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HomeMy WebLinkAbout1988-1747 - Ordinance - 04/28/1988ORDINANCE NO. 1747 ORDINANCE AUTHORIZING THE ISSUANCE OF PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS WHEREAS, the Public Property Finance Act, Chapter 271, Texas Local Government Code (the "Act") authorizes, among others, cities to execute, perform, and make payments under contracts with any person for the use, acquisition, or purchase of personal property as described in the Act; and WHEREAS, the Act permits the governing body of a city to execute contracts in any form deemed appropriate by the governing body thereof in connection with the use, acquisi- tion, or purchase of personal property; and WHEREAS, the City Council of the City of College Station, Texas (the "Issuer") desires to acquire or purchase personal property, to -wit: computer equipment or such other personal property, appliances, equipment, facilities, furnishings, or interests therein, whether movable or fixed, deemed by the City Council of the Issuer to be necessary, useful, and/or appropriate for the purposes of the Issuer (the "Property"); and WHEREAS, the City Council of the Issuer deems it appropriate to adopt this Ordinance and issue the "Con- tractual Obligations" herein authorized as permitted by the Act. THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS THAT: Section 1. DESIGNATION, AMOUNT, AND PURPOSE OF CON- TRACTUAL OBLIGATIONS. The Contractual Obligations desig- nated CITY OF COLLEGE STATION, TEXAS PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS, SERIES 1988 (the "Contractual Obligations") are hereby authorized to be issued in the aggregate principal amount of $1,500,000, FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE ISSUER'S CONTRACTUAL OBLIGATIONS TO BE INCURRED IN CONNECTION WITH THE ACQUISI- TION OR PURCHASE OF PERSONAL PROPERTY, IN ACCORDANCE WITH THE PROVISIONS OF THE PUBLIC PROPERTY FINANCE ACT, CHAPTER 271, TEXAS LOCAL GOVERNMENT CODE. Section 2. DATE, DENOMINATIONS, NUMBERS, AND MATURI- TIES OF CONTRACTUAL OBLIGATIONS. Initially there shall be issued, sold, and delivered hereunder fully registered contractual obligations dated May 15, 1988, in the respective denominations and principal amounts hereinafter stated, payable to the respective initial registered owners thereof (as designated in Section 19 hereof), or to the n0524i registered assignee or assignees of the Contractual obliga- tions or any portion or portions thereof (in each case, the "registered owner"), and the Contractual Obligations shall mature and be payable on May 15, 1992. The term "Contractual obligations" as used in this Ordinance shall mean and include collectively the contractual obligation initially issued and delivered pursuant to this ordinance and all substitute contractual obligations exchanged there- for, as well as all other substitute contractual obligations and replacement certificates issued pursuant hereto, and the term "Contractual Obligation" shall mean any of the Contrac- tual obligations. Section 3. INTEREST. The Contractual Obligations shall bear interest from the dates specified in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance to their due date at the rates of 8.50% per annum for the period from the Original Issue Date through May 14, 1989; 9.50% per annum for the period from May 15, 1989 through May 14, 1990; 10.50% per annum for the period from May 15, 1990 through May 14, 1991; and 11.50% per annum for the period from May 15, 1991 through May 14, 1992. Said interest shall be payable in the manner provided and on the dates stated in the FORM OF CONTRACTUAL OBLIGATION set forth in this ordinance. Section 4. CHARACTERISTICS OF THE CONTRACTUAL OBLIGA- TIONS. (a) Registration. Transfer, Conversion and Exchange• Authentication. The Issuer shall keep or cause to be kept at the principal corporate trust office of First City National Bank of Houston, Houston, Texas (the "Paying Agent/Registrar") books or records for the registration of the transfer, conversion, and exchange of the Contractual Obligations (the "Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such registrations of transfers, conversions, and exchanges under such reasonable regulations as the Issuer and the Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations, transfers, conversions, and exchanges as herein provided. The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the registered owner of each Contractual Obligation to which payments with respect to the Contractual Obligations shall be mailed, as herein provided; but it shall be the duty of each registered owner to notify the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and such interest payments shall not be mailed unless such notice has been given. The Issuer shall have the right to inspect the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by law, shall not permit their inspection n05248 2 by any other entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such registration, transfer, conversion, exchange, and delivery of a substitute Contractual Obligation or Contractual Obligations. Registration of assignments, transfers, conversions, and exchanges of Contractual Obligations shall be made in the manner provided and with the effect stated in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance. Each substitute Contractual Obligation shall bear a letter and/or number to distinguish it from each other Contractual Obligation. Except as provided in Section 4(c) of this Ordinance, an authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Contractual obliga- tion, date and manually sign said Contractual Obligation, and no such Contractual Obligation shall be deemed to be issued or outstanding unless such Contractual Obligation is so executed. The Paying Agent/Registrar promptly shall cancel all paid Contractual Obligation or Contractual Obligations surrendered for conversion and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the Issuer or any other body or person so as to accomplish the foregoing conversion and exchange of any Contractual Obligation or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Contractual Obligations in the manner prescribed herein, and said Contractual obliga- tions shall be of type composition printed on paper with lithographed or steel engraved borders of customary weight and strength. Pursuant to Vernon's Ann. Tex. Civ. St. Art. 717k-6, and particularly Section 6 thereof, the duty of conversion and exchange of Contractual obligations as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Contractual Obligations, the converted and exchanged Contractual Obligations shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Contractual Obligations which initially were issued and delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. (b) Payment of Contractual Obligations and Interest. The Issuer hereby further appoints the Paying Agent/Regis- trar to act as the paying agent for paying the principal of and interest on the Contractual Obligations, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by the Issuer and the Paying Agent/Registrar with respect to the Contractual Obligations. (c) In General. The Contractual Obligations (i) shall be issued in fully registered form, without interest cou- pons, with the principal of and interest on such Contractual 005249 Obligations 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 converted and exchanged for other Contractual obliga- tions; (v) shall have the characteristics; (vi) shall be signed, sealed, executed, and authenticated; (vii) the principal of and interest on the Contractual Obligations shall be payable; and (viii) shall be administered and the Paying Agent/Registrar and the Issuer shall have certain duties and responsibilities with respect to the Contractual Obligations, all as provided, and in the manner and to the effect as required or indicated, in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance. The Contractual Obligations initially issued and delivered pursuant to this Ordinance (to which Contractual Obligations is attached the Registration Certificate of the Comptroller of Public Accounts) are not required to be, and shall not be, authen- ticated by the Paying Agent/Registrar, but on each substi- tute Contractual obligation issued in conversion of and exchange for any Contractual Obligation or Contractual Obligations issued under this Ordinance the Paying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the FORM OF CONTRACTUAL OBLIGATION. The Paying Agent/Registrar shall fill in the date of delivery of the Contractual Obligations under the heading "Original Issue Date" as it appears on the face of each of the Contractual Obligations upon the initial delivery of the Contractual Obligations to the purchaser named in Section 18 of this Ordinance. (d) Substitute Paying Agent/Registrar. The Issuer covenants with the registered owners of the Contractual Obligations that at all times while the Contractual Obliga- tions are outstanding the Issuer will provide a competent and legally qualified bank, trust company, financial insti- tution, or other agency to act as and perform the services of Paying Agent/Registrar for the Contractual Obligations under this Ordinance, and that the Paying Agent/Registrar will be one entity. The Issuer reserves the right to, and may, at its option, change the Paying Agent/ Registrar upon not less than 120 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days prior to the next principal or interest payment date after such notice. In the event that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust company, financial institution, or other agency to act as Paying Agent/Registrar 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 thereof), along with all other pertinent books and records relating to the 4 005250 Contractual Obligations, to the new Paying Agent/Registrar designated and appointed by the Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Contractual Obligations, by United States Mail, first-class postage prepaid, which notice also shall give the address of the new Paying/Agent Registrar. By accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar. Section 5. FORM OF CONTRACTUAL OBLIGATIONS. The form of the Contractual obligations, including the form of the Paying Agent/Registrar's Authentication Certificate, the form of Assignment, and the form of the Registration Certi- ficate of the Comptroller of Public Accounts of the State of Texas to be attached to the Contractual Obligations initial- ly issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as follows, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance. 005251 FORM OF CONTRACTUAL OBLIGATION NO. R-1 United States of America PRINCIPAL ORIGINAL State of Texas AMOUNT ISSUE DATE CITY OF COLLEGE STATION, TEXAS $1,500,000 PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATION SERIES 1988 ON MAY 15, 1992, THE CITY OF COLLEGE STATION, TEXAS (the "Issuer"), hereby promises to pay to FIRST CITY NATIONAL BANK OF HOUSTON, HOUSTON, TEXAS (hereinafter called the "registered owner") the principal amount of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000) and to pay interest thereon from the Original Issue Date, specified above, on August 15, 1988, and on the fifteenth day of each November, February, May, and August thereafter while this Contractual Obligation is outstanding at the interest rate per annum, calculated on a 30 day month and 360 day year basis as follows: 8.50% for the period from the Original Issue Date through May 14, 1989; 9.50% for the period from May 15, 1989 through May 14, 1990; 10.50% for the period from May 15, 1990 through May 14, 1991; and 12.50% for the period from May 15, 1991 through May 14, 1992; except that if this Contractual Obligation is required to be authen- ticated and the date of its authentication is later than August 15, 1988, such principal amount shall bear interest from the interest payment date next preceding the date of authentication, unless such date of authentication is after any Record Date (hereinafter defined) but on or before the next following interest payment date, in which case such principal amount shall bear interest from such next follow- ing interest payment date; provided, however, that if on the date of authentication hereof the interest on the Contractual Obligation or Contractual Obligations, if any, for which this Contractual Obligation is being exchanged or converted from is due but has not been paid, then this Contractual Obligation shall bear interest from the date to which such interest has been paid in full. IN CONSIDERATION of the registered owner's acceptance hereof, which acceptance shall constitute the registered owner's assent hereto and to the terms and conditions of the ordinance authorizing the issuance of this Contractual Obligation adopted by the City Council of the Issuer on April 28, 1988 (the "Ordinance"), the Issuer hereby unilaterally contracts with such registered owner that it will utilize the net available proceeds of the Contractual Obligations, after payment of the costs of issuance related thereto, to acquire or purchase personal property in accor- dance with the Ordinance and the Issuer's plan of acquisi- tion therefor. 005252 0 THE PRINCIPAL OF AND INTEREST ON this Contractual Obligation are payable in lawful money of the United States of America, without exchange or collection charges. The payment of principal and interest on this Contractual Obligation shall be made by First City National Bank of Houston, Houston, Texas, which is the initial "Paying Agent/Registrar" for this Contractual Obligation, to the registered owner hereof on each principal and interest payment date by check or draft, dated as of such payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the Ordinance to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by United States Mail, first-class postage prepaid, on each such payment date, to the registered owner hereof, at its address as it appeared on the last calendar day of the month next preceding each such date (the "Record Date") on the Regis- tration Books kept by the Paying Agent/Registrar, as herein- after described. The foregoing notwithstanding, the final payment of principal on this Contractual Obligation shall be paid only upon surrender of this Contractual Obligation to the Paying Agent/Registrar for cancellation. The Issuer covenants with the registered owner of this Contractual Obligation that on or before each principal payment date and interest payment date for this Contractual Obligation it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Contractual Obligations, when due. AT ANY TIME PRIOR TO MATURITY this Certificate is subject to redemption prior to its scheduled maturity, at the option of the Issuer, at a redemption price equal to the principal amount thereof plus unpaid accrued interest to the date fixed for redemption, without premium. Notice of any redemption shall be given by certified mail postmarked at least ten days prior to the dated fixed for redemption and addressed to the Registered Owner of this Certificate. It is hereby specifically provided that written notification to the Registered Owner shall be the only notice actually required in connection with or as a prerequisite to redemption of this Certificate. When this Certificate has been called for redemption, and due provision has been made to redeem the same, this Certificate shall be payable solely from the funds provided for redemption, and interest which would otherwise accrue shall terminate on the date fixed for redemption. IF THE DATE for the payment of the principal of or interest on this Contractual Obligation shall be a Saturday, a Sunday, a legal holiday, or a day on which banking insti- tutions in the city where the principal corporate trust n05253 office of the Paying Agent/Registrar is located are authori- zed by law or executive order to close, or the United States Postal Service is not open for business, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close, or the United States Postal Service is not open for business; and payment on such date shall have the same force and effect as if made on the original date payment was due. THIS CONTRACTUAL OBLIGATION is one of a Series of PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS dated as of May 15, 1988, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $1,500,000, FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE ISSUER'S CONTRACTUAL OBLIGATIONS TO BE INCURRED IN CONNECTION WITH THE ACQUISITION OR PURCHASE OF PERSONAL PROPERTY, IN ACCORDANCE WITH THE PROVISIONS OF THE PUBLIC PROPERTY FINANCE ACT, CHAPTER 271, TEXAS LOCAL GOVERNMENT CODE. THIS CONTRACTUAL OBLIGATION OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books kept by the Paying Agent/Registrar acting in the capacity of registrar for the Contractual Obligations, upon the terms and conditions set forth herein and in the Ordinance. This Contractual Obligation may only be assigned and transferred upon presentation and surrender to the Paying Agent/Regis- trar for transfer of registration and cancellation, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/ Registrar, evidencing assignment of this Contractual obliga- tion or any portion or portions hereof to the assignee or assignees in whose name or names this Contractual Obligation or any such portion or portions hereof is or are to be transferred and registered. If the form of Assignment printed or endorsed on this Contractual Obligation shall be executed by the registered owner, or its duly authorized attorney or representative, it shall conclusively evidence the assignment hereof. Upon surrender of this Contractual Obligation or any portion or portions hereof for transfer of registration, an authorized representative of the Paying Agent/Registrar shall make such transfer in the Registration Books, and shall deliver a new Contractual Obligation or Contractual Obligations payable to such assignee or assignees, or to the registered owner hereof in the case of the assignment and transfer of only a portion of this Contractual Obligation, in exchange for this Contractual Obligation, all in the form and manner as provided in the next paragraph hereof for the conversion and exchange of Contractual Obligations. The registered owner of this Contractual Obligation shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner 005254 I hereof for all purposes, including payment and discharge of liability upon this Contractual Obligation to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary. ALL CONTRACTUAL OBLIGATIONS OF THIS SERIES issued as a result of a transfer, conversion, or exchange are issuable solely as fully registered certificates, without interest coupons, in the denomination of any integral multiple of $5,000. In accordance with the form and procedures set forth in the Ordinance, this Contractual Obligation, or any unpaid portion hereof, may, at the written request of the registered owner or the assignee or assignees hereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the Paying Agent/ Registrar, be converted into and exchanged for a Contractual Obligation or Contractual Obligations of like aggregate principal amount, payable to the appropriate registered owner, assignee, or assignees, as the case may be, having the same due dates, and bearing interest at the same rate, in any denomination or denominations in any integral mul- tiple of $5,000 as requested, with appropriate changes in the schedule of principal installments payable on the due dates to reflect the different denominations thereof, upon surrender of this Contractual Obligation to the Paying Agent/Registrar at its principal corporate trust office for cancellation. The one requesting a transfer, conversion, or exchange shall pay any taxes or governmental charges re- quired to be paid with respect thereto as a condition precedent to the exercise of such privilege of transfer, conversion, or exchange. The Paying Agent/Registrar shall not be required to make any such transfer, conversion, or exchange during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date. IN THE EVENT any Paying Agent/Registrar for the Con- tractual Obligations is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed to the registered owners of the Contractual Obligations. IT IS HEREBY certified, recited, and covenanted that this Contractual Obligation has been duly and validly authorized, issued, and delivered; all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this Contractual Obligation have been performed, existed, and been done in accordance with law; and annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Contractual Obligation, as n05255 E such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the Issuer, and have pledged for such payment, within the limit prescribed by law. BY HIS ACCEPTANCE of this Contractual Obligation the registered owner assents to the terms and provisions of the Ordinance, a copy of which is on file in the official records of the Issuer, and the Contractual Obligation; agrees to be bound by such terms and provisions; and agrees that the terms and provisions of this Contractual Obligation and the Ordinance constitute a contract between each regis- tered owner hereof and the Issuer. IN WITNESS WHEREOF, the Issuer has caused this Contrac- tual obligation to be signed with the manual or facsimile signature of the Mayor of the Issuer and countersigned with the manual or facsimile signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Contractual Obligation. CITY OF COLLEGE STATION, TEXAS (signature) City Secretary (SEAL) (sianature) Mayor n05256 to FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE (To be executed if this Contractual Obligation is not accompanied by an executed Registration Certificate of the Comptroller of Public Accounts of the State of Texas) It is hereby certified that this Contractual Obligation has been issued under the provisions of the ordinance described on the face of this Contractual Obligation, and that this Contractual Obligation has been issued in conver- sion or replacement of, or in exchange for, a contractual obligation, contractual obligations, or a portion of a contractual obligation or contractual obligations of a Series which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated: FIRST CITY NATIONAL BANK OF HOUSTON, Houston, Texas Paying Agent/Registrar By Authorized Representative 005257 11 FORM OF ASSIGNMENT ASSIGNMENT FOR VALUE RECEIVED, the undersigned registered owner of this Contractual Obligation, or duly authorized representa- tive or attorney thereof, hereby assigns this Contractual Obligation to (Assignee's Social Security (print or type Assignee's name or Taxpayer Identification and address, including zip Number) code) and hereby irrevocably constitutes and appoints attorney to transfer the registration of this Contractual Obligation on the Paying Agent/Registrar's Registration Books with full power of substitution in the premises. Dated Signature Guaranteed: The following abbreviations, when used in the assign- ment above or on the face of the within Contractual Obligation, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenant with right of survivorship and not as tenants in common UNIF GIFT MIN ACT - Custodian (Gust) (Minor) under Uniform Gifts to Minor Act State Additional abbreviations may also be used though not in the list above. n05258 12 FORM OF REGISTRATION CERTIFICATE OF THE COMPTROLLER OF PUBLIC ACCOUNTS: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Contractual Obligation has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Contractual Obligation has been registered by the Comptrol- ler of Public Accounts of the State of Texas. Witness my signature and seal this (COMPTROLLER'S SEAL) Comptroller of Public Accounts of the State of Texas [END OF FORMS) Section 6. DEFINITIONS. The terms defined in this Section for all purposes of this Ordinance, except where the context by clear implication shall otherwise require, shall have the respective meanings as follows, to -wit: (a) The term "Code" shall mean the Internal Revenue Code of 1986. (b) The terms "Contractual Obligation" or "Contractual Obligations" shall mean the Issuer's Public Property Finance Contractual Obligations, Series 1988 authorized to be issued by this Ordinance. (c) The term "Paying Agent/Registrar" shall mean initially First City National Bank of Houston, Houston, Texas, or thereafter any successor named by the Issuer in accordance with the provisions of Section 4 of this Ordinance. Section 7. INTEREST AND SINKING FUND. The City of College Station, Texas, Contractual Obligation Series 1988 Interest and Sinking Fund, hereinafter called the "Interest and Sinking Fund" is hereby authorized and shall be estab- lished and maintained in a depository bank of the Issuer, sc long as the Contractual Obligations, or interest thereon, are outstanding and unpaid. Section 8. USE OF INTEREST AND SINKING FUND. On or before the 15th day of August, 1988, .and on or before the 15th day of each November, February, May, and August thereafter so long as any of the Contractual Obligations remain outstanding, there shall be deposited in the Interest and Sinking Fund an amount, together with other amounts in 13 005259 the Interest and Sinking Fund, not less than the amount of the installment of principal and interest coming due on the Contractual Obligations on the next succeeding payment date. The Interest and Sinking Fund shall be used to pay the principal of and interest on the Contractual Obligations as such principal and interest come due. Section 9. TAX LEVY. All ad valorem taxes levied and collected for and on account of the Contractual Obligations shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any of the Contractual Obligations are outstanding and unpaid, the City Council of the Issuer shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on the Contractual Obligations as such interest comes due, and to provide and maintain a sinking fund adequate to pay the principal of the Contractual Obligations as such princi- pal matures (but never less than 2% of the original princi- pal amount of the Contractual Obligations as a sinking fund each year); and said tax shall be based on the latest approved tax rolls of the Issuer, with full allowance being made for tax delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered to be levied, against all taxable property in the Issuer for each year while any of the Contractual obligations are outstanding and unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of the the Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of the Contractual obligations, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. Section 10. SECURITY FOR FUNDS. All Funds created by this Ordinance shall be secured in the manner and to the fullest extent permitted or required by law for the security of public funds, and such Funds shall be used only for the purposes and in the manner permitted or required by this Ordinance. Section 11. DEFEASANCE OF CONTRACTUAL OBLIGATIONS. (a) Any Contractual Obligation and the interest thereon shall be deemed to be paid, retired, and no longer outstand- ing (a "Defeased Contractual Obligation") within the meaning of this Ordinance, except to the extent provided in sub- section (d) of this Section 11, when payment of the princi- pal of such Contractual 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 terms thereof or (ii) shall have been provided for on or before such due date by irrevo- cably depositing with or making available to the Paying 14 n05260 Agent/Registrar for such payment (1) lawful money of the United States of America sufficient to make such payment, (2) Government Obligations which mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money to provide for such payment, and when proper arrangements have been made by the Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased Contractual Obligations shall have become due and payable, or (3) any combination of money or such Governmental Obligations. At such time as a Contractual Obligation shall be deemed to be a Defeased Contractual Obligation hereunder, as aforesaid, such Contractual Obligation and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Govern- ment Obligations. (b) Any money so deposited with the Paying Agent/ Registrar may at the written direction of the Issuer also be invested in Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from such Government Obligations received by the Paying Agent/ Registrar which is not required for the payment of the Contractual Obligations and interest thereon, with respect to which such money has been so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer. (c) The term "Government Obligations" as used in this Section 11, shall mean direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, which may be United States Trea- sury obligations such as its State and Local Government Series, which may be in book -entry form. (d) Until all Defeased Contractual Obligations shall have become due and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Contractual Obligations the same as if they had not been defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required by this Ordinance. Section 12. DAMAGED, MUTILATED, LAST, STOLEN, OR DESTROYED CONTRACTUAL OBLIGATIONS. (a) Replacement Con- tractual obligations. In the event any outstanding Contrac- tual Obligation is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new Contractual Obligation of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or 005261 15 destroyed Contractual Obligation, in replacement for such Contractual Obligation in the manner hereinafter provided. (b) Application for Replacement Contractual Oblioa tions. Application for replacement of damaged, mutilated, lost, stolen, or destroyed Contractual Obligations shall be made by the registered owner thereof to the Paying Agent/Registrar. In every case of loss, theft, or de- struction of a Contractual Obligation, the registered owner applying for a replacement contractual obligation shall furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity as may be required by them to save each of them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Issuer, the registered owner shall furnish to the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Contractual Obligation, as the case may be. In every case of damage or mutilation of a Contractual Obligation, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Contractual obligation so damaged or mutilated. (c) No Default Occurred. Notwithstanding the forego- ing provisions of this Section 12, in the event any such Contractual Obligation shall have matured, and no default has occurred which is then continuing in the payment of the principal of or interest on this Contractual Obligation, the Issuer may authorize the payment of the same (without surrender thereof except in the case of a damaged or mu- tilated Contractual Obligation) instead of issuing a replacement contractual obligation, provided security or indemnity is furnished as above provided in this Section 12. (d) Charge for Issuing Replacement Contractual obliga- tions. Prior to the issuance of any replacement contractual obligation, the Paying Agent/Registrar shall charge the registered owner of such Contractual Obligation with all legal, printing, and other expenses in connection therewith. Every replacement contractual obligation issued pursuant to the provisions of this Section 12 by virtue of the fact that any Contractual Obligation is lost, stolen, or destroyed shall constitute an obligation of the Issuer whether or not the lost, stolen, or destroyed Contractual Obligation shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Contractual Obligations duly issued under this Ordinance. (e) Authority for Issuing Replacement Contractual Obligations. In accordance with Section 6 of Vernon's Ann. Tex. Civ. St. Art. 717k-6, this Section 12 of this Ordinance shall constitute authority for the issuance of any such replacement certificate without necessity of further action 16 005262 by the Issuer or any other body or person, and the duty of the replacement of such Contractual Obligations is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Contractual Obligations in the form and manner and with the effect, as provided in Section 4(a) of this Ordinance for Contractual Obligations issued in conversion and ex- change of other Contractual Obligations. Section 13. CUSTODY, APPROVAL, AND REGISTRATION OF CONTRACTUAL OBLIGATIONS. The Mayor and/or the Director of Finance of the Issuer is hereby authorized to have control of the Contractual Obligations initially issued and deliver- ed hereunder and all necessary records and proceedings pertaining to the Contractual Obligations pending their delivery and their investigation, examination, and approval by the Attorney General of the State of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Contractual Obligations said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate attached to the Contractual Obligations, and the seal of said Comptroller shall be impressed, or placed in facsimile, on the Contractual Obligations. Section 14. CONTRACTUAL UNDERTAKING WITH REGISTERED OWNER. The Issuer hereby, and by the acceptance of each of the Contractual Obligations, contractually obligates and commits itself to utilize the net proceeds available from the issuance and delivery of the Contractual Obligations, after payment of costs of issuance related thereto, for the acquisition or purchase of the Property in accordance with this Ordinance and the Issuer's plan of acquisition there- for. Section 15. REMEDIES IN EVENT OF DEFAULT. In addition to all of the rights and remedies provided by the laws of the State of Texas, the Issuer covenants and agrees that in the event of default in payment of principal or interest on any of the Contractual Obligations when due; in the event it fails to make the payments required to be made into the Interest and Sinking Fund; or in the event it defaults in the observance or performance of any other of the contracts, covenants, conditions, or obligations set forth in this Ordinance, the registered owners shall be entitled to a writ of mandamus issued by a court of competent jurisdiction compelling and requiring the Issuer and the officials thereof to observe and perform the contracts, covenants, obligations, or conditions prescribed.in this Ordinance and any delay or omission to exercise any right or power accruing upon any default shall not impair any such right or power nor be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be 005263 17 exercised from time to time and as often as may be deemed expedient. Section 16. COVENANTS OF THE ISSUER. A. General Covenants. The Issuer covenants and represents that: (1) The Issuer is a duly incorporated Home Rule City, having more than 5000 inhabitants, operating and existing under the Constitution and laws of the State of Texas, and is duly authorized under the laws of the State of Texas to create and issue Contractual Obliga- tions; all action on its part for the creation and issuance of the Contractual Obligations has been duly and effectively taken; and the Contractual obligations in the hands of the Owners thereof are and will be valid and enforceable obligations of the Issuer in accordance with their terms; and (2) The Contractual Obligations shall be ratably secured in such manner that no one Contractual Obligation shall have preference over other Contractual Obligations. B. Specific Covenants. The Issuer covenants and represents that, while the Contractual Obligations are outstanding and unpaid, it will: (1) Proceed to acquire with all due diligence and dispatch so much of the Property as shall have been financed with the proceeds of the Contractual obliga- tions and, if necessary, as described in subsection D of this Section 16 to expend certain minimum amounts of proceeds of the Contractual Obligations by certain dates; (2) Levy an ad valorem tax that will be suffi- cient to provide funds to pay the current interest on the Contractual Obligations and to provide the neces- sary sinking fund, all as described in this Ordinance; and (3) Keep proper books of record and account in which full, true, and correct entries will be made of all dealings, activities, and transactions relating to the Funds created pursuant to this Ordinance, and all books, documents, and vouchers relating thereto shall at all reasonable times be made available for inspec- tion upon request from any Owner. C. Covenants Regarding Tax Exemption of Interest on the Contractual Obligations. The Issuer covenants to take any action to maintain, or refrain from any action which would adversely affect, the treatment of the Contractual Obligations as obligations described in section 103 of the 18 005264 Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the Issuer specifically covenants as follows: (1) To take any action to assure that no more than 10% of the proceeds of the Contractual Obligations (less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of the Code or, if more than 10% of the proceeds are so used, that amounts, whether or not received by the Issuer with respect to such private business use, do not under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10% of the debt service on the Contractual Obligations, in contravention of section 141(b)(2) of the Code; (2) To take any action to assure that in the event that the "private business use" described in subsection (a) hereof exceeds 5% of the proceeds of the Contractual Obligations (less amounts deposited into a reserve fund, if any), then the amount in excess of 5% is used for a "private business use" which is "related" and not "disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental use; (3) To take any action to assure that no amount which is greater than the lesser of $5,000,000 or 5% of the proceeds of the Contractual Obligations (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to per- sons, other than state or local governmental units, in contravention of section 141(c) of the Code; (4) To refrain from taking any action which would otherwise result in the Contractual Obligations being treated as "private activity bonds" within the meaning of section 141(b) of the Code; (5) To refrain from taking any action that would result in the Contractual Obligations being "federally guaranteed" within the meaning of section 149(b) of the Code; (6) To refrain from using any portion of the proceeds of the Contractual Obligations, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which would produce a materially higher yield over the term of the Contractual Obligations, other than invest- ment property acquired with -- 005265 19 (A) proceeds of the Contractual obligations invested for a reasonable temporary period of three years or less until such proceeds are needed for the purpose for which the Contractual obliga- tions are issued, (B) amounts invested in a bona fide debt service fund, within the meaning of section 1.103-13(b)(12) of the Treasury Regulations, and (C) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10% of the proceeds of the Contractual Obligations; (7) To otherwise restrict the use of the proceeds of the Contractual Obligations or amounts treated as proceeds of the Contractual Obligations, as may be necessary, so that the Contractual Obligations do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings); (8) To pay to the United States of America at least once during each five year period (beginning on the date of delivery of the Contractual Obligations) an amount that is at least equal to 90% of the "Excess Earnings," within the meaning of section 148(f) of the Code, and to pay to the United States of America, not later than 60 days after the Contractual Obligations have been paid in full, 100% of the amount then re- quired to be paid as a result of Excess Earnings under section 148(f) of the Code; and (9) To maintain such records as will enable the Issuer to fulfill its responsibilities under this Section and section 148 of the Code and to retain such records for at least six years following the final payment of principal and interest on the Contractual Obligations. It is the understanding of the Issuer that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department of Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Contractual Obligations, the Issuer will not be required to comply with any covenant contained• herein to the extent that such modification or expansion, in the opinion of nationally -recognized bond counsel, will not adversely affect the exemption of interest on the Contractual Obliga- tions under section 103 of the Code. In the event that 20 n05266 regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Contractual Obligations, the Issuer agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Contractual Obligations under section 103 of the Code. In order to facilitate compliance with the above covenants (7), (8), and (9), a "Rebate Fund" is hereby established by the Issuer for the sole benefit of the United States of America, and such Fund shall not be subject to the claim of any other person, including without limitation the Bondholders. The Rebate Fund is established for the addi- tional purpose of compliance with section 148 of the Code. Section 17. DESIGNATION AS QUALIFIED TAX-EXEMPT CONTRACTUAL OBLIGATIONS. The Issuer hereby designates the Contractual Obligations as "qualified tax-exempt bonds" as defined in Section 265(b)(3) of the Internal Revenue Code of 1986 (the "Code"). In furtherance of such designation, the Issuer represents, covenants, and warrants that (a) during the calendar year 1988, the Issuer (including any subordin- ate entities) has not designated nor will it designate any tax-exempt obligation, which, when aggregated with the Contractual Obligations, will result in more than $10,000,000 of "qualified tax-exempt bonds" being issued; (b) the Issuer reasonably anticipates that the amount of tax-exempt obligations issued during the calendar year 1988 by the Issuer (or any subordinate entities) will not exceed $10,000,000; and (c) the Issuer will take such action or refrain from such action as necessary, and as more particularly set forth in Section 16 of this Ordinance, in order that the Contractual Obligations will not be con- sidered "private activity bonds" within the meaning of Section 142 of the Code. Section 18. SALE OF CONTRACTUAL OBLIGATIONS AND AUTHORIZATION OF AN ESCROW AGREEMENT. The Contractual Obligations are hereby sold and shall be delivered to First City National Bank of Houston, for the par value thereof and any accrued interest to date of delivery, and any such accrued interest shall be deposited into the Interest and Sinking Fund. The Contractual Obligations initially shall be registered in the name of First City National Bank of Houston. An Escrow Agreement substantially in the form attached hereto as Exhibit A, between the Issuer and First City National Bank of Houston, Houston, Texas, is hereby approved, and shall be executed by the City Manager and City Secretary of the Issuer, and approved as to form and legality by the City Attorney, on behalf of the City Council of the Issuer, and the proceeds from the sale of the Contractual Obligations shall be deposited in the 21 n05267 Contractual Obligation Escrow Fund established pursuant to the Escrow Agreement. Section 19. EFFECTIVE DATE. This Ordinance shall take effect and be in full force and effect from and after the date of its passage, and it is so ordained. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS, this 28th day of April, 1988, at which meeting a quorum was present. Mayor, Ctty jol�-� ge S `tion, Texas ATTEST: 1 City Secre r , City of College Station, x 005268 22 ORDINANCE CERTIFICATE I, the undersigned City Secretary of the City of College Station, Texas (the "City"), hereby certify as follows: I. The City Council of the City (the "Council") convened in Regular session, open to the public, on April 28, 1988, at the meeting place designated in the notice (the "Meeting"), and the roll was called of the members, to wit: Larry J. Ringer, Mayor, and Patricia Boughton, Mayor Protem; and the following Councilmembers: vacancy, Fred Brown, Jim Gardner, Dick Haddox, and Lynn McIlhaney. All members of the Council were present, thus constituting a quorum. Whereupon among other business, the following was transacted at the Meeting a written ORDINANCE AUTHORIZING THE ISSUANCE OF PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS (the "Ordinance") was duly introduced for the consideration of the Council and read in full. It was then duly moved by Councilmember Brown and seconded by Councilmember Boughton that the Ordinance be finally passed and adopted; and, after due discussion, such motion, carrying with it the adoption of the Ordinance prevailed and carried by the following vote: AYES: 6 NOES: 0 ABSTENTIONS: 0 2. A true, full, and correct copy of the Ordinance adopted at the Meeting is attached to and follows this Certificate; the Ordinance has been duly recorded in the Council's minutes of the Meeting; the above and foregoing paragraph is a true, full, and correct excerpt from the Council's minutes of the Meeting pertaining to the adoption of the Ordinance; the persons named in the above and foregoing para- graph are duly chosen, qualified, and acting officers and members of the Council as indicated therein; each of the officers and members of the Council was duly and sufficiently notified officially and person- ally, in advance, of the time, place, and purpose of the Meeting, and that the Ordinance would be introduced and considered for adoption at the Meeting and each of such officers and members consented, in advance, to the holding of the Meeting for such purpose; and the Meeting was open to the public, and public notice of the time, place, purpose of the Meeting was given, all as required by Article 6252-17, Vernon's Texas Civil Statutes, as amended. 3. Dian Jones is the duly appointed and acting City Secretary of the City. SIGNED AND SEALED THIS �L,LsC� �Zl iL (CITY SEAL) City Secreta)KYJC-Tty of College Station, Texas n05269