HomeMy WebLinkAbout2002-2552 - Ordinance - 03/14/2002ORDINANCE NO. 2552
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $18,215,000
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS,
SERIES 2002; AWARDING THE SALE OF THE BONDS; APPROVING THE
OFFICIAL STATEMENT; AND ALL OTHER MATTERS RELATED THERETO,
INCLUDING IMMEDIATE EFFECTIVENESS
WHEREAS, the City of College Station, Texas (the "City" or the "Issuer") has heretofore
issued the following described outstanding bonds (collectively, the "Previously Issued Parity
Bonds"), to-wit:
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE AND REFUNDING
BONDS, SERIES 1993, in the original principal amount of $5,850,000, and presently outstanding in
the principal amount of $3,000,000 (the "Series 1993 Bonds");
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1994,
in the original principal amount of $16,500,000, and presently outstanding in the principal amount
of $10,725,000 (the "Series 1994 Bonds");
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1995,
in the original principal amount of $6,000,000, and presently outstanding in the principal amount of
$4,500,000 (the "Series 1995 Bonds");
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE AND REFUNDING
BONDS, SERIES 1996, in the original principal amount of $10,110,000, and presently outstanding
in the principal amount of $8,650,000 (the "Series 1996 Bonds");
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1998,
in the original principal amount of $2,700,000, and presently outstanding in the principal amount of
$2,495,000 (the "Series 1998 Bonds");
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 2000,
in the original principal amount of $10,500,000, and presently outstanding in the principal amount
of $10,315,000 (the "Series 2000 Bonds"); and
CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 2001,
in the original principal amount of $23,500,000, and presently outstanding in the principal amount
of $23,500,000 (the "Series 2000 Bonds");
WHEREAS, all of the Previously Issued Parity Bonds are secured by a pledge of the net
revenues fi.om the operation of the City's combined watenvorks system, sewer system, and electric
light and power system, and are on a parity with each other (and any Parity Bonds, hereinafter
defined, which are hereafter authorized, issued, and delivered); and
WHEREAS, the bonds hereinafter authorized are to be issued and delivered pursuant to the
laws of the State of Texas, including specifically Chapter 1502, Texas Government Code; and
WHEREAS, the bonds hereinafter authorized are on a parity with the outstanding Previously
Issued Parity Bonds;
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
COLLEGE STATION, TEXAS;
Section 1. BONDS AUTHORIZED. That the City's bonds (the "Bonds") are hereby
authorized to be issued in the aggregate principal amount of $18,215,000 for the purpose of
financing water system, wastewater system and electric light and power system improvements and
paying the costs of issuance of the Bonds. The Bonds shall be designated as the "City of College
Station, Texas Utility System Revenue Bonds, Series 2002".
Section 2. DATES AND MATURITIES. That the Bonds shall be dated February 15, 2002,
shall be in the denomination of $5,000 or any integral multiple thereof (an "Authorized
Denomination"), shall be numbered consecutively from R-1 upward, and shall mature on the matu-
rity date, in each of the years, and in the amounts, respectively, as set forth in the following schedule:
MATURITY DATE: FEBRUARY 1
YEARS AMOUNTS ($) YEARS
AMOUNTS ($)
2003 530,000 2013 895,000
2004 555,000 2014 940,000
2005 585,000 2015 995,000
2006 620,000 2016 1,045,000
2007 650,000 2017 1,100,000
2008 685,000 2018 1,160,000
2009 725,000 2019 1,225,000
2010 765,000 2020 1,290,000
2011 805,000 2021 1,360,000
2012 850,000 2022 1,435,000
Section 3. RIGHT OF PRIOR REDEMPTION. (a) That the City reserves the right to
redeem the Bonds maturing on or after February 1, 2013, in whole or in part in principal amounts
of $5,000 or any integral multiple thereof, on February 1, 2012, 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
Bonds are to be redeemed by the City, the City shall determine the maturity or maturities and the
amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot Bonds, or
portions thereof, within such maturity or maturities and in such principal amounts, for redemption.
(b) The Bonds are not subject to mandatory sinking fund redemption prior to their scheduled
maturities.
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(c) At least thirty (30) days prior to the date any such Bonds are to be redeemed, a written
notice of redemption shall be given by the Paying Agent/Registrar to the registered owner of each
Bond or a portion thereof being called for redemption by depositing such notice in the United States
mail, first-class, postage prepaid, addressed to each such registered owner at the address thereof as
shown on the Registration Books (hereinafter defined). By the date fixed for any such redemption
due provision shall be made by the City with the Paying Agent/Registrar for the payment of the
required redemption price for the Bonds or the portions thereof which are to be so redeemed, plus
accrued interest thereon to the date fixed for redemption. If such notice of redemption is given, and
if due provision for such payment is made, all as provided above, the Bonds, or the portions thereof
which are to be so redeemed, thereby automatically shall be redeemed prior to their scheduled
maturities, and shall not bear interest after 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
price plus accrued 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 Bonds or any portion thereof. If a portion of any
Bond shall be redeemed, a substitute Bond or Bonds 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 be 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 in the manner
described in Section 5(h) hereof, but the failure to provide such notice as described in Section 5(h)
hereof shall not affect the validity or effectiveness of the proceedings for the redemption of the
Bonds.
Section 4. INTEREST. That the Bonds scheduled to mature during the years, respectively,
set forth below shall bear interest at the following rates per annum:
maturities 2003, % maturities 2013, %
maturities 2004, % maturities 2014, %
maturities 2005, % maturities 2015, %
maturities 2006, % maturities 2016, %
maturities 2007, % maturities 2017, %
maturities 2008, % maturities 2018, %
maturities 2009, % maturities 2019, %
maturities 2010, % maturities 2020, %
maturities 2011, % maturities 2021, %
maturities 2012, % maturities 2022,~%
payable to the registered owner of any such Bond, in the manner provided in the FORM OF BOND
set forth in this Ordinance, on February 1, 2003, and semiannually thereafter on August 1 and
February 1 of each year.
Section 5. PAYING AGENT/REGISTRAR; BOOK-ENTRY ONLY SYSTEM. (a)
That the City shall keep or cause to be kept at the designated corporate trust office in Houston, Texas
(the "Designated Trust Office") of JPMorgan Chase Bank, or such other bank, trust company, fi-
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nancial institution, or other entity duly qualified and legally authorized to serve and perform duties
of and services of paying agent and registrar, named in accordance with the provisions of (g) of this
Section hereof (the "Paying Agent/Registrar"), books or records of the registration and transfer of
the Bonds (the "Registration Books"), and the City hereby appoints the Paying Agent/Registrar as
its registrar and transfer agent to keep such books or records and make such transfers and reg-
istrations under such reasonable regulations as the City and the Paying Agent/Registrar may pre-
scribe; and the Paying Agent/Registrar shall make such transfers and registrations as herein provided.
It shall be the duty of the Paying Agent/Registrar to obtain from the registered owner and record in
the Registration Books the address of such registered owner of each Bond to which payments with
respect to the Bonds shall be mailed, as herein provided. The Paying Agent/Registrar shall provide
to the City, by electronic means or otherwise, within fifteen (l 5) Business Days of the delivery of
the Bonds to the Purchaser (hereinafter defined), and thereafter no less often than once every three
(3) months, a true and correct copy of the Registration Books, which copy shall be maintained at
the City by the Chief Financial Officer of the City or the designee thereof. The Paying
Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by
law, shall not permit their inspection by any entity other than the City. Registration of each Bond
may be transferred in the Registration Books only upon presentation and surrender of such Bond for
transfer of registration and cancellation to the Paying Agent/Registrar at its Designated Trust Office
during normal business hours, together with proper written instruments of assignment, in form and
with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing the assignment
of the Bond, or any portion thereof in any Authorized Denomination, to the assignee or assignees
thereof, and the right of such assignee or assignees to have the Bond or any such portion thereof
registered in the name of such assignee or assignees. Upon the assignment and transfer of any Bond
or any portion thereof, a new substitute bond or bonds shall be issued in exchange therefor in the
manner herein provided. As of the date this Ordinance is approved by the City, the Designated Trust
Office is the Charlotte, North Carolina corporate trust office of the Paying Agent/Registrar.
(b) The entity in whose name any Bond shall be registered in the Registration Books at
any time shall be treated as the absolute owner thereof for all purposes of this Ordinance, whether
such Bond shall be overdue, and the City and the Paying Agent/Registrar shall not be affected by any
notice to the contrary unless otherwise required by law; and payment of, or on account of, the
principal of, premium, if any, and interest on any such Bond shall be made only to such registered
owner. All such payments shall be valid and effectual to satisfy and discharge the liability upon such
Bond to the extent ofthe sum or sums so paid.
(c) The City hereby further appoints the Paying Agent/Registrar to act as the paying
agent for paying the principal of, premium, if any, and interest on the Bonds, and to act as its agent
to exchange or replace Bonds, all as provided in this Ordinance. The Paying Agent/Registrar shall
keep proper records of all payments made by the City and the Paying Agent/Registrar with respect
to the Bonds, and of all exchanges of such bonds, and all replacements of such bonds, as provided
in this Ordinance.
(d) Each Bond may be exchanged for fully registered bonds in the manner set forth
herein. Each Bond issued and delivered pursuant to this Ordinance, to the extent of the unpaid or
unredeemed principal amount thereof, may, upon surrender thereof at the Designated Trust Office
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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 attorneys or
representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, at the option
of the registered owner or such assignee or assignees, as appropriate, be exchanged for fully
registered bonds, without interest coupons, in the form prescribed in the FORM OF BOND set forth
in this Ordinance, in an Authorized Denomination (subject to the requirement hereinafter stated that
each substitute Bond shall have a single stated maturity date), as requested in writing by such
registered owner or such assignee or assignees, in an aggregate principal amount equal to the unpaid
or unredeemed principal amount of any Bond or Bonds so surrendered, and payable to the appro-
priate registered owner, assignee, or assignees, as the case may be. If a portion of any Bond shall
be redeemed prior to its scheduled maturity as provided herein, at the request of the registered owner
a substitute bond or bonds having the same maturity date, bearing interest at the same rate, in an
Authorized Denomination, and in an aggregate principal amount equal to the unredeemed portion
thereof, will be issued to the registered owner upon surrender thereof for cancellation. If any Bond
or portion thereof is assigned and transferred, each bond issued in exchange therefor shall have the
same principal maturity date and bear interest at the same rate as the bond for which it is being
exchanged. Each substitute bond shall bear a letter and/or number to distinguish it from each other
bond. The Paying Agent/Registrar shall exchange or replace Bonds as provided herein, and each
fully registered bond delivered in exchange for or replacement of any bond or portion thereof as
permitted or required by any provision of this Ordinance shall constitute one of the Bonds for all
purposes of this Ordinance, and may again be exchanged or replaced. On each substitute bond
issued in exchange for or replacement of any bond or bonds issued under this Ordinance there shall
be printed thereon a Paying AgentYRegistrar's Authentication Certificate, in the form set forth in the
FORM OF BOND set forth in this Ordinance (the "Authentication Certificate"). An authorized
representative of the Paying Agent/Registrar shall, before the delivery of any such bond, manually
sign and date the Authentication Certificate, and no such bond shall be deemed to be issued or
outstanding unless the Authentication Certificate is so executed and dated. The Paying
Agent/Registrar promptly shall cancel all Bonds surrendered for exchange 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 Bond or
portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery
of the substitute bonds in the manner prescribed herein, pursuant to Chapter 1206, Texas
Government Code, and particularly Subchapter B thereof. The duty of such exchange or replacement
of bonds as described in the preceding sentence is hereby imposed upon the Paying Agent/Registrar,
and upon the execution of the Authentication Certificate, the exchanged or replaced Bond shall be
valid, incontestable, and enforceable in the same manner and with the same effect as the Bonds
which originally were delivered pursuant to this Ordinance, approved by the Attorney General, and
registered by the Comptroller of Public Accounts. Neither the City nor the Paying Agent/Registrar
shall be required (1) to make any transfer or exchange during a period beginning at the opening of
business 15 days before the day of the first mailing of a notice of redemption of Bonds and ending
at the close of business on the day of such mailing, or (2) to transfer or exchange any Bond after it
is selected for redemption, in whole or in part when such redemption is scheduled to occur within
30 calendar days; provided, however, such limitation shall not be applicable to an exchange by the
owner of the uncalled principal balance of a Bond.
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(e) All Bonds issued in exchange or replacement of any other Bond or portion thereof,
(i) shall be issued in fully registered form, without interest coupons, with the principal of and interest
on such bonds 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 Bonds,
(v) shall have the characteristics, (vi) shall be signed and sealed, and (vii) the principal of and
interest on the Bonds shall be payable, all as provided, and in the manner required or indicated, in
the FORM OF BOND set forth in this Ordinance.
(f) The City shall pay all of the Paying Agent/Registrar's reasonable and customary fees
and charges for making transfers, conversions and exchanges of the Bonds in accordance with an
agreement between the City and the Paying Agent/Registrar, but the registered owner of any Bond
requesting such transfer shall pay any taxes or other governmental charges required to be paid with
respect thereto. In addition, the City hereby covenants with the registered owners of the Bonds that
it will pay the reasonable 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 the Bonds, when due.
(g) The City covenants with the registered owners of the Bonds that at all times while the
Bonds are outstanding the City will provide a competent and legally qualified bank, trust company,
financial institution, or other entity duly qualified and legally authorized to serve as and perform the
duties and services of Paying Agent/Registrar, to act as and perform the services of Paying
Agent/Registrar for the Bonds under this Ordinance, and that the Paying Agent/Registrar will be one
entity. The City reserves the fight to, and may, at its option, change the Paying Agent/Registrar upon
not less than 60 days written notice to the Paying Agent/Registrar. 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 City covenants that promptly it will appoint a
competent and legally qualified national or state banking institution, which shall be a corporation
organized and doing business under the laws of the United States of America or of any state,
authorized under such laws to exercise trust powers, subject to supervision or examination by federal
or state authority, and whose qualifications substantially are similar to the previous Paying
Agent/Registrar, 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 Bonds, to the City and to the new Paying Agent/Registrar designated and appointed by the City.
Upon any change in the Paying Agent/Registrar, the City promptly will cause a written notice
thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Bonds, 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.
(h)(i) In addition to the manner of providing notice of redemption of Bonds as set forth in
Section 3(c) hereof, the Paying Agent/Registrar shall give notice of redemption of Bonds by United
States mail, first-class, postage prepaid, at least thirty (30) days prior to a redemption date to the
and each NRMSIR. In addition, in the event of a redemption caused by an advance refunding of the
Bonds, the Paying Agent/Registrar shall send a second notice of redemption to the persons specified
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in the immediately preceding sentence at least thirty (30) days but not more than ninety (90) days
prior to the actual redemption date. Any notice sent to the SID and a NRMSIR shall be sent so that
such notice is received at least two (2) days prior to the general mailing or publication date of such
notice. The Paying Agent/Registrar shall also send a notice of redemption to the registered owner
of any Bonds who has not sent the Bonds in for redemption sixty (60) days after the redemption date.
The failure to send, mail or receive any such notice described in this clause (i), or any defect therein
or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings
for the redemption of any Bond.
(ii) Each redemption notice, whether required in the FORM OF BOND or otherwise by
this Ordinance, shall contain a description of the Bonds to be redeemed including the complete name
of the Bonds, the Series, the date of issue, the interest rate, the maturity date, the CUSIP number, the
amounts called of each Bond, the publication and mailing date for the notice, the date of redemption,
the redemption price, the name of the Paying Agent/Registrar and the address at which the Bond may
be redeemed including a contact person and telephone number.
(iii) All redemption payments made by the Paying Agent/Registrar to the registered owners
of the Bonds shall include a CUSIP number relating to each amount paid to such registered owner.
Section 6. FORMS. That the form of all Bonds, including the form of the Authentication
Certificate, the form of Assignment, and the form of the Comptroller's Registration Certificate to
accompany the Bonds on the initial delivery thereof, shall be, respectively, substantially as
follows, with such appropriate variations, omissions, or insertions as are permitted or required by
this Ordinance:
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NO. R-
FORM OF BOND:
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF BRAZOS
CITY OF COLLEGE STATION, TEXAS
UTILITY SYSTEM
REVENUE BOND
SERIES 20O2
MATURITY INTEREST ORIGINAL
DATE RATE ISSUE DATE CUSIP
ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF COLLEGE STATION,
IN BRAZOS COUNTY, TEXAS (the "City"), hereby promises to pay to
~ or the registered assignee hereof(either being hereinafter called
the "registered owner") the principal amount of
and to pay interest thereon, from the original issue date of this Bond specified above, to the date of
its scheduled maturity or the date of its redemption prior to scheduled maturity, at the rate of interest
per annum specified above, with said interest being payable on August 1, 2002, and semiannually
on each February 1 and August 1 thereafter, except that if the Paying Agent/Registrar's
Authentication Certificate appearing on the face ofthis Bond is dated later than August 1, 2002, such
interest is payable semiannually on each February 1 and August 1 following such date.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the registered owner hereof upon presentation and sun'ender of this Bond at maturity, or
upon the date fixed for its redemption prior to maturity, at the designated corporate trust office in
Houston, Texas (the "Designated Trust Office"), of JPMorgan Chase Bank, which is the "Paying
Agent/Registrar" for this Bond. The payment of interest on this Bond shall be made by the Paying
Agent/Registrar to the registered owner hereof as shown by the "Registration Books" kept by the
Paying Agent/Registrar at the close of business on the Record Date (hereinafter defined) by check
drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required to be
on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check
shall be sent by the Paying Agent/Registrar by United States mail, first-class, postage prepaid, on
each such interest payment date, to the registered owner hereof at its address as it appears on the
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Registration Books kept by the Paying Agent/Registrar, as hereinafter described, or by such other
method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the
registered owner. The record date ("Record Date") for the interest payable on any interest payment
date means the 15th day of the preceding month. In the event of a non-payment of interest on a
scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a
"Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the
payment of such interest have been received from the City. Notice of the Special Record Date and
of the scheduled payment date of the past due interest (the "Special Payment Date", which shall be
15 days after the Special Record Date) shall 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 registered
owner of a Bond appearing on the books of the Paying Agent/Registrar at the close of business on
the last business day next preceding the date of mailing of such notice. The City covenants with the
registered owner of this Bond that no later than each principal payment date and interest payment
date for this Bond it will make available to the Paying Agent/Registrar the amounts required to
provide for the payment, in immediately available funds, of all principal of and interest on the Bonds,
when due, in the manner set forth in the ordinance authorizing the issuance of the bonds (the
"Ordinance").
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions are authorized by laxv or
executive order to close in the city where the Designated Trust Office of the Paying Agent/Registrar
is located, 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; and
payment on such date shall have the same force and effect as if made on the original date payment
was due. Notwithstanding the foregoing, during any period in which ownership of the bonds of this
Series is determined only by a book entry at a securities depository therefor, any payment to the
securities depository, or its nominee or registered assigns, shall be made in accordance with existing
arrangements between the City and the securities depository.
THIS BOND is one of a Series of bonds of like tenor and effect except as to denomination,
number, maturity, interest rate and right of prior redemption, dated as of the Original Issue Date
stated above, issued in the aggregate principal amount of $18,215,000 for the purpose of financing
water system, wastewater system and electric light and power system improvements and paying the
costs of issuance of the Bonds. All Bonds &this Series are issuable solely as fully registered bonds,
without interest coupons, in the denomination of any integral multiple of $5,000 (an "Authorized
Denomination").
THE BONDS of this Series scheduled to mature on and after February 1, 2013 may be
redeemed prior to their scheduled maturities, in whole, or in part in principal amounts of $5,000 or
any integral multiple thereof, at the option of the City, on February 1, 2012, or on any date thereafter,
at the redemption price of par plus accrued interest to the date fixed for redemption. If less than all
ofthe Bonds are to be redeemed by the City, the City shall determine the maturity or maturities and
the amounts therewith to be redeemed and shall direct the Paying Agent/Registrar to call by lot
Bonds, or portions thereof, within such maturity or maturities and in such principal amounts, for
redemption; provided, that during any period in which ownership &the Bonds is determined only
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by a book entry at a securities depository for the Bonds, if fewer than all of the Bonds of the same
maturity and bearing the same interest rate are to be redeemed, the particular Bonds of such maturity
and bearing such interest rate shall be selected in accordance with the arrangements between the City
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 by the Paying Agent/Registrar to the registered owner of each Bond or a
portion thereof being 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 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 of the required
redemption price for this Bond or the portion hereof which is to be so redeemed, plus accrued
interest thereon to the date fixed for redemption. If such notice of redemption is given, and if due
provision for such payment is made, all as provided above, this Bond, or the portion hereof which
is to be so redeemed, thereby automatically shall be redeemed prior to its scheduled maturity, and
shall not bear interest after 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 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 this Bond or any portion hereof. If a portion of any Bond shall be
redeemed a substitute Bond or Bonds having the same maturity date, beating interest at the same
rate, in any Authorized Denomination, at the written request of the registered owner, and in ag-
gregate principal amount equal to the unredeemed portion thereof, will be issued to the registered
owner upon the surrender thereof for cancellation, at the expense of the City, all as provided in the
Ordinance.
AS PROVIDED IN THE ORDINANCE, this Bond, or any unredeemed portion hereof, may,
at the request of the registered owner or the assignee or assignees hereof, be assigned, transferred,
and exchanged for a like aggregate principal amount of fully registered bonds, 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 Authorized Denomination
as requested in writing by the appropriate registered owner, assignee, or assignees, as the case may
be, upon surrender of this Bond to the Paying Agent/Registrar at its Designated Trust Office for
cancellation, all in accordance with the form and procedures set forth in the Ordinance. Among
other requirements for such assignment and transfer, this Bond must be presented and surrendered
to the Paying Agent/Registrar, together with proper instruments of assignment, in form and with
guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this
Bond or any portion or portions hereof in any Authorized Denomination to the assignee or assignees
in whose name or names this Bond or any such portion or portions hereof is or are to be transferred
and registered. The form of Assignment printed or endorsed on this Bond 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
assignment of this Bond or any portion or portions hereof from time to time by the registered owner.
The City shall pay the Paying Agent/Registrar's reasonable standard or customary fees and charges
for transferring, converting and exchanging any Bond or portion thereof; provided, however, that any
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taxes or governmental charges required to be paid with respect thereto shall be paid by the one
requesting such transfer, conversion and exchange. In any circumstance, neither the City nor the
Paying Agent/Registrar shall be required (1) to make any transfer or exchange during a period
beginning at the opening of business 15 days before the day of the first mailing of a notice of
redemption of bonds and ending at the close of business on the day of such mailing, or (2) to transfer
or exchange any Bonds so selected for redemption when such redemption is scheduled to occur
within 30 calendar days; provided, however, such limitation shall not be applicable to an exchange
by the registered owner of the uncalled principal balance of a Bond.
WHENEVER the beneficial ownership of this Bond is determined by a book entry at a
securities depository for the Bonds, the foregoing requirements of holding, delivering or transferring
this Bond shall be modified to require the appropriate person or entity to meet the requirements of
the securities depository as to registering or transferring the book entry to produce the same effect.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the City, resigns,
or otherwise ceases to act as such, the City has covenanted in the 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 Bonds.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions ofthe Ordinance, agrees to be bound by such terms and
provisions, acknowledges that the Ordinance is duly recorded and available for inspection in the
official minutes and records of the City, and agrees that the terms and provisions of this Bond and
the Ordinance constitute a contract between each registered owner hereof and the City.
THE CITY has reserved the right, subject to the restrictions stated, and adopted by reference,
in the Ordinance, to issue additional parity revenue bonds which also may be made payable from,
and secured by a first lien on and pledge of, the "Net Revenues" of the City's combined waterworks
system, sewer system, and electric light and power system (as defined and described in the Ordi-
nance) on a parity with the Previously Issued Parity Bonds (as defined in the Ordinance) and the
Bonds.
THE REGISTERED OWNER HEREOF shall never have the right to demand payment of
this obligation out of any funds raised or to be raised by taxation, or from any source whatsoever
other than the aforesaid Net Revenues.
IT IS HEREBY certified and covenanted that this Bond has been duly and validly authorized,
issued and delivered; that 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 Bond have been
performed, existed and been done in accordance with law; that this Bond is a special obligation;
and that the principal of and interest on this Bond together with outstanding parity revenue bonds
are payable from, and secured by a first lien on and pledge of, the Net Revenues.
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IN TESTIMONY WHEREOF, the City Council has caused the seal of the City to be duly
impressed or placed in facsimile hereon, and this Bond to be signed with the imprinted facsimile
signature of the Mayor and countersigned by the facsimile signature of the City Secretary.
XXXXXXXX XXXXXXXX
City Secretary,
City of College Station
Mayor,
City of College Station
(SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the proceedings
adopted by the City as described in the text of this Bond; and that this Bond has been issued in
exchange for or replacement of a bond, bonds, or a portion of a bond or bonds of an issue 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
Paying Agent/Registrar
By:
Authorized Representative
(FORM OF COMPTROLLER'S CERTIFICATE ATTACHED TO
THE BONDS UPON INITIAL DELIVERY THEREOF ONLY)
OFFICE OF COMPTROLLER :
STATE OF TEXAS :
REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
Witness my signature and seal this
XXXXXXXX
Comptroller of Public Accounts of
the State of Texas
-12-
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers
unto
Ple
ase insert Social Security or Taxpayer Identification Number of Transferee
/ /
(Please print or typewrite name and address, including zip code of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints
attorney to
register the transfer of the within Bond on the books kept for registration thereof, with full power
of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signatures must be guaranteed by
an eligible guarantor institution participating
in a Securities Transfer Association
recognized signature guarantee program.
NOTICE: The signature above must
correspond with the name of the registered
owner as it appears upon the front of this
Bond in every particular, without alteration or
enlargement or any change whatsoever.
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The printer of the Bonds is hereby authorized to print on the Bonds (i) the form of bond counsel's
opinion relating to the Bonds, and (ii) an appropriate statement of insurance fumished by a municipal
bond insurance company providing municipal bond insurance, if any, covering all or any part of the
Bonds.
Section 7. DEFINITIONS. That, as used in this Ordinance, the following terms shall have
the meanings set forth below, unless the text hereof specifically indicates otherwise:
"Additional Bonds" means the additional parity obligations which the City reserves the right
to issue in the future, as provided in Section 13 of this Ordinance.
"Bond" or "Bonds" means one or more~ as the case may be, of the Bonds authorized to be
issued by this Ordinance.
"Bond Fund" means the fund provided for in the ordinances authorizing the issuance of the
Previously Issued Parity Bonds.
"City" and "Issuer" mean the City of College Station, Texas, or where appropriate, the City
Council.
"City Council" means the governing body of the City.
"Code" means the Internal Revenue Code of 1986, as amended.
"Defeasance Securities" means (i) direct, noncallable obligations of the United States of
America, including obligations that are unconditionally guaranteed by the United States of America,
(ii) noncallable obligations of an agency or instrumentality of the United States of America,
including obligations that are unconditionally guaranteed or insured by the agency or instrumentality
and that, on the date of the purchase thereof are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent, and (iii) noncallable
obligations ora state or an agency or a county, municipality, or other political subdivision 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 financial arrangements are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent.
"Initial Purchasers" shall have the meaning as set forth in Section 24 hereof.
"MSRB" means the Municipal Securities Rulemaking Board.
"Net Revenues" means the gross revenues of the Systems less the reasonable expenses of
operation and maintenance of the Systems, including all salaries, labor, materials, repairs, and
extensions necessary to render efficient service; provided, however, that only such repairs and
extensions, as in the judgment of the City Council, reasonably and fairly exercised, are necessary to
keep the plant or utility in operation and render adequate service to the City and the inhabitants
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thereof, or such as might be necessary to meet some physical accident or condition which would
otherwise impair the Parity Bonds shall be deducted in determining the "Net Revenues".
"NRMSIR" means each person whom the SEC or its staff has determined to be a nationally
recognized municipal securities information repository within the meaning of the Rule from time to
time.
"Parity Bonds" means collectively the Previously Issued Parity Bonds, the Bonds, and any
Additional Bonds.
"Parity Bonds Ordinances" means collectively the ordinances authorizing the Parity Bonds.
"Previously Issued Parity Bonds" means the outstanding Series 1993 Bonds, Series 1994
Bonds, Series 1995 Bonds, Series 1996 Bonds, Series 1998 Bonds, Series 2000 Bonds and Series
2001 Bonds.
"Reserve Minimum" is defined in Section 13(e) hereof.
"Rule" means SEC Rule 15c2-12, as amended fi.om time to time.
"SEC" means the United States Securities and Exchange Commission.
"Series 1993 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 1994 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 1995 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 1996 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 1998 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 2000 Bonds" means the bonds described in the preamble to this Ordinance.
"Series 2001 Bonds" means the bonds described in the preamble to this Ordinance.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule fi.om time to time.
"Systems" means the City's entire existing waterworks system, sewer system, and electric
light and power system, including all present and future extensions, enlargements, additions,
replacements, and improvements thereto.
"Systems Fund" means that fund described in Section 10 hereof.
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"Year" or "fiscal year" means the regular fiscal year used by the City in connection with the
operation of the Systems, which may be any 12 consecutive months period established by the City
Council.
Section 8. PLEDGE. That the principal of the Parity Bonds, redemption premium, if any,
and any interest payable thereon, are and shall be secured by and payable from an irrevocable first
lien on and pledge of the Net Revenues, and the Net Revenues are further pledged irrevocably to the
establishment and maintenance of the funds created by the Parity Bonds Ordinances. The Parity
Bonds are not and will not be secured by or payable from a mortgage or deed of trust on any real,
personal, or mixed properties constituting the Systems. The owners of the Parity Bonds shall never
have the right to demand payment of such obligations out of any funds raised or to be raised by
taxation, or from any soume whatsoever other than the Net Revenues. This Ordinance shall not be
construed as requiring the City to expend any funds which are derived from sources other than the
operation of the Systems, but nothing herein shall be construed as preventing the City from doing
SO.
Section 9. RATES. That the City covenants and agrees with the holders of the Parity Bonds
that it will: (a) fix and maintain rates and collect charges for the facilities and services afforded by
the Systems which will provide revenues sufficient at all times: (1) to pay all operation, maintenance,
depreciation, replacement, and bettermeflt charges of the Systems; (2) to establish and maintain the
Bond Fund; (3) to generate in each year Net Revenues equal to 1.25 times the maximum annual
requirements for the payment of the principal of and interest on the Parity Bonds at the time
outstanding (although amounts shall be paid into the Bond Fund only in accordance with Section 10
hereof); and (4) to pay all indebtedness outstanding against the Systems, other than the Parity Bonds,
as and when the same become due; and (b) deposit as collected all revenues derived from the
operation of the Systems into the Systems Fund.
Section 10. FLOW OF FUNDS. That there has been created and established on the books
of the City, and accounted for separate and apart from all other funds ofthe City, a special Systems
Fund. All gross revenues received from operation of the Systems are and shall be deposited into and
credited to the Systems Fund immediately upon receipt. The necessary and reasonable expenses of
operation and maintenance of the Systems shall first be paid from the Systems Fund. The City shall
then make substantially equal monthly payments into the Bond Fund (commencing with respect to
the Bonds and any Additional Bonds on the date of delivery to the initial purchaser thereof) during
each year in which any of the Parity Bonds are outstanding in an aggregate amount equal to 100%
of the amounts required to meet the interest and principal payments (including any sinking fund
payments) falling due on or before the next maturity date of the Parity Bonds. The City shall, at least
five days prior to each February 1 and August 1, deposit into the Bond Fund any additional Net
Revenues available in the Systems Fund which may be necessary to pay in full the interest on and
principal (including any sinking fund payments), if any, coming due on the Parity Bonds such
February 1 or August 1. In no event shall any amount in excess of the amounts stated above be
placed in the Bond Fund for the payment ofthe interest on or principal ofthe Parity Bonds, and any
amount so placed may be withdrawn by the City and replaced in the Systems Fund. Any funds
remaining in the Systems Fund, after provision for the reasonable cost of operating and maintaining
-16-
the Systems, and after paying the amounts required to be paid into the Bond Fund, may be used for
any lawful purpose.
Section 11. INVESTMENTS. That money in any Fund established by the Parity Bonds
Ordinances may, at the option of the City, be placed or invested in any investments then permitted
by Texas law and permitted in the Parity Bonds Ordinances.
Section 12. FUNDS SECURED. That money in all Funds created by this Ordinance, to the
extent not invested, shall be secured in the manner prescribed by law for securing funds of the City.
Section 13. ADDITIONAL BONDS. That in addition to inferior lien obligations, the City
expressly reserves the right hereafter to issue additional parity bonds and other evidences of
indebtedness now or hereafter authorized by the Legislature of Texas (collectively, the "Additional
Bonds"), and the Additional Bonds, when issued, may be secured by and payable from a first lien
on and pledge of the Net Revenues in the same manner and to the same extent as the outstanding
Parity Bonds but subject to the remaining provisions hereof, and the Previously Issued Parity Bonds,
the Bonds, and the Additional Bonds may be in all respects of equal dignity. It is provided, however,
that no Additional Bonds shall be issued unless:
(a) As long as any of the Previously Issued Parity Bonds are outstanding and unpaid, all
material conditions set forth in the Parity Bonds Ordinances are satisfied;
(b) As long as any of the Previously Issued Parity Bonds are outstanding, the "net earnings"
(defined below) of the Systems for the fiscal year next preceding the month in which the ordinance
authorizing such Additional Bonds is adopted, were equal to each of the provisions following in
items (c)(i) and (ii) below, determined independently and certified by an independent firm of
certified public accountants, based upon an annual audit of the books of the Systems;
(c) An independent firm of certified public accountants, based upon an annual audit of the
books of the Systems, certified that the net earnings of the Systems for the previous fiscal year or for
any 12 consecutive month period ending not more than 90 days prior to the date of the adoption of
the ordinance authorizing such Additional Bonds or other evidence of indebtedness were equal to
each of the following determined independently:
(i) at least 1.40 times the average annual requirements for the payment of principal
and interest on the then outstanding Parity Bonds and other evidences of indebtedness
payable from the revenues of the Systems and on said Additional Bonds or other evidences
of indebtedness, when issued, sold, and delivered; and
(ii) at least 1.25 times the maximum annual requirement for the payment of the
principal of and interest on the Parity Bonds then outstanding and on such Additional Bonds,
when issued, sold, and delivered;
provided, however, should the certificate of the accountant certify that the net earnings of the
Systems for the period covered thereby were, in either case, less than required above, and a change
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in the rates and charges for the services afforded by the Systems became effective at least 60 days
prior to the scheduled date of adoption of the ordinance authorizing such Additional Bonds, then
such Additional Bonds may nevertheless be issued if an independent engineer or engineering firm
having a favorable reputation with respect to such matters certifies that, had such change in rates and
charges been effective for the entire period covered by the accountant's certificate would have met
the tests specified in (i) and (ii) above.
The term "net earnings" as used in this Section shall mean all of the Net Revenues, exclusive
of income received specifically for capital items, after deduction of the reasonable expenses of
operation and maintenance of the Systems excluding expenditures which under standard accounting
practice should be charged to capital expenditures or depreciation;
(d) Such Additional Bonds or other evidences of indebtedness are made to mature on
February 1 in each of the years in which they are scheduled to mature; and
(e) The entire issue of such Additional Bonds is insured in a manner similar to the Previously
Issued Parity Bonds by an insurance company or association of companies whose insured obligations
are rated by either Moody's Investors Service or Standard & Poor's Ratings Services in the same or
a higher rating category than the insured obligations of MBIA Insurance Corporation (at the time
such Additional Bonds are to be issued) or the City shall establish a reserve fund for such Additional
Bonds by any method or combination of methods that the City deems reasonable and appropriate
provided that (i) the amount of such reserve fund (or coverage of any surety bond in lieu thereof)
shall at least equal the maximum annual debt service requirements of such Additional Bonds, not
to exceed the maximum then permitted by applicable regulations, procedures, or published rulings
of the Internal Revenue Service (the "Reserve Minimum"); (ii) if any cash reserve fund is funded by
making transfers of Net Revenues in the Systems Fund, such transfers shall be made each month in
an amount reasonably sufficient to reach the Reserve Minimum within a period of not more than five
years after such Additional Bonds are sold and delivered; and (iii) such reserve fund shall be for the
equal benefit of the owner of (x) such Additional Bonds, (y) any Parity Bonds theretofore issued
which are nbt insured in manner similar to the Previously Issued Parity Bonds, and (z) any
Additional Bonds thereafter issued which are not so insured.
Section 14. GENERAL COVENANTS. That the City further covenants, warrants, and
agrees that in accordance with and to the extent required or permitted by law while the Parity Bonds
are outstanding and unpaid:
(a) PERFORMANCE. It will faithfully perform at all times any and all covenants,
undertakings, stipulations, and provisions contained in each Parity Bonds Ordinance, and in each and
every Parity Bond; it will promptly pay or cause to be paid the principal of and interest on every
Parity Bond, on the dates and in the places and manner prescribed in the Parity Bonds Ordinances;
and it will, at the times and in the manner prescribed, deposit, or cause to be deposited, the amounts
required to be deposited into the Bond and the Reserve Fund, if any; and any holder of the Parity
Bonds may require the City, its officials and employees, to carry out, respect, or enforce the
covenants and obligations of the Parity Bonds Ordinances by all legal and equitable means, including
-18-
specifically, but without limitation, the use and filing of mandamus proceedings in any court of
competent jurisdiction against the City, its officials and employees.
(b) CITY'S LEGAL AUTHORITY. It is a duly created and existing home rule city of the
State of Texas, and is duly authorized under the laws of the State of Texas to create and issue the
Parity Bonds; all action on its part for the creation and issuance of said obligations has been duly and
effectively taken; and said obligations in the hands of the holders and owners thereof are and will
be valid and enfomeable special obligations of the City in accordance with their terms.
(c) TITLE. It has or will obtain lawful title to the lands, buildings, structures, and facilities
constituting the Systems; it will defend the title to all the aforesaid lands, buildings, structures, and
facilities, and every part thereof, for the benefit of the holders and owners of the Parity Bonds against
the claims and demands of all persons whomsoever; it is lawfully qualified to pledge the Net
Revenues to the payment of the Parity Bonds in the manner prescribed herein; and it has lawfully
exercised such rights.
(d) LIENS. It will from time to time and before the same become delinquent pay and
discharge all taxes, assessments, and govemmental charges, if any, which shall be lawfully imposed
upon it or the Systems; it will pay all lawful claims for rents, royalties, labor, materials, and supplies
which if unpaid might by law become a lien or charge thereon, the lien of which would be prior to
or interfere with the liens hereof, so that the priority of the liens granted hereunder shall be fully
preserved in the manner provided herein; and it will not create or suffer to be created any mechanic's,
laborer's, materialman's, or other lien or charge which might or could be prior to the liens hereof, or
do or suffer any matter or thing whereby the liens hereof might or could be impaired; provided,
however, that no such tax, assessment, or charge, and that no such claims which might be used as
the basis of a mechanic's, laborer's, materialman's, or other lien or charge, shall be required to be paid
so long as the validity of the same shall be contested in good faith by the City.
(e) OPERATION OF SYSTEMS; NO FREE SERVICE. It shall continuously and efficiently
operate the Systems and maintain the Systems in good condition, repair, and working order, all at
reasonable cost. No free service of the Systems shall be allowed, and should the City or any of its
agencies or instrumentalities, lessees, or concessionaires make use of the services and facilities of
the Systems, payment monthly of the standard retail price of the services provided shall be made by
the City or any of its agencies or instrumentalities, lessees, or concessionaires out of funds from
sources other than the revenues of the Systems.
(f) FURTHER ENCUMBRANCE. It shall not additionally encumber the Net Revenues in
any manner, except as permitted in the Parity Bonds Ordinances in connection with Additional
Bonds, unless said encumbrance is made junior and subordinate in all respects to the liens, pledges,
covenants, and agreements of the Parity Bonds Ordinances; but the right of the City to issue
obligations payable from a subordinate lien on the surplus Net Revenues is specifically recognized
and retained.
(g) SALE OR DISPOSAL OF PROPERTY. It shall not sell, convey, mortgage, encumber,
lease, or in any manner transfer title to, or dedicate to other use, or otherwise dispose of the Systems,
or any significant or substantial part thereof; provided, however, that when the City deems it
-19-
necessary to dispose of any other property to other use, it may do so either when it has made
arrangements to replace the same or provide substitutes therefor, or it is determined by resolution
of the City Council that no such replacement or substitute is necessary.
(h) INSURANCE. It agrees to maintain insurance on the Systems, for the benefit of the
holders or owners of the Parity Bonds, of a kind and in an amount which usually would be carried
by private companies engaged in a similar type of business in the same area.
(i) RECORDS AND AUDITS. It shall keep proper books, records, and accounts, separate
from all other books, records, and accounts, in which complete and correct entries shall be made of
all transactions relating to the Systems. Upon written request made not more than 60 days following
the close of the fiscal year, the City shall furnish to any holder of any Parity Bonds complete
financial statements of the Systems in reasonable detail covering such fiscal year, certified by the
City's auditor. Any holders of 25% in principal amount of the Parity Bonds at the time outstanding
shall have the right at all reasonable times to inspect the Systems and all records, accounts, and data
of the City relating thereto.
O) GOVERNMENTAL AGENCIES. It has or will obtain and keep in full force and effect
all franchises, permits, authorization, and other requirements applicable to or necessary with respect
to the acquisition, construction, equipment, operation, and maintenance of the Systems, and it will
comply with all of the terms and conditions of any and all franchises, permits and authorizations
applicable to or necessary with respect to the Systems.
(k) NO COMPETITION. It will not operate, or grant any fi'anchise or, to the extent it legally
may, permit the acquisition, construction, or operation of, any facilities which would be in
competition with the Systems, and to the extent that it legally may, the City will prohibit any such
competing facilities.
Section 15. AMENDMENT OF ORDINANCE. (a) That the holders of the Parity Bonds
aggregating in principal amount 51% of the aggregate principal amount of then outstanding Parity
Bonds shall have the right from time to time to approve any amendment to this Ordinance which may
be deemed necessary or desirable by the City; provided, however, that without the consent of the
holders of all of the Parity Bonds at the time outstanding, nothing herein contained shall permit or
be construed to pemfit the amendment of the terms and conditions in this Ordinance or in the Parity
Bonds so as to:
(i) Make any change in the maturity of the outstanding Parity Bonds;
(ii) Reduce the rate of interest borne by any of the outstanding Parity Bonds;
(iii) Reduce the amount of the principal payable on the outstanding Parity Bonds;
(iv) Modi fy the terms of payment of principal of or interest on the outstanding Parity
Bonds or impose any conditions with respect to such payment;
(v) Affect the fights of the holders of less than all ofthe Parity Bonds; or
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(vi) Change the minimum percentage of the principal amount of Parity Bonds
necessary for consent to such amendment.
(b) If at any time the City shall desire to amend the Ordinance under this Section, the City
shall cause notice of the proposed amendment to be published in a financial newspaper or journal
published in The City of New York, New York, once during each calendar week for at least two
successive calendar weeks. Such notice shall briefly set forth the nature of the proposed amendment
and shall state that a copy thereof is on file at the principal office of the Paying Agent/Registrar for
inspection by all holders of Parity Bonds. Such publication is not required, however, if notice in
writing is given to each holder of the Parity Bonds.
(c) When at any time not less than 30 days, and within one year, from the date of the first
publication of said notice or other service of written notice, the City shall receive an instrument or
instruments, executed by the holders of at least 51% in aggregate principal amount of all Parity
Bonds, which instrument or instruments shall refer to the proposed amendment described in said
notice and which specifically consent to and approve such amendment in substantially the form of
the copy thereof on file with the Paying Agent/Registrar, the City Council may pass the amendatory
ordinance in substantially the same form.
(d) Upon the passage of any amendatory ordinance pursuant to the provisions of this Section,
this Ordinance shall be deemed to be amended in accordance with such amendatory ordinance, and
the respective rights, duties, and obligations under this Ordinance of the City and all the holders of
Parity Bonds shall thereafter be determined, exercised, and enforced hereunder, subject in all
respects to such amendments.
(e) Any consent given by the holder of a Parity Bond pursuant to the provisions of this
Section shall be irrevocable for a period of six months from the date of the first publication of the
notice provided for in this Section, and shall be conclusive and binding upon all future holders of
the same Parity Bond during such period. Such consent may be revoked at any time after six months
from the date of the first publication of such notice by the holder who gave such consent, or by a
successor in title, by filing notice thereof with the Paying Agent/Registrar and the City, but such
revocation shall not be effective if the holders of 51 °A in aggregate principal amount of the Parity
Bonds as in this Section defined have, prior to the attempted revocation, consented to and approve
the amendment.
(f) For the purpose of this Section the fact of the holding of Parity Bonds issued in registered
form without coupons and the amounts and numbers of such Parity Bonds and the date of their
holding same shall be proved by the Registration Books of the Paying Agent/Registrar. The City may
conclusively assume that such ownership continues until written notice to the contrary is served upon
the City.
(g) The foregoing provisions of this Section notwithstanding, the City by action of the City
Council may amend this Ordinance for any one or more of the following purposes:
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(i) To add to the covenants and agreements of the City in this Ordinance contained,
other covenants and agreements thereafter to be observed, grant additional fights or remedies
to bondholders, or to surrender, restrict, or limit any right or power herein reserved to or
conferred upon the City;
(ii) To make such provisions for the purpose of curing any ambiguity, or curing,
correcting, or supplementing any defective provision contained in this Ordinance, or in
regard to clarifying matters or questions arising under this Ordinance, as are necessary or
desirable and not contrary to or inconsistent with this Ordinance and which shall not
adversely affect the interests of the holders of the Parity Bonds;
(iii) To modify any of the provisions of this Ordinance in any other respect whatever,
provided that (A) such modification shall be, and be expressed to be, effective only after all
Parity Bonds outstanding at the date of the adoption of such modification shall cease to be
outstanding, and (B) such modification shall be specifically referred to in the text of all
Additional Bonds issued after the date of the adoption of such modification.
Section 16. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.
(a) That in the event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the
Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond of the same
principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed
Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Application for replacement of damaged, mutilated, lost, stolen, or destroyed Bonds shall
be made to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the
applicant for a replacement bond shall furnish to the City 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 Bond, the applicant
shall furnish to the City and to the Paying Agent/Registrar evidence to their satisfaction of the loss,
theft, or destruction of such Bond, as the case may be. In every case of damage or mutilation of a
Bond, the applicant shall surrender to the Paying Agent/Registrar for cancellation the Bond so
damaged or mutilated.
(c) Notwithstanding the foregoing provisions of this Section, in the event any such Bond
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 Bond, the City may authorize the
payment of the same (without surrender thereof expect in the case of a damaged or mutilated Bond)
instead of issuing a replacement Bond, provided security or indemnity is furnished as above provided
in this Section.
(d) Prior to the issuance of any replacement bond, the Paying Agent/Registrar shall charge
the owner of such Bond with all legal, printing, and other expenses in connection therewith. Every
replacement bond issued pursuant to the provisions of this Section by virtue of the fact that any Bond
is lost, stolen, or destroyed shall constitute a contractual obligation of the City whether or not the
lost, stolen or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be
-22-
entitled to all the benefits of this Ordinance equally and proportionately with any and all other Bonds
duly issued under this Ordinance.
(e) In accordance with Chapter 1206, Texas Government Code, this Section of this
Ordinance shall constitute authority for the issuance of any such replacement bond without necessity
of further action by the City Council or any other body or person, and the duty of the replacement
of such bonds is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying
Agent/Registrar shall authenticate and deliver such bonds in the form and manner and with the
effect, as provided in Section 5(d) of this Ordinance for Bonds issued in exchange for other Bonds.
Section 17. BOOK-ENTRY ONLY SYSTEM. That it is intended that the Bonds initially
be registered so as to participate in a securities depository system (the "DTC System") with The
Depository Trust Company, New York, New York, or any successor entity thereto ("DTC"), as set
forth herein. The definitive Bonds shall be issued in the form of a separate single definitive Bond
for each maturity. Upon issuance, the ownership of each such Bond shall be registered in the name
of Cede & Co., as the nominee of DTC, and all of the outstanding Bonds shall be registered in the
name of Cede & Co., as the nominee of DTC. The City and the Paying Agent/Registrar are
authorized to execute, deliver, and take the actions set forth in such letters to or agreements with
DTC as shall be necessary to effectuate the DTC System, including a "Letter of Representation" (the
"Representation Letter").
With respect to the Bonds registered in the name of Cede & Co., as nominee of DTC, the
City and the Paying Agent/Registrar shall have no responsibility or obligation to any broker-dealer,
bank, or other financial institution for which DTC holds the Bonds from time to time as securities
depository (a "Depository Participant") or to any person on behalf of whom such a Depository
Participant holds an interest in the Bonds (an "Indirect Participant"). Without limiting the
immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility
or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co., or any Depository
Participant with respect to any ownership interest in the Bonds, or (ii) the delivery to any Depository
Participant or any Indirect Participant or any other person, other than a registered owner ora Bond,
of any amount with respect to principal of, premium, if any, or interest on the Bonds. While in the
DTC System, no person other than Cede & Co., or any successor thereto, as nominee for DTC, shall
receive a Bond evidencing the obligation of the City to make payments of principal, premium, if any,
and interest pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of
written notice to the effect that DTC has determined to substitute a new nominee in place of Cede
& Co., and subject to the provisions in this Ordinance with respect to interest checks or drafts being
mailed to the holder, the word "Cede & Co." in this Ordinance shall refer to such new nominee of
DTC.
In the event that (a) the City determines that DTC is incapable of discharging its
responsibilities described herein and in the Representation Letter, (b) the Representation Letter shall
be terminated for any reason, or (c) DTC or the City determines that it is in the best interest of the
beneficial owners of the Bonds that they be able to obtain certificated Bonds, the City shall notify
the Paying Agent/Registrar, DTC, and Depository Participants of the availability within a reasonable
period of time through DTC of certificated certificates, and the Bonds shall no longer be restricted
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to being registered in the name of Cede & Co., as nominee of DTC. At that time, the City may
determine that the Bonds shall be registered in the name of and deposited with a successor depository
operating a securities depository system, as may be acceptable to the City, or such depository's agent
or designee, and if the City and the Paying Agent/Registrar do not select such alternate securities
depository system then the Bonds may be registered in whatever names the registered owners of
Bonds transferring or exchanging the Bonds shall designate, in accordance with the provisions
hereof.
Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bond
is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal
of, premium, if any, and interest on such Bond and all notices with respect to such Bond shall be
made and given, respectively, in the manner provided in the Representation Letter.
Section 18. DEFEASANCE OF THE BONDS. (a) Defeased Bonds. That any Bond and
the interest thereon shall be deemed to be paid, retired and no longer Outstanding (a "Defeased
Bond"), except to the extent provided in subsection (d) of this Section, when payment of the
principal of such Bond, 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 irrevocably
depositing with or making available to the Paying Agent/Registrar in accordance with an escrow
agreement or other similar instrument (the "Future Escrow Agreement") for such payment (1) lawful
money of the United States of America sufficient to make such payment or (2) Defeasance Securities
that 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 City with the Paying Agent/Registrar for the payment of its
services until all Defeased Bonds shall have become due and payable. At such time as a Bond shall
be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon shall
no longer be secured by, payable from, or entitled to the benefits of, the Net Revenues, and such
principal and interest shall be payable solely from such money or Defeasance Securities.
(b) Investment in Defeasance Securities. Any moneys so deposited with the Paying
Agent/Registrar may at the written direction of the City be invested in Defeasance Securities,
maturing in the amounts and times as hereinbefore set forth, and all income from such Defeasance
Securities received by the Paying Agent/Registrar that is not required for the payment of the Bonds
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 Securities are held for the payment of Defeased Bonds 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 subsections (a)(i) or (ii) of this Section. All income from such Defeasance Securities
received by the Paying Agent/Registrar which is not required for the payment of the Defeased Bonds,
with respect to which such money has been so deposited, shall be remitted to the City or deposited
as directed in writing by the City.
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(c) Paying Agent/Registrar Services. Until all Defeased Bonds shall have become due
and payable, the Paying Agent/Registrar shall perform the services of Paying AgentfRegistrar for
such Defeased Bonds the same as if they had not been defeased, and the City shall make proper
arrangements to provide and pay for such services as required by this Ordinance.
(d) Selection of Bonds for Defeasance. In the event that the City elects to defease less
than all of the principal amount of Bonds of a maturity, the Paying Agent/Registrar shall select, or
cause to be selected, such amount of Bonds by such random method as it deems fair and appropriate.
Section 19. TAX COVENANTS. That the Issuer covenants to refrain from any action
which would adversely affect, or to take any action to assure, the treatment of the Bonds as
obligations described in section 103 of the 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
covenants as follows:
(a) to take any action to assure that no more than 10 pement of the proceeds of
the Bonds or the projects financed therewith (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 percent 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 percent of the debt service on the Bonds, in contravention of
section 141 (b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use"
described in subsection (a) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited into 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 141 (b)(3) of the Code, to the govemmental
use;
(c) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve
fund, if any), is directly or indirectly used to finance loans to persons, other than state or local
governmental units, in contravention of section 141 (c) of the Code;
(d) to refrain from taking any action which would otherwise result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(a) of the Code;
(e) to refrain from taking any action that would result in the Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Bonds, 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 produces a
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materially higher yield over the term of the Bonds, other than investment property acquired
with --
(1) proceeds of the Bonds invested for a reasonable temporary period of
three years or less or, in the case of refunding bonds, of 30 days or less until such
proceeds are needed for the purpose for which the bonds are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning
of section 1.148-1 (b) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated
as proceeds of the Bonds, as may be necessary, so that the Bonds 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); and
(h) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90
percent of the "Excess Earnings", 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 Bonds have been paid
in full, 100 percent of the amount then required to be paid as a result of Excess Earnings
under section 148(f) of the Code.
The Issuer understands that the term "proceeds" included "disposition proceeds" as defined in the
Treasury Regulations and, in the case of a refunding bond, transferred proceeds (if any) and proceeds
of the refunded bonds expended prior to the date of the issuance of the Bonds. 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 the 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 Bonds, the Issuer will not be required to
comply with any covenant contained herein to the extent that such failure to comply, in the opinion
of nationally-recognized bond counsel, will not adversely affect the exemption from federal income
taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or
rulings are hereafter promulgated which impose additional requirements which are applicable to the
Bonds, 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 Bonds under section 103 of the Code. In furtherance of the foregoing, the
Mayor, the City Manager, the Director of Finance and any Assistant City Manager may execute any
certificates or other reports required by the Code and to make such elections, on behalfofthe City,
which may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds.
In order to facilitate compliance with the above clause (h), a "Rebate Fund" is hereby established
by the City for the sole benefit of the United States of America, and such Rebate Fund shall not be
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subject to the claim of any other person, including without limitation the registered owners of the
Bonds. The Rebate Fund is established for the additional purpose of compliance with section 148
of the Code.
Section 20. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR
THE PROJECT. That the City covenants to account for on its books and records the expenditure
of proceeds from the sale of the Bonds and any investment earnings thereon to be used for the
purposes described in Section 1 of this Ordinance (such purposes referred to herein and Section 21
hereof as a "Project") in accordance with the requirements of the Code. The City recognizes that
in order for the proceeds to be considered used for the reimbursement of costs, the proceeds must
be allocated to expenditures within 18 months of the later of the date that (a) the expenditure on a
Project is made or (b) each such Project is completed; but in no event later than three years after the
date on which the original expenditure is paid. The foregoing notwithstanding, the City recognizes
that in order for proceeds to be expended under the Code, the sale proceeds or investment earnings
must be expended no more than 60 days after the earlier of (a) the fifth anniversary of the date of
delivery of the Bonds or (b) the date the Bonds are retired. The City agrees to obtain the advice of
a nationally-recognized bond counsel if such expenditure fails to comply with the foregoing to assure
that such expenditure will not adversely affect the tax-exempt status of the Bonds. For purposes of
this Section, the City shall not be obligated to comply with this covenant if it obtains an opinion of
a nationally-recognized bond counsel to the effect that such failure to comply will not adversely
affect the excludability for federal income tax purposes from gross income of the interest.
Section 21. DISPOSITION OF PROJECT. That the City covenants that the property
constituting the Project will not be sold or otherwise disposed in a transaction resulting in the receipt
by the City of cash or other compensation, unless the City obtains an opinion of a nationally-
recognized bond counsel substantially to the effect that such sale or other disposition will not
adversely affect the tax-exempt status of the Bonds. For purposes of this Section, the portion of the
property comprising personal property and disposed of in the ordinary course of business shall not
be treated as a transaction resulting in the receipt of cash or other compensation. For purposes of
this Section, the City shall not be obligated to comply with this covenant if it obtains an opinion of
a nationally-recognized bond counsel to the effect that such failure to comply will not adversely
affect the excludability for federal income tax purposes from gross income of the interest.
Section 22. CONTINUING DISCLOSURE UNDERTAKING. (a) Annual Reports.
(i) That the City shall provide annually to each NRMSIR and any SID, within six months after the
end of each Year ending in or after 2002, financial information and operating data with respect to
the City of the general type included in the final Official Statement authorized by Section 23 of this
Ordinance, being the information described in 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 principles as the City may be required to employ from time to time
pursuant to state law or regulation, and (2)audited, if the City commissions an audit of such
statements and the audit is completed within the period during which they must be provided. If the
audit of such financial statements is not complete within such period, then the City shall provide
unaudited financial statements by the required time and will provide audited financial statements for
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the applicable Year to each NRMSIR and any SIX), when and if the audit report on such statements
become available.
(ii) If the City changes its Year, it will notify each NRMSIR and any SID of the change (and
of the date of the new Year end) prior to the next date by which the City otherwise would be required
to provide financial information and operating data pursuant to this Section. The financial
information and operating data to be provided pursuant to this Section may be set forth in full in one
or more documents or may be included by specific reference to any document (including an official
statement or other offering document, if it is available from the MSRB) that theretofore has been
provided to each NRMSIR and any SID or filed with the SEC.
(b) Material Event Notices. The City shall notify any SID and either each NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event
is material within the meaning of the federal securities laws:
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Principal and interest payment delinquencies;
Non-payment related defaults;
Unscheduled draws on debt service reserves reflecting financial difficulties;
Unscheduled draws on credit enhancements reflecting financial difficulties;
Substitution of credit or liquidity providers, or their failure to perform;
Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
Modifications to rights of holders of the Bonds;
Bond calls;
Defeasances;
Release, substitution, or sale of property securing repayment of the Bonds;
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
(a) of this Section by the time required by such subsection.
(c) Limitations, Disclaimers, and Amendments. (i) The City shall be obligated to observe
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 Bonds within the meaning of the Rule, except that
the City in any event will give notice of any deposit made in accordance with this Ordinance or
applicable law that causes Bonds no longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the holders and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any
legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to
provide only the financial information, operating data, financial statements, and notices which it has
expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any
other information that may be relevant or material 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
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make any representation or warranty concerning such information or its usefulness to a decision to
invest in or sell Bonds at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE
CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS 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 shall
comprise a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
(v) The provisions of this Section may be amended by the City from time to time to adapt
to changed circumstances that arise from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions
of this Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in
the primary offering of the Bonds 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 holders of a majority in aggregate principal amount (or any greater amount required by
any other provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds
consent to such amendment or (b) a person that is unaffiliated with the City (such as nationally
recognized bond counsel) determines that such amendment will not materially impair the interest of
the holders and beneficial owners of the Bonds. If the 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 (a) of this Section an explanation, in narrative form, of the reason for
the amendment and of the impact of any change in the type of financial information or operating data
so provided. The City may also amend or repeal the provisions of this continuing disclosure
agreement if the SEC amends or repeals the applicable provision of the Rule or a court of final
jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent
that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or
selling Bonds in the primary offering of the Bonds.
Section 23. NOTICE OF SALE AND BIDDING INSTRUCTIONS, THE OFFICIAL
BID FORM AND OFFICIAL STATEMENT. That the Notice of Sale and Bidding Instructions
and the Official Bid Form, together with any addenda thereto, prepared and circulated with respect
to the sale of the Bonds, are hereby approved. The use of the "Preliminary Official Statement" dated
, 2002, prepared in connection with the sale of the Bonds, is hereby ratified and
approved. The Director of Fiscal Services is hereby authorized to cause a final "Official Statement"
to be prepared in connection with the sale of the Bonds.
-29-
Section 24. SALE OF BONDS. That the sale of the Bonds to , as syndicate
manager (the "Initial Purchasers"), at a price of par and accrued interest to the date of delivery, plus
a premium ors is hereby authorized, ratified and confirmed. One Bond in the principal
amount maturing on each maturity date as set forth in Section 2 hereof shall be delivered to the
Initial Purchasers, and the Initial Purchasers shall have the fight to exchange such Bonds as provided
in Section 5 hereof without cost. It is hereby officially found, determined and declared that the
Bonds were sold to the highest bidder at terms that were the most advantageous reasonably obtained.
The Initial Purchasers included in their bid that the Bonds are to be insured by (the
"Insurer"), with the cost of the municipal bond insurance policy to be paid by the Initial Purchasers.
A legend provided by the Insurer for inclusion on the Bonds is hereby authorized to be printed on
the Bonds. The City hereby finds that the municipal bond insurance policy to be issued by the
Insurer satisfies the requirement set forth in Section 13(e) hereof.
Section 25. APPROVAL AND REGISTRATION OF BONDS. That the Director of
Finance is hereby authorized to have control of the Bonds and all necessary records and proceedings
pertaining to the Bonds 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 Bonds, the Comptroller of Public Accounts
(or a deputy designated in writing to act therefor) shall manually sign the Comptroller's Registration
Certificate. The Bonds thus registered shall remain in the custody of the City Manager (or the
designee thereoO until delivered to the Initial Purchasers.
Section 26. FURTHER PROCEDURES. That the Mayor, the City Secretary, the City
Manager, the Director of Finance, 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 directed from time to time and at any time to do and perform all such acts and things and to
execute, acknowledge, and deliver in the name and under the corporate seal and on behalf of the City
all such instruments, whether or not herein mentioned, as may be necessary or desirable in order to
carry out the terms and provisions of this Ordinance, and the sale and delivery of the Bonds and
fixing all details in connection therewith.
Section 27. USE OF PROCEEDS. That the proceeds from the sale of the Bonds shall be
as follows: (i) accrued interest on the Bonds shall be deposited to the credit of the Bond Fund and
(ii) the balance of the proceeds shall be deposited to a construction fund (the "Construction Fund")
held at the City's depository bank and used for the purposes described in Section 1 hereof. Any
amounts remaining in the Construction Fund after completion of the improvements described in
Section 1 hereof shall be transferred FIRST to the Rebate Fund, to the extent required by Section 19
hereof, and THEREAFTER to the Bond Fund.
Section 28. PREAMBLE. That the preamble to this Ordinance is incorporated by reference
and made a part hereof for all purposes.
Section 29. MISCELLANEOUS PROVISIONS. (a) Titles Not Restrictive. That the
titles assigned to the various sections of this Ordinance are for convenience only and shall not be
considered restrictive of the subject matter of any section or of any part of this Ordinance.
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(b) Rules of Construction. 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 requires, terms defined 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 regulatory provision means such provision as it exists on the date this Ordinance is
adopted by the City and any future amendments thereto or successor provisions thereof. 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 herein.
(c) Inconsistent Provisions. All orders and resolutions, or parts thereof, which are in conflict
or inconsistent with any provision of this Ordinance are hereby repealed and declared to be
inapplicable, and the provisions of this Ordinance shall be and remain controlling as to the matters
prescribed herein.
(d) Severability. If any word, phrase, clause, paragraph, sentence, part, portion, or provision
of this Ordinance or the application thereof to any person or circumstance shall be held to be invalid,
the remainder of this Ordinance shall nevertheless be valid and the City hereby declares that this
Ordinance would have been enacted without such invalid word, phrase, clause, paragraph, sentence,
part, portion, or provisions.
(e) Governing Law. This Ordinance shall be construed and enforced in accordance with the
laws of the State of Texas.
(f) Open Meeting. The City officially finds and determines that the meeting at which this
Ordinance is adopted was open to the public; and that public notice of the time, place, and purpose
of such meeting was given, all as required by Chapter 551, Texas Government Code.
(g) Immediate Effect. In accordance with the provisions of Section 1201.028, Texas
Government Code, this Ordinance shall be effective immediately upon its adoption by the City
Council.
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~ir-OT-2062 14:46 Fro.-Ig;~LL PARKHUST +2147S402S0 T-MT P.003/004 F-831
PA.~$F.~ AND APPROVED this M~h 14, 2002.
City S~crets.,'y, City of'College Station,
Mayor, ~ity of College .qvafion,~exas
(crrY SEAL)
APPROV]~:
Counsel
-32-
Exhibit A
to
Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 22 of this Ordinance.
Annual Financial 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 Official Statement referred to):
1. The "Audit 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 1 through 9 and Appendix 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 paragraph 1 described above, as such principles
may be changed from time to time to comply with state law or regulation.