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HomeMy WebLinkAboutRES.2680.03-19-2012BILL NO. 12-29 RESOLUTION NO. A RESOLUTION APPROVING A BOND COMPLIANCE POLICY AND PROCEDURE FOR THE CITY OF CAPE GIRARDEAU, MISSOURI. WHEREAS, the Internal Revenue Service has advised issuers of tax-exempt bonds to adopt written procedures for monitoring post -issuance federal tax requirements for tax-exempt bonds. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF CAPE GIRARDEAU, MISSOURI, AS FOLLOWS: Section 1. Approval of Bond Compliance Policy and Procedure. The Bond Compliance Policy and Procedure in substantially the form attached hereto as Exhibit A is hereby approved. Section 2. Further Authority. The City hereby authorizes and empowers the officers and representatives of the City to do all such acts and things and to execute, acknowledge and deliver all such documents as may in their discretion be deemed necessary or desirable in order to carry out or comply with the terms and provisions of this Resolution in connection with the approval of the Bond Compliance Policy and Procedure. All of the acts and undertakings of such officers and representatives that are in conformity with the intent and purposes of this Resolution, whether heretofore or hereafter taken or done, shall be and the same are hereby in all respects, ratified, confirmed and approved. Section 3. Effective Date. This Resolution shall be in full force and effect from and after its adoption by the City Council. PASSED AND ADOPTED by the City Council of the City of Cape Girardeau, Missouri, this 19th day of March, 2012... __ __1 4 arry E. R Iger, ayor CITY OF CAPE GIRARDEAU, MISSOURI BOND COMPLIANCE POLICY AND PROCEDURE Dated as of March 19, 2012 BOND COMPLIANCE POLICY AND PROCEDURE TABLE OF CONTENTS TAX-EXEMPT BONDS CURRENTLY OUTSTANDING Section 4.1. Tax -Exempt Bonds Covered by Article IV Procedures.................................................... 5 Section 4.2. Tax -Exempt Bond File..................................................................................................... 5 Section 4.3. Annual Compliance Checklists........................................................................................ 5 Section 4.4. Correcting Prior Deficiencies in Compliance.................................................................. 5 ARTICLE V COMPLIANCE PROCEDURE FOR NEW TAX-EXEMPT BOND ISSUES Section5.1. Application..................................................................................................... Section 5.2. Prior to Issuance of Tax -Exempt Bonds......................................................... Section 5.3. Accounting and Recordkeeping..................................................................... Section 5.4. Final Allocation of Bond Proceeds................................................................ ARTICLE VI ONGOING MONITORING PROCEDURES Section 6.1. Annual Compliance Checklist........................................................................ Section 6.2. Arbitrage and Rebate Compliance................................................................. ARTICLE VII CONTINUING DISCLOSURE Section 7.1. Annual Disclosure Filings.............................................................................. Section 7.2. Material Event Disclosure Filings.................................................................. Exhibit A — List of Tax -Exempt Bonds Covered by this Compliance Procedure 5 5 6 6 7 7 8 8 (i) March 19, 2012 Page ARTICLE I DEFINITIONS Section1.1. Definitions........................................................................................................................ 1 ARTICLE II PURPOSE AND SCOPE Section 2.1. Purpose of Compliance Procedure................................................................................... 3 Section 2.2. Scope of Compliance Procedure; Conflicts..................................................................... 4 Section 2.3. Amendments and Publication of Compliance Procedure ................................................. 4 ARTICLE III BOND COMPLIANCE OFFICER; TRAINING Section 3.1. Bond Compliance Officer Duties..................................................................................... 4 Section3.2. Training............................................................................................................................ 4 ARTICLE IV TAX-EXEMPT BONDS CURRENTLY OUTSTANDING Section 4.1. Tax -Exempt Bonds Covered by Article IV Procedures.................................................... 5 Section 4.2. Tax -Exempt Bond File..................................................................................................... 5 Section 4.3. Annual Compliance Checklists........................................................................................ 5 Section 4.4. Correcting Prior Deficiencies in Compliance.................................................................. 5 ARTICLE V COMPLIANCE PROCEDURE FOR NEW TAX-EXEMPT BOND ISSUES Section5.1. Application..................................................................................................... Section 5.2. Prior to Issuance of Tax -Exempt Bonds......................................................... Section 5.3. Accounting and Recordkeeping..................................................................... Section 5.4. Final Allocation of Bond Proceeds................................................................ ARTICLE VI ONGOING MONITORING PROCEDURES Section 6.1. Annual Compliance Checklist........................................................................ Section 6.2. Arbitrage and Rebate Compliance................................................................. ARTICLE VII CONTINUING DISCLOSURE Section 7.1. Annual Disclosure Filings.............................................................................. Section 7.2. Material Event Disclosure Filings.................................................................. Exhibit A — List of Tax -Exempt Bonds Covered by this Compliance Procedure 5 5 6 6 7 7 8 8 (i) March 19, 2012 BOND COMPLIANCE POLICY AND PROCEDURE ARTICLE I DEFINITIONS Section 1.1. Definitions. Capitalized words and terms used in this Compliance Procedure have the following meanings: "Annual Compliance Checklist" means a questionnaire and/or checklist described in Section 6.1 that is completed each year for a Tax -Exempt Bond issue. "Bond Compliance Officer" means the Issuer's Finance Director or, if the position of Finance Director is vacant, the person filling the responsibilities of the Finance Director for the Issuer. "Bond Counsel" means a law firm selected by the Issuer to provide a legal opinion regarding the tax status of interest on Tax -Exempt Bonds as of the issue date or the law firm selected to advise the Issuer on matters referenced in this Compliance Procedure. "Bond Restricted Funds" means the funds, accounts, and investments that are subject to arbitrage rebate and/or yield restriction rules that have been identified in the Tax Compliance Agreement for a Tax -Exempt Bond issue. "Bond Transcript" means the "transcript of proceedings" or other similarly titled set of transaction documents assembled by Bond Counsel following the issuance of Tax -Exempt Bonds. "City Council" means the City Council of the Issuer. "Code" means the Internal Revenue Code of 1986, as amended. "Compliance Procedure" means this Bond Compliance Policy and Procedure. "Continuing Disclosure Undertaking" means the Continuing Disclosure Agreement(s), Continuing Disclosure Undertaking(s), Continuing Disclosure Instructions or other written certification(s) of the Issuer setting out covenants for satisfying the Issuer's requirements for providing information to the MSRB pursuant to SEC Rule 15c2-12 on an ongoing basis for one or more Tax -Exempt Bond issues. "Cost" or "Costs" means all costs and expenses paid for the acquisition, design, construction, equipping or improvement of a Project Facility or costs of issuing Tax -Exempt Bonds. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.or . "Final Written Allocation" means the Final Written Allocation of Bond proceeds prepared pursuant to Section 5.4 of this Compliance Procedure. "Financed Assets" means that part of a Project Facility treated as financed with Tax -Exempt Bond proceeds as reflected in a Final Written Allocation or, if no Final Written Allocation was prepared, the accounting records of the Issuer and the Tax Compliance Agreement for the Tax -Exempt Bond issue. "Intent Resolution" means a resolution of the City Council stating (a) the intent of the Issuer to finance all or a portion of the Project Facility, (b) the expected maximum size of the financing and (c) the intent of the Issuer to reimburse the costs paid by the Issuer from proceeds of the Tax -Exempt Bonds. "IRS" means the Internal Revenue Service. "Issuer" means the City of Cape Girardeau, Missouri. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with Rule 15c2 -12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "Placed In Service" means that date (as determined by the Bond Compliance Officer) when the Project Facility is substantially complete and in operation at substantially its design level. "Project Facility" means all tangible or intangible property financed in whole or in part with Tax -Exempt Bonds that is (a) functionally related or integrated in use, (b) located on the same physical site or proximate sites, and (c) expected to be Placed In Service within a one-year period of each other. "Rebate Analyst" means the Rebate Analyst for the Tax -Exempt Bonds selected pursuant to the Tax Compliance Agreement. "Regulations" means all regulations issued by the U.S. Treasury Department to implement the provisions of Code §§ 103 and 141 through 150 and applicable to tax-exempt obligations. "Tax Compliance Agreement" means the Federal Tax Certificate, Tax Compliance Agreement, Arbitrage Agreement, or other written certification or agreement of the Issuer setting out representations and covenants for satisfying the post -issuance tax compliance requirements for a Tax -Exempt Bond issue. "Tax -Advantaged Bond(s)" means any bond, note, installment sale agreement, lease or certificate intended to be a debt obligation of the Issuer or another political subdivision or government instrumentality, the proceeds of the which are to be loaned or otherwise made available to the Issuer, and the interest on which is taxable to bond owners, but is based on a lower rate due to the advantages of a federal program (such as Build America Bonds). A list of all Tax -Advantaged Bonds outstanding and subject to this Compliance Procedure as of March 19, 2012, is attached as Exhibit A. "Tax -Exempt Bond(s)" means any bond, note, installment sale agreement, lease or certificate intended to be a debt obligation of the Issuer or another political subdivision or government instrumentality, the proceeds of the which are to be loaned or otherwise made available to the Issuer, and the interest on which is excludable from gross income for federal income tax purposes. A list of all Tax - Exempt Bonds outstanding and subject to this Compliance Procedure as of March 19, 2012, is attached as Exhibit A. For purposes of this Compliance Procedure, any reference to "Tax -Exempt Bond(s)" includes Tax- Advantaged Bonds. "Tax -Exempt Bond File" means documents and electronic medium, maintained for the Tax -Exempt Bonds. following information if applicable: (a) Intent Resolution. (b) Bond Transcript. records which may consist of paper and Each Tax -Exempt Bond File will include the 2 March 19, 2012 (c) Final Written Allocation and/or all available accounting records related to the Project Facility showing expenditures allocated to the proceeds of the Tax - Exempt Bonds and expenditures (if any) allocated to other sources of funds. (d) All rebate and yield reduction payment calculations performed by the Rebate Analyst and all investment records provided to the Rebate Analyst for purposes of preparing the calculations. (e) Forms 8038-T together with proof of filing and payment of rebate. (f) Investment agreement bid documents (unless included in the Bond Transcript) including: (1) bid solicitation, bid responses, certificate of broker; (2) written summary of reasons for deviations from the terms of the solicitation that are incorporated into the investment agreement; and (3) copies of the investment agreement and any amendments. (g) Any item required to be maintained by the terms of the Tax Compliance Agreement involving the use of the Project Facility or expenditures related to tax compliance for the Tax -Exempt Bonds. (h) Any opinion of Bond Counsel regarding the Tax -Exempt Bonds not included in the Bond Transcript. (i) Amendments, modifications or substitute agreements to any agreement contained in the Bond Transcript. (j) Any correspondence with the IRS relating to the Tax -Exempt Bonds including all correspondence relating to an audit by the IRS of the Tax -Exempt Bonds or any proceedings under the Tax -Exempt Bonds Voluntary Closing Agreement Program (VCAP). (k) Any available questionnaires or correspondence substantiating the use of the Project Facility in accordance with the terms of the Tax Compliance Agreement for the Tax -Exempt Bonds. (1) For refunding bond issues, the Tax -Exempt Bond File for the refunded Tax - Exempt Bonds. ARTICLE II PURPOSE AND SCOPE Section 2.1. Purpose of Compliance Procedure. (a) The Issuer uses Tax -Exempt Bonds to fund Costs of a Project Facility. The Issuer understands that in exchange for the right to issue Tax -Exempt Bonds at favorable interest rates and terms, the Code and Regulations impose ongoing requirements related to the proceeds of the Tax -Exempt Bonds and the Project Facility financed by the Tax -Exempt Bonds. These requirements focus on the investment, use and expenditure of proceeds of the Tax -Exempt Bonds and related funds as well as restrictions on the use of the Project Facility. (b) The Issuer recognizes that the IRS has stated that all issuers of Tax -Exempt Bonds should have separate written procedures regarding ongoing compliance with the federal tax requirements for Tax -Exempt Bonds. (c) The Issuer is required under the Continuing Disclosure Undertaking to provide disclosures of certain financial information and operating data and to file notices of certain material events to the marketplace to facilitate informed secondary trading in Tax -Exempt Bonds issued by the March 19, 2012 Issuer. The Issuer is committed to full compliance with the tax and securities law requirements for all of its outstanding and future tax-exempt financings. This Compliance Procedure is adopted by the City Council to comply with the IRS and SEC directives and to improve tax and securities law compliance and documentation. Section 2.2. Scope of Compliance Procedure; Conflicts. This Compliance Procedure applies to all Tax -Exempt Bonds currently outstanding and all Tax -Exempt Bonds issued in the future. If the provisions of this Compliance Procedure conflict with a Tax Compliance Agreement, the Continuing Disclosure Undertaking or any other specific written instructions of Bond Counsel, the terms of the Tax Compliance Agreement, the Continuing Disclosure Undertaking or specific written instructions of Bond Counsel will supersede and govern in lieu of this Compliance Procedure. Any exception to this Compliance Procedure required by Bond Counsel as part of a future issue of Tax -Exempt Bonds will be incorporated in the Tax Compliance Agreement for the future issue. Any requirements imposed on the Issuer in the Tax Compliance Agreement, will be noted by the Bond Compliance Officer and incorporated into the Annual Compliance Checklist. The Issuer acknowledges that the Continuing Disclosure Undertaking may also apply to one or more issues of taxable securities issued by the Issuer. Section 2.3. Amendments and Publication of Compliance Procedure. This Compliance Procedure may be amended from time -to -time by the City Council. Copies of this Compliance Procedure and any amendments will be included in the permanent records of the Issuer. ARTICLE III BOND COMPLIANCE OFFICER; TRAINING Section 3.1. Bond Compliance Officer Duties. The Bond Compliance Officer is responsible for implementing this Compliance Procedure. The Bond Compliance Officer will work with other employees that use the Project Facility to assist in implementing this Compliance Procedure. The Bond Compliance Officer will consult with Bond Counsel, legal counsel to the Issuer, accountants, tax return preparers and other outside experts to the extent necessary to carry out the purposes of this Compliance Procedure. The Bond Compliance Officer will report to the City Council as necessary, and will report to the City Manager at least annually regarding implementation of this Compliance Procedure and any recommended changes or amendments to this Compliance Procedure. Section 3.2. Training. When appropriate, the Bond Compliance Officer and/or other employees of the Issuer under the direction of the Bond Compliance Officer will attend training programs offered by the IRS or other industry professionals regarding tax-exempt financing that are relevant to the Issuer. At the time the individual acting as the Bond Compliance Officer passes the responsibilities for carrying out the provisions of this Compliance Procedure to another individual, the outgoing Bond Compliance Officer is responsible for training the incoming individual acting as Bond Compliance Officer to ensure the Issuer's continued compliance with the provisions of this Compliance Procedure and all Tax Compliance Agreements for any outstanding Tax -Exempt Bonds. 4 March 19, 2012 ARTICLE IV TAX-EXEMPT BONDS CURRENTLY OUTSTANDING Section 4.1. Tax -Exempt Bonds Covered by Article IV Procedures. This Article IV applies to all Tax -Exempt Bonds issued prior to the date of this Compliance Procedure that are currently outstanding. These Tax -Exempt Bonds are listed on Exhibit A. Section 4.2. Tax -Exempt Bond File. As soon as practical, the Bond Compliance Officer will attempt to assemble as much of the Tax -Exempt Bond File as is available for the Tax -Exempt Bonds listed on Exhibit A. Section 4.3. Annual Compliance Checklists. As soon as practical following the adoption of this Compliance Procedure, the Bond Compliance Officer will work with Bond Counsel and/or legal counsel to the Issuer and cause Annual Compliance Checklists to be completed for all outstanding Tax - Exempt Bonds and will follow the procedures specified in Article VI to complete the Annual Compliance Checklists and thereafter include each completed Annual Compliance Checklist in the Tax -Exempt Bond File. Section 4.4. Correcting Prior Deficiencies in Compliance. If the Bond Compliance Officer determines a deficiency in compliance with a Tax Compliance Agreement for an outstanding Tax -Exempt Bond listed on Exhibit A, the Bond Compliance Officer will direct the Issuer to follow the procedures described in the Regulations or the Tax -Exempt Bonds Voluntary Closing Agreement Program (VCAP) to remediate the noncompliance. If remediation of the noncompliance requires the Issuer to submit a request under VCAP, the Bond Compliance Officer will undertake this step only after reporting the violation to the City Council and obtaining its approval. 0 t41 [*Il DIVA COMPLIANCE PROCEDURE FOR NEW TAX-EXEMPT BOND ISSUES Section 5.1. Application. This Article V applies to Tax -Exempt Bonds issued on or after the date of this Compliance Procedure. Section 5.2. Prior to Issuance of Tax -Exempt Bonds. (a) Intent Resolution. The City Council will authorize and approve the issuance of Tax - Exempt Bonds. Prior to or as a part of this authorizing resolution or ordinance, the City Council may adopt an Intent Resolution. (b) Directions to Bond Counsel. The Bond Compliance Officer will provide a copy of this Compliance Procedure to Bond Counsel with directions for Bond Counsel to structure the documentation and procedural steps taken prior to issuing the Tax -Exempt Bonds so that they conform to the requirements of this Compliance Procedure, except to the extent Bond Counsel determines that different procedures are required. The Bond Compliance Officer will consult with Bond Counsel so that appropriate provisions are made to fund or reimburse the Issuer's costs and expenses incurred to implement this Compliance Procedure. (c) Tax Compliance Agreement. For each issuance of Tax -Exempt Bonds a Tax Compliance Agreement will be signed by the Bond Compliance Officer. The Tax Compliance Agreement will (1) March 19, 2012 describe the Project Facility and the anticipated Financed Assets, (2) identify all Bond Restricted Funds and provide for arbitrage and rebate compliance by the Issuer, (3) for new money financings, require the Issuer to complete a Final Written Allocation, and (4) contain a form of the Annual Compliance Checklist for the Tax -Exempt Bonds, The Bond Compliance Officer will confer with Bond Counsel and the Issuer's counsel regarding the meaning and scope of each representation and covenant contained in the Tax Compliance Agreement. (d) Preliminary Cost Allocations. For new money financings, the Bond Compliance Officer in consultation with Bond Counsel, will prepare a preliminary cost allocation plan for the Project Facility. The preliminary cost allocation plan will identify the assets and expected costs for the Project Facility, and, when necessary, will break-out the portions of Costs expected to be financed with proceeds of the Tax -Exempt Bonds (the "Financed Assets") and the portions, if any, expected to be financed from other sources. (e) Tax Review with Bond Counsel. Prior to the sale of Tax -Exempt Bonds, the Bond Compliance Officer and Bond Counsel will review this Compliance Procedure together with the draft Tax Compliance Agreement to ensure that any tax compliance issues in the new financing are adequately addressed by this Compliance Procedure and/or the Tax Compliance Agreement. If Bond Counsel determines that this Compliance Procedure conflicts with the Tax Compliance Agreement, or must be supplemented to account for special issues or requirements for the Tax -Exempt Bonds, the Bond Compliance Officer will ask Bond Counsel to include the written modifications or additions in the final Tax Compliance Agreement. The Bond Compliance Officer will request Bond Counsel to prepare a form of Annual Compliance Checklist for use in monitoring the ongoing compliance requirements for the Tax - Exempt Bonds. Section 5.3. Accounting and Recordkeeping. (a) Accounting for New Money Projects, The Bond Compliance Officer will be responsible for accounting for the investment and allocation of proceeds of the Tax -Exempt Bonds. The Bond Compliance Officer will establish separate accounts or subaccounts to record expenditures for Costs of the Project Facility. Where appropriate, the Bond Compliance Officer may use accounts established as part of the Issuer's financial records for this purpose. In recording Costs for the Project Facility, the Bond Compliance Officer will ensure that the accounting system will include the following information: (1) identity of person or business paid, along with any other available narrative description of the purpose for the payment, (2) date of payment, (3) amount paid, and (4) invoice number or other identifying reference. (b) Allocation for Refunded Bonds and Related Refunded Bond Accounts. For Tax -Exempt Bonds that refund prior Tax -Exempt Bonds, the Tax Compliance Agreement will set out special allocation procedures for the proceeds of the financing, and if necessary proceeds of the refinanced Tax - Exempt Bonds. (c) Tax -Exempt Bond File. The Bond Compliance Officer will be responsible for assembling and maintaining the Tax -Exempt Bond File. The Annual Reports, other reports and notices of certain material events filed by the Issuer with the MSRB will be publicly available on EMMA and need not be separately maintained in the Tax -Exempt Bond File. Section 5.4. Final Allocation of Bond Proceeds. (a) Preparation of Final Written Allocation; Timing. The Bond Compliance Officer is responsible for making a written allocation of proceeds of Tax -Exempt Bonds to expenditures and 6 March 19, 2012 identifying the Financed Assets. This process will be memorialized in the Final Written Allocation. For a new money financing, the Bond Compliance Officer will commence this process as of the earliest of (1) the requisition of all Tax -Exempt Bond proceeds from any segregated Tax -Exempt Bond funded account, (2) the date the Project Facility has been substantially completed or (3) four and one/half years following the issue date of the Tax -Exempt Bonds. For Tax -Exempt Bonds issued only to refund a prior issue of Tax -Exempt Bonds, the Bond Compliance Officer will work with Bond Counsel to prepare and/or document the Final Written Allocation for the Project Facility financed by the refunded Tax -Exempt Bonds and include it in the Tax Compliance Agreement. (b) Contents and Procedure. The Bond Compliance Officer will consult the Tax Compliance Agreement and, if necessary, contact Bond Counsel to seek advice regarding any special allocation of Tax -Exempt Bond proceeds and other money of the Issuer to the Costs of the Project Facility. If no special allocation is required or recommended, the Bond Compliance Officer will allocate Costs of the Project Facility to the proceeds of the Tax -Exempt Bonds in accordance with the Issuer's accounting records. Each Final Written Allocation will contain the following: (1) a reconciliation of the actual sources and uses to Costs of the Project Facility, (2) the percentage of the cost of the Project Facility financed with proceeds of the Tax -Exempt Bonds (sale proceeds plus any investment earnings on those sale proceeds), (3) the Project Facility's Placed in Service date, (4) the estimated economic useful life of the Project Facility, and (5) any special procedures to be followed in completing the Annual Compliance Checklist (e.g., limiting the Annual Compliance Checklist to specific areas of the Project Facility that the Final Written Allocation or the Tax Compliance Agreement treats as having been financed by Tax - Exempt Bonds). (c) Finalize Annual Compliance Checklist. As part of the preparation of the Final Written Allocation, the Bond Compliance Officer will update the draft Annual Compliance Checklist contained in the Tax Compliance Agreement. The Bond Compliance Officer will include reminders for all subsequent arbitrage rebate computations required for the Tax -Exempt Bonds in the Annual Compliance Checklist. (d) Review of Final Written Allocation and Annual Compliance Checklist. Each Final Written Allocation and Annual Compliance Checklist will be reviewed by legal counsel to the Issuer or Bond Counsel for sufficiency and compliance with the Tax Compliance Agreement and this Compliance Procedure. Following the completion of the review, the Bond Compliance Officer will execute the Final Written Allocation. ARTICLE VI ONGOING MONITORING PROCEDURES Section 6.1. Annual Compliance Checklist. An Annual Compliance Checklist will be completed by the Bond Compliance Officer each year following completion of the Final Written Allocation. Each Annual Compliance Checklist will be designed and completed for the purpose of identifying potential noncompliance with the terms of the Tax Compliance Agreement or this Compliance Procedure and obtaining documents (such as investment records, arbitrage calculations, or other documentation for the Project Facility) that are required to be incorporated in the Tax -Exempt Bond File. The Bond Compliance Officer will refer any responses indicating a violation of the terms of the Tax Compliance Agreement to legal counsel to the Issuer or Bond Counsel and, if recommended by counsel, will follow the procedure set out in Section 4.4 to remediate the non-compliance. Section 6.2. Arbitrage and Rebate Compliance. The Bond Compliance Officer will monitor the investment of Bond Restricted Funds and provide investment records to the Rebate Analyst 7 March 19, 2012 on a timely basis. The Bond Compliance Officer will follow the directions of the Rebate Analyst with respect to the preparation of and the timing of rebate or yield reduction computations. ARTICLE VII CONTINUING DISCLOSURE Section 7.1. Annual Disclosure Filings. For each issuance of Tax -Exempt Bonds, the Bond Compliance Officer will review the Continuing Disclosure Undertaking to determine the financial information and operating data required to be included in the Annual Report to be filed by the Issuer with the MSRB on EMMA. The Bond Compliance Officer will cause the Annual Report to be fled with the MSRB on EMMA within the timeframe provided in the Continuing Disclosure Undertaking for the Tax - Exempt Bonds. Section 7.2. Material Event Disclosure Filings. For each outstanding issue of Tax -Exempt Bonds, the Bond Compliance Officer will review the Continuing Disclosure Undertaking to determine the "material events" that require prompt notice to be fled with the MSRB. Generally, the occurrence of any of the following events with respect to the Tax -Exempt Bonds represents a "material event:" (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional trustee or the change of name of the trustee, if material. After obtaining actual knowledge of the occurrence of any event that the Bond Compliance Officer believes may constitute an event requiring disclosure, the Bond Compliance Officer will contact Bond Counsel to determine if notice of the event is required to be given to the MSRB under the Continuing Disclosure Undertaking. If it is determined that notice should be provided to the MSRB or is required to be provided to the MSRB by the Continuing Disclosure Undertaking, the Bond Compliance March 19, 2012 Officer will cause the appropriate notice to be filed with the MSRB on EMMA within 10 business days after the occurrence of the event or as otherwise directed by Bond Counsel. ADOPTED BY THE CITY COUNCIL March 19, 2012 March 19, 2012 EXHIBIT A TAX-EXEMPT BONDS COVERED BY THIS COMPLIANCE PROCEDURE: 1. Waterworks System Refunding Revenue Bonds, Series 2006A 2. Cape Girardeau (Missouri) Public Facilities Authority, Leasehold Revenue Bonds (City of Cape Girardeau, Missouri, Lessee), Series 2009 3. Special Obligation Refunding and Improvement Bonds, Series 2002 4. Special Obligation Bonds, Series 2005 5. Special Obligation Bonds, Series 2010A 6. Waterworks System Refunding Revenue Bonds, Series 2012A TAX -ADVANTAGED BONDS COVERED BY THIS COMPLIANCE PROCEDURE: 1. Sewerage System Revenue Bonds (State Revolving Fund Program), Series 1991 2. Sewerage System Revenue Bonds (State Revolving Fund Program), Series 1993 3. Sewerage System Revenue Bonds (State Revolving Fund Program), Series 1995D 4. Sewerage System Revenue Bonds (State Revolving Fund Program), Series 1996D 5. Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2000B 6. Waterworks System Revenue Bonds (State of Missouri — Direct Loan Program — ARRA), Series 2010 A-1 March 19, 2012 $13,775,000 CITY OF CAPE GIRARDEAU, MISSOURI WATERWORKS SYSTEM REFUNDING REVENUE BONDS SERIES 2012A March 19, 2012 BOND PURCHASE AGREEMENT Mayor and City Council City of Cape Girardeau, Missouri Ladies and Gentlemen: On the basis of the representations, warranties and covenants and upon the terms and conditions contained in this Bond Purchase Agreement, Piper Jaffray & Co., Leawood, Kansas (the "Purchaser"), hereby offers to purchase $13,775,000 aggregate principal amount of Waterworks System Refunding Revenue Bonds, Series 2012A (the "Bonds"), to be issued by the City of Cape Girardeau, Missouri (the "City") under and pursuant to an Ordinance adopted by the City on March 19, 2012 (the "Ordinance"). Capitalized terms used herein shall have the meanings set forth in the Ordinance unless some other meaning is plainly indicated. The City acknowledges and agrees that: (i) the purchase and sale of the Bonds pursuant to this Bond Purchase Agreement is an arm's length, commercial transaction between the City and the Purchaser; (ii) in connection with such transaction, the Purchaser is acting solely as a principal and is not acting as a municipal advisor, financial advisor or fiduciary to the City; (iii) the Purchaser has not assumed any advisory or fiduciary responsibility to the City with respect to the transaction contemplated hereby and the discussions, undertakings and proceedings leading thereto (irrespective of whether the Purchaser has provided other services or is currently providing other services to the City on other matters) or any other obligation to the City except the obligations expressly set forth in this Bond Purchase Agreement; and (iv) the City has consulted its own legal, accounting, tax, financial and other advisors, as applicable, to the extent it has deemed appropriate in connection with the transaction contemplated herein. This offer is made subject to acceptance of this Bond Purchase Agreement by the City on or before 11:59 p.m., central standard time, on March 19, 2012. SECTION 1. CITY'S REPRESENTATIONS AND WARRANTIES By acceptance hereof, the City hereby represents and warrants to the Purchaser that: (a) The City is a home rule charter city and political subdivision, duly organized and existing under the laws of the State of Missouri. (b) The City has complied with all provisions of its Charter, the Constitution and the laws of the State of Missouri with respect to the Bonds, including particularly the Act, and has full power and authority to consummate all transactions contemplated by the Ordinance and this Bond Purchase Agreement, and all other agreements relating thereto. (c) The City has duly authorized by all necessary action to be taken by the City (1) the adoption and performance of the Ordinance; (2) the execution, delivery and performance of this Bond Purchase Agreement; (3) the approval of the Official Statement (as defined herein); (4) the execution and performance of the Continuing Disclosure Agreement dated April 4, 2012 (the "Continuing Disclosure Agreement") between the City and UMB Bank, N.A., as dissemination agent, (5) the execution and performance of any and all such other agreements and documents as may be required to be executed, delivered and performed by the City in order to carry out, give effect to and consummate the transactions contemplated by the Ordinance, this Bond Purchase Agreement and the Continuing Disclosure Agreement; and (6) the carrying out, giving effect to and consummation of the transactions contemplated by the Ordinance, this Bond Purchase Agreement and the Continuing Disclosure Agreement. Executed counterparts of the Ordinance and all such other agreements and documents specified herein will be delivered to the Purchaser by the City at the Closing Time (as defined below). (d) The Ordinance, this Bond Purchase Agreement and the Continuing Disclosure Agreement (collectively, the "Transaction Documents"), when executed and delivered by the City, will be legal, valid and binding obligations of the City enforceable in accordance with their respective terms, except to the extent that enforcement thereof may be limited by any applicable bankruptcy, reorganization, insolvency, moratorium or other law or laws affecting the enforcement of creditors' rights generally or against entities such as the City and further subject to the availability of equitable remedies. (e) The Bonds have been duly authorized by the City, and when issued, delivered and paid for as provided for herein and in the Ordinance, will have been duly executed, authenticated, issued and delivered and will constitute valid and binding obligations of the City enforceable in accordance with their terms and entitled to the benefits and security of the Ordinance (subject to any applicable bankruptcy, reorganization, insolvency, moratorium or other law or laws affecting the enforcement of creditors' rights generally or against entities such as the City and further subject to the availability of equitable remedies). The Bonds will not pledge the full faith and credit of the State of Missouri or any political subdivision thereof, including the City, nor shall they be secured by a lien against any of their respective properties, except as provided for in the Ordinance. The Bonds shall be special, limited obligations of the City payable solely from, and secured as to the payment of principal and interest by a pledge of, the net income and revenues derived from the operation of the System, after providing for the costs of operation and maintenance thereof and, pursuant to the Ordinance, the City pledges said net income and revenues to the payment of the principal of and interest on the Bonds. The Bonds shall not be or constitute a general obligation of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction, and the taxing power of the City is not pledged to the payment of the Bonds, either as to principal or interest. (f) The execution and delivery of the Transaction Documents, the Bonds and the Official Statement and compliance with the provisions thereof, will not conflict with or constitute on the part of the City a violation or breach of, or a default under, any existing law, regulation, court or administrative decree or order, or any agreement, ordinance, mortgage, lease or other instrument to which it is subject or by which it is or may be bound. (g) The City is not, or with the giving of notice or lapse of time or both would not be, in violation of or in default under any indenture, mortgage, deed of trust, loan agreement, bonds or other agreement or instrument to which the City is a party or by which it is or may be bound, except for violations and defaults which individually and in the aggregate are not material to the City and will not be material to the holders of the Bonds. As of the Closing Time, no event will have occurred and be -2- continuing which with the lapse of time or the giving of notice, or both, would constitute an event of default under the Transaction Documents or the Bonds. (h) The information contained in the Preliminary Official Statement dated March 7, 2012, as amended and supplemented by the Official Statement dated March 19, 2012, and in any amendment or supplement thereto that may be authorized for use by the City with respect to the Bonds (collectively, the "Official Statement"), relating to (1) the City and the System, including the organization, operations, structure, and financial and other affairs of the foregoing, (2) the financial statements including income statements and balance sheets referred to in subsection 0) hereof, (3) application by the City of the proceeds to be received by it from the sale of the Bonds, and (4) the City's participation in the transactions contemplated by the Transaction Documents is, and as of the Closing Time will be, true, correct and complete in all material respects and does not omit and will not omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (i) For the purpose of enabling the Purchaser to comply with the requirements of Rule 15c2 -12(b)(1) of the Securities and Exchange Commission, promulgated under the Securities Exchange Act of 1934, as amended (the "1934 Act"), the City hereby deems the information regarding the City contained in the Preliminary Official Statement to be "final" as of its date, except for the omission of such information as is permitted by Rule 15c2 -12(b)(1), such as offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings, identity of the underwriters and other terms of the Bonds depending on such matters. 0) The audited financial statements of the City for the fiscal year ended June 30, 2011, audited by Beussink, Hey, Roe, Seabaugh & Stroder, L.L.C., Cape Girardeau, Missouri, independent certified public accountants, contained in the Official Statement in Appendix A attached thereto, except as noted therein, present fairly and accurately the financial condition of the City as of the dates indicated and the results of its operations for the periods specified. (k) The City has not, since June 30, 2011, incurred any material liabilities and there has been no material adverse change in the condition of the City or the System, financial or otherwise, other than as set forth in the Official Statement. (1) There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body pending or, to the knowledge of the City, threatened against or affecting the City or the System (or, to its knowledge, any basis therefor) wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated hereby or by the Ordinance or the validity of the Bonds, the Transaction Documents or any agreement or instrument to which the City is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or by the Ordinance. (m) The City will enter into the Continuing Disclosure Agreement and, unless otherwise described in the Official Statement, the City has not failed during the previous five years to comply in all material respects with any previous undertakings in a written continuing disclosure contract or agreement under SEC Rule 15c2-12. Any certificate signed by any of the authorized officials of the City and delivered to the Purchaser in connection with the Closing shall be deemed a representation and warranty by the City to the Purchaser as to the statements made therein. -3- SECTION 2. COVENANTS AND AGREEMENTS OF CITY The City covenants and agrees with the Purchaser for the time period specified, and if no period is specified, for so long as any of the Bonds remain outstanding, as follows: (a) To cooperate with the Purchaser and its counsel in any reasonable endeavor to qualify the Bonds for offering and sale under the securities or "Blue Sky" laws of such jurisdictions of the United States as the Purchaser may reasonably request; provided that nothing contained herein shall require the City to file written consents to suit or written consents to service of process in any jurisdiction in which such consent may be required by law or regulation so that the Bonds may be offered or sold. The City consents to the use of drafts of the Preliminary Official Statement and drafts of the Official Statement prior to the availability of the Official Statement by the Purchaser in obtaining such qualification. The Purchaser shall pay all expenses and costs (including legal, registration and filing fees) incurred in connection therewith. (b) If, prior to the earlier of (1) 90 days after the "end of the underwriting period" (as defined in Rule 15c2-12 under the 1934 Act) or (2) the time when the Official Statement is available to any person from the Municipal Securities Rulemaking Board, but in no case earlier than 25 days after the end of the underwriting period, any event shall occur relating to or affecting the City or the System, as a result of which it is necessary to amend or supplement the Official Statement in order to make the statements therein, in the light of the circumstances existing when the Official Statement is delivered to a purchaser, not materially misleading, or the Official Statement is required to be amended or supplemented to comply with law, the City shall promptly prepare and furnish, at the expense of the City, to the Purchaser and to the dealers (whose names and addresses the Purchaser will furnish to the City) to which Bonds may have been sold by the Purchaser and to any other dealers upon request, such amendments or supplements to the Official Statement as may be necessary so that the statements in the Official Statement as so amended or supplemented will not, in the light of the circumstances existing when the Official Statement is delivered to a purchaser of the Bonds, be misleading or so that the Official Statement will comply with law. (c) Within seven business days after the date of this Bond Purchase Agreement or within sufficient time to accompany any confirmation that requests payment from any customer of the Purchaser, whichever is earlier, the City shall provide to the Purchaser sufficient copies of the Official Statement to enable the Purchaser to comply with the requirements of Rule 15c2 -12(b)(4) under the 1934 Act, and with the requirements of Rule G-32 of the Municipal Securities Rulemaking Board. (d) From the date hereof until the Closing Time, the City shall furnish the Purchaser with a copy of any proposed amendment or supplement to the Official Statement for review and shall not use any such proposed amendment or supplement to which the Purchaser reasonably objects. (e) The proceeds of the Bonds will be used as provided in the Ordinance to pay the costs of refunding the City's Waterworks System Revenue Bonds (State Revolving Fund Program), Series 1998, currently outstanding in the principal amount of $14,050,000 and paying the costs of issuing the Bonds, and neither said proceeds nor the System have been used or shall be used in a manner which would jeopardize the exclusion of interest on the Bonds from gross income for purposes of federal income taxation under the provisions of Section 103 of the Code, as long as any of the Bonds are outstanding. SECTION 3. PURCHASE, SALE AND DELIVERY OF THE BONDS On the basis of the representations, warranties, covenants and agreements contained herein and in the other agreements and documents referred to herein, and subject to the terms and conditions herein set -4- forth, at the Closing Time the Purchaser agrees to purchase from the City and the City agrees to sell to the Purchaser the Bonds at a purchase price of $ (being the principal amount of the Bonds, plus a net original issue premium of $ , and less an underwriting discount of $ ), together with accrued interest thereon to the date of delivery and payment, if any. The Bonds shall be issued under and secured as provided in the Ordinance, and the Bonds shall have the maturities and interest rates and be subject to redemption as set forth in the Ordinance. The Purchaser initially agrees to offer the Bonds to the public at the prices set forth on Schedule 1 hereto, but may subsequently change such offering prices; the Purchaser agrees to notify the City of such changes, if such changes occur prior to the Closing Time, but failure so to notify shall not invalidate such changes. The Purchaser may offer and sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) at prices lower than the public offering prices. At the request of the City the Purchaser will provide information explaining the factual basis for the Purchaser's representations in the Purchaser's Receipt for Bonds and Representation Letter. This agreement by the Purchaser to provide such information will continue to apply after the Closing Time if (a) the City requests the information in connection with an audit or inquiry by the Internal Revenue Service or the Securities and Exchange Commission, or (b) the information is required to be retained by the City pursuant to future regulation or similar guidance from the Internal Revenue Service, the Securities and Exchange Commission or other federal or state regulatory authority. Payment for the Bonds shall be made by federal wire transfer or draft in immediately available federal funds payable to the order of the City for the account of the City, at the offices of Gilmore & Bell, P.C., One Metropolitan Square, Suite 2350, 211 North Broadway, St. Louis, Missouri, at 9:00 a.m., local time, on April 4, 2012, or such other place, time or date as shall be mutually agreed upon by the City and the Purchaser. Upon such payment, the Bonds shall be delivered and upon the instructions of the Purchaser released to, or held by the paying agent pursuant to the "FAST" procedures of, The Depository Trust Company, New York, New York or its agent. The date of such delivery and payment is herein called the "Closing Date", and the hour and date of such delivery and payment is herein called the "Closing Time." The delivery of the Bonds shall be made in book -entry only form, as fully -registered bonds (in such denominations as the Purchaser shall specify in writing at least 48 hours prior to the Closing Time) duly executed and authenticated and bearing CUSIP numbers (provided neither the printing of a wrong number on any Bond nor the failure to print a number thereon shall constitute cause to refuse delivery of any Bond); provided, however, that the Bonds may be delivered in temporary form. If delivered in definitive form, the Bonds shall be available for examination and packaging by the Purchaser at least 24 hours prior to the Closing Time. SECTION 4. USE OF OFFICIAL STATEMENT The City hereby ratifies and confirms the Purchaser's use of the Preliminary Official Statement, and the City authorizes, and will make available, the Official Statement for the use by the Purchaser in connection with the sale of the Bonds. -5- SECTION 5. CONDITIONS TO THE PURCHASER'S OBLIGATIONS The Purchaser's obligations hereunder shall be subject to the due performance by the City of its obligations and agreements to be performed hereunder at or prior to the Closing Time and to the accuracy and completeness of the City's representations and warranties contained herein, as of the date hereof and as of the Closing Time, and are also subject to the following conditions: (a) The Bonds and the Ordinance shall have been duly authorized, executed and delivered in the form heretofore approved by the Purchaser with only such changes therein as shall be mutually agreed upon by the Purchaser and the City. (b) At the Closing Time, the Purchaser shall receive: (1) The opinion in form and substance satisfactory to the Purchaser, dated as of the Closing Date, of Gilmore & Bell, P.C., Bond Counsel, relating to the valid authorization and issuance of the Bonds, the due authorization and adoption of the Ordinance by the City, the exclusion of interest on the Bonds from gross income for federal income tax purposes and certain other matters. (2) A certified copy of the Ordinance of the City authorizing or approving, as appropriate, the execution and delivery of the Official Statement, the Transaction Documents and the Bonds, together with a certificate dated the Closing Date to the effect that such Ordinance has not been modified, amended or repealed. (3) A closing certificate of the City, satisfactory in form and substance to the Purchaser, dated as of the Closing Date. (4) A completed Form 8038-G (Information Return for Tax -Exempt Governmental Obligations). (5) Such additional certificates, legal and other documents, listed on a closing agenda to be approved by Bond Counsel and the Purchaser, as the Purchaser may reasonably request to evidence performance or compliance with the provisions hereof and the transactions contemplated hereby and by the Ordinance, or as Bond Counsel shall require in order to render its opinion, all such certificates and other documents to be satisfactory in form and substance to the Purchaser. SECTION 6. CONDITIONS TO THE CITY'S OBLIGATIONS The obligations of the City hereunder are subject to the Purchaser's performance of its obligations hereunder. SECTION 7. THE PURCHASER'S RIGHT TO CANCEL The Purchaser shall have the right to cancel its obligations hereunder to purchase the Bonds (which cancellation shall not constitute a default for purposes of Section 3 hereof) by notifying the City in writing or by facsimile of its election to make such cancellation prior to the Closing Time, if at any time prior to the Closing Time: W (a) The Preliminary Official Statement deemed by the City to be "final" pursuant to Section 1(i) is thereafter amended or supplemented in a manner that may, in the reasonable judgment of the Purchaser, have a material adverse effect on the marketability of the Bonds. (b) A committee of the House of Representatives or the Senate of the Congress of the United States shall have pending before it legislation which, if enacted in its form as introduced or as amended, would have the purpose or effect of imposing federal income taxation upon revenues or other income of the general character to be derived by the City or by any similar body or upon interest received on obligations of the general character of the Bonds, or the Bonds, which, in the Purchaser's opinion, materially adversely affects the market price of the Bonds; (c) A tentative decision with respect to legislation shall be reached by a committee of the House of Representatives or the Senate of the Congress of the United States, or legislation shall be favorably reported by such a committee or be introduced, by amendment or otherwise, in or be passed by the House of Representatives or the Senate, or be recommended to the Congress of the United States for passage by the President of the United States, or be enacted by the Congress of the United States, or a decision by a court established under Article III of the Constitution of the United States or the Tax Court of the United States shall be rendered, or a ruling, regulation or order of the Treasury Department of the United States or the Internal Revenue Service shall be made or proposed having the purpose or effect of imposing federal income taxation, or any other event shall have occurred which results in the imposition of federal income taxation, upon revenues or other income of the general character to be derived by the City or by any similar body or upon interest received on obligations of the general character of the Bonds, or the Bonds, which, in the Purchaser's opinion, materially and adversely affects the market price of the Bonds; (d) Any legislation, ordinance, rule or regulation shall be introduced in or be enacted by the General Assembly of the State of Missouri or by any other governmental body, department or agency of the State of Missouri, or a decision by any court of competent jurisdiction within the State of Missouri shall be rendered which, in the Purchaser's opinion, materially and adversely affects the market price of the Bonds, or litigation challenging the law under which the Bonds are to be delivered shall be filed in any court in the State of Missouri; (e) A stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of any provision of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or the Trust Indenture Act of 1939, as amended; (f) Legislation shall be enacted by the Congress of the United States of America, or a decision by a court of the United States of America shall be rendered, to the effect that obligations of the general character of the Bonds, or the Bonds, including all the underlying obligations, are not exempt from registration under or from other requirements of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect; (g) Any event shall have occurred, or information become known, which, in the Purchaser's opinion, makes untrue in any material respect any statement or information contained in -7- the Official Statement as originally circulated, or has the effect that the Official Statement as originally circulated contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; (h) Additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; (i) The New York Stock Exchange or any other national securities exchange, or any governmental authority, shall impose, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Purchaser; 0) Any general banking moratorium shall have been established by federal, New York or Missouri authorities; or (k) A material default has occurred with respect to the obligations of, or proceedings have been instituted under the Federal bankruptcy laws or any similar state laws by or against, any state of the United States or any city located in the United States having a population in excess of one million persons or any entity issuing obligations on behalf of such a city or state which, in the Purchaser's opinion, materially adversely affects the market price of the Bonds; (1) Any proceeding shall be pending or threatened by the Securities and Exchange Commission against the City; (m) A war involving the United States shall have been declared, or any conflict involving the armed forces of the United States shall have escalated, or any other national emergency relating to the effective operation of government or the financial community shall have occurred, which, in the Purchaser's opinion, materially adversely affects the market price of the Bonds (the Purchaser acknowledges that no such war, conflict or national emergency exists as of the date hereof); or (n) Any financial rating assigned to the Bonds shall have been downgraded or withdrawn. SECTION 8. PAYMENT OF EXPENSES Whether or not the Bonds are sold by the City to the Purchaser (unless such sale is prevented at the Closing Time by the Purchaser's default), the Purchaser shall be under no obligation to pay any expenses incident to the performance of the obligations of the City hereunder. If the Bonds are sold by the City to the Purchaser, all expenses and costs to effect the authorization, preparation, issuance, delivery and sale of the Bonds (including, without limitation, the fees and disbursements of Gilmore & Bell, P.C., as Bond Counsel and for the preparation of the Official Statement, the fees and disbursements of the Purchaser in connection with the offering and sale of the Bonds, and the expenses and costs for the preparation, printing, photocopying, execution and delivery of the Bonds, the Official Statement, the Transaction Documents and all other agreements and documents contemplated hereby) shall be paid by the City out of the proceeds of the Bonds. If the Bonds are not sold by the City to the Purchaser (unless such sale is prevented at the Closing Time by the Purchaser's default), all such expenses and costs shall be paid by the City. -8- SECTION 9. NOTICE Any notice or other communication to be given under this Bond Purchase Agreement may be given by mailing or delivering the same in writing to the applicable person, as follows: (a) If to the City: City of Cape Girardeau, Missouri 401 Independence Street P.O. Box 617 Cape Girardeau, Missouri 63702 Attention: City Manager (b) If to the Purchaser: Piper Jaffray & Co. 11150 Overbrook Road, Suite 310 Leawood, Kansas 66211 Attention: Public Finance Department SECTION 10. APPLICABLE LAW; NONASSIGNABILITY This Bond Purchase Agreement shall be governed by the laws of the State of Missouri. This Bond Purchase Agreement shall not be assigned. SECTION 11. EXECUTION OF COUNTERPARTS This Bond Purchase Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. SECTION 12. RIGHTS HEREUNDER This Bond Purchase Agreement is made for the benefit of the City and the Purchaser and no other person including any purchaser of the Bonds shall acquire or have any rights hereunder or by virtue hereof. SECTION 13. EFFECTIVE DATE This Bond Purchase Agreement shall become effective, as to the City, on the date on which the Ordinance becomes effective and, as to the Purchaser, upon the date of execution hereof. S1 Upon your acceptance of the offer, the foregoing agreement will be binding upon you and the Purchaser. Please acknowledge your agreement with the foregoing by executing the enclosed copy of this Bond Purchase Agreement prior to the date and time specified on page 1 hereof and returning it to the undersigned. Very truly yours, [Bond Purchase Agreement.] -10- PIPER JAFFRAY & CO. By Title Managing Director Accepted and agreed to as of the date first above written. CITY OF CAPE GIRARDEAU, MISSOURI By: Title City Manager [Bond Purchase Agreement.] SCHEDULEI TO THE BOND PURCHASE AGREEMENT SERIAL BONDS Payment Date Principal Interest (January I) Amount Rate Price 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 TERM BONDS Payment Date Principal Interest (January 1) Amount Rate Price 20 20 20 S1-1