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HomeMy WebLinkAbout2004-2721 - Ordinance - 04/29/2004ORDINANCE NO 2721 PROVIDING FOR THE ISSUANCE OF $9,315,000 CITY OF COLLEGE STATION, TEXAS CERTIFICATES OF OBLIGATION, SERIES 2004 AND ORDAINING OTHERMA'I-I-J~RS RELATING TO THE SUBYECT, INCLUDING IMMEDIATE EFFECTIVENESS WHEREAS, on thc 1 lth day of March, 2004, the City Council of the City of College Station (the "City" or the *Issuer'*) passed a resolution authorizing and directing notice of its intention to issue the Certificates of Obli§etion hereto authorized to be issued on April 22, 2004, to be published in a newspaper as required by Section 271 049 of the Texas Local Government Code; and WHEREAS, said notice was published in the Bryan-College Statton Eagle, a "newspaper" of the t~e described in Section 2051 044, Texas Government Code, as required by smd Section 271 049 of the Texas Local Govemmant Code, on April 5, 2004 and April 12, 2004, and WHEREAS, the City Council meeting originally scheduled for April 22, 2004 was reschaduled to be held on April 29, 2004, and WHEREAS, no petition, signed by at least 5% of the qualified electors of said City as permitted by said Section 271 049 of the Texas Local Government Code protesting the issuance of such Certificates of Obligetion, has been filed, and WHEREAS, the Certificates of Obligation herelnaRer authorized are to be issued and delivered pursuant to Subchapter C of Chapter 271 of the Texas Local Government Code, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS Section I AUTHORIZATION OF CERTIFICATES OF OBLIGATION. That said City's Certificatas of Obligation, to be designated the "City of College Station, Texas Certificates of Obligation, Series 2004", are hereby authorized to be issued and delivered in the principal amount of S9,315,000 for the purpose of paying contractual obligations to be incurred by the City, to-wit. 1) construction ofstreets, drainase improvements, street lighting, and water and sewer improvamants in the City, including the area of the City located at the northcest side of Highway 6 and the northwest side ofGrecas Prmrie Road; and 2) the payment of fiscal, engineering and leBel fees incurred in connection therewith Section 2 DATE, DENOMINATIONS, NUMBERS AND MATURITIES That said Certificates of Obligation shall initially be issued, sold and delivered hereunder as fufly reBistered certificates, without interest coupons, dated May 1, 2004, in the respective denominations and principal amounts hereinafter stated, numbered consecutively from R-I upward, payable to the respective initial registered owners thereof, or to the registered assignee or assilplecs of said camifleates or any portion or portions thereof (in each case, the "Registered Owner"), and said Certificates of Obligation shall mature and be payable on February 1 $ in each of the years and in the principal amounts as follows PRINCIPAL PRINCIPAL YEAR AMOUNT f$~ YEAR AMOUNT 200~ 2006 2007 2008 2OO9 2010 2011 2012 2013 2014 ~0~,000 360,000 360,000 370,000 37~000 385 000 39~ 000 40S000 420 000 430 000 20IS 445,000 2016 460,000 2017 480,000 2018 49~,000 2019 SIS,O00 2020 S3~,O00 2021 ~60,000 2022 ~80,000 2023 60~,000 2024 63~,000 The term "Certificates" as used in this Ordinance shall mean and include collectively the Certificates of Obligation initially issued and delivered pursuant to this Ordinance and all substitute Certificates of Obligatton exchanged therefor, ns well as all other substitute Certificates of Oblil~.tion and replacement Certificates of Obl~anon issued pursuant hereto, and the term 'Certificate" shall menn any of the Certificates Section 3 REDEMPTION (a) That the City reserves the fight to redeem the Certificates of Obligation maturing on or after February 15, 2014. in whole or in part m principal amounts of $5,000 or any integral multiple thereof, on February 15, 2013, or on any date thereafter, at the redemption price of par plus accrued interest to the date fixed for redemption If less than all of the Certifieates of Obligation are to be redeemed by the City, the City shall determine the maturity or maturities and the amounts thereofto be redeemed and shall direct the Paying ASant/Re~istrar to call by lot Cemficates of Obligation, or portions thereof, within such maturity or maturities and in such principal amounts, for redemption provided, that durin~ any period in which ownership of the Cemficetes of Obligation is determined only by a book antty at a securities depository for the Cemficates of Obligation, tf fewer than all of the Certificates of Oblisation ofthe same maturity and bea~in~ the same interest rate are to be redeemed, the particular Certificates of Obli~tion of such maturity and bearin~ such ~nterest rate shall be selected in accordance with the arran~emants between the City and the securities depository Tbe City shall notify the Payins A~en~fltegistrer at least forty- five (45) days prior to the scheduled redemption date that a redemption of the Certificates of Obligation is to be effected (b) The Certificates are not subject to mandatory sinkin8 fund redemption prior to maturity (c) At least thirty (30) days prior to the date any such Certificates of Oblisat~on are to be redeemed, a written notice of redemption shall be given by the Paying Agent/Registrar to the registered owner of each Certificate of Obligation or a portion thereof being called for redemption by depositing such notice in the United States mail, tim-class, postage prepaid, addressed to eanh such registered owne~ at the address thereof as shown on the registration books of the Paying Agent/Registrar By the date fixed for any such redemption due provision shall be made by the City with the Paying Agent/Registrar for the payment ofthe required redemption price for the Cartificates of Obligation or the portions thereofwlach are to be so redeemed, plus accrued interest thereon to the date fixed for redemption Ir'such notice of redemption is given, and if due provision for such pnyment is made, all as provided above, the Certificates of Obhgation, or the pomons thereof which are to be so redeemed, thereby automatically shall be redeemed prior to their scheduled maturities, and shall not bear interest alter the date fixed for their redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption pnce plus nccrued interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all such redemptions of principal of the Certificates of Obhgafion or any portion thereof Ifa portion ofany Certificate of Obligauon shall be redeemed, a submtute Certificate of Obligatton or Certificates of Obligation having the same maturity date, bearing interest at the same rate, in any Authorized Denomination, at the written request of the registered owner, and in an aggregate principal amount equal to the unredeemed portion thereof, will he issued to the registered owner upon the surrender thereof for cancellation, at the expense of the City, all as provided in this Ordinance In addition, notice of such redemption shall be provided m the manner described in Section 5(h) hereof, but the failure to provide such notice as described in Sectmon 5(h) hereof' shall not affect the validity or effectiveness of the proceedtngs for the redemption of the Certificates of Obligation Section 4 IN't-~REST The Certificates scheduled to mature during the years, respectively, set forth below shall bear interest at the following rates per annum maturities 2005, % maturities 2015, maturities 2006,. % maturities 2016,. maturities 2007, % maturities 2017, maturities 2008, % maturities 2018, maturities 2009, % maturities 2019, maturities 201 O, % maturities 2020, maturities 201 I, % maturities 202 I, maturities 20 ! 2,. % maturities 2022, maturities 2013, % maturities 2023, maturities 2014, % maturities 2024, S~d interest shall be payable to the registered owner of any such Certificate in the manner provided and on the dates stated in the FORM OF CERTIFICATE Section 5 CHARACTERISTICS OF THE CERTIFICATES (a) The Issuer shall keep or cause to be kept at the corporate trust office in Dallas, Texas (the "Designated Trust Office") of JPMorgan Chase Bank, or such other bank, trust company, financial institution, or other agency named in accordance with the provisions of (g) below (the "Paying Agant/Registrar"), books or records for the regtstration and transfer of the Certificates (the "Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar ns its registrar and transfer ngent to keep such books or 3 records and make such transfers and registrations under such reasonable regulations as the Issuer and Payin~ Agent/Registrar may prescribe, and thc Payin8 Agent/Registrar shall make such transfers and registrations as herein provided It shall be the duty oftha Payin~ Agent/Registrar to obtsin froin the ~gistered owner and record in the Registration Books the address of the registered owner of each Certificate to which payments with respect to the Cartificetes shall he inalled, as here~n provided The Issuer or its designee shall have the right to inspect thc Registretton Books during regular business hours of the Paying AgcnVRegistrar at tts Designated Trust Office, but otherwise the Payin~ Agent/Registrar shall keep the Registration Books confidential and, unless otherwise reqmred by law, shall not permit their insl~ction by any oth~r entity Registration of each Certificate may be trans- ferred in the Registration Books only upon presentation and surrender thereof to the Paying Agent/- Registrar at its Designated Trust Office for transfer of registration and cancellation, together with proper written instruments of assignment, in form and with guarantee ofsiguatures satisfanto~y to the Payin~ Agent/Registrar, evidencing the assignment of such Certificate, or any portion thereof in any integral inulttple of $5,000, to the assignee or assignees thereof, and the right of such assignee or assignees to have such Certificate or any such portion therenfregistered in the name of such assignee or asstgnees. Upon the assignment and transfer of any Certificate or any portion thereof, a new substitute certificate or certificates shall be issued in exchange therefor in the manner herein provided Co) The entity in whose name any Certdieate shall be registered in thc Registration Books at any time shall be treated as the absolute owner thereof for all purposes of this Ordinance, whether or not such certificate shall be overdue, and the City and the Paying Agent/Registrar shall not be affected by any notice to the contrary, and payment of, or on account of, the principal of. premiuin, if any, and interest on any such certificate shall be made only to such registered owner All such payinents shall he valid end effectual to satts~ and discharge the liability upon such certificate to the extent of the sum or suins so paid. (c) The City hereby further appoints the Paying Agent/Registrar to act as the payin~ agent for paying the principal of and interest on the Certificates, and to act as its agent to exchange or rophce Certificates, all as provided h this Ordinance The Paying Agent/Registrar shall kenp proper records of all payments inade by the Csty and the Paying Agent/Registrar with respect to the Certificates, and of all exchanges thereof, and all replacements thereof, as provided in this Orcheance (d) Eanh Certificate may be exchanged for fully registered certificates in the manner set forth herein Each Certlneate issued and delivered pursuant to this Ordinance may, upon surrender thereof at the Designated Trust Office of the Paying Agent/Registrar, together with a written request therefor duly executed by the registered owner or the assignee or assignees thereof, or its or their duly authorized auomeys or representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, at thc option of the registered owner or such assignee or assignees, as appropriate, be exchanged for fully registered certificates, without interest coupons, tn the form prescribed in the FORM OF CERI'tlqCATE, in the denomination of $5,000, or any integral multiple thereof (subje~ to the requirement hereinaRer stated that each substitute certificate shall have a single stated maturity date), as requested in writing by such regtstered owner or such assignee or assignees, in an aggregate principal amount equal to the principal amount ofany Certificate or Certificates so surrendered, and payable to the appropriate registered owner, assignee, or assignees, as the case amy be If any Certificate or portion thereof is assigned end transferred, each certt_qcate issued tn exchange therefor shall have the same principal maturity date and bear interest at the same rate as the certificate for which it is being exchanged ~h substitute certificate shall bear a letter and/or number to distingnish it fi.om each other certificate The Paying ASent/Rngistrar shall exchange or replace Certificates as provided her~J, and each flJlly registered certificate or c,mificates delivered in exchangn ~or or replacement of any Ce~ificate or po~on thereof'as permitted or required by any provision of'this Ordinance shall constitute one of'the Certificates for all purposes or'this Ordinance, and may apin be exchanged or replaced It is speciflcaJly provided, however, that any Certificate delivered in exchanse ~or or ropla~"..ment of.another Certificate prior to the first scheduled interest payment date on the Certificates (as stated on the face thereof) shall be dated the seine date as such Certificate, but each substitute certificate so delivered on or aRer such first scheduled interest payment date shall be dated as of' the interest payment date preceding the date on which such substitute certificate is delivered, unless such substitute certificate is delivered on an interest payment date, in which c~se it shall be dated as of'such date of'delivery, provided, however, that if at the time of'dellve~ of'any substitute certificate the interest on the certificate for which it is being exchanged has not been paid, then such sub~tute certificate shall be dated as of.the date to which such interest has been paid in full On each substitute certificate issued in exchange for or replacement or'any Certificate or Certificates issued under this Ordinance there shall be pnnted thereon a Paying Aaent/Re~istrar's Authentication Certificate, in the form herelnaRer set forth in the FORM OF CERTIFICATE An authorized representative of the Paym8 Agen~/Rngistrar shall, before the delivery of' any such substitute certificate, date such substitute certificate in the manner set forth above, and manually sign and date such Authentication Certificate, and no such substitute certificate shall be deemed to be issued or outstanding unless such Authentication Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all Certificates surrendered for exchanae or replacement No additional ordinances, orders, or resolutions need be passed or adopted by the City Council or any other body or person so as to accomplish the foregoing exchange or replacement of any Certificetes or portion thereot~, and the Paying Aaent/Registrar shall provide for the printing, execution, and delivery of the substitute certificates in the manner prescribed hereto Pursuant to Chapter 1206, Texas Government Code, the duty of exchange or replacement of any Certificates as aforesaid is hereby imposed upon the Paying Aaent/Rngistrar, and, upon the execution of said Paying Aaent/Registrar's Authentication Certificate, the exchanged or replaced certificate shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Ce~lficates which originally were delivered pursuant to this Ordinnnce, approved by the Attorney General, and registered by the Comptroller of Public Accounts. Neither the City nor the Paying Agent/Registrar shall be required to tranger or exchange any Certificate so selected for redemption, in whole or in part, within 45 calendar days of the date fixed for redemption, provided, however, such limitation of. transfer shall not be applicable to an exchange by the registered owner of'the uncelled principal of'a Certificate (e) Ali Certificates issued in exchange or replacement of any other Certificate or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Certificates to be payable only to the registered owners thereof, (ii) may be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may be exchanged for other Certificates, (v) shall have the characteristics, (w) shall be signed and sealed, and (vii) the principal ofand interest on the Certificates shall be payable, ali as provided, and in the manner re- quired or indicated, in the FORM OF CERTIFICATE (f) The City shell pay the Paying A~ent/Registrar's reasonable and customary fees and char~es for making transfers of Certificates, but the ragistered owner of any Certificates requesting such transfer shall pay any taxes or other I~ovemmental charges required to be paid with respect thereto The registered owner of'any Certificates rcquesfin~ any exchange shall pay the Paying Agent. s- trar's reasonable and standard or custonmy fees and char~es for exchanging any such cenillcete or portion thereof, together ruth any taxes or governmental charges required to be paid with respect thereto, all as a condition precedent to the exercise of such privilege of exchange, except, however. that in the case ofthe exchange of'an assigned and transferred certificate or cel'tificetes or any portion or portions thereof'in any integral multiple ot' 155.000. as provided in this Ordinance. such fees and charges will be paid by the City In addition, the City hereby covenants with the registered owners ofthe Certificates that it will (i) pay the ressonab[e and standard or customary fees and charges of the Paying Agent/Registrar for its services with respect to the payment of'the principal of and interest on Certificates. when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for serv~eas with respect to the transfer or registration of Certificates solely to the extent above provided, and v~th respeet to the exchange of Certiflcetes solely to the extent above provided (g) The City covenants with the registered owners ofthe Certificates that at all times while the Certificates are outstanding the C,ty will provide a competent and legally qualified bank, trust company, financial institution, or other agency to act as and perform the services of Paying Agant/Registrar for the Certificates under this Ordinance, and that the Paying Agent/Registrar will be one entity The City reserves the right to, and may, at its option, change the Paying Agent/Regis- trar upon not less than 60 days written notice to the Paying Agent/Registrar In the event that the entity at any time aeting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the City covenants that it will promptly appoint a competent and legally qualified national or state banking institution which shall be a corporation organized and doin~ business under the laws of the United States of Americe or of any mate, authorized under such laws to exercise trust powers, subject to supervision or examination by federal or state authority, end whose qualifications substantially are similar to the previous Paying Agent/Registrar to act as Paying Agent/Rngistrer under this Ordinance Upon any change in the Paying Agent/Registrar. the previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy thereo0, along with all other pertinent books and records relating to the Cerhflcates, to the new Paying Agent~egistrer designated and appointed by the City Upon any change in the Pnyin8 Agent/Registrar, the City promptly will cause a written notice thereof to be sant by the new Paying Agent/Registrar to each registered owner of the Certificates. by United States Mail, first-class postage p~paid, which notice also shall give the address of the new Paying Agent/Ragistrar By accepting the position end performing as such, each Payin~ Agent/Ragistrar shall be deemed to have agreed to the provisions of this Ordinance, and a certtfed copy of this Ordinance shall be delivered to each Paying Agent/Registrar (h) (i) In addition to the manner ofprovidin8 notice of redemption of Certificates as set forth in this Ordinance, the Paying Agent/Registrar shell sire notice of redemption of Cerfificates by United States mai], first-class postage prepaid, at least 30 days prior to a redemption date to each NRMS]R (as defined in Section 18 hereof) and the SID (as defined in Section 18 herenl~ In addition, in the event of a redemption caused by an advance reftmding of'the Certificates, the Paying Asant/Rngistrar shall send a second notice of redemption to the persons specified in the immediately preceding sentence at least 30 days but not more than 90 days prior to the actual redemption date Any notice sent to the NRMS~ or the SID shall be sent so that they are received at least two days prior to the i~enerel mailing or publication date of such notice Tbe Paying Agent/Registrar shail also send a notice oF prepayment or redemption to the owner of any Certificate who has not sent the Certificates in for redemption 60 days after the redemption date (ii) Each redemption notice, whether required in the FORM OF CF. RTIPICATE or otherwise by this Ordinance, shall contain a description of the Certificates to be redeemed, Including thc complete name oftbe Certificates, the series, the date of issue, the interest rate, the maturity date, the CUSIP number, if any, the mounts called of each Certificate, the publication and mailing date for the notice, the date of redemption, the redemption price, the name oftha Paying Agent/Registrar nad the address at which the Certificate may be redeemed, including a contact person and telephone number (ii0 All redemption payments made by the Paying Agent/Registrar to the registered owners of the Certificates shall include CUSIP numbers reletin8 to each amount paid to such registered owner Section 6 FORM OF CERTIFICATES The f~rm ofthe Cemflcates, including the form of Paying Agent/Registrars Authentication Certificate, the form of Assignment and the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to tho Certificatas initially issued and delivered pursuant to this Ordinance, shall be in substantially the form as set forth in Exhibit A to this Ordinance, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance The printer of the Certificates is hereby authorized to print on the Certificates (i) the form of bond couasel's opinion relating to the Certificates, and (ii) an appropriate statement of insurance furnished by a municipal bond insurance company providing municipal bond insurance, if any, covering ail or any part oftbe Certificates Section 7 DEFINITIONS That the terms "Certificates" end "Certificates of Obllgation" shall mean the City of College Station, Texas Cmificates of Obligation, Series 2004, authorized to be issued and delivered by tins Ordinance, end the term "Surplus Revenues" shall mean those revenues ~rom the operation of the City's combined munielpai electric light and power, waterworks and sewer system remaining after payment of ail operation and maintenance expenses thereof and other obligations heretofore or hereaRer incurred to which such revenues have been or shall be encumbered by a lien on and pledge of' such revenues superior to the lien on and pledge of' such revenues to the Certificates Section 8 INTEREST AND SINI~NG FUND. That a speciai fund or account, to be designated the "City of College Station. Texas Series 2004 Certificate of Obligation Interest and Sinking Fund" is hereby created and shall be established and maintained by the Issuer Said Interest end Sinking Fund shall be kept separate and apart fi.om ail other funds and accounts of said Issuer, 7 and shall be used only for paying the interest on and principal oF said Certificates All ed valorem taxes lewed and collected for and on account of said Certificates shall be deposited, as collected, to the credit of smd Interest and Sinldng Fund During each year while uny of said Certificates are outstanding and unpaid, the governing body of said Issuer shall compute and ascertain the rate and amount of ad valorem tax, hesed on the latest approved tax rolls of said Issuer, with fl~ll allowances being made for tax delinquencies and the cost o~tax collections, which will be sufficient to raise and produce the money required to pay the interest on said Certificates as such interest comes due, and to prowde a sinking fitnd to pay the principal (including mandatory stoking fi~nd redemption payments, if any) of said Certificates as such principnl matures or comes due throuF, h operation of the mandatory sinking ~und redemption, R'any, but never less than 2% of the on~nal amount of smd Certificates as a sinking fi~nd each year Said rate and amount of nd valorem tax is hereby ordered to be levied a~inst ail taxable property in said Issuer for each year while any of said Certificates are outstanding and unpaid, and said ed valorem tax shall be assessed and conected each such year and deposited to the credit of the aforesaid Interest and Sinking Fund Said ad valorem taxes necessary to pay the interest on and principal of said Certificates, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. There shall be approl~iated ~om the General Fund of the City for deposit into the Interest and Sinking Fund moneys as may be necessary to pay the principal end interest payments on the Certificates oF Obhgation scheduled to occur on or before February 15, 2005 Section 9 REVENUES That the Certificates of ObliBat~on are additionally secured by end shall he payable from the Surplus Revenues The Surplus Revenues are pledb, ed by the City pursuant to anthority of Chapter 1502, Texas Government Code, specifically Section 1502 058 thereof The City shall promptly deposit the Surplus Revenues upon their receipt to the credit of the Interest and Sinking Fund created pursuant to Section 8, to pay the principal and interest on the Certificates of Obligation The amount of Surplus Revenues pledged to tho payment of the Certificates of ObliF, atJon shall not exceed $1,000 Section 10 TRANSFER That the City shell do any and nil things necessary to accomplish the transt'er of monies to the Interest and Sinking Fund of this issue m ample time to pay such items of principal and interest due on the Certificates of ObliBation Section 11 SECURITY FOR FUNDS That the Interest and Sinking Fund created by this Ordinance shell be secured in the manner and to the fullest extent perw;tted or required by law for the security of public fonds, and such Fund shall be used only for the purposes and in the manner permitted or required by thts Ordinance Section 12 DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROY'ED CERI'wICATES (a) Replacement Cert~catcs, That in the event any outstanding Certificate is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to he printed, executed, end deiivemi, a new certificate of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Certificate, in replacement for such Certificate in the manner hereina_Rer provided ~o) ApphcattonforReplacementCerttficates That applicationforreplacemantofdamaged, mutilated, lost, stolen, or destroyed Certificates shall be made by the registered owner therenfto the Paying Agent/Registrar In every case of loss, the~, or desmaction of a Certificate, the registered owner applying for a replacement certificate shall furnish to the City and to the Paying Agenl/P. egistrar such security or indemnity as may be required by them to save each of them harmless from any loss or damase with respect thereto Also, in every case of loss, thett, or destruction of a Certificate, the registered owner shall furnish to the City and to the Paying Agent/Registrar evidence ~o their satisfaction of the loss, the~, or destruction of such Certificate, as the case may be. In every case of dama§e or mutilation of a Certificate, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Cemficste so demaaed or mutilated (c) N'o Default Occurred That notwithstanding the foregoing provistons of this S~"fion, in the event any such Certificate shall have matured, and no default has occurred which is then continuing in the payment of the principal of, redemption premium, if any, or interest on the Certificate, the City may autborizo the payment of the same (without surrender thereof except in the casa of a damnged or mutilated Certificate) instead of issuing a replacement ~mificate, provided secodty or indenmity is furnished as above provided in this Section (d) Charge for Issuing Replacement Certt. fi~ates. That prior to the issuance of any replacement certificate, the Pa~nng Agent/Registrar shall dmrge the registered owner of such Certificate with all legal, priming, and other expenses in connectton ther~nth. Every replacement certificate issued putsuent to the provisions of this Section by virtue of the fact that any Certificate is lost, stolen, or destroyed shall constitute a contra~ual obligation of the City whether or not the lost, stolen, or destroyed Certificate shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance eqtadly and proportionately with any and all other Certflicates duly issued under this Ordinance (e) duthortgy for lszutng Replacement Certtficates That in accordance with Section 1201 067, Texas Government Code, this Section of this Ordinance shall constitute authority for the issuance of any such replacement certificate without necessity of further action by the City or any other body or person, and the duty of the replacement of such certificates is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying A&enffl~',egistrar shall authenticate and dehver such Certificates in the form and manner and with the effect, as provided in Section 5(a) of this Ordinance for Certificates issued in conversion end exchange of other Certificates Sextion 13 FEDERAL INCOME TAX MATTERS That the City covenants to refrain from any action which would adversely affect, or to take such action as to ensure, the treatment of the Certificates of Obligation as obligations described in Section 103 of the Code, the interest on which is not includable in the #~ross income" of the holder for purposes of federal income taxation In furtherance thereof, the City covenants as follows (a) to take any acUon to assure that no more than 10 percent of the proceeds of the Certificates of Oblilgation (less amounts deposited to a reserve fond, if any) are used for any "private business use," as defined ~n section 141COX6) of the Code or, if more than 10 percent of the proceeds are so used, that amounts, whether or not received by the City, with respect to such private business use, do not, under the terms of this Ordmanea or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent ofthe debt service on the Certificates of Obligatton, in contravention of Section 141(b)(2) of the Code, (b) to take any action to assure that m the event that the "private business use" described in subsection (a) hereof exceeds 5 percent of the proceeds of the Certttlcates of Obligation (less amounts deposited mto a reserve fund, if any) then the amount in excess of 5 percent is used for a "private business use" which is "related" and not "disproportionate", within the meaning of Section 141COX3) ofthe Code, to the 8overomenml use, (c) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or five percent of the proceeds of the Certificates of Obligation 0ess amounts deposited into a reserve fund, ifany) is directly or indirectly used to finance loans to persons, other than state or local guvemmental units, m couu-&vention of Seotion ! 41 (o) of the Code, (d) to refrain from taking any action which would otherwise result in the Certificates of Obligation being treated as "private activity bonds" w~thin the meaning of Section 141(b) of the Code, (e) to refrain fi-om taking nny action that would result in the Certificates of Obligation being "federally guaranteed" within the meaning of section 149(b) of the Code; (0 to refrain from using any portion of the proceeds of the Certificates of Obligation, directly or indiractiy, to acquire or to replace funds which w~e used. directly or indirectly, to acquire investment property (ns defined in Section 148Co)(2) of the Code) which produces a materially higher yield over the term of the Certificates of Obligation, other than investment property acquired vath - (1) proceeds of the Certificates of Obligation invested for a reasonable temporao' period of three years or less until such proceeds are needed for the purpose for which the cmificates of obhgation are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of Section I 148-1(b) of the Treasury Regulations, and 10 (3) amounts deposited in any reasonably required reserve or replacement fired to the extent such amounts do not exceed 10 perce~t of the proceeds of the Certificates of Obhgat~on, (g) to otherwise restrict the use of the proceeds of the Certificates of Oblisafion or amounts treated as proceeds oftbe Certificates of Obligation, as may be necessa~, so that the Certificates of Obhgatiun do not otherwise contravene the requirements of Section 148 of the Code (relating to arbitress) and, to the extent applicable, Section 149(d) of tbs Code (rolatin8 to advance refundings), and (h) to pay to the United States of America at least once during each five-yesr period (beginning on the date ofdelivery of the Certificates of Obligatlon) an amount that is at least equal to 90 percent of the "Exvces Eare~s," within the meaning of Section 148(0 of the Code and to pay to the United States of America, not later than 60 days after the Certificates of Obligatlun have been paid in full, 100 percent of the amount then required to be p~nd as a result of Excess Earnings under Section 148(0 of the Code For purposes of the foregoing (a) and (b), the Issuer understands that the ter~i "proceeds" includes 'disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferral proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance ofthe Certificates of Obligation It Is the understanding oftbe City that the covenants con- tained herein are intended to assure comphance with the Code and any regulations or rulings promulgated by the U S Department of the Treasury pursuant thereto. In the event that regulations or ruling are hereafter pronxflgated which modify or expand provisions ofthe Code, as applicable to the Certificates of Obligation, the City vail not be required to comply with any covenant contained herein to the extent that such failure to comply, tn the opinion ofnationaily-recognized bond counsel, will not adversely effect the exemption bom federal income taxation of interest on the Certificates of Obligation under Section 103 ofthe Code In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Certificates of Obligation, the City agrees to comply with the additional requirements to the extent necessary, in the opinion of nationaily-recoguized bond counsel, to preserve the exemption from federal income tax~tion of~nterest on ~he Certificates of Obligation under Section 103 of the Code. In furtherance of such intention, the City he~oy authorizes and directs the Mayor, the City Manager, any Assistant City Manager end the Director of Fiscai Services to execute any documents, certificates or reports required by the Code, and to make such elections on behaif of the City which may be permitted by the Code as are consistent with the purpose for the issuance ofthe Certificates of Obligation In ordor to facilitate cmuphance with clause (h) above, a "Rebate Fund" is he. by established by the Ctty fur the sole benefit of the Umted States of America, and such Fund shall not be subject to the elaim of eny other person, including without limitation the bondholders The Rebnte Fund is established for the additional purpose of compliance with Section 148 of tbs Code Section 14 ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE PROJECT That the Issuer covenants to account for the expenditure ofprocceds from the sale of the Certificates and any investment earnings thereon to be used for the purposes described in Section I 11 of this Ordinance (such purpose offended to herein and Section 15 hereof as a 'Project") on its books and records by allocating proceeds to expenditures within 18 months of the later of the date that (a) the expenditure on a Project is made or Co) such Project is completed The foregoing notwithstanding, the Issuer shall not expend such proceeds or investment ea~ more than 60 days a~er the earlier of(a) the tiRh anniversary of the date of delivery o£the Certificates or (b) the date the Certificates are retired, unless the Issuer obtains an OlXnlon ofnationaily-reco~nized bond counsel substantially to the effect that such expenditure will not adversely effect the tax.exempt status of the Certificates For purposes hereof, the Issuer shall not be obligated to comply with this covenant if !t obtains an opinion that such failure to comply will not adversely effect the excludability t'or federal income tax purposes from 8ross income ofthe interest Section 15 DISPOSITION OF PROJECT That the Issuer ~ovenants that the property constituting a Project will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash or other compensation, unless the Issuer obtains an opinion of nationally- recognized bond counsel substantially to the effect that such sale or other disposition will not adversely alT~ct the tax-exempt status ofthe Certificates For purposes o£the foregolng, the portion of the proper~y comprising personal property and d~sposed in the ordinary course shall not he treated as a transaction resulting in the receipt of cash or other compensation For purposes hereof, the Issuer shall not be obhgated to comply w~th this covenant if it obtains an opinion that such fadure to comply will not adversely affect the excludability for federal income tax purposes from ~ross income of the interest Seclion 16 CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES. That the City Manager of the City is hereby authorized to have control of the Ce~itlcates initially issued and delivered hereunder and ell necesse~y records and proceedin~ pertaining to the Certificates pending their dehvery and their investigation, examination, and approval by the Attorney General of the State of Texes, and their registration bythe Comptroller of Public Accounts ofthe State of Texns Upon registration ofthe Certificates said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptrollers Registration Certificate attached to such Certificates, and the seal of said Comptroller shah be impressed, or placed in facsimile, on such certificate. Section 17 DTCREOISTRATION ThattheCertifieatesofObligationinltiallyshallheissued and delivered in such manner that no physical distribution of the Certificates of Obligation will be made to the public, and The Depository Trust Company ("DTC"), New York, New York, initially will ect as depository for the Certificates of Obligation DTC has represented that it is a limited purpose trust company incorporated under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered under Section 17A ofthe Securities Exchange Act of 19'~4, as emended, and the City accepts, but in no way verifies, such representations The Certificates of Obli~tion initially authorized by this Ordinance shall be delivered to and registered in the name of CEDE & CO, the nominee of DTC It is expected that DTC will hold the Certificates of Obligation on behalf of the Underwriters (as defined in Sectmn 20 of this Ordinance) and its participants So long es eech Certificate of Obligation is registered in tho nnme ofCEDE & CO, the Paying Agent/Registrar shall treat and deal with DTC the same in all respects as ifit were the actual 12 and beneficial owner thereof It is expected that DTC will maintain a book=entry system which will identify ownership oftbe C~tificetes of Obligetion in intngral amounts of $5,000, with transfers of own~ship being elated on the records of DTC and ita participants pursuant to roles and regulations established by them, end that the Certificates of Obligution initially deposited with DTC shall be immobilized and not be further exchanged for substitute Certificates of Obligufion except as herelna.~er provided The Ctty is not responsible or liable for any functions of DTC, will not be responsible for paying any fees or charges with respect to its services, will not be responsible or liable for raalntalning, supervising, or reviewing the records o£DTC or its participants, or protecting any interests °r rishts ofthe beneficial owners ofthe Certificates of Obligation It sludl be the duty ofthe DTC Participants, as defined in the Official Statement herein approved, to make all arrangaments with DTC to establish this book-ent~ system, the beneficial ownership of the Certificates of Obligution. and the method ofpaying the fees and charges of DTC The City docs not represent, nor does it in any way covenant that the initml book-ent~y system established with DTC will be maintained in the future Notwithstanding the initial establishment of the forngoing book-enuy system with DTC, if for any reason any ofthe originally delivered Certificates of Obligution is duly filed with the Paying Asent/Rngistrar with propa~ request for transfer and substitution, as provided for in this Ordinance, substitute Certificates of Obligution will be duly delivered as provided in this Ordinance, and there will be no assurance or n'presentation that any book-entry system will be maintained for such Certificates of Obhgution In connection with the initial establishment ofthe forngoing book-entry system with DTC, the City heretofore has executed a "Blanket Letter of Representations* prepared by DTC in order to implement the book-ent~ system described abovc Seotionl8 CONTINUING DISCLOSURE OBLIGATION. (a) Definmons. Thatasused in this Section, the following terms have the meanings ascribed to such terms below. "MSP, B" means the Municipal Securities Rulemaking Board "ArRMS/R" means each person whom the SEC or its staff has determined to be a nationally recosnized municipal securities information repository within the meaning of the Rule from time to time "Rule" means SEC Rule 1502-12, as amended from timo to thne 'SEC" means the United States Securities and Exchange Commission 'S/D" means any person designated by the State of Texas or an authorized department, officer, or a~enoy the~of es, and determined by the SEC or its staff to he, a state infornmtion depository within the meaning ofthe Rule from time to time (b) ,4nnuai R~poru. (0 The City shall provide annually to each NRMSIR and any SID, within six months aRer the end of each fiscal year endin~ in or aRer 2002, financial infornmt~on and operating data with respect to the City of tho general type included in the final Official Statement anthorized by Section 20 ofthis Ordinance, being the information described m Exhibit A hereto Any financial statements so to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit A hereto, or such other accounting principle~ as the City may be 13 requital to employ from time to time pursuant to state law or regulation, and (2) auditM, if th~ City commissions an audit of such statements and thc audit is completed within the period during which they must be provided Ifthe audit o£such financial statements is not complete within such p~od, then the City shall provide unaudited financial statements by the required time, and shall provide audited financial statements for the applicable fiscal year to each NILMSIR and any SID, when and if the audit report on such statements become available (ii) If the City changes its fiscal year, it will noti~ each NRMSIR and any SID of the clmnge (and of the date ofthe new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial informatinn and operating data pursuant to this Section The financial int'ormation and operating data to be provided pursuant to this Section may be set forth in foil in one or more documents or muy be included by specific referenca to any document (including an official statement or othe~ offering document, R'it is available fi'om tho MSRB) that theretofore hu been provided to each NRMSIR and any SID or filed with the SEC (c) MatenalEvent/~ottces. The City shall notify any SI]) nad either each NRMSI~ or the MSRB, in a timely manner, of' any of the fei]owing events with respect to the Ce~ificates of Obligation, if such event is material within the meaning of the federal securities laws 1 2. 3 4 6 7 8 9 10 11 Pfineipal and interest payment delinquencies, Non-payment related def~lts, Unscheduled draws on debt se~ice reserves reflecting financial dii~culties, Unscheduled draws on credit enhancements reflecting financial difl~cultiea, SubsUtution of credit or liquidity providers, or their failure to perform, Adverse tax opinions or events affecting the tax-exempt status of the Certificates of Obligation, Modifications to n~hts of holders of the Certificates of Obli~tinn; Cemficates of Obligation calls, Release, substitutton, or sale of property securing repayment of the Certtficates of Obligation, and Rating changes The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Seedon by the time required by such subsection (d) Ltmttattons, Dtsclatmers. and~mendments. (i) The City shall be obligated to obs~ve and perform the covenants specified in this Section for so long as, but only for so long as, the City remains an "obligated person" with respect to the Certificates of Obligation within the meaning of the Rule, except that the City in any event will 8ire notice of any deposit made in accordanea with this Ordinance or applicable law that causes Cemficates of Obligation no longer to be outstanding (ii) The provisions of this Section are for the sole benefit of the resistered owners and beneficial owners of the Certificates of Obbgation, and nothing in fins Section, express or implied. 14 shall ~vz any benefit or any legal or eqmtable right, remedy, or claim hemmder to any oth~r pe~son The City undertakes to provide only the financial information, operating data, financial s~etements, and notices which it has expressiy agreed to provide put.ant to this S~tion and does not hereby under~e to provide any other information that may be relevant or n~ial to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest m or sell Certificates of Obligation at any future date (iii.) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CER'I'I.I"ICATE OF OBLIGATION OR ANY OTHF_.R PriSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTINO IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN TI-HS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE · (iv) No default by the City in observing or performing its obligations under this Section sim{l comprise a breach of or default under the Ordinance for purposes of any other prevision of this Ordinance Nothng in th, s Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the C;ty under federal and state securities laws (v) The provisions ofthis Section may be amended by the City from time to time to adapt to changed drcumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operetioas of the City, but only if(l) the provisions ofthis Section, as so amended, would have permitted an underwriter to purchase or sell Certificates of .Obligation in the prima~ offenng of the Certificates of Obligation in compliance with the Rule, taking into account any amendments or interpretations of the Rule since such offering as well as such changed circumstances and (2) either (a) the regmered owners ora majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of thc outstanding Certificates of Obhgation consent to such amendment or (b) a person that is unaffdiated with the City (such as nationally recognized bond counsel) deto~mined that such amendment will not materially imp~ur the interest of the registered ownem and beneficial owners ofthe Certificates ofObligation lfthe City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection Co) of this Sect,on an explanation, in narrative form, ofthe reason for the amendment and of the impact of any change in the type of financial informat,on or operating data so provided The C,ty may also amend or repeal the provisions of this continuing disclosure agreement ffthe SEC amends or repeals the applicable provision of the Rule or a court offlnsl jurisdiction entersjudgmect that such provisions of the Rule are invalid, but only if and to the extent that the provisions ofthis sentence would not prevent an underwriter from lawfully purchasing or sellinl~ Certificates of Obligation in the primary offering of the Cert,ficates of Obligation Section 19 DEFEASANCE (a) Deemed Paid Any Certificate of Obligation and the interest thereon shall be deemed to be paid, retired and no longer outstanding (a '~f'eased Certificate*) within the meaninB of this Ordimmce. except to the extent provided in subsection (e) of this Section, when payment of the principal of such Certificate of Obligation, plus interest thereon to the due date (whether such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to be made in accordance with the tr~ ms thereof, or (ii) shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent/Registrar in accordance with an escrow agreement or other instrument (the 'Future Escrow Agreement") for such payment (I) lawful money of the United States of Americe sufficient to make such payment or (2) Defeasance Securities that mature as to principal and inte~st in such amounts and at such times as will insure the availability, without reinvestment, ofsuffidant money to provide for such payment, and when proper mTangaments have been made by the City with the Paying Agant/Registrar for the payment of its senrices until all Defeased Certificates shall have bccomc due and payable At such time as a Certificate of Obligafion shall be deemed to be a Defeesed CeniflcsAe hereunder, as aforesaid, such Certificate of Obligation and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes or revenues herein leaned and pledged as provided in this Ordinance, and such pnncipai and interest shall be payable solely from such money or Defeasance Securities ~o) Investments Any moneys so deposited with thc Paying AgenVRegistrar may sA the written dircction of the City be invested in Defeasance Securities, maturing in the amounts and times as hereinbefore set forth, and ali income from such Defeasance Securities received by the Paying Agent/Resistrsr that is not required for the payment of the Certificates of Obligation and interest thereon, with respect to which such money has been so deposited, shall be turned over to the City, or deposited as directed in writing by the City Any Future Escrow Agreement pursuant to which the money and/or Defeasance Sacunties are held for the payment of Defeased Certificates may contain provisions permitting the investment or reinvestment of such moneys in Defeasance Securities or the substitution of other Defeasance Securities upon the satisfaction of the requirements specified in subsection (a)(i) or (ii) above Ail income from such Defeasance Securities received by the Paying Agent/Registrar which is not required for the payment of the Defnssed Securities, with respect to which such money has been so deposited, shah be remitted to the City or deposited as directed in writing by the City (c) Selectton ofDefeased Certtficates In the event that the City elects to defease less than all of the pfinelpal amoum of Certificates of Obhgations of a maturity, the Paying Agant/Registrar shall select, or cause to be selected, such amount of Certificates of Obligations by such random method ns it deems fair and appropriate (d) Dzfeasance Obhgattons The term "Defeasance Securities" means (i) direct, noncallable obfigations of the United States of America. inclu&ng obhgatsons that are unconditionally 8ueranteed by the United States of America, (ii) noncailable obligations of an aganoy or instrumentality of the United States of America, mcluding obligations that are unconditionally 8uerentend or insured by the agencT or instrumentality and that. on the date of the purchase thereof are rated as to investment quality by a nationally recognized Investmem rating firm not less than AAA or its equivalent, and (iii) noncallable obligations o£a state or an agency or a county, mumcipality, or other political subdivismn 16 of a state that have been refunded and that, on the date the governing body of the City adopts or approves the proceedings authorizing the flnandal arrangaments are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent ( e} Conttnumg Duty of Paytng Agent/Registrar. Until all Certificates of Obligation defcesed under this Section of this Ordinance shall become due and payable, the Paying Agent/Registrer for such Certificates of Obligation shall perform the services of Paying Agent/Registrar for such Certificates of Obligatinn the same as if they had not been defeased, and the City shall make proper arrangements to provide and pay for such services Section 20 SALE OF CERTIFICATES (a) Sale to Underwrtters. That the sale of the Certificates to Coastal Securities, as representative for the undervniters named in the Bond Purchase Agreement (the "Purchase Agreement") between the City and the underwriters named therein (the "Unden~niters"), at the purchase price described in the Purchase Agreement, is hereby anthonzed, ratified twa confirmed One Certificate in the principal amount maturing on each maturity date as set forth in Section 2 hereof shall be delivered to the Underwriters, and the Underwriters shall have the right to exchange such Certificates as provided in Section 5 hereof without cost Co) Fa~cutton of Purchase .48reement That tha Purchase Agrenment setting forth the terms of the sale of the Certificates to the Underwriters, in substantially the form attached to this Ordinance, is hereby accepted, approved and authorized to be dehvered in executed form to the Underwriters (c)O~ciaiStaternent The "Official Statement" prepared in connection with the sale ofthe Certificates, in substantially the form attached to this Ordinance, is hereby accepted, approved and authorized to be delivered in executed form to the Underwritem The use ofthe "Preliminary Ofllclal Statement" prepared in connection with the sale of the Certificates is hereby ratified (d) Bondlnsurance. Thc Mayor, City ManaBer and the Director of Fiscal Sen/ices each is authorized, in connection with effecting the sale of the Certificates, to obtmn from (the "Insurer") a municipal bond insurance policy in support of the Certificates To that end, for so long as such pohcy is in effect, the requirements of the Insurer relatm~ to the nssuance of said policy is incorporated by rcfe~nce into this Ordinance end made a pan hereof for all purposes, notwithstand,ng any other provision of this Ordinance to the contrary Section21 APPROVAL AND REGISTRATION OF CERTIFICATES That the Director of Fiscal Ser~ices is hereby authorized to have control ofthe Certificates and all necessa~ records and proceedings pertaining to the Certzficates pending their delivery and their investigation, examination and approval by the Attorney General of the S~ate of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas Upon registrataon of the Certificates, the Comptroller of Public Accounts (or a deputy designated in writing to act the~for) shall manually sign the Comptroller's Restoration Centficate The Certificates thus registered shall remain in the custody of the Cit~ Manager (or the designee thereof) until delivered to the Underwnters 17 Section 22 FURTHER PROCEDURES That the Mayor, the City Seermry, the City Manager, the Director of Fmcai Services, any Assistant City Manager, and all other officers, employees, and agents of the City, and each of them, shall be and they are hereby expressly authorized, empowered, and di~cted from time to time and at any tim~ to do and perform all such acts and thiags and to execute, acknowledge, and deliver in the name and under the corporate seal and on bchaifof the City all such instruments, whether or not herein mentioned, as may be necessatT or desirable in order to cant out the terms and provisions of this Ordinance, and the sale and dehvery of the Certificates and fixing all details in connection therewith Section 23 USE OF PROCEEDS That the proceeds from the sale of the Certiflcetes shall be used in the manner described in a letter ofinstructmns prepared by the City or on behalf of the City by the City's financial advisor The foregnin8 nntwithstanding, proceeds represeotin~ acerued interest on the Certificates shall be deposited to the credit ofthe lnte~st and Sinking Fond, and proceeds representing premium on the Bonds shall be used in a manner consistent with the provisions of Section 1201.029. Texas Government Code Any amounts remainiag afrer completion of the improvements described in Section 1 herenf shall be transferred FIRST to the Rebate Fund. to the extent required by Section 13 hereof, and THEREAFTER to the Interest and Sinkiag Fund Section 24 INTEREST EARNINGS That the interest earnings derived from the investment of proceeds from the sale of the Certificates may be used alonS with other proceeds for the construction of the p~..,anent improvements set forth in Section I hereof for which the Certificates are issued, pwvided that after completion of such permanent improvements, if any of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and Sinkiag Fund It is further provided, however, that any interest eamiags on proceeds which am required to be rebated to the United States of America pursuant to this Ordinance herenfin order to p~-vent the Certificates from being arbitrage bonds shall be so rebated and not considered as interest earnings for the purposes of this Section Section 25. FREAMBLE That the preamble to this Ordinance is incorporated by reference and made a part hereof f~r all purposes Section 26 MISCELLANEOUS PROVISIONS (n) TttlesNotRestricttv~ That the titles assigned to the various sections of this Ordinance are for convenience only and shah not be considered restrictive of the subject matter of any section or of any part of this Ordinance Co) Rul~s of Constructton The words "herein", "hereof and "hereunder" and other words of similar import refer to this Ordinance as a whole and not to any particular Section or other subdivision Except where the context otherwise requiros, terms dMined in this Ordinance to impart the singular number shall be considered to include the plural number and vice versa References to any named person means that party and its successors and assigns References to any constitutional, statutory or reStdatory provision means such provision es it exists on the date this Ordinance is adopted by the City and any future amendments thereto or successor provisions thereof Any refl,-rence to *FORM OF CERTIFICATE" shall refer to the form of the Certificates set forth in IS Exhibit A to this Ordinance Any reference to the payment of principal in this Ordinance shall be deemed to include the payment of any mandatory sinking fund redemption payments as may be described beton (c) Inconsistent Provisions All orders end resolutions, or pans thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed and declared to be inapplicable, end the provis,ons of this Ordinance shall be and remain controlling as to the matters prescribed herein (d) SeverabdtO~ If any word, phrase, clause, paragraph, sentence, part, portion, or provision of this Ordinance or the application thereof to any person or drcomstance shall be held to be invalid. the remainder of this Ordinance shall nevertheless be valid end the City hereby declares that this Ordinar~e would have been enacted without such invalid word, phrase, clause, paragraph, sentence, part, portion, or provisions (e) GowrningLaw This Ordinance shall be construed end enforced in accordance with the laws of the State of Texas (0 Open Meeting The City officially finds end determines that the meeting at which this Ordinance ts adopted was open to the public, and that public notice of the time, placa, and purpose ofsuch meeting was given, all as required by Chapter 551, Texas Government Code (g) Apphcatton of Chapter 1208, Government Code Chapter 1208, Texas Government Code, applies to the issuance of the Certificates and the pledge of ad valorem taxes and the Surpim Revenues granted by the City under Sections 8 and 9, end such pledge is therefore valid, effective, and perfected If Texas law is emended at any time while the Certificates are outstanding end unpaid such that the pledge of the ad valorem taxes end Surplus Revenues granted by the City is to be subJeCt to the firing requirements of Chapter 9, Texas Business & Commerce Code, then in order to presage to the Registered Owners of the Certificates the perfection of the security interest in said pledge, the City agrees to take such measures as it determines ere reasonable end necessary under Texas law to comply with the applicable provisions of Chapter 9, Texas Business & Commerce Code end enable a filing to perfect the security interest in said pledge to occur (h) Immediate Effect In accordance with the provisions of Seodon 1201 028, Texas Government Code, this Ordinance shall be effective immediately upon its adoption by the City Councal 19 PASSED AND APPROVI~D this April 29, 2004 Ci;y .%cr~av/, City of'College Station, Texas (CITY SEAL) APPROVED Mc, C~il, Parkhum & Hor~on L L P Bond Counsel 2O Ezhlbit A to Ordinance FORM OFCERTIFICATR NO UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF BRAZOS CITY OF COLLEGE STATION, TEXAS CERTIFICATES OF OBLIGATION SERIES 2004 ~ IIVI~REST RATE ORIGINAL ISSUE DATR CUS~ % MAY 1, 2004 ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF COLLEGE STATION, TEXAS, in Brazos County (the "City" or the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to , or to the registered assiguee hereof(either bein~hereinafter called the "registered owner") the principal amount of DOLLARS and to pay interest thereon, from the Origlnai Issue Date specified above, to the Maturity Date specified above, or the date of its redemption prior to scheduled maturity, et the interest rate per annum specified above, with said interest payable on February 15. 2005, and semiannually on each August 15 and February 15 thereafter, except that if this Certificate is required to be authenticated and the date of its authentication is later than February 15, 2005, such interest is payable semiannually on each August 15 and February 15 following such date TH~ PRINCIPAL OF AND INTEREST ON this Cemficate are payable in lawful money of th.e United States of America, without exchange or collection charges At maturity or redemption prior to maturity, the principal ofthis Certificate shall be paid to the registered owner hereof upon presentation and surrender of this Certificate at the desiguated corporate trust office in Dallas, Trams (the 'Designated Trust Office") ofJPMorgan ChaseBauk, which is the "Paying A8enffRegistrar" for this Certificate The payment of interest on this Certificate shall be made by the Payin8 Agent/Registrer to the registered owner hereof on each interest payment date by check, dated as of such interest payment date, drawn by the Payin8 Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance authonzin~ the issuance of this Certificate (the "Certificate Ordinance") to be on depostt with the Palan8 Agent/Registrar for such purpose as hereinafter pro- vlded, and such check shall be sent by the Paym~ Agent/Registrar by United States mail, first-class postagu prepaid, on each such interest payment date, to the resistered owner hereof, at its address as it appeared on the last business day of the month precedmff each such date (the "Record Date") on the Registration Books kept bythe Paying Agant/Registrar, as hereinatter described Any accrued interest due at maturity as provided herein shall be paid to the registered owner upon presentation and surrender of this Certificate for payment at the Designated Trust Office of the Paying Agent~strar The Issuer covenants with the registered owner ofthis Certificate that on or hefore each principal and interest payment date for tlis Certificate it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate Ordinance, the amounts required to provide for the payment, in immediately available funds, ofall princspal of and interest on the Certificates, when due IN THE EVENT OF NON-PAYMENT of interest on it scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (n "Special Record Date") will be established by the Paying Agent/Registrar, if and when fonds for the payment of such interest have been received from the Issuer. Notice of the Special Record Date and ofthe scheduled payment date ofthe past due interest ("Special Payment Date", which shall be 15 days aRer the Special Record Date) sludi be sent at least five business days prior to the Special Record Date by United States mail, first-class postage prepaid, to the address of each resistered owner of a Certificate appearing on the Registration Books kept by the Paying Agent/Registrar at the dose ofbuainass on the last business day next preceding the date of mailing o£such notice IF THE DATE for the payment of the principal of or interest on this Certificate shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the Designated Trust Office of the Paying Agant/Rngistrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, Ingal holiday, or day on which banking institutions a~ authorized to close, and payment on such date shall have the same force and effect as if made on the original date payment was due THIS CERTIFICATE is one ora Series of Cert~flcates dated as of the Original Issue Date stated above, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $9,315,000, for the purpose ofpaying contractual obligations to be incurred by the City, to-wit, the conatmetion ofimprovements as described in the Certificate Ordinance, and the payment of fiscal, engineering and legal fees incurred in connection therewith ON FEBRUARY 15, 2013, or on any dale thereaRer, the Certificates ofthis Series maturing on February 15, 2014 and thereafter may be redeemed prior to their scheduled maturities, at the option of the Issuer, ~n whole, or,n part, at par and accrued interest to the date fixed for redemption The years of maturity of the Certificates called for redemption at the option of the City prior to stated maturity shall be selected by the City The Certificates or portions thereof redeemed within a raaturity shall be selected by lot or other method by the Paying Agent/Registrar,/~rov~ded. that during any pariod in which ownership of the Certificates is determined only by a book entry at a securities depository for the Certificates, ii'fewer than all of'tho Certificates ofthe same maturity and bearing .the same interest rate are to be redeemed, the particular Certificates of such maturity and beating such interest rate shall he selected in accordance with the arrangements between the Issuer and the securities depository AT LEAST 30 days prior to the date fixed for any such redemption, a written notice of such redemption shall be given to the regtste~d owner of'each Certificate or a portion thereofheing called for redemption by depositing such notice in the United States mail. first class postage prepaid. addressed to each such registered owner at his address shown on the Registration Books of'the Paying A~.nt/Re~strar By the date fixed for any such redemption due provision shall be mede by the Issuer with the Paying Agent/Registrar for the payment of the required redemption price for this Certificate or the portion hereofwhich is to be so redeemed, plus accrued interest thereon to the date fixed for redemption If'such notice of'redemption is given, and it'due provtsion for such payment is made. all as provided above, tins Certificate, or the portion hereof winch is to be so redeemed. thereby automatically shall be redeemed prmr to its scheduled maturity, and shall not bear interest aRer the date fixed for its redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption price plus accrued interest to the date fixed for redemption from the PaymS Agent/Registrar out of the funds provided for such payment The Paying Agent/Registrar shall record in the Registration Books all such redemptions of principal of this Certificate or any portion hereof Ifa portion of any Certificate shall be redeemed a substitute Certificate or Certificates having the same nmtunty date. bearing interest at the same rate. in any denomination or denominations in any integral multiple of $5.000. at the written request of the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender therenf for cancellation, at the expense of the Issuer. aH as provided in the Ordinance ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered certificates. without interest coupons, in the denomination of any integral multiple of $$.000 As provided in the Certificate Ordinance. tins Certificate may. at the request of the registered owner or the assignee or assignees hereof, be ass,gned, transferred, and exchanged for a like aggregate principal amount of fully registered ce~ificates, without interest coupons, payable to the appropriate registered owner. assignee, or assignees, as the case may be. having the same maturity date. and bearing interest at the same rate. in any denomination or denonunations in any integral multiple of $$.000 as requested in writing by the appropriate registered owner, assignee, or assignees, as the case may be. upon surrender of this Certificate to the Paying Agent/Registrar at its Designated Trust Office for cancellation, all in accordance with the form and procedures set forth in the Certificate Ordinance Among other requirements for such assignment and transfer, tins Certificate must bo presented and sun~ndered to the Paying Agent/Registrar at ~ts Designated Trust Off, ce. to~ether with proper instruments of assignment, in form and vath suaranten of signatures satisfactory to the Paying Agent/Registrar. evidencing assignment of th~s Certificate or any portion or portions hereof in any intngral multiple of $5.000 to the assignee or assignees in whose name or names this Certificate or any such portion or portions hereof is or are to be transferred and registered The form of Assign- ment pnnted or endorsed on this Certificate may be executed by the registered owner to evidence the assignment hereof, but such method is not exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the ass~gement of this Certificate or any portion or portions hereoffrom time to t~me by the registered owner The foregoing notwithstanding. in the case of the exchange of an assigned and transferred Certificate or Certificates or any portion or portions thereof, such fees and charges of the Paying Agent/Registrar will bo paid by the Issuer The one requesting such exchange shall pay the Paying Agent/Rcgistrar's reasonable standard or customn~ fees and charges for exchnnging any Certificate or portion thereof In any circumstance. any t~.xes or governmental charges required to be paid with respect thereto shall be paid by the one requestin~ such aseigement, transfer, or exchanse as a condition pr_~__~d_ent to the exercise of such privilege In any circumstance, neither the Issuer nor the Payin~ A~ent/Rngistrer shell be required (!) to nmke any transfer or exchange during a period beginning at the openin~ of business 30 days before the day of the first mailing ora notice ol'redemption of'Certificates and ending at the close of business on the day of such mailing, or (2) to transfer or exchanse any Certificates so selected for redemption when such redemption is scheduled to occur within 30 calendar days WHENEVER the beneficial ownership of this Certificate is determined by a book entry at a securities depository for the Certificates, the foregoing requirements of holding, delivering or transferring this Certificate shall be modified to require the eppropnete person or entity to meet the requirements of tb.e securities depository as to registenng or transferrin8 the book entry to produce the same effect IN THE EVENT any Paying AsenC/Re~strer for the Certificates is changed by the Issuer, ren~ns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be mailed to the registered owners of the Certificates IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and vahdly authorized, issued, and delivered, that ail acts, conditions, and ~J~nss required or proper to be performed, exist, and be done precedent to or in the authoriza~on, issuance, and delivery of this Certificate have been performed, existed, and been done in accordance with law, that ~s Certificate is a direct obllgetion of said Issuer, issued on the full faith and credit thereof, and that annual ad valorem taxes sufficient to provide for the payma~t ofthe interest on and principal of this Certificate, as such interest comes due and such principal matures, have been lewed and ordered to he levied ngeinst all taxable property m said Issuer, and heve been pledged for such payment, within the limit prescribed by law, and that a hn~ted pledge (not to exceed $1,000) of the surplus revenues from the operation ofthe City's combined municipal electric hght and power, waterworks and sewer system remainm~ nfrer payment of ail operation and maintenance expenses thereof and any other obli~tions heretofore or hereafter incurred to which such revenues have been or shall he encumbered by a lien on and pledge of such revenues superior to the lien on and pledge of such revenues to the Certificates, have been pledged as additional security for the Certificates BY BECOMING the reStstered owner of this Certificate, the re~ste~d owner thereby acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Certificate Ordinance Is duly recorded and available for inspection in the official minutes and records of the Issuer, and asrees that the terms and provisions offs Certificate and the Certificate Ordinance constitute a contract between each registered owner hereof and the Issuer. IN WITNESS WHEREOF, this Certificate has been sisned with the manual or facsimile si~.ature of the M~tyor of the City, nt~ested by the manual or fttcsimile siiptature of the City Secreuuy, and the of~cial seal of the Issuer has been duly nffixed to, or unpressed, or plat. ed in f~tcsirnile, on this Certificate. xxxxx City Seoreta~y City of College Station, Texas Mayor City of'College Station, Texas (SEAL) FORM OF PAYfNG AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGiSTRAR'S AUTHENTICATION CERTIFICATE It is hereby certified that this Cert,ficate ot'Obl~,ation has been issued under the provisions oftha procaedlngs adopted by the City as described in the text of this Certificate of Obligation, and that this Certificate of Obhgation has been issued in exchange for or replacement of a certificate of obligation of an issue which originally was approved by the Attorney General of the State of Texas and rei~stered by the Comptroller of Pubhc Accounts of the State of'Texas Da~ed JPMORGAN CHASE BANK, Paying Agent/Registrec By. Authorized Representative *FORM OF COIVIFrROLI-~R'S CERTIFICATE ATTACHED TO THE CERTIFICATES UPON INITIAL DI~LIVERY THEREOF OFFICE OF COMPTROLLER STATE OF TEXAS REGISTER NO I hereby certiBy that there is on file and of record m my office a cerUficate of the Attorney General of thc State of Texas to the effect that this Ce~ificato has been examined by him as required by law, and that he finds that it has been issued in conformity with the Constitutton and laws of the State of Texas, and that it is a vahd and binding oblisa~ion of the City of Collese Statmn, Toxas, payable in the manner provided by and in the ordinance authorizing samc, and said Ce~ificat¢ has this day been registered by me WITNESS MY HAND and se, al of offic~ a~ Austin, Texas this (SEAL) Comptroller of Public Accounts of the State of Texas NOTE'*'{ to accompany initial certificates only FORM OF ASSIGNMENT ASSIGNMENT FOR VALUE RECEIVED, the undersigned het~oy sells, assisns and transfers unto (Please insert Social Secunty or Taxpayer ldenuflcation Number of Transferee) / / (Please print or ~powdte name and address, inclu&ng zip code of Transferee) the within Certificate of Obligation and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to register the transfer of the within Certificate of Obligation on books kept for registration thereof, with full power of substitution in the prermses Da~ed Signature Guaranteed NOTICE Signature(s) must be ~uarantend by a member finn of the New York Stock Exchanse or a commercial bank or trust company NOTICE Thn signature above must correspond with the name of the Registered Owner as it appears upon the front ofthis Certificate in every particular, without alteration or enlargement or any change whatsoever Exhibit B to Ordinance DESCRll)TION OF ANNUAL FINANCIAL INFORMATION The following information is referred to m Seotlon 18 of tins Ordinance Annum FinnnciM Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified below (and included in the Appendix or under the headings of the Oilioial Statement referred to) I The "Aucht Report" for the most recently concluded fiscal year 2 The information included in the Official Statement under the following captions, but for the most recently concluded fiscal year. Tables I through 6 and 8 throush 13, and AppandLx B Accounting Principles The accounting principles referred to in such Section are the accounting principles described in the notes to the financial statements referred to in parasraph i described above, as such principles may be changed from time to time to comply with state law or regulation ADDff[ONAL RESOURCES UTIUTY REVENUE BONDS INTEREST ON INVESTMENTS TRANSFERS FROM OPERATIONS ~ GOVERNMENTAL OTHER SUBTOTAL ADDfHONAL RESOURCES TOTAL RESOURCES AVAILABLE REHABILITATION PROJECTS COLLECI'ION SYSTI~I P~r. HA~ CARTEI~ CREEE SCi~W uFr SYS'IEM FERST & MAPLE SIREETS REHAB HENSEL PARK LIFT STATION UFT STATION e2 FORCEMA]N REAUGNMEKT HUN 30 TURNAROUND 'TEXAS AVE P, ELOCATION SOUTH SOUTHSIDE SEWER UPGRADE A WEST PAR~ COLLEGE PARK/Bm:~Ty HEIGHTS SOUTH KNOLL SOUTHWOOD 5-7 McCULLOCH THE KNOLL CLOSED PROJECTS SUBTOTAL CO~ ] ~CTION OVERSIZE P/~TICIPA'I1ON & PLANNING NORTHEAST TRUNK EXPAN PHASE I DARTMOUTH PI-hi JONES-BLrrLER WASTE'WATER EX'I13~SION GEORGE BUSH DR EAST W~i~IING SS0209 TBD SS0212 SS0203 SS0207 SS0003 TOTAl. ESTIMATED PROJEc,~ ~ FY 02-03 FY 03-04 6 440 563 $ 3,351.213 0 $ 4,000,000 30O,0O0 100,0O0 o 0 0 270,0OO 0 0 300,000 $ 4,370,0O0 6~740,5~3 ~ 7,721~213 $ 2O5 00O $ 285.000 290,400 667.920 77.000 0 371,000 0 0 300.000 147,0O0 0 540,000 1,010,0O0 80,000 0 0 1,500.00O 0 0 0 0 0 0 0 0 0 0 $ 1,710,400 $ 3,762,920 SS0200 250,000 250.000 SS9702 0 0 SS9805 300,00O 0 TBD 0 50,000 TBD 2,500 30,000 ST9804 0 12,000 ~ Ill'ACT FEE UFT STAT[ON #1 GRAVITY UN£ liCK CREE~ pAR.A~ ~ m TRUNK LINE MATERIAL STAGING STORAGE AREA - USC CLOSED PROJECTS SUBTOTAL UCK CREEK TRUNK & PLANT EXPANSION ODOR CONTROL SLUDG~ PROCESSING IMPROVEMENTS CC PLANT DEMO & MAINT BLDG WASTEWATER PLANT SECURr~ ~ PAVEMENT/REPAIRS IMP CLOSi~ PRO,rr. CTS SS9806 S59810 5S9904 SS0204 SS0105 6,550 1,000,000 0 35,000 0 0 0 77.000 0 $ 559~050 $ 1,454~000 45.5.ooo $ o 62.000 0 0 466,000 100.000 150,000 0 210,000 0 330,000 0 215,000 0 0 SUBTOTAL ~ 617~000 } 113711000 ANNEXATION PROJECTS ~ T P, ORN RD N OF GANDY (AREA 1) GREI~S PR W OF ARRINOTON {AREA ~ NflNTUCF~ET E OF HARPER'S FERRY (AREA 3} ROCK P RD S OF CARTER LAKE (AREA 5) GREENS PR RD CORRIDOR EAST (AREA 6) CLOSED PROdECTS GENERAL ~ ADI~NISTRATIVE DEBT ISSUANCE COST TBD 61,800 30,900 TBD 36,000 324,000 'TBD 20,100 180,900 TBD 0 0 'I'BD 0 0 117,900 !~ 535~800 0 0 325,000 200,000 60,000 20~000 3~3891350 $ 7~343~720 ENDING FUND BALANCE: ~ 3~351~213 $ 377~493 - T~ projects will Ix~ r(dmhu~sed I~ ~pact ~ee~ Project Budpt Trmnsfem 5OUTHSIDE ~ U~ A W'F0379101 Budget Transfer m Process CI,0SED W s ~'nGI~ID I ACADEMY ~ REHAB CREAGER PEBBLETHiLLS PH Il EASTGATE PH Il&ill EASTGATE PH IV GlO, dAM RD IMPACT FEE NORTHGATE REHAB NORTHF-AST 1RUNKI..~IE PH IU [&l REDUCTION SOLrlHS~E REHAB PHI SS0205 SS9902 SS9903 SS0102 SS9802 SS9804 SS0202 SS0007 2 ACADEMY SL~R REHAB EASTGATE PH Il&IH [&l REDUCI1ON SS0205 SS9903 SS0102 SS0007 3 NORTHr~ST TRUNKLINE PH In SOUI~ISID£ REHAB PHI i~1 REDUCTION PROG~AIq SS0t~7 4 CREAGI~BLE HILLS PHIl ~ RD IMPACT FEE NORTHEAST TRUNKLINE PH III 5599O2 559802 .559902 6 ~ CP.~EK BLDG 7 CA~TEP~ C'RF.F~ BLDG 8 CAR'rI~5 CREI~ BLD(3 550105 .550105 5.50105