeeping entries of a similar nature, interest charges and
charges for the payment of principal, or amortization, cf bonded or
other indebtedness of the Governmental Agency, costs, or charges
made therefor, for capital additions, replacements, betterments,
extensions or improvements to or retirements from the System which
under Generally Accepted Accounting Principles are properly
chargeable to the capital account or the reserve for depreciation,
and do not include losses from the sale, abandonment,
reclassification, revaluation or other disposition of any •
properties of the System nor such prope=cy items, including taxes
NYl-512353 .Vl A-2 .\ugusi: 29. 1997
•
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DESCRIPTION OF THE LOAN
(1) Commencement Date: October l, 1997
(2} Address of Governmental Agency:
City of Englewood
3400 South Elati
Englewood, Colorado 80110
(3) Cost of the Project:
(4) Principal Amount of Loan Commitment:
(5) Loan Term: The final Loan Repayment Date set
forth in Exhibit C.
(6) Description of the Project: See Exhibit A(l)
(7) Authorized Officer(s):
(8) Completion Date:
N'll-Sl295J .Vl B-1
EXHIBIT B
Auqust 29. 199 7
(1)
(2)
(3)
LOAN REPAYMENT SCHEDULE
Loan
Repayment
Date
Principal
Portion of
Loan R~aymentO)
Allocated to Principal of Authority Bonds.
Principal
Portion of
Loan R~a.vment<2l
Allocated to Authority Funds Deposited in Project Loan Subaccount.
Allocated to Interest on Authority Bonds.
NYl-512953.Vl C-1
Total
Principal
EXHIBIT C
Interest
Portion of
Loan Repaymencf3)
Total Loan
Repayment
August. 29, 1997
•
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•
EXHIBIT D
GOVERNMENTAL AGENCY BOND
FOR V;.LUE RECEIVED, the undersigned, the City of
Englewood, Colorado Acting By And Through Its Water Enterprise (the
"Governmental Agency") hereby promises to pay to the Colorado Water
Resources and Power Development Authority (the "Authority") , or
registered assigns, the principal amount of
Dollars ($ ), at
the times and in the amounts determined as provided in the Loan
Agreement dated as of October l, 1997, by and between the Authority
and the Governmental Agency (the "Loan Agreement"), together with
interest thereon in the amount calculated as provided in the Loan
Agreement, payable on the dates and in the amounts determined as
provided in the Loan Agreement .
This Governmental Agency Bond is issued pursuant to the
Loan Agreement and is issued in consideration of the loan made
thereunder (the "Loan") and to evidence the obL.gations of the
Governmental Agency set forth in Section 3.03(a) and (b) thereof.
This Governmental Agency Bond has been assigned to
as trustee (the "Trustee") under the Bond Resolution (as defined in
the Loan Agreement) , and payments hereunder shall, except as
otherwise provided in the Loan Agreement, be made directly to the
Loan Servicer (as defined in the Bond Resolution) for the account
of the Authority pursuant to such assignment. Such assignment has
been made as security for the payment of the Authority Bonds (as
defined in the Bond Resolution) issued to finance or refinance, ar..d
in connection with, the Loan and as otherwise described in the Loan
Agreement. All of the terms, conditions and provisions of the Loan
Agreement are, by this reference thereto, incor?orated herein as a
part of this Governmental Agency Bond.
Pursuant to the Loan Agreement, disbursements shall be
made in accordance with written instructions of the Authority by
the Trustee to the Governmental Agency, upon the receipt by the
Authority and Trustee of requisitions from the Governmental Agency
executed and delivered in accordance with the requirements set
forth in Section 3.02 of the Loan Agreement.
This Governmental Agency Bond is entitled to the benefits
and is subject to the conditions of the Loan Agreement. The
obligations of the Governmental Agency to make the payments
required hereunder shall be absolute and unconditional without any
defense or right of setoff, counterclaim or recoupment by reason of
any default by the Authority under the Loan Agreement or under any
other agreement between the Governmental Agency and the Authority
or out of any indebtedness or liability at ar.y time owing to the
Governmental Agency by the Authority or for any other reason .
NYl-512953 .Vl D-1 August:. 29, 1997
This Governmental Agency Bond is subject to optional
prepayment under the terms and conditions, and in the amounts,
provided in Section 3.07 of the Loan Agreement. •
The obligation of the Governmental Agency to make
payments under the Loan Agreement and this Governmental Agency Bond
is payable solely from the repayment source described in the Loan
Agreement. This Governmental Agency Bond is a special and limited
obligation of the Governmental Agency payable solely out of. and
secured by an irrevocable pledge of and lien (but not necessarily
exclusive lien) upon the Pledged Property (as defined in paragraph
(4) of Exhibit A of the Loan Agreement). This Governmental Agency
Bond does not constitute a debt or an indebtedness of the
Governmental Agency within the meaning of any constitutional,
charter or statutory provision or limitation. This Governmental
Agency Bond is not payable in whole or in part from the proceeds of
general property taxes, and the full faith and credit of the
Governmental Agency is not pledged for the payment of the principal
of or interest on this Governmental Agency Bond.
IN WITNESS WHEREOF, the Governmental Agency has caused
this Governmental Agency Bond to be duly executed, sealed and
delivered, as of this 1st day of October 1997.
(SEAL)
ATTEST:
Secretary
NYl-51 2 953 .Vl D-2
CITY OF ENGLEWOOD, COLORADO
ACTING BY AND THROUGH ITS
WATER ENTERPRISE
Chairman
Auqust 29, 1997
•
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EXHIBIT E-1
OPINION OF GOVERNMENTAL AGENCY COUNSEL
[LETTERHEAD OF COUNSEL TO GOVERNMENTAL AGENCY]
[DATED CLOSING DATE]
Colorado Water Resources and Power
Development Authority
as Truscee
PaineWebber Incorporated
as Representative of the Underwriters
Ladies and Gentlemen:
[insert "I am an attorney" or "We are attorneys"]
admitted to practice in the State of Colorado and ["I" or "We"]
have acted as counsel to the City of Englewood, Colorado Acting By
And Through Its Water Enterprise (the "Governmental Agency"), which
has entered into a Loan Agreement (as hereinafter defined) with the
Colorado Water Resources and Power Development Authority (the
"Authority"), and have acted as such in connection with the
authorization, execution and delivery by the Governmental Agency of
the Loan Agreement and its Governmental Agency Bond (as hereinafter
defined) .
In so acting [insert "I" or "we"] have examined the
Constitution and laws of the State of Colorado and rules of the
Governmental Agency. [insert "I" or "We"] have also examined
originals, or copies certified or otherwise identified to [insert
"my" or "our"] satisfaction, of the following:
(a) The Authority's Drinking Water Revolving Fund 1997 Series A
Revenue Bond Resolution, adopted by the Authority on
(the "Bond Resolution");
(b) the Loan Agree."!tent, dated as of October 1, 1997 (the
"Loan Agreement") by and between the Authority and the Governmental
Agency;
(c) proceedings of the governing members of the
Governmental Agency relating to the approval of the Loan Agreement
and the execution, issuance and delivery thereof on behalf of the
Governmental Agency, and the authorization of the undertaking and
completion of the Project (as defined in the Loan Agreement);
NYl-512953 .Vl E-1-1 August:: 29 , 1997
(d) the Governmental Agency Bond, dated October l, 1997
(the "Governmental Agency Bond") issued by the Governmental Agency
to the Authority to evidence the Loan; •
(e) proceedings of the governing body of the
Governmental Agency relating to the issuance of the Governmental
Agency Bond and the execution, issuance and delivery thereof to the
Authority (the Loan Agreement and the Governmental Agency Bond are
referred to herein collectively as the "Loan Documents");
(f) all outstanding instruments relating to bonds, notes
or other indebtedness of or relating to the Governmental Agency, if
any; and
( g) Appendix
Authority dated
to the Official Statement of the
{the "Official Statement").
[insert "I" or "We" have also examined and relied upon
originals, or copies certified or otherwise authenticated to
[insert "my" or "our"] satisfaction, of such other records,
documents, certificates and other instruments, and made such
investigation of law as in [insert "my" or "our"] judgment [insert
"I" or "we"] have deemed necessary or appropriate to enable [insert
"me" or "us"] to render the opinions expressed below.
Based upon the foregoing, [insert "I am" or "We are"] of
the opinion that:
1. The Governmental Agency is a "governmental agency" within the
meaning of the Authority's enabling legislation with the legal
right to carry on the business of the System {as defined in the
Loan Agreement) as currently being conducted and as proposed to be
conducted.
2. The Governmental Agency has full legal right and
authority to execute the Loan Documents and to observe and perform
its duties, covenants, obligations and agreements thereunder;
subject, however, to the effect of, restrictions and limitations
imposed by or resulting from, bankruptcy, insolvency, moratorium,
reorganization, debt adjustment or other similar laws affecting
creditors' rights generally (Creditor's Rights Limitations)
heretofore or hereafter enacted.
3. The proceedings of the Governmental Agency's
governing members approving the Loan Documents and authorizing
their execution, issuance and delivery on behalf of the
Governmental Agency, and authorizing the Governmental Agency to
undertake and complete the Project have been duly and lawfully
adopted and authorized in accordance with applicable Colorado law, •
(hereinafter collectively called the "Authorizing Resolutions"),
which Authorizing Resolutions were duly approved in accordance with
N'il-512953 . Vl E-1-2 Auqust 29, 1997
•
•
applicable Colorado law , at a meeting or meetings which were duly
called pursuant to necessary public notice and held in accordance
with applicable Colorado law, and at which quorums were present
acting throughout.
4. To the best of [insert "my" or "our"] knowledge,
after such investigation as [insert "I" or "we"] have deemed
appropriate, the authorization, execution and delivery of the Loan
Documents by the Governmental Agency, the observation and
performance by the Governr:i.ental Agency of its duties, covenants,
obligations and agreements thereunder and the consummation of the
transactions contemplated therein and the undertaking and
completion of Project do not and will not contravene any existing
law or any existing order, injunction, judgment, decree, rule or
regulation of any court or governmental or administrative agency,
authority or person having jurisdiction over the Governmental
Agency or its property or assets or result in a breach or violation
of any of the terms and provisions of, or constitute a default
under, any existing bond resolution, trust agreement, indenture,
mortgage, deed of trust or other agreement to which the
Governmental Agency is a party or by which it, the System (as
defined in the Loan Agreement) or its property or assets is bound.
5. To the best of [insert "my" or "our"] knowledge,
after such investigation as [insert "I" or "we"] have deemed
appropriate, all approvals, consents or authorizations of, or
registrations of or filings with , any governmental or public
agency, authority or person required to date on the part of the
Governmental Agency in connection with the authorization,
execution, delivery and performance of the Loan Documents (other
than authorizations, licenses and permits relating to the siting ,
construction and acquisition of the Project which the Governmental
Agency expects to receive in the ordinary course of business) and,
the undertaking and completion of the Project have been obtained or
made.
6. To the best of [insert "my" or "our"] knowledge,
after such investigation as [insert "I" or "we"] have deemed
appropriate, there is no litigation or other proceedi ng pending or
threatened in any court or other tribunal of competent jurisdiction
(either State or Federal) questioning the creation, organization or
existence of the Governmencal Agency or of the validity, lega l ity
or enforceability of the Loan Documents or the undertaking or
completion of the Project or which if adv ersely determined, could
(i) materially adversely affect (a ) the financial position of t~e
Governmental Agency, (b ) the ability of the Governmental Agency to
perform its obligations under the Loan Documents, (c) the security
for the Loan Documents , or (d) the transactions contemplated by the
Loan Documents or (ii) impair the ability of the Governmental
Agency to maintain and operate its System, except as described in
Appendix ~-of the Official Statement of the Authority dated April
25, 1997.
N'l l -5 1 2953 . Vl E-1-3 August: 29 , 1997
7. In accordance with [insert "my" or "our" J
understanding with the Governmental Agency, [insert "I" or "we"]
have participated in the preparation of Appendix to the •
Official Statement, and in that connection have participated in
conferences with, and made general inquiries of, officers and
representatives of the Governmental Agency and others with respect
to the contents of Appendix ~-to the Official Statement. While
("I" or "we" J are not passing upon, and do not assume
responsibility for, the accuracy , completeness or fairness of the
statements containe d in Appendix ~-to the Official Statement, no
facts have come to [insert "my" or "our"] attention in the course
of the activities described above which lead [insert "me" or "us"]
to believe that Appendix ~-to the Official Statement (other than
the financial and statistical data contained therein, as to which
[insert "I" or "we"] express no opinion or belief) as of its date
contained, or as of the ·date hereof contains, any untrue statement
of a material fact or as of its date omitted, or as of the date
hereof omits, to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
8. There does not exist any bill, act, law, rule or
regulation pending or, to the best of [insert "my" or "our" J
knowledge, threatened which, if enacted, could (i) materially
adversely affect (a ) the ability of the Governmental Agency to
perform its obligations under the Loan Documents, (b) the security
for the Loan Documents or (c) the transactions contemplated by the
Loan Documents or (ii) impair the ability of the Governmental
Agency to maintain and operate the System.
9. The City/Governmental Agency is a "covered entity"
under C.R. S. 37-60-126 and has duly adopted, pursuant to the
provisions of C.R.S. 37-60-126 a Water Use Efficiency Plan
satisfying the provisions of C .R.S. 3 7 -60-126 prior to submitting
its application for the Loan to the Authority.
This opinion is rendered on the basis of Federal law and
the laws of the State of Colorado as enacted and construed on the
date hereof. [insert "I" or "we"] express no opinion as to any
matter not set forth in the numbered paragraphs herein.
[insert "I" or "We"] hereby authorize O'Melveny & Myers
LLP, Bond Counsel and Carlson, Hammond & Paddock L.L.C., Genera l
Counsel to t h e Authoricy to re l y on t hi s opinion as if [insert "I"
or "we"] had addressed this op i nion to them in addition to you.
Very truly yours,
NYl-5 1 2 9 5 3.Vl S-1-4 Augu st: 29 , 19 97
•
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EXHIBIT E-2
OPINION OF GOVERNMENTAL AGENCY BOND COUNSEL
[LETTERHEAD OF BOND COUNSEL TO GOVERNMENTAL AGENCY]
(DATED CLOSING DATE]
Colorado Water Resources and Power
Development Authority
as Trustee
PaineWebber Incorporated
as Representative of the Underwriters
Gentlemen:
We have acted as bond counsel to the City of Englewood,
Colorado Acting By And Through Its Water Enterprise (the
"Governmental Agency"), which has entered into a Loan Agreement (as
hereinafter defined) with the Colorado Water Resources and Power
Development Authority (the "Authority"), and have acted as such in
connection with the authorization, execution and delivery by the
Governmental Agency of the Loan Agreement and its Governmental
Agency Bond (as hereinafter defined).
In so acting we have examined the Constitution and laws
of the State of Colorado and rules of the Governmental Agency. We
have also examined originals, or copies certified or otherwise
identified to our satisfaction, of the following:
(a) The Authority's Drinking Water Revolving Fund 1997
Series A Revenue Bond Reso:.ution, adopted by the Authority on
(the "Bond Resolution");
(b) the Loan Agreement, dated as of October l, 1997 (the
"Loan Agreement") by and between the Authority and the Governmental
Agency;
(c) proceedings of the governing members of the
Governmental Agency relating to the approval of the Loan Agreement
and the exec:1tion, issuance and delivery thereof on behalf of the
Governmental Agency;
(d) the Governmental Agency Bond, dated October 1, 1997
(the "Governmental Agency Bond") issued by the Governmental Agency
to the Authority to evidence the Loan; and
NYl-512953 .Vl E-2-1 August: 29 , 1997
(e) proceedings of the governing body of the
Governmental Agency relating to the issuance of the Governmental
Agency Bond and the execution, issuance and delivery thereof to the •
Authority (the Loan Agreement and the Governmental Agency Bond are
referred to herein collectively as the "Loan Documents").
We have also examined and relied upon originals, or
copies certified or otherwise authenticated to our satisfaction, of
such other records, documents, certificates and other instruments,
and made such investigation of law as in our judgment we have
deemed necessary or appropriate to enable us to render the opinions
expressed below.
Based upon the foregoing, We are of the opinion that:
1. The Governmental Agency is a "governmental agency" within the
meaning of the Authority's enabling legislation.
2. The Governmental Agency has full legal right and
authority to execute the Loan Documents and to observe and perform
its duties, covenants, obligations and agreements thereunder;
subject, however, to the effect of, restrictions and limitations
imposed by or resulting from, bankruptcy, insolvency, moratorium,
reorganization, debt adjustment or other similar laws affecting
creditors' rights generally (Creditor's Rights Limitations)
heretofore or hereafter enacted.
3. The Governmental Agency has pledged the [insert
specific source of payment] for the punctual payment of the
princ i pal of and interest on the Loan (as defined in the Loan
Agreement), and all other amounts due under the Loan Documents
according to their respective terms and the Authority has a first
lien on such source of repayment. No filings or recordings are
required under the Colorado Uniform Commercial code in order to
provide a first lien on such source of repayment and all actions
have been taken as required under Colorado law to insure the
priority, validity and enforceability of such lien.
4. The Loan Documents have been duly authorized,
executed and delivered by the authorized officers of the
Governmental Agency; and, assuming in the case of the Loan
Agreement, that the Authority has all the requisite power and
authority to authorize, execute and deliver, and has duly
authorized, executed and delivered the Loan Agreement, the Loan
Documents constitute the legal, valid and binding obligations of
the Governmental Agency enforceable in accordance with their
respective terms; subject, however, to the ef feet of, and to
restrictions and limitations imposed by or resulting from
Creditor's Rights Limitations or other laws, judicial decisions and •
principles of equity relating to the enforcement of contractual
obligations generally.
NYl-512953.Vl E-2-2 August: 29 , 1997
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5. Assuming compliance with the covenants co?tained in
the Loan Agreement, the Governmental Agency is not (d ~rectly or
indirectly) (A) using in excess of 10 percent of the p ri oceeds of
the Authority Bonds (as defined in the Loan Agreement) jloaned to
the Governmental Agency or the Proj ec-: in a manner t~at would
constitute "private business use" wit~in the meaning o f Section
141(b) (6) of the Internal Revenue Code of 1986, as ame~ded (the
"Code"), and at least one-half of such private busilness use
permitted by clause (A) is neither unrelated to the gov~rnmental
use of the proceeds of the Authority Bonds loaned \ to the
Governmental Agency (within the meaning of Section
141(b) (3) (A) (ii) (I) or (III) of the Code) nor disprop ~rtionate
related business use (within the meaning of Section
141(b) (3) (A) (ii) (II) or (III) of the Code) nor (B) using (directly
or indirectly) any of the proceeds of the Authority Bonds oaned to
the Governmental Agency to make or finance loans to persops other
than governmental units (as such term is used in Section 1~\l(c) of
the Code).
6. The execution and delivery of the Loan Docum nts are
not subject to the limitations of Article X, Section 20 of the
Colorado Constitution ("TABOR") since the System of the
Governmental Agency as of the date hereof constitutes an en~rprise
under TABOR. The performance of the obligations f the
Governmental Agency under the Loan Documents is not subject to the
limitations of TABOR as long as the System continues to qua ify as
an enterprise under TABOR. If the System is no lo~er an
enterprise under TABOR, the Loan Documents will conti ' ue to
constitute legal, valid and binding obligations of the Gover ental
Agency enforceable in accordance with their respective j terms;
subject, however, to (a) Creditor's Rights Limitations o other
laws, judicial decisions and principles of entity relating to the
enforcement of contractual rights generally and (b) subject to the
next sentence, the revenue and spending limitations of TAB ~R. If
the System at any time fails to be an enterprise under TABO f , (i)
the Governmental Agency may continue to impose any incre~se in
fees, rates and charges of the System with out voter approval· (ii)
all revenues of the Governmental Agency used to pay Loan Repa ents
shall be included in the Governmental Agency's fiscal year sprnding
limit under Section 7(d) of TABOR, except that debt service c f anges
and reductions are exceptions to, and not part of, the Govern!'\lental
Agency's revenue and spending basis and limits; and (iii) ~f the
Governmental Agency is required to reduce spending in order to
comply with its fiscal year spending limit under Section 7 (~) of
TABOR, the Governmental Agency will first be required to l~duce
spending for purposes for which it does not have an obligf tion
under law or by contract prior to reducing spending requir d to
comply with the other covenants contained in the Loan Docume ts .
NY l -512953 .Vl E-2-3 August: 2 \' 1997
This opinion is rendered on the basis of Federal law and
the laws of the State of Colorado as enacted and construed on the •
date hereof. I express no opinion as to any matter not set forth
in the numbered paragraphs herein.
We hereby authorize O'Melveny & Myers LLP, Bond Counsel
and Carlson, Hammond & Paddock, LLC General Counsel to the
Authority to rely on this opinion as if we had addressed this
opinion to them in addition to you.
NYl-512953.Vl E-2-4 Auqusc 29, 1997
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EXHIBIT F
ADDITIONAL COVENANTS AND REQUIREMENTS
Audit Requirements. For each year
Governmental Agency requests a disbursement from
Subaccount, the Governmental Agency shall conduce
in accordance with the federal Single Audit Act,
et seq.
in which the
the Project Loan
its annual audit
31 u.s.c. § 7501
Additional Senior, Parity and Subordinate Lien Bonds.
The Governmental Agency covenants that it will not issue any
obligations payable from the Pledged Property which are superior to
the lien of this Loan Agreement on the Pledged Property. In
addition, the Governmental Agency covenants that it will not issue
any obligations with a lien on the Pledged Property which is on a
parity with the lien of the Governmental Agency Bond other than the
refunding obligations, payable from the Pledged Property unless the
Governmental Agency certifies to the Authority that Net Revenues
(as defined in paragraph (4) of Exhibit A to this Loan Agreement)
for any 12 consecutive months out of the 18 months preceding the
month in which such obligacions are to be issued is at least equal
to the sum (a) of 110% of the maximum annual debt service of (i)
the Governmental Agency Bond and all obligations of the
Governmental Agency outstanding during such 12 month period payable
on a parity with the Governmental Agency from the Pledged Property,
and (ii) such proposed obligations to be issued and (b) 100% of all
other indebtedness payable from the Pledged Property. Net Revenues
for the purposes of the preceding sentence may be adjusted to
reflect any rate increases adopted prior to the issuance of such
additional obligations. Notwithstanding the foregoing, the
Governmental Agency may issue refunding obligations, payable from
the Pledged Property without compliance with the requirements
stated above, provided that the debt service payments on such
refunding obligations do not exceed the debt service payments on
the refunded obligations on any interest payment date. In
addition, the Governmental Agency covenants that it will not issue
any obligations payable from the Pledged Property which is
subordinate to the lien of this Loan Agreement on the Pledged
Property unless of the Governmental Agency certifies to the
Authority that for any 12 consecutive months out of the 18 months
preceding the month in which such obligations are to be issued Net
Revenues were at least 100% of the maximum annual debt service on
all indebtedness outstanding during such period.
Operations and Maintenance Reserve Fund. The
Governmental Agency shall maintain an operations and maintenance
reserve in an amount equal to three months of operation and
maintenance expenses, excluding depreciation, of the System as set
for th in the annual budget for the current fiscal year. Said
reserve may be in the form of unobligated fund balances or other
NYl-512953.Vl F-1 Auqust: 29, 1997
unobligated cash or securities (i.e. capital reserves) or may be in
a separate segregated fund. If the operations and maintenance
reserve falls below this requirement, the sho=tfall shall be made
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up in 24 substantially equal monthly installments beginning the •
second month after such shortfall.
Rate Study. In the event that Revenues collected during
a fiscal year are not sufficient to meet the requirements set forth
in the Rate Covenant contained in pa=ag=aph 5 of Exhibit A of this
Loan Agreement, the Governmental Agency shall, within 90 days of
the end of such fiscal year, cause an independent firm of
accountants or consulting engineers, to prepare a rate study for
the purpose of recommending a schedule of rates, fees and charges
for the use of the System which in the opinion of the firm
conducting the study will be sufficient to provide Revenues to be
collected in the next succeeding fiscal year which will provide
compliance with the Rate Covenant described in paragraph 5 of
Exhibit A of this Loan Agreement. Such a study shall be delivered
to the Authority and the Trustee. The Governmental Agency shall
within six months o~ receipt of such study, adopt rates, fees and
charges for the use of the System, based upon the recommendations
contained in such study, which provide compliance with said rate
covenant.
Special Fund. The Governmental Agency covenants to
create a special fund into which shall be deposited the Revenues
(as defined in paragraph (4) of Exhibit A to this Loan Agreement) .
The Revenues shall be applied, on or before the last day of each
month, first to the payment of the Ope=ating Expenses (as defined
in paragraph (4) of Exhibit A to this Loan Agreement) and then
applied to the payment of the Loan Repayments and other amounts
payable on a parity with the Loan Repayments. Any further
application shall be as provided by ordinance or resolution of the
Governmental Agency.
N'll-5'_295). ,,._ F-2 .>.uqus: 29, lB7
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