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HomeMy WebLinkAboutbocc.res.186.2001 SUPPLEMENTAL RESOLUTION NO. ► g6—200 / AUTHORIZING THE ISSUANCE OF PITKIN COUNTY, COLORADO, SALES TAX REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2001, IN AN AGGREGATE PRINCIPAL AMOUNT OF $8,460,000, SUPPLEMENTING AND AMENDING RESOLUTIONS NOS. 92-392, 93-191, 95-49 AND 98-206, AND SETTING FORTH CERTAIN OTHER MATTERS RELATING THERETO RECITALS 1. Pitkin County, in the State of Colorado (the "County" and the "State," respectively), is a duly created political subdivision organized and operating as a home rule county pursuant to the Constitution and laws of the State including particularly Title 30, Article 35, Colorado Revised Statutes, as amended, and the Home Rule Charter of the County, adopted March 21, 1978, as amended (the "Charter"). 2. The members of the Board of County Commissioners of the County (the "Board") have been duly elected, chosen and qualified. 3. The County and the City of Aspen have, pursuant to an intergovernmental agreement dated November 21, 1983 and amended on June 9, 1986, formed the Roaring Fork Transit Agency("RFTA") to provide public transit in the County. 4. At a special election of the electors of the County, duly called and held on May 3, 1983, in accordance with law and Resolution 83-29 adopted by the Board on April 5, 1983, as amended (the "Sales Tax Resolution"), and pursuant to due notice, a majority of the registered electors of the County voting at said election voted for the imposition by the County of an additional 1% sales tax to be used for public transit purposes (the "Sales Tax"). 5. Pursuant to Title 29, Article 2, Colorado Revised Statues, as amended (together with Title 11, Article 57, Part 2, Colorado Revised Statutes, as amended, the "Act') and the Charter, the County is authorized to issue sales tax revenue bonds payable from the Sales Tax. 6. Pursuant to Resolution No. 92-392, duly adopted by the Board on October 27, 1992, (the "Series 1992 Resolution"), the County authorized the issuance of its "Pitkin County, Colorado, Sales Tax Improvement and Refunding Revenue Bonds, Series 1992" (the "Series 1992 Bonds") as Sales Tax Parity Obligations, as defined in the Series 1992 Resolution, in the aggregate principal amount of $2,530,000, for the purpose of refunding the "Pitkin County, Colorado Sales Tax Revenue Bonds Series 1983" and providing funds to purchase additional buses for RFTA. 7. The Series 1992 Resolution authorizes the issuance of additional sales tax revenue bonds on a parity with the Series 1992 Bonds upon compliance by the County with certain conditions set out in Section 29(a) of the Series 1992 Resolution. 02-101352.06 2 8. At a special election of the electors of the County, duly called and held on November 2, 1993 (the "1993 Election"), in accordance with law and pursuant to due notice, a majority of the registered electors voting at said election approved the following ballot question (the "1993 Ballot Question"): SHALL PITKIN COUNTY DEBT BE INCREASED A PRINCIPAL AMOUNT OF UP TO $13,650,000 WITH A REPAYMENT COST OF UP TO $29,725,0001 BY THE ISSUANCE AND PAYMENT OF REVENUE BONDS AT THE BEST AVAILABLE NET EFFECTIVE INTEREST RATE NOT TO EXCEED 21 YEARS FROM THE DATE OF ISSUANCE, FOR THE PURPOSE OF INCREASING AND IMPROVING THE PUBLIC MASS TRANSPORTATION SYSTEM WITHIN THE ROARING FORK VALLEY; such mass transportation system improvements to be approved by intergovernmental agreement between Pitkin County, the City of Aspen, and the Town of Snowmass Village and to include but not be limited to (i) increased an improved bus service, including, where feasible, the conversion of diesel- powered buses to cleaner-burning alternative fuels, (ii) park-and-ride facilities, and(iii) participating with Roaring Fork Valley governments and/or others to acquire the Denver and Rio Grande railroad right-of-way for transportation and related trails and open space uses; such bonds to be issued in one or more series, with or without a premium for redemption prior to maturity, and upon such other terms as the Board of County Commissioners of Pitkin County may determine, Pitkin County being authorized (i) to refund the bonds; (ii) to pledged sales and use taxes and any legally available revenues of the transportation system in an amount sufficient to pay the principal of, premium, if any, and interest on the bonds and any refunding bonds when due; and (iii) to receive, collect and spend the proceeds of the bonds and any refunding bonds and the revenues from such taxes and revenues and any earnings from the investment of such proceeds and revenues without application of the revenue and spending limitations of Article X, Section 20 of the Colorado Constitution and without thereby otherwise limiting the receipt, collection or spending of any other revenues or funds of Pitkin County? 1 Maximum repayment cost calculated as the sum of the equal annual installments required to repay principal of$13,650,000 plus interest at 8 V2% over 21 years. The actual interest rate, term and repayment cost could be lower but not higher. 9. Pursuant to the authority granted by the approval of the 1993 Ballot Question and Resolution No. 93-191, which was duly adopted on December 21, 1993 (the "Series 1993 Resolution") and which supplemented and amended the Series 1992 Resolution, the County authorized the issuance of its "Pitkin County Colorado, Sales Tax Revenue Bonds, Series 1993" (the "Series 1993 Bonds") as Sales Tax Panty Obligations, in the aggregate principal amount of $2,265,000, which bonds were issued on a panty with the Series 1992 Bonds for the purpose of acquiring and equipping additional buses for use by RFTA. 02-101352.06 3 10. Pursuant to the authority granted by the approval of the 1993 Ballot Question and Resolution No. 95-49, which was duly adopted on April 12, 1995 (the "Series 1995 Resolution") and which supplemented the Series 1992 Resolution, as previously supplemented and amended by the Series 1993 Resolution, the County authorized the issuance of its "Pitkin County, Colorado, Sales Tax Revenue Bonds, Series 1995" (the "Series 1995 Bonds") as Sales Tax Parity Obligations, in the aggregate principal amount of$1,325,000, which bonds were issued on a parity with the Series 1992 Bonds and the Series 1993 Bonds for purpose of making or acquiring capital improvements to the public mass transit system in the Roaring Fork Valley, including, but not limited to, the acquisition and equipping of a bus maintenance and storage facility for RFTA. 11. Pursuant to the authority granted by the approval of the 1993 Ballot Question and Resolution No. 98-206, which was duly adopted on September 23, 1998 (the "Series 1998 Resolution") and which supplemented and amended the Series 1992 Resolution as previously supplemented and amended by the Series 1993 Resolution and the Series 1995 Resolution, the County authorized the issuance of its "Pitkin County, Colorado, Sales Tax Revenue Bonds, Series 1998 (the "Series 1998 Bonds") as Sales Tax Parity Obligations, in the aggregate principal amount of $1,960,000, which bonds were issued on a parity with the Series 1992 Bonds, the Series 1993 Bonds and the Series 1995 Bonds for the purpose of acquiring additional buses for use by RFTA. 12. The Series 1992 Resolution, as supplemented and amended by the Series 1993 Resolution, the Series 1995 Resolution, the Series 1998 Resolution and this Supplemental Resolution, is referred to herein as the "Bond Resolution." 13. At an election held on November 7, 2000 (the "2000 Election"), a majority of the registered electors of the County, the City of Aspen, Colorado, the Town of Basalt, Colorado, Eagle County, Colorado, the City of Glenwood Springs, Colorado and the Town of Snowmass Village, Colorado voting at such election approved the formation of the Roaring Fork Transportation Authority(the "Authority") as a separate political subdivision and body public of the State organized under and governed by the Roaring Fork Transportation Authority hntergovernmental Agreement dated as of September 12, 2000 (the "Authority IGA") that was entered into by and among each of such counties, cities and towns pursuant to Title 29, Article 1, Part 2, .Colorado Revised Statutes, as amended (the "Intergovernmental Relations Act"), Article IV, Section 18 of the Colorado Constitution, and the Colorado Rural Transportation Authority Act, Title 43, Article 4, Part 6, Colorado Revised Statues, as amended (the "Rural Transportation Authority Act"). 14. Pursuant to the Authority IGA, RFTA will be reorganized and merged into the Authority and the Authority will succeed to RFTA's assets, liabilities, revenues and responsibilities. 15. The County is empowered by the Intergovernmental Relations Act, by Article IV, Section 18 of the Colorado Constitution and by the Rural Transportation Authority Act to contribute revenues from the Sales Tax to the Authority and to issue sales tax revenue bonds to finance projects for the Authority. 02-101352.06 4 16. At the 2000 Election, a majority of the registered electors of the County voting at such election approved the following ballot question (the "2000 Ballot Question" and, collectively with the 1993 Ballot Question, the"Ballot Questions"): SHALL PITKIN COUNTY DEBT BE INCREASED BY AN AMOUNT NOT TO EXCEED $10.2 MILLION WITH A MAXIMUM REPAYMENT COST OF $14 MILLION (BUT WITH NO INCREASE IN THE COUNTY'S EXISTING TAXES) FOR THE PURPOSE OF SUPPLEMENTING EXISTING DEBT AUTHORIZATION OF $8.1 MILLION AND OTHER LOCAL, STATE AND FEDERAL FUNDING TO ACCOMPLISH THE FOLLOWING TRANSIT PROJECTS: PROVIDE LOCAL FUNDS TO PARTICIPATE WITH THE COLORADO DEPARTMENT OF TRANSPORTATION IN THE COMPLETION OF THE IMPROVEMENTS TO HIGHWAY 82 FROM BUTTERMILK TO 7TH AND MAIN, INCLUDING A CUT AND COVER TUNNEL, NEW BRIDGES OVER MAROON CREEK AND CASTLE CREEK, AND REALIGNING THE HIGHWAY TO CONNECT DIRECTLY WITH THE 7TH AND MAIN STREET INTERSECTION, $7 MILLION FOR SNOWMASS VILLAGE TRANSPORTATION IMPROVEMENTS, $1.5 MILLION FOR SAFETY IMPROVEMENTS TO PITKIN COUNTY BUS STOPS, AND $7.5 MILLION FOR BUSES, MAINTENANCE FACILITY IMPROVEMENTS, AND AFFORDABLE HOUSING FOR THE ROARING FORK TRANSIT AGENCY OR SUCCESSOR REGIONAL TRANSPORTATION AUTHORITY; SUCH DEBT TO CONSIST OF REVENUE BONDS WHICH SHALL BEAR INTEREST, MATURE, BE SUBJECT TO REDEMPTION, WITH OR WITHOUT PREMIUM, AND BE ISSUED, DATED AND SOLD (AT, ABOVE OR BELOW PAR) IN SUCH MANNER AND CONTAINING SUCH OTHER TERMS, NOT INCONSISTENT HEREWITH, AS THE BOARD OF COUNTY COMMISSIONERS MAY DETERMINE, PITKIN COUNTY BEING AUTHORIZED TO PAY SUCH BONDS AND OTHER PREVIOUSLY AUTHORIZED REVENUE BONDS FROM, AND TO SECURE SUCH PAYMENT BY A PLEDGE OF, EXISTING PITKIN COUNTY SALES AND USE TAXES AND OTHER LEGALLY AVAILABLE FUNDS? 17. The County has agreed, at the request of the Authority, to issue County sales tax revenue bonds for the purpose of improving the public mass transportation system within the Roaring Fork Valley, acquiring buses, constructing or acquiring maintenance facility 02-101352.06 5 improvements, and constructing or acquiring affordable housing for the Authority (as defined herein, the "Series 2001 Improvement Project'). 18. The County desires to refund, defease and call for redemption on December 1, 2001 the maturities of the outstanding Series 1992 Bonds (currently outstanding in the aggregate principal amount of $1,405,000), Series 1993 Bonds (currently outstanding in the aggregate principal amount of$1,355,000), and Series 1995 Bonds (currently outstanding in the aggregate principal amount of$1,125,000) (collectively, the "Refunded Bonds"). 19. Pursuant to the provisions of Title 11, Article 56, Colorado Revised Statutes, as amended (the "Refunding Act'), the County is authorized to issue refunding revenue bonds for the purpose of refunding, paying and discharging the Refunded Bonds and for one or more other purposes, including but not limited to reducing the net effective interest rate of the obligations represented by the Refunded Bonds, reducing the total principal and interest payable on such obligations, reducing the principal and interest payable on such obligations in one or more particular year or years and effecting other economies for the County, subject to the terms, conditions and limitations in the Refunding Act. 20. The Board has determined that it is in the best interests of the County and its residents to issue the Pitkin County, Colorado, Sales Tax Revenue Refunding and Improvement Bonds, Series 2001 (the "Series 2001 Bonds") in the aggregate principal amount of$8,460,000 for the purposes of: the 2001 Improvement Project; currently refunding the Refunded Bonds to effect the economies described in the preceding recital pursuant to the Refunding Act (as defined herein, the "2001 Refunding Project'); and funding a reserve for and paying the costs of issuance of the Bonds. 21. Of the $8,460,000 aggregate principal amount of the Bonds, $3,490,000 will be used to finance the Series 2001 Refunding Project, and $4,970,000 will be used to finance the Series 2001 Improvement Project. 22. The Series 2001 Bonds shall be issued as Sales Tax Parity Obligations and shall be payable from the Sales Tax on a parity with the Series 1998 Bonds and any Sales Tax Parity Obligations later issued. 23. The issuance of Sales Tax Parity Obligations by the County is subject to the provisions of Section 29(a) of the Bond Resolution and the provisions of Section 4 of the Intergovernmental Agreement: Transportation Sales Tax Distribution dated as of January 1, 2001 (the "Transportation Sales Tax Distribution IGA") among the County, the City of Aspen, Colorado and the Town of Snowmass Village, Colorado. 24. The issuance of the Series 2001 Bonds shall be in accordance with all requirements of Section 29(a) of the Bond Resolution and Section 4 of the Transportation Sales Tax Distribution IGA. 25. At the 1993 Election, the registered electors of the County voting at such election approved the imposition of an additional 0.5% Sales Tax (the "Additional Sales Tax"), the net proceeds of which are not currently pledged to the payment of the Bonds but which the Board has determined may at a future date be pledged to the payment of the then-outstanding Bonds 02-101352.06 6 and any additional Sales Tax Parity Obligations issued thereafter, subject to the provisions of the Transportation Sales Tax Distribution IGA. 26. There has been presented to the Board (a) the contract between the County and Kirkpatrick, Pettis, Smith, Polian, Inc. for the purchase of the Series 2001 Bonds (the "Series 2001 Purchase Contract"); and (b) the Preliminary Official Statement dated November 7, 2001, relating to the Series 2001 Bonds (the "Series 2001 Preliminary Official Statement'). 27. This Supplemental Resolution sets forth certain matters relating to the Series 2001 Bonds and supplements and amends the Bond Resolution. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF PITKIN COUNTY, COLORADO THAT: Section 1. Definitions. The terms defined in this section shall have the designated meanings for all purposes of this Supplemental Resolution and of any amendatory or additional supplemental resolution, except where the context by clear implication requires otherwise. Other terms are parenthetically defined elsewhere in this Supplemental Resolution, including the recitals hereto. Capitalized terms used in this Supplemental Resolution and not defined in this section or elsewhere in this Supplemental Resolution shall have the meanings given them in the Bond Resolution. "Act" means, collectively, Title 29, Article 2, Colorado Revised Statutes, as amended, or any successor thereto, and Title 11, Article 57, Part 2, Colorado Revised Statutes, as amended, or any successor thereto. "Authority" means the Roaring Fork Transportation Authority, a separate political subdivision and body public of the State created pursuant to the Authority IGA. "Authority IGA" means the Roaring Fork Transportation Authority Intergovernmental Agreement dated as of September 12, 2000, entered into by and among the County, the City of Aspen, Colorado, the Town of Basalt, Colorado, Eagle County, Colorado, the City of Glenwood Springs, Colorado and the Town of Snowmass Village, Colorado, for the purpose of creating the Authority. "Ballot Questions" means, collectively, the 1993 Ballot Question and the 2000 Ballot Question. body. "Board" means the Board of County Commissioners of the County, and any successor "Bond Counsel" means (a) as of the date of issuance of the Series 2001 Bonds, Kutak Rock LLP, and (b) as of any other date, Kutak Rock LLP or such other attorneys selected by the County with nationally recognized expertise in the issuance of municipal bonds. "Charter" means the Pitkin County Home Rule Charter, adopted March 21, 1978, as amended. 02-1 01 3 52.06 7 "Code" means the Internal Revenue Code of 1986, as amended. Each reference to a section of the Code herein shall be deemed to include the United States Treasury Regulations proposed or in effect thereunder and applicable to the Bonds or the use of proceeds thereof, unless the context clearly requires otherwise. "County"means Pitkin County, Colorado and any successor thereto. "1993 Ballot Question" means the ballot question adopted by the registered electors of the County at the special election held on November 2, 1993, as set forth in Recital 8 to this Supplemental Resolution. "Paying Agent" means The Bank of Cherry Creek, N.A., in Denver, Colorado, or any successor thereto or assignee thereof approved by the County. "Refunded Bonds" means the currently outstanding Series 1992 Bonds, Series 1993 Bonds and Series 1995 Bonds. "Refunded Bond Requirements" means the principal, redemption premium, if any, and interest due in connection with the Refunded Bonds upon prior redemption on December 1, 2001. "Refunding Act" means Title 11, Article 56, Colorado Revised Statutes, as amended, or any successor thereto. "Registrar" means The Bank of Cherry Creek, N.A., in Denver, Colorado, or any successor thereto or assignee thereof approved by the County. "Series 1992 Bonds" means the "Pitkin County, Colorado, Sales Tax Improvement and Refunding Revenue Bonds, Series 1992," issued on October 29, 1992 in the aggregate principal amount of $2,530,000 and currently outstanding in the aggregate principal amount of $1,405,000. "Series 1993 Bonds" means the "Pitkin County, Colorado, Sales Tax Revenue Bonds, Series 1993," issued on December 29, 1993 in the aggregate principal amount of$2,265,000 and currently outstanding in the aggregate principal amount of$1,355,000. "Series 1995 Bonds" means the "Pitkin County, Colorado, Sales Tax Revenue Bonds, Series 1995," issued on May4, 1995 in the aggregate principal amount of $1,325,000 and currently outstanding in the aggregate principal amount of$1,125,000. "Series 1998 Bonds" means the "Pitkin County, Colorado, Sales Tax Revenue Bonds, Series 1998," issued on November 9, 1998 in the aggregate principal amount of$1,960,000 and currently outstanding in the aggregate principal amount of$1,785,000. "Series 2001 Bond Insurer" means Financial Security Assurance hic., a New York stock insurance company, or any successor thereto or assignee thereof. 02-101352.06 8 "Series 2001 Bond Insurance Policy" means the municipal bond insurance policy issued by the Series 2001 Bond Insurer guaranteeing the scheduled payment of principal of and interest on the Series 2001 Bonds when due. "Series 2001 Bonds" means the "Pitkin County, Colorado, Sales Tax Revenue Refunding and Improvement Bonds, Series 2001" issued pursuant to the provisions of Section 3 hereof. "Series 2001 Improvement Project" means improving the public mass transportation system within the Roaring Fork Valley, acquiring buses, constructing or acquiring maintenance facility improvements, and constructing or acquiring affordable housing for the Authority and paying an allocable portion of the costs of issuance of the Series 2001 Bonds. "Series 2001 Preliminary Official Statement" means the Preliminary Official Statement dated November 7, 2001 relating to the Series 2001 Bonds. "Series 2001 Purchase Contract" means the agreement for the purchase of the Series 2001 Bonds dated November 20, 2001 between the County and the Series 2001 Underwriter. hereof. "Series 2001 Rebate Account' means the account of that name established in Section 18 "Series 2001 Refunding Project' means any purpose for which proceeds of the Series 2001 Bonds may be expended under the Refunding Act and the Charter, including, but not limited to, the payment of an allocable portion of the costs of issuance of the Series 2001 Bonds and the current refunding, paying and discharging of the Refunded Bond Requirements. "Series 2001 Reserve Account Policy" means the municipal bond debt service reserve insurance policy issued by the Series 2001 Bond Insurer and deposited in the Reserve Account pursuant to Section 13 hereof. "Series 2001 Reserve Account Policy Insurance Agreement" means the Insurance Agreement dated as of the date of issuance of the Series 2001 Bonds between the County and the Series 2001 Bond Insurer. "Series 2001 Underwriter" means Kirkpatrick, Pettis, Smith, Polian, Inc., or any successor thereto approved in writing by the County. "Tax Letter of Instructions"means the Tax Letter of Instructions, dated the date on which the Bonds are originally issued and delivered to the County by Bond Counsel, as such instructions may be superseded or amended in accordance with their terms. "2000 Ballot Question" means the ballot question adopted by the registered electors of the County at the election held on November 7, 2000, as set forth in Recital 16 to this Supplemental Resolution. Section 2. Ratification. All action (not inconsistent with the provisions of this Supplemental Resolution) heretofore taken by the Board and the officers of the County directed 02-101352.06 9 toward effecting the Series 2001 Improvement Project, the Series 2001 Refunding Project and the sale and delivery of the Series 2001 Bonds for such purpose be, and the same is hereby, ratified, approved and confirmed. Section 3. Authorization of Series 2001 Bonds. In accordance with the Ballot Questions, the Constitution of the State of Colorado, the Act, the Refunding Act, the Charter, and all other laws of the State thereunto enabling, the Board, on behalf of the County, hereby authorizes the issuance of its "Pitkin County, Colorado, Sales Tax Revenue Refunding and Improvement Bonds, Series 2001" in the aggregate principal amount of $8,460,000 for the Purpose of providing funds for the Series 2001 Improvement Project and the Series 2001 Refunding Project and funding a reserve for the Bonds. Section 4. Bond Details. The Series 2001 Bonds shall be issued in fully registered form (i.e., registered as to payment of both principal and interest) in book-entry form as provided in the Bond Resolution, in denominations of$5,000 or integral multiples thereof(provided that no Series 2001 Bond may be in a denomination which exceeds the principal coming due on any maturity date and no individual Series 2001 Bond may be issued for more than one maturity). The Series 2001 Bonds shall be dated December 1, 2001 and numbered in such manner as the Registrar shall determine. The Series 2001 Bonds shall bear interest from their date to maturity, payable on June 1 and December 1 each year, commencing on June 1, 2002, except that Series 2001 Bonds which are reissued upon transfer, exchange or other replacement shall bear interest from the most recent interest payment date to which interest has been paid or duly provided for, or if no interest has been paid, from the date of the Series 2001 Bonds. The Series 2001 Bonds shall mature on December I of each year and bear interest at the rates per annum shown below: MATURITY SCHEDULE Interest Rate Year Amount (Per Annum) 2002 $ 430,000 3.25% 2003 445,000 3.25 2004 465,000 3.25 2005 475,000 3.25 2006 495,000 3.50 2007 505,000 3.50 2008 225,000 3.75 2009 230,000 4.00 2010 240,000 4.00 2011 250,000 4.00 2016 1,790,000 5.00 2021 2,910,000 5.25 The principal of and premium, if any, on any Series 2001 Bond shall be payable to the owner thereof as shown on the registration books kept by the Registrar upon maturity thereof or prior redemption of any Series 2001 Bond and upon presentation and surrender at the principal 02-101352.06 10 corporate trust office of the Paying Agent in Denver, Colorado. If any Series 2001 Bond shall not be paid upon such presentation and surrender at or after maturity, it shall continue to draw interest at the interest rate borne by said Series 2001 Bond until the principal thereof is paid in full. Payment of interest on any Series 2001 Bond shall be made to the owner thereof by check or draft mailed by the Paying Agent, on or before each interest payment date (or, if such interest payment date is not a business day, on or before the next succeeding business day), to the owner thereof at his or her address as it last appears on the registration books kept by the Registrar on the Record Date; but any such interest not so timely paid or duly provided for shall cease to be payable to the person who is the owner thereof at the close of business on the Record Date and shall be payable to the person who is the owner thereof at the close of business on a Special Record Date for the payment of any such defaulted interest. Such Special Record Date shall be fixed by the Registrar whenever moneys become available for payment of the defaulted interest, and notice of the Special Record Date shall be given to the owners of the Series 2001 Bonds not less than 10 days prior thereto by first-class mail to each such owner as shown on the Registrar's registration books on a date selected by the Registrar, stating the date of the Special Record Date and the date fixed for the payment of such defaulted interest. The Paying Agent may make payments of interest on any Series 2001 Bond by such alternative means as may be mutually agreed to between the owner of such Bond and the Paying Agent (provided, however, that the County shall not be required to make funds available to the Paying Agent prior to the date stated in this Section). All such payments shall be made in lawful money of the United States of America. Section 5. Prior Redemption. (a) Optional Prior Redemption. The Series 2001 Bonds maturing on or before December 1, 2011, are not subject to prior redemption. The Series 2001 Bonds maturing on or after December 1, 2012, shall be subject to redemption prior to their respective maturities, at the option of the County, in whole or in part, in integral multiples of$5,000, in such manner as the County may determine, on December 1, 2011, or on any date thereafter, at a redemption price equal to the principal amount thereof so redeemed, plus accrued interest thereon to the redemption date. In the case of a Series 2001 Bond of a denomination larger than $5,000, a portion of such Series 2001 Bond ($5,000 or any integral multiple thereof) may be redeemed, in which case the Registrar shall, without charge to the owner of such Series 2001 Bond, authenticate and issue a replacement Series 2001 Bond or Series 2001 Bonds for the unredeemed portion thereof. (b) Mandatory Sinking Fund Redemption. The Series 2001 Bonds maturing on December 1, 2016 are subject to mandatory sinking fund redemption by lot on December I of the years and in the principal amounts specified below, at a redemption price equal to the principal amount thereof(with no redemption premium), plus accrued interest to the redemption date: 02-101352.06 I 1 Mandatory Sinking Fund Redemption Schedule For Series 2001 Bonds Maturing December 1, 2016 Years Principal Amount 2012 $260,000 2013 270,000 2014 285,000 2015 475,000 2016 (maturity) 500,000 The Series 2001 Bonds maturing on December 1, 2021 are subject to mandatory sinking fund redemption by lot on December 1 of the years and in the principal amounts specified below, at a redemption price equal to the principal amount thereof (with no redemption premium), plus accrued interest to the redemption date: Mandatory Sinking Fund Redemption Schedule For Series 2001 Bonds Maturing December 1, 2021 Years Principal Amount 2017 $525,000 2018 550,000 2019 580,000 2020 610,000 2021 (maturity) 645,000 At its option, to be exercised on or before the forty fifth day next preceding each sinking fund redemption date, the County may (i) purchase and cancel any Series 2001 Bonds with the same maturity date as the Series 2001 Bonds subject to such sinking fund redemption and (ii) receive a credit in respect of its sinking fund redemption obligation for any Series 2001 Bonds with the same maturity date as the Series 2001 Bonds subject to such sinking fund redemption which prior to such date have been redeemed (otherwise than through the operation of the sinking fund) and cancelled and not theretofore applied as a credit against any sinking fund redemption obligation. Each Series 2001 Bond so purchased and cancelled or previously redeemed shall be credited at the principal amount thereof to the obligation of the County on such sinking fund redemption date, and the principal amount of Series 2001 Bonds to be redeemed by operation of such sinking fund on such date shall be accordingly reduced. Section 6. Execution and Authentication. The Series 2001 Bonds shall be executed in the name of and on behalf of the County and signed by the Chairperson of the Board (the "Chairperson"), countersigned by the Director of Administrative Services, ex-officio Treasurer of the County (the "Treasurer"), sealed with a manual or facsimile impression of the seal of the County and attested by the County Clerk and Recorder or the Deputy County Clerk and Recorder (the "Clerk"). The signatures of the Chairperson, the Treasurer and the Clerk may be 02-10135206 12 manual or by facsimile. The Series 2001 Bonds bearing the manual or facsimile signatures of the persons in office at the time of the signing thereof shall be the valid and binding obligations of the County (subject to the requirement of authentication by the Registrar as hereinafter provided), notwithstanding that before the delivery thereof, or before the issuance thereof upon transfer or exchange, any or all of the persons whose facsimile signatures appear thereon shall have ceased to fill their respective offices. The Chairperson, Treasurer and Clerk of the County shall, by the execution of a signature certificate pertaining to the Series 2001 Bonds, adopt as and for their respective signatures the facsimiles thereof, if any, appearing on the Series 2001 Bonds. At the time of the execution of such a signature certificate, the Chairperson, Treasurer and Clerk may each adopt as and for his or her facsimile signature the facsimile signature of his or her predecessor in office in the event that such facsimile signature appears upon any of the Series 2001 Bonds. No Series 2001 Bond shall be valid or obligatory for any purpose unless the certificate of authentication, substantially in the form hereinafter provided, has been duly executed by the Registrar. The Registrar's certificate of authentication shall be deemed to have been duly executed by it if manually signed by a duly authorized officer of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication on all of the Bonds issued hereunder. By authenticating any of the Series 2001 Bonds initially delivered pursuant to this Resolution, the Registrar and Paying Agent shall be deemed to have assented to the provisions of this Resolution. Section 7. Series 2001 Bonds Equally Secured. The covenants and agreements herein set forth to be performed on behalf of the County shall be for the equal benefit, protection and security of the owners of any and all of the Outstanding Series 2001 Bonds, all of which, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction, except as otherwise expressly provided in or pursuant to this Supplemental Resolution. Section 8. Security for the Series 2001 Bonds. (a) Pledge of Pledged Revenues. All of the Series 2001 Bonds, together with the interest accruing thereon, shall be special, limited obligations payable and collectible from the Pledged Revenues, which are hereby irrevocably so pledged. To secure said pledge, the County hereby grants a first priority lien on the Pledged Revenues in favor of the Series 2001 Bonds at any time Outstanding. Such lien shall be, and is hereby confirmed to be, on a parity with the lien on the Pledged Revenues in favor of all Sales Tax Panty Obligations currently Outstanding and any other Sales Tax Parity Obligations issued in accordance with the Bond Resolution. The owner or owners of the Series 2001 Bonds may not look to any general or other fund for the payment of principal or interest on the Series 2001 Bonds, except the designated special funds pledged therefor. The Series 2001 Bonds shall not constitute an indebtedness or a debt within the meaning of any applicable charter, constitutional or statutory provision or limitation; nor shall they be considered or held to be general obligations of the County. (b) No Prohibition on Additional Security. Nothing herein shall prohibit the County from (i) using, pledging or granting a lien on any revenues from the Sales Tax 02-101352.06 13 that are not Pledged Revenues or any other moneys for the payment of the principal of, premium, if any, or interest on the Series 2001 Bonds and any other Sales Tax Panty Obligations currently Outstanding or issued hereafter in accordance with the Bond Resolution, or (ii) depositing any revenues from the Sales Tax that are not Pledged Revenues or any other moneys into the Bond Account to be used to pay the principal of, premium, if any, and interest on the Series 2001 Bonds and any other Sales Tax Parity Obligations currently Outstanding or issued hereafter in accordance with the Bond Resolution. Section 9. [Reserved]. Section 10. [Reserved]. Section 11. Form of Bonds. The Bonds shall be in substantially the form set forth in Appendix A hereto, with such changes thereto, not inconsistent herewith, as may be necessary or desirable and approved by the officials of the County executing the same (whose manual or facsimile signatures thereon shall constitute conclusive evidence of such approval). All covenants, statements, representations and agreements contained in the Bonds are hereby approved and adopted as the covenants, statements, representations and agreements of the County. The Bonds shall contain a recital that they are issued pursuant to the Act and the Refunding Act. Although attached as an appendix for the convenience of the reader, Appendix A is an integral part of this Resolution and is incorporated herein as if set forth in full in the body of this Resolution. Section 12. Delivery of Series 2001 Bonds. When the Series 2001 Bonds have been duly executed and authenticated and on receipt of the agreed purchase price as set forth in Section 11 hereof, the Series 2001 Bonds shall be delivered to the Paying Agent on behalf of DTC for the account of the Series 2001 Underwriter. The Registrar shall initially register the Series 2001 Bonds in the name of Cede & Co., as nominee for DTC and security depository for the Series 2001 Bonds. The funds realized from the sale of the Series 2001 Bonds shall be applied solely for the purposes set forth in Section 3 hereof and for no other purposes whatsoever. The Series 2001 Underwriter shall in no manner be responsible for the application or disposal by the County, or any of its officers, of any such funds. Section 13. Disposition of Bond Proceeds. The proceeds derived from the sale of the Series 2001 Bonds, upon the receipt thereof, shall immediately be deposited and accounted for as follows: (a) Any moneys received as accrued interest on the Series 2001 Bonds from their date to the date of their delivery shall be credited to the Bond Account; (b) In lieu of the amount necessary to ensure that the total amount on deposit in the Reserve Account immediately upon issuance of the Series 2001 Bonds is equal to the Minimum Reserve, the Series 2001 Reserve Account Insurance Policy shall be deposited to the Reserve Account pursuant to Section 17(b) of the Bond Resolution; 02-101352.06 14 (c) The amount necessary to pay the Refunded Bond Requirements shall be transferred to the Paying Agent, which shall use the same to immediately redeem, refund and defease the Refunded Bonds; and (d) The balance of the proceeds shall be deposited into an account hereby created within the Transportation Capital Improvement Fund and to be known as the Series 2001 Improvement Project Account, held by the County Treasurer. The moneys in the Series 2001 Improvement Project Account, except as otherwise provided herein, shall be used solely for the costs of the Series 2001 Improvement Project. Upon completion of the Series 2001 Improvement Project, any moneys remaining in the Series 2001 Project Account and not needed for the Series 2001 Improvement Project shall be deposited into the Bond Account. Section 14. Defeasance. When the principal of, premium, if any, and interest on any Series 2001 Bonds have been duly paid, the pledge and lien and all obligations hereunder shall be discharged, and such Series 2001 Bonds shall no longer be deemed to be Outstanding within the meaning of this Supplemental Resolution. There shall be deemed to be such due payment of any Series 2001 Bonds when the County has placed in escrow or in trust with a commercial bank located within or without the State, and exercising trust powers, an amount sufficient (including the known minimum yield from Federal Securities in which such amount wholly or in part may be initially invested, which Federal Securities shall not contain provisions permitting the redemption thereof other than at the option of the holder) to meet all requirements of principal of, premium, if any, and interest on such Series 2001 Bonds as the same become due to their final maturities or upon any redemption dates as of which the County shall have exercised or shall have obligated itself to exercise its prior redemption option. The Federal Securities shall become due at or prior to the respective times at which the proceeds thereof shall be needed, in accordance with a schedule established and agreed upon between the County and such bank at the time of the creation of the escrow or trust, or the Federal Securities shall be subject to redemption at the option of the holders thereof to assure such schedule. Section 15. Amendment of Bond Resolution. (a) Section l(n) of the Bond Resolution is hereby amended and restated as follows: (n) "Minimum Reserve" means an amount equal to the least of (i) 10% of the principal amount of all Sales Tax Parity Obligations, (ii) the maximum annual debt service in any calendar year on all Sales Tax Parity Obligations or (c) 125% of the average annual debt service on all Sales Tax Parity Obligations; provided, however, that the Minimum Reserve may be reduced if, in the opinion of Bond Counsel, the funding or maintenance of it at the level otherwise determined pursuant to this definition will adversely affect the exclusion from gross income tax for federal income tax purposes of interest on any of the Sales Tax Parity Obligations. 02-101352.06 15 (b) Section 1(q) of the Bond Resolution is hereby amended and restated as follows: (q) "Pledged Revenues"means: (i) all of the revenues received from time to time by the County from the Sales Tax (including, without limitation, any revenues received by the County from interest and penalties on delinquent Sales Tax collections), (ii) proceeds of Sales Tax Parity Obligations or other legally available moneys deposited into and held in the Bond Account and the Reserve Account, (iii) interest or investment income on the Bond Account and the Reserve Account, and (iv) all of the revenues received from time to time by the County from any other sales tax hereafter pledged by the Board to the payment of the Outstanding Series 2001 Bonds, any other outstanding Sales Tax Panty Obligations, and any additional Sales Tax Parity Obligations; all to the extent that such moneys are at any time required by Section 17 hereof to be deposited into and held in the Bond Account or the Reserve Account; provided, however, that Pledged Revenues do not include (a) moneys retained by the State Department of Revenue of the State Treasurer for costs of collection, administration and enforcement of the Sales Tax; (b) amounts withheld by retailers as vendors' fees pursuant to the Sales Tax Resolution and applicable law of the State, to be subject to valid claims for refunds; (d) amounts in or rebatable arbitrage investment earnings payable into, the Rebate Account (or any similar account established for any other obligations payable from Pledged Revenues) to the extent required to be paid to the United States as provided in Section 22 hereof. Clause (i) above shall apply to Sales Tax revenues whenever they are received by the County, notwithstanding that such revenues could have been retained by the State for a longer period of time under the provisions of applicable State law. (c) Section 17 of the Bond Resolution is hereby amended by the replacement of the word "Bonds" in the introductory paragraph to such Section with the words "Sales Tax Panty Obligations." (d) Section 29(a)(v) of the Bond Resolution is hereby amended and restated to read as follows: 02-101352.06 16 (v) An independent certified public accountant shall certify that the Pledged Revenues for a 12-month period within the previous 24 months preceding the date of the issuance of the additional Sales Tax Parity Obligations being issued were equal to at least two hundred percent (200%) of the combined maximum annual principal and interest requirement on the Sales Tax Panty Obligations to be Outstanding after the issuance of the additional Sales Tax Parity Obligations (including the additional Sales Tax Panty Obligations to be issued); provided, however, that, upon the defeasance of all Sales Tax Parity Obligations issued prior to the issuance of the Series 2001 Bonds, the requirement shall be that an independent certified public accountant shall certify that the Pledged Revenues for a 12-month period within the previous 24 months preceding the date of the issuance of the additional Sales Tax Panty Obligations being issued were equal to at least on hundred forty percent (140%) of the combined maximum annual principal and interest requirement on the Sales Tax Parity Obligations to be Outstanding after the issuance of the additional Sales Tax Panty Obligations (including the additional Sales Tax Parity Obligations to be issued). (e) Section 9 of the Series 1998 Resolution is hereby amended and restated as follows: Section 9. Security for the Series 1998 Bonds; Satisfaction of Requirements of Section 29(a) of the Bond Resolution. (a) Pledge of Pledged Revenues. All of the Series 1998 Bonds, together with the interest accruing thereon, shall be special, limited obligations payable and collectible from the Pledged Revenues, which are hereby irrevocably so pledged. To secure said pledge, the County hereby grants a first priority lien on the Pledged Revenues in favor of the Series 1998 Bonds at any time Outstanding. Such lien shall be, and is hereby confirmed to be, on a parity with the lien on the Pledged Revenues in favor of all Sales Tax Panty Obligations currently Outstanding and any other Sales Tax Parity Obligations issued in accordance with the Bond Resolution. The owner or owners of the Series 1998 Bonds may not look to any general or other fund for the payment of principal or interest on the Series 1998 Bonds, except the designated special funds pledged therefor. The Series 1998 Bonds shall not constitute an indebtedness or a debt within the meaning of any applicable charter, constitutional or statutory provision or limitation; nor shall they be considered or held to be general obligations of the County. (b) No Prohibition on Additional Security. Nothing herein shall prohibit the County from (i) using, pledging or granting a lien on any revenues from the Sales Tax that are not Pledged Revenues or any other moneys for the payment of the 02-101352.06 17 principal of, premium, if any, or interest on the Series 1998 Bonds and any other Sales Tax Parity Obligations currently Outstanding or issued hereafter in accordance with the Bond Resolution, or (ii) depositing any revenues from the Sales Tax that are not Pledged Revenues or any other moneys into the Bond Account to be used to pay the principal of, premium, if any, and interest on the Series 1998 Bonds and any other Sales Tax Parity Obligations currently Outstanding or issued hereafter in accordance with the Bond Resolution. Section 16. Covenants of the County. (a) All resolutions concerning the Sales Tax are now in full force and effect and have not been repealed. Unless the pledge and lien hereof on the Sales Tax shall have been released as permitted hereby, the County will not repeal or amend such resolutions in any manner which would diminish the Pledged Revenues to a level below the level designated in Section 29(a)(v) of the Bond Resolution. In addition, the County will take whatever actions it deems necessary to effectuate the Sales Tax. The County will continue to levy, impose, administer, enforce and collect the Sales Tax within the County in accordance with the Sales Tax Resolution, without reduction in the percentage rate of the Sales Tax or the items and/or transactions subject thereto, except as set forth above and herein. The County's performance of the foregoing covenants may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity, by the exercise by the State of Colorado and its governmental bodies of the police power inherent in the sovereignty of the State of Colorado and by the exercise by the United States of America of the powers delegated to it by the Constitution of the United States of America. All of the Pledged Revenues resulting from the imposition and collection of the Sales Tax shall be subject to the payment of principal of, premium, if any, and interest on Sales Tax Parity Obligations and the use thereof to remedy deficiencies in the Reserve Account and otherwise as provided herein or in any instrument supplemental or amendatory hereof. (b) Defense of Legality of Pledged Revenues. There is not pending or threatened any suit, action or proceeding against or affecting the County before or by any court, arbitrator, administrative agency or other governmental authority which affects the validity or legality of the Bond Resolution, this Supplemental Resolution, the Sales Tax Resolution, or the imposition and collection of the Sales Tax, any of the County's obligations under the Bond Resolution, this Supplemental Resolution or any of the transactions contemplated by the Bond Resolution, this Supplemental Resolution or the Sales Tax Resolution. The County shall, to the extent permitted by law, defend the validity and legality of the Bond Resolution, this Supplemental Resolution and the Sales Tax Resolution, and 02-101352.06 18 all amendments thereto or substitutions thereof against all claims, suits and proceedings which would diminish or impair the Pledged Revenues as security for the Sales Tax Parity Obligations. Furthermore, the County shall amend from time to time the provisions of the Bond Resolution, this Supplemental Resolution, the Sales Tax Resolution and any other resolution of the County, as necessary, to prevent impairment of the Pledged Revenues as required to pay principal of, premium, if any, and interest on the Sales Tax Parity Obligations when due. Except as specified in his Supplemental Resolution, the County has not previously assigned or pledged the Pledged Revenues in any manner except with respect to the Series 1992 Bonds, the Series 1993 Bonds, the Series 1995 Bonds and the Series 1998 Bonds as set forth in the Bond Resolution. Section 17. Federal Income Tax Covenants. For purposes of ensuring that the interest on the Series 2001 Bonds is and remains excluded from gross income for federal income tax purposes, the County hereby covenants that: (a) Prohibited Actions. The County will not use or permit the use of any proceeds of the Series 2001 Bonds or any other funds of the County from whatever source derived, directly or indirectly, to acquire any securities or obligations and shall not take or permit to be taken any other action or actions, which would cause any Series 2001 Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code, or would otherwise cause the interest on any Series 2001 Bond to be includible in gross income for federal income tax purposes. ) y will at al times and perfrm all acts permitted by law f that are n ces osary in order tassure thatlinterest pad by theo oCounty on the Series 2001 Bonds shall not be includible in gross income for federal income tax purposes under the Code or any other valid provision of law. In particular, but without limitation, the County represents, warrants and covenants to comply with the following rules unless it receives an opinion of Bond Counsel stating that such compliance is not necessary: (i) gross proceeds of the Series 2001 Bonds and the Improvement Project and Refunding Project will not be used in a manner that will cause the Series 2001 Bonds to be considered "private activity bonds" within the meaning of the Code; (ii) the Series 2001 Bonds are not and will not become directly or indirectly "federally guaranteed'; and (iii) the County will timely file an Internal Revenue Service Form 8038-G with respect to the Series 2001 Bonds, which shall contain the information required to be filed pursuant to Section 149(e) of the Code. (c) Tax Letter of Instructions. The County will comply with the Tax Letter of Instructions delivered to it on the date of issuance of the Series 2001 Bonds, including but not limited by the provisions of the Tax Letter of Instructions regarding the application and investment of Series 2001 Bond proceeds, the use of the Improvement Project and the Refunding Project, the calculations, the deposits to the Series 2001 Rebate Account, the disbursements, the investments and the retention of records described in the Tax Letter of Instructions; provided that, in the event the Tax Letter of Instructions are superseded or amended by new Tax Letter of Instructions drafted by, and 02-1 01 3 5 2.06 19 accompanied by an opinion of, Bond Counsel stating that the use of the new Tax Letter of Instructions will not cause the interest on the Series 2001 Bonds to become includible in gross income for federal income tax purposes, the County will thereafter comply with the new Tax Letter of Instructions. (d) Rebate Account. There is hereby created the "Pitkin County, Colorado, Sales Tax Revenue Refunding and Improvement Bonds, Series 2001, Improvement Rebate Account" (the "Series 2001 Rebate Account"). The Series 2001 Rebate Account shall be funded as provided in Section 17 of the Bond Resolution in the amounts and at the times provided in the Tax Letter of Instructions The Series 2001 Rebate Account shall be considered to be a rebate fund established for a series of Sales Tax Parity Obligations for the purpose of Section 17(c) of the Bonds Resolution. (e) Designation and Deemed Designation of Series 2001 Bonds as Qualified Tax-Exempt Obligations. The County hereby designates the portion of the Series 2001 Bonds allocable to the Improvement Project as qualified tax-exempt obligations within the meaning of Section 265(b)(3)(B)(i) of the Code. The portion of the Series 2001 Bonds allocable to the Refunding Project will be deemed designated as qualified tax- exempt obligations pursuant to Section 265(b)(3)(D)(ii) of the Code. The County covenants that the aggregate face amount of all tax-exempt obligations issued by the County and all governmental entities which derive their issuing authority from the County or are subject to substantial control by the County, other than the portion of the Series 2001 Bonds deemed designated as qualified tax-exempt obligations as described in the preceding sentence and any other obligations deemed designated as such pursuant to Section 265(b)(3)(D)(ii), shall not be more than $10,000,000 during calendar year 2001. The County recognizes that such tax-exempt obligations include notes, leases, loans and warrants, as well as bonds. The County further recognizes that any bank, thrift institution or other financial institution that owns the Series 2001 Bonds will rely on the designation of the Series 2001 Bonds as qualified tax-exempt obligations for the purpose of avoiding the loss of 100% of any otherwise available interest deduction attributable to such institution's tax-exempt holdings. Section 18. Approval of Related Documents. The Board hereby ratifies and approves the distribution and use in connection with the offering of the Bonds of the Series 2001 Preliminary Official Statement in the form presented to the Board at this meeting, authorizes and directs the preparation of the Series 2001 Official Statement for use in connection with the sale of the Bonds in substantially the form of the Series 2001 Preliminary Official Statement, with such changes therein, if any, not inconsistent herewith, as are approved by the Chairperson of the Board (whose signature thereon shall constitute conclusive evidence of such approval). The Chairperson of the Board is hereby authorized and directed to execute the Series 2001 Official Statement and the Chairperson of the Board, the County Clerk and Recorder or deputy and all other appropriate officers and employees of the County are hereby authorized and directed to execute the Series 2001 Bond Purchase Agreement between the County and the Series 2001 Underwriter, in substantially the form presented to the Board at this meeting, with such changes therein, not inconsistent herewith, as the Chairperson of the Board shall approve (whose signature thereon shall constitute conclusive evidence of such approval), the Series 2001 Reserve Account Policy Insurance Agreement, an undertaking to facilitate compliance with 02-101352.06 20 Securities and Exchange Commission Rule 15c2-12 (17 C.F.R. §240.15c2-12), an agreement with the Paying Agent concerning the duties and obligations of the Paying Agent with respect to the Bonds, a tax compliance certificate or similar certificate describing the County's expectations regarding the use and investment of proceeds of the Bonds and other moneys and the use of the Improvement Project and the Refunding Project, an Internal Revenue Service Form 8038-G with respect to the Bonds, a letter of representations regarding custodial deposit of the Bonds with DTC and all other documents and certificates necessary or desirable to effectuate the issuance or administration of the Bonds and the transactions contemplated hereby. Section 19. Provisions Relating to the Series 2001 Bond Insurer. (a) Agreement by Owners of Series 2001 Bonds for Benefit of Series 2001 Bond Insurer. Each owner of any Series 2001 Bond, by its purchase of such Series 2001 Bond, grants to the Series 2001 Bond Insurer all the rights and privileges contained in this Section and any other rights and privileges granted by any other provision hereof to the Series 2001 Bond Insurer as a condition to, and in consideration for, the Series 2001 Bond Insurer's delivery of the Series 2001 Bond Insurance Policy. (b) Series 2001 Bond Insurer to Exercise Rights of Owners of Series 2001 Bonds. The Series 2001 Bond Insurer shall be deemed to be the owner of the Series 2001 Bonds for all purposes other than the receipt of payments of principal of, premium, if any, and interest on the Series 2001 Bonds, and the Series 2001 Bond Insurer shall be entitled to exercise all rights of the owner of the Series 2001 Bonds, except the right to receive payments of principal, premium, if any, and interest on the Series 2001 Bonds; provided, however, that the Series 2001 Bond Insurer shall be subrogated to the payment rights of the owners of the Series 2001 Bonds as provided in subsection (c)(i) of this Section. These rights of the Series 2001 Bond Insurer include, but are not limited to, (i) the right to control remedies following an Event of Default; (ii) the right to consent to an amendment to the Bond Resolution for which such consent must be obtained pursuant to Section 25 of the Bond Resolution; (iii) any right to vote as owner of the Series 2001 Bonds in any reorganization, liquidation or similar proceeding relating to the County or with respect to any plan of reorganization or liquidation relating to the County; and (iv) any other right to consent, exercise rights or control proceedings by or on behalf of the owners of the Series 2001 Bonds. (c) Rights of the Series 2001 Bond Insurer Following Payment of Principal or Interest on Series 2001 Bonds. If the Series 2001 Bond Insurer pays the principal of or interest due on any Series 2001 Bond pursuant to the Series 2001 Bond Insurance Policy, then, unless and until the Series 2001 Bond Insurer has been reimbursed for the amount so paid by it: (i) the Series 2001 Bond Insurer shall be subrogated to all rights of the owner of such Series 2001 Bond, including, but not limited to, the rights of such owner to payments of principal, premium and interest on such Series 2001 Bond; 02-101352.06 21 (ii) such Series 2001 Bond shall, notwithstanding the definition of "Outstanding" in Section 1 of the Bond Resolution, remain Outstanding for all purposes and such Series 2001 Bond shall not be defeased, nor shall the obligations of the City with respect to such Series 2001 Bond be deemed satisfied, paid or otherwise discharged, without the Series 2001 Bond Insurer's written consent; and (iii) the pledge of the Pledged Revenues pursuant to the Bond Resolution for the benefit of such Series 2001 Bond and all obligations of the County to the owners of the Series 2001 Bonds shall continue to exist and shall run to the benefit of the Series 2001 Bond Insurer. (d) Claims upon the Series 2001 Bond Insurance Policy and Payments by and to the Series 2001 Bond Insurer. (i) If, on the business day prior to the related scheduled interest payment date or principal payment date ("Payment Date") there is not on deposit with the Paying Agent, after making all transfers and deposits required under the Bond Resolution, moneys sufficient to pay the principal of and interest on the Series 2001 Bonds due on such Payment Date, the Paying Agent shall make a claim under the Series 2001 Bond Insurance Policy and give notice to the Series 2001 Bond Insurer and to its designated agent (if any) (the " Fiscal Agent") by telephone or telecopy of the amount of such deficiency, and the allocation of such deficiency between the amount required to pay interest on the Series 2001 Bonds and the amount required to pay principal of the Series 2001 Bonds, confirmed in writing to the Series 2001 Bond Insurer and the Fiscal Agent by 12:00 noon, New York City time, on such Business Day by filling in the form of Notice of Claim and Certificate delivered with the Series 2001 Bond Insurance Policy. (ii) In the event the claim to be made is for a mandatory sinking fund redemption installment, upon receipt of the moneys due, the Paying Agent shall authenticate and deliver to affected owners who surrender their Series 2001 Bonds a new Series 2001 Bond or Series 2001 Bonds in an aggregate principal amount equal to the unredeemed portion of the Series 2001 Bond surrendered. The Paying Agent shall designate any portion of payment of principal on Series 2001 Bonds paid by the Series 2001 Bond Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Series 2001 Bonds registered to the then current owner of such Series 2001 Bonds, whether DTC or its nominee or otherwise, and shall issue a replacement Series 2001 Bond to the Series 2001 Bond Insurer, registered in the name of Financial Security Assurance Inc., in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Paying Agent's failure to so designate any payment or issue any replacement Series 2001 Bond shall have no effect on the amount of principal or interest payable by the County on any Series 2001 Bond or the subrogation rights of the Series 2001 Bond Insurer. 02-1 01 3 52.06 22 (iii) The Paying Agent shall keep a complete and accurate record of all funds deposited by the Series 2001 Bond Insurer into the Policy Payments Account (defined below) and the allocation of such funds to payment of interest on and principal paid in respect of any Series 2001 Bond. The Series 2001 Bond Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Paying Agent. (iv) Upon payment of a claim under the Series 2001 Bond Insurance Policy the Paying Agent shall establish a separate special purpose trust account for the benefit of owners of the Series 2001 Bonds referred to herein as the "Policy Payments Account" and over which the Paying Agent shall have exclusive control and sole right of withdrawal. The Paying Agent shall receive any amount paid under the Insurance Policy in trust on behalf of owners of Series 2001 Bonds and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made. Such amounts shall be disbursed by the Paying Agent to owners of Series 2001 Bonds in the same manner as principal and interest payments are to be made with respect to the Series 2001 Bonds under the sections of the Bond Resolution regarding payment of Series 2001 Bonds. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments. (v) Funds held in the Policy Payments Account shall not be invested by the Paying Agent and may not be applied to satisfy any costs, expenses or liabilities of the Paying Agent. (vi) Any funds remaining in the Policy Payments Account following a Payment Date shall promptly be remitted to the Series 2001 Bond Insurer. (e) Right to Pay in Absence of Notice of Nonpayment. The Series 2001 Bond Insurer shall be entitled to pay principal of or interest on the Series 2001 Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment (as such terms are defined in the Series 2001 Bond Insurance Policy) by the County in accordance with the Bond Resolution, whether or not the Series 2001 Bond Insurer has received a Notice of Nonpayment (as defined in the Series 2001 Bond Insurance Policy) or a claim upon the Series 2001 Bond Insurance Policy. M Series 2001 Bond Insurer as Third Parry Beneficiary. The Series 2001 Bond Insurer is hereby declared to be a third party beneficiary of the covenants made by the County in the Bond Resolution and in this Series 2001 Supplemental Resolution for the benefit of the owners of the Series 2001 Bonds. (g) Exercise of Series 2001 Bond Insurer's Rights Contractual. The rights granted to the Series 2001 Bond Insurer under the Bond Resolution to request, consent to or direct any action are rights granted to the Series 2001 Bond Insurer in consideration of its issuance of the Series 2001 Bond Insurance Policy. Any exercise by the Series 2001 02-101352.06 23 Bond Insurer of such rights is merely an exercise of the Series 2001 Bond Insurer's contractual rights and shall not be construed or deemed to be taken for the benefit or on behalf of the owners of the Series 2001 Bonds. (h) Additional Consent Rights of Series 2001 Bond Insurer. In addition to any consents required from the Series 2001 Bond Insurer as deemed owner of the Series 2001 Bonds pursuant to subsection (b) of this Section and any other consents required of the Series 2001 Bond Insurer hereunder, the County shall obtain the written consent of the Series 2001 Bond Insurer prior to: (i) the substitution of a reserve account credit facility for any deposit of cash to the Reserve Account required by Section 17(b) of the Bond Resolution; or (ii) the amendment of the Bond Resolution pursuant to paragraph (B) or(G) of the first paragraph of Section 25 of the Bond Resolution; provided that such consent shall not be unreasonably withheld by the Series 2001 Bond Insurer. (i) Qualified Investments. So long as the Series 2001 Bond Insurance Policy is in effect, moneys on deposit in the Bond Account and Reserve Account shall, in addition to being invested in accordance with Section 18 of the Bond Resolution, be invested in Qualified Investments, as defined below. Qualified Investments shall not include corporate debt other than commercial paper rated in the highest category by S&P and Moody's. Investments purchased with funds on deposit in the Reserve Account shall have an average aggregate weighted term to maturity not greater than five years. For Purposes of this Section, "Qualified Investments" shall mean: (i) (A) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America ("United States Treasury Obligations"), (B) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (C) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, and (D) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated; (ii) Federal Housing Administration debentures; (iii) The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America: (A) Federal Home Loan Mortgage Corporation(FHLMC): (1) Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts); 02-1013510e 24 (2) Senior debt obligations; (B) Farm Credit Banks (formerly: Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives): consolidated system-wide bonds and notes; (C) Federal Home Loan Banks (FHL Banks): consolidated debt obligations; (D) Federal National Mortgage Association(FNMA): (1) Senior debt obligations; (2) Mortgage-backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts); (E) Student Loan Marketing Association (SLMA): senior debt obligations (excluded are securities that do not have a fixed par value and/or whose terms do not promise a fixed dollar amount at maturity or call date); (F) Financing Corporation(FICO): Debt obligations; and (G) Resolution Funding Corporation (REFCORP): debt obligations; (iv) Unsecured certificates of deposit, time deposits, and bankers' acceptances (having maturities of not more than 30 days) of any bank the short- term obligations of which are rated 'A-1' or better by S&P; (v) Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks which have capital and surplus of at least $5 million; (vi) Commercial paper (having original maturities of not more than 270 days) rated 'A-1+'by S&P and 'Prime-1'by Moody's; (vii) Money market funds rated 'AAm'or'AAm-G'by S&P, or better; (viii) "State Obligations,"which means: (A) Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated 'AY by Moody's and 'A' by S&P, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated; 02-101352.06 25 (B) Direct general short-term obligations of any state agency or subdivision or agency thereof described in (A) above and rated 'A-1+' by S&P and 'MIG-l'by Moody's; and (C) Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (A) above and rated 'AA' or better by S&P and 'Aa' or better by Moody's; (ix) Pre-refunded municipal obligations rated "AAA" by S & P and "Aaa" by Moody's meeting the following requirements: (A) the municipal obligations are (1) not subject to redemption prior to maturity or (2) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; (B) the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations; (C) the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations ("Verification"); (D) the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations; (E) no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new Verification; and (F) the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent. (x) Repurchase agreements with any domestic bank or domestic branch of a foreign bank, the long term debt of which is rated at least "A" by S&P and Moody's, any broker-dealer with "retail customers" or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least "A" by S&P and Moody's, which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation, or any other entity rated "A" or better by S&P and Moody's and acceptable to the Series 2001 Bond Insurer, provided in each case that: 02-101352.06 26 (A) The market value of the collateral is maintained at levels and upon such conditions as would be acceptable to S & P and Moody's to maintain an "A" rating in an "A" rated structured financing (with a market value approach); provided that if a repurchase agreement has a term of 270 days or less (with no evergreen provision), collateral levels need not be as in this paragraph, so long as such collateral levels are 103% or better and the provider is rated at least "A" by S&P and Moody's, respectively; (B) The Paying Agent or a third party acting solely as agent therefor or for the County (the "Holder of the Collateral") has possession of the collateral or the collateral has been transferred to the Holder of the Collateral in accordance with applicable state and federal laws (other than by means of entries on the transferor's books); (C) The repurchase agreement shall state and an opinion of counsel shall be rendered at the time such collateral is delivered that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); (D) All other requirements of S&P in respect of repurchase agreements shall be met; and (E) The repurchase agreement shall provide that if during its term the provider's rating by either Moody's or S&P is withdrawn or suspended or falls below "A-" by S&P or "A3" by Moody's, as appropriate, the provider must, at the direction of the County or the Paying Agent (who shall give such direction if so directed by the Insurer), within 10 days of receipt of such direction, repurchase all collateral and terminate the agreement, with no penalty or premium to the County or Paying Agent; (xi) Investment agreements with a domestic or foreign bank or corporation (other than a life or property casualty insurance company) the long- term debt of which, or, in the case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least "AA" by S&P and "Aa" by Moody's; provided that, by the terms of the investment agreement: (A) interest payments are to be made to the Paying Agent at times and in amounts as necessary to pay debt service (or, if the investment agreement is for the construction fund, construction draws) on the Series 2001 Bonds; (B) the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days' prior 02-101352.06 27 notice; the County and the Paying Agent hereby agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; (C) the investment agreement shall state that is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to its other depositors and its other unsecured and unsubordinated creditors; (D) the County or the Paying Agent receives the opinion of domestic counsel (which opinion shall be addressed to the County and the Series 2001 Bond Insurer) that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable) in form and substance acceptable, and addressed to, the Series 2001 Bond Insurer; term: (E) the investment agreement shall provide that if during its (1) the provider's rating by either S&P or Moody's falls below "AA-" or "AaY, respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either (i) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider's books) to the County, the Paying Agent or a third party acting solely as agent therefor (the "Holder of the Collateral") collateral free and clear of any third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to S & P and Moody's to maintain an "A" rating in an "A" rated structured financing (with a market value approach); or (ii) repay the principal of and accrued but unpaid interest on the investment, and (2) the provider's rating by either S&P or Moody's is withdrawn or suspended or falls below "A-" or "AY, respectively, the provider must, at the direction of the County or the Paying Agent (who shall give such direction if so directed by the Insurer), within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the County or Paying Agent, and (F) The investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged 02-101352.06 28 by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); (G) the investment agreement must provide that if during its term: (1) the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the County or the Paying Agent (who shall give such direction if so directed by the Series 2001 Bond Insurer), be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the County or Paying Agent, as appropriate, and (2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. ("event of insolvency"), the provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the County or Paying Agent, as appropriate; and (xii) Any local government investment pool trust fund, as defined in Title 24, Article 75, Part 7, Colorado Revised Statutes, as amended, which is: (A) invested in Qualified Investments listed in paragraphs (i) through (xi) of this subsection (i); or(B) rated"AAA-m"by S&P. 0) Reimbursement of Series 2001 Bond Insurer Fees and Costs in Certain Circumstances. The County shall pay or reimburse the Series 2001 Bond Insurer any and all charges, fees, costs and expenses which the Series 2001 Bond Insurer may reasonably pay or incur in connection with (i) the enforcement, defense or preservation of any rights or security in the Bond Resolution; (ii) the pursuit of any remedies under the Bond Resolution or otherwise afforded by law or equity, (iii) the violation by the County or of any law, rule or regulation, or any judgment, order or decree applicable to it; or (iv) any litigation or other dispute in connection with the Bond Resolution or the transactions contemplated thereby, other than amounts resulting from the failure of the Series 2001 Bond Insurer to honor its obligations under the Series 2001 Bond Insurance Policy; provided that any amounts so paid or reimbursed by the County shall be made from Pledged Revenues and shall not cause the County to exceed any limitations of the Ballot Questions; and provided further that any amounts required to be paid by the County that are in excess of such limitations shall, to the extent permitted by law, be paid (to the amount of such excess) only from amounts appropriated by the County for such purpose in the fiscal year of the County in which such amounts are to be paid. 02-101352.06 29 (k) Information to be Provided to the Bond Insurer. In addition to any notices required to be delivered to the Series 2001 Bond Insurer as deemed owner of the Series 2001 Bonds pursuant to subsection (b) of this section and any other notices or other information required to be delivered to the Series 2001 Bond Insurer pursuant to the Bond Resolution, the County shall provide the following information to the Series 2001 Bond Insurer, such information to be addressed to Financial Security Assurance Inc., 350 Park Avenue, New York, New York 10022-6022, Attention: Managing Director—Surveillance, Telephone: (212) 826-0100, Telecopier: (212) 339-3529 and referencing the policy number of the Series 2001 Bond Insurance Policy (and if such notice or other communication refers to an Event of Default, a copy of such notice or other communication shall also be sent to the attention of General Counsel and marked "URGENT MATERIAL ENCLOSED"): (i) Annual audited financial statements within 180 days after the end of the Issuer's fiscal year and the Issuer's annual budget within 30 days after the approval thereof, (ii) Notice of any draw upon the Reserve Account within two Business Days after knowledge thereof other than (i) withdrawals of amounts in excess of the Minimum Reserve and (ii) withdrawals in connection with a refunding of Sales Tax Parity Obligations; (iii) Notice of any Event of Default within five Business Days after knowledge thereof, (iv) Prior notice of the advance refunding or redemption of any of the Series 2001 Bonds, including the principal amount, maturities and CUSIP numbers thereof; (v) Notice of the resignation or removal of the Paying Agent or Registrar and the appointment of, and acceptance of duties by, any successor thereto; (vi) Notice of the commencement of any proceeding by or against the County commenced under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding"); (vii) Notice of the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or interest on, the Series 2001 Bonds; (viii) A full original transcript of all proceedings relating to the execution of any amendment or supplement to the Bond Resolution or any document delivered in connection with the issuance of the Series 2001 Bonds; and 02-1 01 3 5 2.06 30 (ix) All reports, notices and correspondence to be delivered under the terms of any document delivered in connection with the issuance of the Series 2001 Bonds. (1) Information to be Provided to Rating Agencies. Copies of any modification or amendment to the Bond Resolution or any other document delivered in connection with the issuance of the Series 2001 Bonds shall be sent to S&P and Moody's. at least 10 days prior to the effective date thereof. (m) Requirements for Defeasance of Series 2001 Bonds. No defeasance of Series 2001 Bonds shall be effective unless the County shall have caused to be delivered in connection with such defeasance: (i) a report of an independent firm of nationally recognized certified public accountants or such other accountant as shall be acceptable to the Series 2001 Bond Insurer (such acceptance not to be unreasonably withheld) verifying the sufficiency of the escrow established to pay such Series 2001 Bonds in full on the maturity or redemption date thereof (a "Verification Report"); (ii) an escrow deposit agreement (which shall be acceptable in form and substance to the Insurer, such acceptance not to be unreasonably withheld); and (iii) an opinion of nationally recognized bond counsel to the effect that such Series 2001 Bonds are no longer Outstanding under the Bond Resolution (a "Defeasance Opinion"). All Verification Reports and Defeasance Opinion shall be acceptable in form and substance (such acceptance not to be unreasonably withheld), and addressed, to the County and the Series 2001 Bond Insurer. In the event a forward purchase agreement will be employed in the defeasance, such agreement shall be subject to the approval of the Series 2001 Bond Insurer (such approval not to be unreasonable withheld) and shall be accompanied by such opinions of counsel as may be reasonably required by the Series 2001 Bond Insurer, The Series 2001 Bond Insurer shall be provided with final drafts of the above-referenced documentation not less than five business days prior to the funding of the escrow. (n) Agreement to Perform Obligations under Series 2001 Reserve Account Policy Insurance Agreement. The County hereby agrees to perform its obligations under the Series 2001 Reserve Account Policy Insurance Agreement in accordance with its terms. (o) Provisions Granting Rights or Privileges to Series 2001 Bond Insurer and References to Series 2001 Bond Insurer and Series 2001 Bond Insurance Policy Ineffective when No Series 2001 Bonds are Outstanding and Following Failure to Pay under Series 2001 Bond Insurance Policy. Notwithstanding any other provision hereof, this Section, any other provision hereof granting any rights or privileges to the Series 2001 Bond Insurer, and all references in the Bond Resolution to the Series 2001 Bond Insurer and the Series 2001 Bond Insurance Policy shall be ineffective (i) when no Series 2001 Bonds are Outstanding and (ii) following a failure by the Series 2001 Bond Insurer to pay the principal of or interest on any Series 2001 Bond pursuant to the Series 2001 Bond Insurance Policy. (p) No Amendment of Provisions Hereof Granting Rights or Privileges to Series 2001 Bond Insurer without Series 2001 Bond Insurer Consent. Notwithstanding 02-101352.06 31 any other provision hereof, (i) no provision of this Section or other provision hereof granting any rights or privileges to the Series 2001 Bond Insurer may be amended without the Series 2001 Bond Insurer's written consent and (ii) the Series 2001 Bond Insurer at any time may waive any or all the provisions of this Section or other provision hereof granting any rights or privileges to the Series 2001 Bond Insurer permanently or with respect to one or more transactions or events or for any period of time. Section 20. Various Findings, Determinations, Declarations and Covenants. The Board, having been fully informed of and having considered all the pertinent facts and circumstances, hereby finds, determines, declares and covenants with the owners of the Series 2001 Bonds that: (a) voter approval of the Ballot Questions was obtained in accordance with all applicable provisions of law; (b) it is in the best interest of the County and its residents that the Series 2001 Bonds be authorized, sold, issued and delivered at the time, in the manner and for the purposes provided in this Supplemental Resolution; (c) of the $8,460,000 aggregate principal amount of the Series 2001 Bonds: (i) $3,490,000 will be used to finance the Series 2001 Refunding Project; and (ii) $4,970,000 will be used to finance the Series 2001 Improvement Project, which amount shall be issued pursuant to the authority granted by the approval of the 1993 Ballot Question; (d) the net effective interest rate on that portion of the Series 2001 Bonds described in clause (i) of subsection (c) of this Section, as sold to the Series 2001 Underwriter, is less than the net effective interest rate of the Refunded Bonds; (e) the refunding of the obligations represented by the Refunded Bonds by the issuance of that portion of the Series 2001 Bonds described in clause (i) of subsection (c) of this Section will: (i) reduce the net effective interest rate of said obligations; (ii) reduce the total principal and interest payable on such obligations; (iii) reduce the principal and interest payable on such obligations in one or more particular year or years; and (iv) effect other economies for the County; (f) the issuance of the Series 2001 Bonds will not cause the County to exceed its debt limit under applicable State law; (g) the issuance of the Series 2001 Bonds and all procedures undertaken incident thereto are in full compliance and conformity with all applicable requirements, provisions and limitations prescribed by the Constitution and laws of the State and the County, including the Act, the Refunding Act and the Charter, and all conditions and limitations of the Act, the Refunding Act and the Charter and other applicable law relating to the issuance of the Bonds have been satisfied; 02-101352.06 32 (h) the County and DTC have previously entered into a Blanket Letter of Representations dated April 21, 1995, which Blanket Letter of Representations will govern the book-entry registration system for the Series 2001 Bonds; (i) the Series 2001 Underwriter has disclosed, in writing, to the Board, the entire income, from all sources, which the Series 2001 Underwriter anticipates receiving from the issuance and sale of the Series 2001 Bonds, specifying all such sources and amounts, and has disclosed all expenses which the Series 2001 Underwriter anticipates the County will incur as a part of the refunding of the Refunded Bonds and the issuance and sale of the Series 2001 Bonds; 0) the Series 2001 Underwriter has provided the Board with a comparison of annual debt service requirements before and after the refunding of the Refunded Bonds and the issuance of the Series 2001 Bonds, by year and amount; such comparison shows the present value of all annual differences in debt service requirements, using as a discount factor the net effective interest rate of the Series 2001 Bonds, all such figures being computed from the date of issuance of the Series 2001 Bonds; and (k) the Series 2001 Project, the Series 2001 Refunding Project and the Series 2001 Bonds are necessary and in the best interests of the County and the Board hereby approves the same; and (1) the requirements of Section 29(a) of the Bond Resolution and Section 4 of the Transportation Sales Tax Distribution IGA have been satisfied in connection with the issuance of the Series 2001 Bonds. Section 21. Contract with Owners. Upon the issuance of the Series 2001 Bonds, the Bond Resolution shall constitute an irrevocable contract between the County and the owner or owners of the Series 2001 Bonds and, except as otherwise provided in the Bond Resolution, shall be and remain irrepealable and unalterable until the Series 2001 Bonds and the interest thereon shall have been fully paid, satisfied and discharged. Section 22. Parties Interested Herein. Nothing herein expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the County, the Paying Agent, the Registrar and the owners from time to time of the Series 2001 Bonds any right, remedy or claim hereunder. All the covenants, stipulations, promises and agreements herein contained by and on behalf of the County shall be for the sole and exclusive benefit of the County, the Paying Agent, the Registrar and any owner of the Series 2001 Bonds. Section 23. Effective Date. This Supplemental Resolution shall become effective immediately upon its passage. Section 24. Severability. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution. 02-1 01 3 5 2.06 33 Section 25. Repealer. All acts and resolutions in conflict with this Supplemental Resolution are hereby rescinded, annulled and repealed. This repealer shall not be construed to revive any act or resolution, or part thereof, heretofore repealed. [remainder of page intentionally left blank] 02-101352.06 34 INTRODUCED, FIRST READ, AND SET FOR PUBLIC HEARING AT A REGULAR MEETING ON THE 24`h DAY OF OCTOBER, 2001. g DAY NOTICE OOC 6B LI ppHEARING PUBLISHED IN THE ASPEN TIMES ON THE 1. Mo wwaeQ, APPROVED AND ADOPTED AFTER SECOND READING AND PUBLIC HEARING ON THE 20"h DAY OF NOVEMBER, 2001. PUBLISHED AFTER ADOPTION IN THE ASPEN TIMES ON THE s�DAY OF NEB, 2001. J>tCp—M g Q-q' Date: November , 2001 BOARD OF COUNTY COMMISSIONERS OF PITKIN COUNTY, COLORADO Attest: By Chairperson oRhe Boatd of County Commissioners B p t County lerk and Recorder APPROVED AS TO FORM: MANAGER APPROVAL: By \ �r By �*✓ County Attomgy-- County 04nager APPROVED AS TO CONTENT: By L/ill Administrative Services Director 02-101352.06 35 APPENDIX A FORM OF SERIES 2001 BOND No. R-_ $ UNITED STATES OF AMERICA PITKIN COUNTY, COLORADO SALES TAX REVENUE REFUNDING AND IMPROVEMENT BOND SERIES 2001 Interest Rate: Maturity Date: Original Dated Date: CUSIP: % December 1, December 1, 2001 REGISTERED OWNER: **CEDE & CO.** Tax Identification Number: 1 3-255 5 1 1 9 PRINCIPAL SUM: ** DOLLARS** Pitkin County, Colorado (the "County"), a legally and regularly created, established, organized and existing political subdivision of the State of Colorado (the "State") organized and operating as a home rule county pursuant to the Constitution and laws of the State and the home rule charter of the County(the "Charter"), for value received, hereby promises to pay to the order of the registered owner named above or registered assigns, solely from the special funds as hereinafter set forth, on the maturity date stated above, the principal sum stated above, in lawful money of the United States of America, with interest thereon from the original dated date stated above, at the interest rate per annum stated above, payable on June 1 and December 1 of each year, commencing June 1, 2002, the principal of and premium, if any, being payable to the registered owner hereof upon the maturity date stated above or prior redemption and upon presentation and surrender of this bond at the principal office of The Bank of Cherry Creek, N.A., as Paying Agent (the "Paying Agent'), in Denver, Colorado, and the interest hereon to be paid by check or draft mailed by the Paying Agent mailed on or before each interest payment date (or, if such interest payment date is not a business day, on or before the next succeeding business day) to the registered owner hereof as of the close of business on the fifteenth day (whether or not such day is a Business Day) next preceding such interest payment date (the "Record Date"), provided that the Paying Agent may make payments of interest on this bond by such alternative means as may be mutually agreed to by the registered owner of this bond and the Paying Agent (provided that the County shall not be required to make funds available to the Paying Agent prior to the date stated above). Any such interest not so timely paid or duly provided for shall cease to be payable to the person who is the owner hereof at the close of business on the Record Date and shall be payable to the person who is the owner hereof at the close of business on a Special Record Date (as defined in Resolution No. 92-392 of the County, adopted by the Board of County Commissioners of the County (the `Board") on October 27, 02-101352.06 A-I 1992, as amended and supplemented by Resolution No. 93-191 of the County, adopted on December 21, 1993, Resolution No. 95-49 of the County, adopted on April 12, 1995, Resolution No. 98-206 of the County, adopted on September 23, 1998 and Resolution No. 01-_ of the County (the "Series 2001 Resolution") (the "Series 2001 Resolution"), adopted on November 20, 2001 (as so amended and supplemented, the "Bond Resolution")) for the payment of any defaulted interest. All such payments shall be made in lawful money of the United States of America This bond is one of an issue of bonds of the County designated Sales Tax Revenue Refunding and Improvement Bonds, Series 2001, issued in the principal amount of$8,460,000 (the "Series 2001 Bonds"). The Series 2001 Bonds are being issued by the County for the purposes of providing funds for the Series 2001 Improvement Project and the Series 2001 Refunding Project (both as defined in the Series 2001 Resolution), pursuant to and in full conformity with the ballot question adopted by the registered electors of the County at the election held on November 7, 2000, the Constitution of the State of Colorado, Title 29, Article 2 and Title 11, Article 57, Part 2, Colorado Revised Statutes, as amended (the "Act'), Title 11, Article 56, Colorado Revised Statutes, as amended (the "Refunding Act'), the Charter, all other laws of the State thereunto enabling, and the Bond Resolution. The Series 2001 Bonds maturing on or before December 1, 2011, are not subject to prior redemption. The Series 2001 Bonds maturing on or after December 1, 2012, shall be subject to redemption prior to their respective maturities, at the option of the County, in whole or in part, in integral multiples of $5,000, in such manner as the County may determine, on December 1, 2011, or on any date thereafter, at a redemption price equal to the principal amount thereof so redeemed, plus accrued interest thereon to the redemption date. In the case of a Series 2001 Bond of a denomination larger than $5,000, a portion of such Series 2001 Bond ($5,000 or any integral multiple thereof) may be redeemed, in which case the Registrar shall, without charge to the owner of such Series 2001 Bond, authenticate and issue a replacement Series 2001 Bond or Series 2001 Bonds for the unredeemed portion thereof. The Series 2001 Bonds maturing on December 1, 2016 are subject to mandatory sinking fund redemption by lot on December 1 of the years and in the principal amounts specified below, at a redemption price equal to the principal amount thereof(with no redemption premium), plus accrued interest to the redemption date: Mandatory Sinking Fund Redemption Schedule For Series 2001 Bonds Maturing December 1, 2016 Years Principal Amount 2012 $260,000 2013 270,000 2014 285,000 2015 475,000 2016 (maturity) 500,000 02-101352.06 A-2 The Series 2001 Bonds maturing on December 1, 2021 are subject to mandatory sinking fund redemption by lot on December 1 of the years and in the principal amounts specified below, at a redemption price equal to the principal amount thereof(with no redemption premium), plus accrued interest to the redemption date: Mandatory Sinking Fund Redemption Schedule For Series 2001 Bonds Maturing December 1, 2021 Years Principal Amount 2017 $525,000 2018 550,000 2019 580,000 2020 610,000 2021 (maturity) 645,000 At its option, to be exercised on or before the forty fifth day next preceding each sinking fund redemption date, the County may (i) purchase and cancel any Series 2001 Bonds with the same maturity date as the Series 2001 Bonds subject to such sinking fund redemption and (ii) receive a credit in respect of its sinking fund redemption obligation for any Series 2001 Bonds with the same maturity date as the Series 2001 Bonds subject to such sinking fund redemption which prior to such date have been redeemed (otherwise than through the operation of the sinking fund) and cancelled and not theretofore applied as a credit against any sinking fund redemption obligation. Each Series 2001 Bond so purchased and cancelled or previously redeemed shall be credited at the principal amount thereof to the obligation of the County on such sinking fund redemption date, and the principal amount of Series 2001 Bonds to be redeemed by operation of such sinking fund on such date shall be accordingly reduced The County shall give written instructions concerning any such prior redemption to the Paying Agent at least 35 days prior to such redemption date. Notice of redemption shall be given by the Paying Agent in the name of the County by sending a copy of such notice by first-class, postage prepaid mail, not less than 30 days prior to the redemption date to Kirkpatrick, Pettis, Smith, Polian, Inc., or any successor thereto approved in writing by the County, as underwriter of the Series 2001 Bonds (the "Underwriter") and to each registered owner of any Series 2001 Bond all or a portion of which is called for prior redemption. Failure to give such notice to the Underwriter or the registered owner of any Series 2001 Bond, or any defect therein, shall not affect the validity of the proceedings for the redemption of other Series 2001 Bonds. Such notice shall identify the Series 2001 Bonds or portions thereof to be redeemed (if less than all are to be redeemed) and the date fixed for redemption, and shall further state that on such redemption date the principal amount thereof and the designated premium thereon, if any, will become due and payable at the Paying Agent, and that from and after such date interest will cease to accrue. Accrued interest to the redemption date will be paid by check or draft mailed to the registered owner (or by alternative means if so agreed to by the Paying Agent and the registered owner). Notice having been given in the manner described above, the Series 2001 Bond or 02-101352.06 A-3 Series 2001 Bonds so called for redemption shall become due and payable on the redemption date so designated; and upon presentation thereof at the Paying Agent, the County shall pay the Series 2001 Bond or Series 2001 Bonds so called for redemption. Upon surrender of any of such Series 2001 Bonds at the Registrar with a written instrument satisfactory to the Registrar duly executed by the owner or his or her duly authorized attorney, such Series 2001 Bond may, at the option of the owner or his or her duly authorized attorney, be exchanged for an equal aggregate principal amount of such Series 2001 Bonds of the same maturity of other authorized denominations, subject to such terms and conditions as set forth in the Bond Resolution. The Registrar shall not be required to transfer or exchange (a) all or a portion of any Series 2001 Bond subject to prior redemption during a period beginning at the opening of business 15 days next preceding the mailing by the Registrar of a notice of prior redemption of Series 2001 Bonds and ending at the close of business on the day of such mailing, or (b) any Series 2001 Bond after the mailing of notice calling such Bond or any portion thereof for prior redemption. This Series 2001 Bond is fully transferable by the owner hereof in person or by his or her duly authorized attorney on the registration books kept by the Registrar upon surrender of this Series 2001 Bond together with a duly executed written instrument of transfer satisfactory to the Registrar. Upon such transfer a new fully registered bond of authorized denomination or denominations of the same aggregate principal amount and maturity will be issued to the transferee in exchange for this Series 2001 Bond, subject to such terms and conditions as set forth in the Bond Resolution. The County and the Registrar and Paying Agent may deem and treat the person in whose name this Series 2001 Bond is registered as the absolute owner hereof for the purpose of making payment and for all other purposes. The Series 2001 Bonds are special, limited obligations of the County payable solely from and secured solely by the sources provided in the Resolution and shall not constitute an indebtedness or a debt within the meaning of any applicable charter, constitutional or statutory provision or limitation; nor shall they be considered or held to be general obligations of the County. Pursuant to the Bond Resolution the County has pledged for the payment of the principal of, premium, if any, and interest on the Series 2001 Bonds, and granted a first priority lien for such purpose on the Pledged Revenues (as defined in the Bond Resolution). The Series 2001 Bonds are issued on a parity with all Sales Tax Parity Obligations (as defined in the Bond Resolution). The County is further authorized by the Bond Resolution to pledge and grant a lien, on a parity with the lien for the payment of the principal of, premium, if any, and interest on the Series 2001 Bonds and other Sales Tax Parity Obligations, on the Pledged Revenues, for the payment of the principal of, premium, if any, and interest on additional Sales Tax Parity Obligations, upon satisfaction of certain conditions set forth in the Bond Resolution. This bond, including the interest hereon, is payable solely from and secured solely by the special funds provided in the Bond Resolution and shall not constitute an indebtedness or a debt within the meaning of any applicable charter, constitutional or statutory provision or limitation; nor shall it be considered or held to be a general obligation of the County. THE BOND RESOLUTION CONSTITUTES THE CONTRACT BETWEEN THE REGISTERED OWNER OF THIS BOND AND THE COUNTY. THIS BOND IS ONLY 02-101352.06 A-4 EVIDENCE OF SUCH CONTRACT AND, AS SUCH, IS SUBJECT IN ALL RESPECTS TO THE TERMS OF THE BOND RESOLUTION, WHICH SUPERSEDES ANY INCONSISTENT STATEMENT IN THIS BOND. The County agrees with the registered owner of this bond and with each and every person who may become the registered owner hereof, that it will keep and perform all the covenants and agreements contained in the Bond Resolution. The Bond Resolution may be amended or supplemented from time-to-time with or without the consent of the registered owners of the Series 2001 Bonds as provided in the Bond Resolution. The Resolution grants certain rights to Financial Security Assurance Inc. (the "Bond Insurer"), including, but not limited to, the right to be deemed to be the registered owner of the Series 2001 Bonds for all purposes other than, except as otherwise provided in the Bond Resolution, the receipt of payments of principal of, premium, if any, and interest on the Series 2001 Bonds, and the right to exercise all rights of the registered owner of the Series 2001 Bonds, other than, except as otherwise provided in the Bond Resolution, the right to receive payments of principal, premium, if any, and interest on the Series 2001 Bonds. These rights of the Bond Insurer include, but are not limited to, (a) the right to control remedies following an Event of Default pursuant to the Bond Resolution; (b) the right to consent to an amendment to the Bond Resolution pursuant thereto; (c) any right to vote as registered owner of the Series 2001 Bonds in any reorganization, liquidation or similar proceeding relating to the County or with respect to any plan of reorganization or liquidation relating to the County; and (d) any other right to consent, exercise rights or control proceedings by or on behalf of the registered owners of the Series 2001 Bonds. It is hereby certified that all conditions, acts and things required by the State Constitution, the Act, the Refunding Act, the Charter and the Bond Resolution to exist, to happen and to be performed, precedent to and in the issuance of this bond, exist, have happened and have been performed, and that the Series 2001 Bonds do not exceed any limitations prescribed by the State Constitution, the Act, the Refunding Act, the Charter and the Bond Resolution. This bond shall not be entitled to any benefit under the Bond Resolution, or become valid or obligatory for any purpose, until the Paying Agent shall have signed the certificate of authentication hereon. [remainder of this page intentionally left blank] 02-101352.06 A-5 IN WITNESS WHEREOF, the Board of County Commissioners of the County has caused this Bond to be signed and executed on behalf of the County by the manual or facsimile signature of its Chairperson, to be countersigned by the manual or facsimile signature of the County Treasurer and to be subscribed and attested with the manual or facsimile signature of the County Clerk and Recorder; and has caused the facsimile of the County seal to be affixed hereon, as of the date specified above. [FACSIMILE SEAL] PITKIN COUNTY, COLORADO By [Manual or Facsimile Signature] Chairperson, Board of County Commissioners Countersigned: Attest: By (Manual or Facsimile Signature] County Treasurer By [Manual or Facsimile Si nature] County Clerk and Recorder 02-101352.06 ,4_6 CERTIFICATE OF AUTHENTICATION This is one of the Series 2001 Bonds described in the within-mentioned Resolution. THE BANK OF CHERRY CREEK, N.A., as Paying Agent By Authorized Representative Date of Authentication: 02-101352.06 A_7 STATEMENT OF INSURANCE Financial Security Assurance Inc. ("Financial Security"), New York, New York, has delivered its municipal bond insurance policy with respect to the scheduled payments due of principal of and interest on the Bonds to The Bank of Cherry Creek, N.A., Denver, Colorado, or its successor, as paying agent for the Bonds (the "Paying Agent'). Said Policy is on file and available for inspection at the principal office of the Paying Agent and a copy thereof may be obtained from Financial Security or the Paying Agent. 02-101352.06 A-8 APPROVING LEGAL OPINION Set forth below is a true copy of the approving legal opinion of Kutak Rock LLP, delivered on the date on which the Series 2001 Bonds were originally issued: [approving opinion of Kutak Rock LLP to be inserted] 02-101352.06 A_9 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please print or typewrite name and address of Transferee) (Tax Identification or Social Security No.) the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever. Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges. TRANSFER FEE MAY BE REQUIRED 02-101352.06 A-1 0 PREPAYMENT PANEL The following installments of principal (or portion thereof) of this bond have been prepaid in accordance with the terms of the Bond Resolution. Date of Principal Signature of Authorized Prepayment Representative of the Depository 02-101352.06 A_1 1