HomeMy WebLinkAbout2002-2553 - Ordinance - 03/14/2002ORDINANCE NO. 2553
PROVIDING FOR THE ISSUANCE OF $14,480,000 CITY OF COLLEGE
STATION, TEXAS CERTIFICATES OF OBLIGATION, SERIES 2002; AND
ORDAINING OTHER MATTERS RELATING TO THE SUBJECT,
INCLUDING IMMEDIATE EFFECTIVENESS
WHEREAS, on the 24th day of January, 2002, the City Council of the City of College
Station (the "City" or the "Issuer") passed a resolution authorizing and directing notice of its
intention to issue the Certificates of Obligation herein authorized to be issued, to be published in
a newspaper as required by Section 271.049 of the Texas Local Government Code; and
WHEREAS, said notice was published in the Bm. an-College Station Eagle, a "newspaper"
of the type described in Section 2051.044, Texas Government Code, as required by said Section
271.049 of the Texas Local Government Code, on ,2002 and ,2002; and
WHEREAS, no petition, signed by at least 5 % of the qualified electors of said City as
permitted by said Section 271.049 of the Texas Local Government Code protesting the issuance
of such Certificates of Obligation, has been filed; and
WHEREAS, the Certificates of Obligation hereinafter authorized are to be issued and
delivered pursuant to Subchapter C of Chapter 271 of the Texas Local Government Code;
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
COLLEGE STATION, TEXAS:
Section 1. AUTHORIZATION OF CERTIFICATES OF OBLIGATION. That said City's
Certificates of Obligation, to be designated the "City of College Station, Texas Certificates of
Obligation, Series 2002", are hereby authorized to be issued and delivered in the principal amount
of $14,480,000 for the purpose of paying contractual obligations to be incurred by the City, to-
wit,
1)
acquisition of vehicles, computer equipment and other equipment for use by City
police, fire and administrative departments;
2)
street improvements to Greens Prairie Road, University Drive, the Dartmouth Road
extension and the Barron Road overpass;
3) the construction of a Municipal Courts Building at 300 Krenek Tap Road;
4)
the construction of sidewalks, pedestrian bridges and hiking trails along Wolf Pen
Creek between Texas Avenue and the Highway 6 Bypass;
5) the reconstruction of Fire Station #1; and
6) the payment of fiscal, engineering and legal fees incurred in connection therewith.
Section 2. DATE, DENOMINATIONS, NUMBERS AND MATURITIES. That said
Certificates of Obligation shall initially be issued, sold and delivered hereunder as fully registered
certificates, without interest coupons, dated February 15, 2002, in the respective denominations
and principal amounts hereinafter stated, numbered consecutively from R-1 upward, payable to
the respective initial registered owners thereof, or to the registered assignee or assignees of said
certificates or any portion or portions thereof (in each case, the "Registered Owner"), and said
Certificates of Obligation shall mature and be payable on February 15 in each of the years and in
the principal amounts as follows:
PRINCIPAL PRINCIPAL
YEAR AMOUNT ($) YEAR AMOUNT ($)
2003 420,000 2013 ~rlO,O00
2004 445,000 2014 ~50,000
2005 465,000 2015 ~'00,OOO
2006 490,000 20! 6 830,000
2oo~r 520,000 2017 S~"5,OOO
2005 545,000 2018
2009 575,000 2019 925,000
605,000 2020 975,000
2010 640,000 2021 1,025,000
2011 675,000 2022 1,O$O,OOO
2012 1,140,000
The term "Certificates" as used in this Ordinance shall mean and include collectively the Certifi-
cates of Obligation initially issued and delivered pursuant to this Ordinance and all substitute
Certificates of Obligation exchanged therefor, as well as all other substitute Certificates of
Obligation and replacement Certificates of Obligation issued pursuant hereto, and the term
"Certificate" shall mean any of the Certificates.
Section 3. REDEMPTION. (a) That the City reserves the right to redeem the Certificates
of Obligation maturing on or after February 15, 2013, in whole or in part in principal amounts of
$5,000 or any integral multiple thereof, on February 15, 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 Certificates of Obligation 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 Certificates of Obligation, or portions thereof, within such maturity or maturities and
in such principal amounts, for redemption. The City shall notify the Paying Agent/Registrar at
least forty-five (45) days prior to the scheduled redemption date that a redemption of the
Certificates of Obligation is to be effected.
(b) The Certificates are not subject to mandatory sinking fund redemption prior to maturity.
(c) At least thirty (30) days prior to the date any such Certificates of Obligation are to be
redeemed, a written notice of redemption shall be given by the Paying Agent/Registrar to the
registered owner of each Certificate of Obligation or a portion thereof being called for redemption
by depositing such notice in the United States mail, first-class, postage prepaid, addressed to each
such registered owner at the address thereof as shown on the registration books of the Paying
Agent/Registrar. By the date fixed for any such redemption due provision shall be made by the
City with the Paying Agent/Registrar for the payment of the required redemption price for the
Certificates of Obligation 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 Certificates of Obligation, 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 Certificates of Obligation
or any portion thereof. If a portion of any Certificate of Obligation shall be redeemed, a substitute
Certificate of Obligation or Certificates of Obligation having the same maturity date, bearing
interest at the same rate, in any Authorized Denomination, at the written request of the registered
owner, and in an aggregate principal amount equal to the unredeemed portion thereof, will 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 Certificates of Obligation.
Section 4. INTEREST. The Certificates scheduled to mature during the years,
respectively, set forth below shall bear interest at the following rates per annum:
maturities 2003
maturities 2004
maturities 2005
maturities 2006
maturities 2007
maturities 2008
maturities 2009
maturities 2010
maturities 2011
maturities 2012,
maturities 2013, %
maturities 2014, %
maturities 2015, %
maturities 2016, %
maturities 2017, %
maturities 2018, %
maturities 2019, __ %
maturities 2020, %
maturities 2021, %
maturities 2022, %
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Said interest shall be payable to the registered owner of any such Certificate in the manner
provided and on the dates stated in the FORM OF CERTIFICATE set forth in this Ordinance.
Section 5. CHARACTERISTICS OF THE CERTIFICATES. (a) The Issuer shall keep
or cause to be kept at the corporate trust office in Houston, Texas (the "Designated Trust Office")
of JPMorgan Chase Bank, or such other bank, trust company, financial institution, or other agency
named in accordance with the provisions of (g) below (the "Paying Agent/Registrar"), books or
records for the registration and transfer of the Certificates (the "Registration Books"), and the
Issuer hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such
books or records and make such transfers and registrations under such reasonable regulations as
the Issuer and Paying Agent/Registrar may prescribe; 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 the registered owner of each Certificate to which payments with respect to the
Certificates shall be mailed, as herein provided. The Issuer or its designee shall have the right to
inspect the Registration Books during regular business hours of the Paying Agent/Registrar at its
Designated Trust Office, but otherwise the Paying Agent/Registrar shall keep the Registration
Books confidential and, unless otherwise required by law, shall not permit their inspection by any
other entity. Registration of each Certificate may be transferred in the Registration Books only
upon presentation and surrender thereof to the Paying Agent/Registrar at its Designated Trust
Office for transfer of registration and cancellation, together with proper written instruments of
assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar,
evidencing the assignment of such Certificate, or any portion thereof in any integral multiple of
$5,000, to the assignee or assignees thereof, and the right of such assignee or assignees to have
such Certificate or any such portion thereof registered in the name of such assignee or assignees.
Upon the assignment and transfer of any Certificate or any portion thereof, a new substitute
certificate or certificates shall be issued in exchange therefor in the manner herein provided.
(b) The entity in whose name any Certificate 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 or not such certificate shall be overdue, and the City and the Paying Agent/Registrar shall
not be affected by any notice to the contrary; and payment of, or on account of, the principal of,
premium, if any, and interest on any such certificate shall be made only to such registered owner.
All such payments shall be valid and effectual to satisfy and discharge the liability upon such
certificate to the extent of the 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 and interest on the Certificates, and to act as its agent to exchange or
replace Certificates, 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 Certificates, and of all exchanges thereof, and all replacements thereof, as provided in this
Ordinance.
(d) Each Certificate may be exchanged for fully registered certificates in the manner set
forth herein. Each Certificate issued and delivered pursuant to this Ordinance may, upon
surrender thereof at the Designated Trust Office of the Paying Agent/Registrar, together with a
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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 satis-
factory to the Paying Agent/Registrar, at the option of the registered owner or such assignee or
assignees, as appropriate, be exchanged for fully registered certificates, without interest coupons,
in the form prescribed in the FORM OF CERTIFICATE set forth in this Ordinance, in the
denomination of $5,000, or any integral multiple thereof (subject to the requirement hereinafter
stated that each substitute certificate 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 principal amount of any Certificate or Certificates so surrendered, and payable to the
appropriate registered owner, assignee, or assignees, as the case may be. If any Certificate or
portion thereof is assigned and transferred, each certificate issued in exchange therefor shall have
the same principal maturity date and bear interest at the same rate as the certificate for which it
is being exchanged. Each substitute certificate shall bear a letter and/or number to distinguish it
from each other certificate. The Paying Agent/Registrar shall exchange or replace Certificates as
provided herein, and each fully registered certificate or certificates delivered in exchange for or
replacement of any Certificate or portion thereof as permitted or required by any provision of this
Ordinance shall constitute one of the Certificates for all purposes of this Ordinance, and may again
be exchanged or replaced. It is specifically provided, however, that any Certificate delivered in
exchange for or replacement of another Certificate prior to the first scheduled interest payment
date on the Certificates (as stated on the face thereof) shall be dated the same date as such
Certificate, but each substitute certificate so delivered on or after such first scheduled interest
payment date shall be dated as of the interest payment date preceding the date on which such
substitute certificate is delivered, unless such substitute certificate is delivered on an interest
payment date, in which case it shall be dated as of such date of delivery; provided, however, that
if at the time of delivery of any substitute certificate the interest on the certificate for which it is
being exchanged has not been paid, then such substitute certificate shall be dated as of the date to
which such interest has been paid in full. On each substitute certificate issued in exchange for or
replacement of any Certificate or Certificates issued under this Ordinance there shall be printed
thereon a Paying Agent/Registrar's Authentication Certificate, in the form hereinafter set forth in
the FORM OF CERTIFICATE set forth in this Ordinance. An authorized representative of the
Paying Agent/Registrar shall, before the delivery of any such substitute certificate, date such
substitute certificate in the manner set forth above, and manually sign and date such Authentication
Certificate, and no such substitute certificate shall be deemed to be issued or outstanding unless
such Authentication Certificate is so executed. The Paying Agent/Registrar promptly shall cancel
all Certificates surrendered for 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 Certificates or portion thereof, and the
Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute
certificates in the manner prescribed herein. Pursuant to Chapter 1206, Texas Government Code,
the duty of exchange or replacement of any Certificates as aforesaid is hereby imposed upon the
Paying Agent/Registrar, and, upon the execution of said Paying Agent/Registrar's Authentication
Certificate, the exchanged or replaced certificate shall be valid, incontestable, and enforceable in
the same manner and with the same effect as the Certificates which originally were delivered
pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller
of Public Accounts.
(e) All Certificates issued in exchange or replacement of any other Certificate or portion
thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal
of and interest on such Certificates to be payable only to the registered owners thereof, (ii) may
be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may
be exchanged for other Certificates, (v) shall have the characteristics, (vi) shall be signed and
sealed, and (vii) the principal of and interest on the Certificates shall be payable, all as provided,
and in the manner required or indicated, in the FORM OF CERTIFICATE set forth in this
Ordinance.
(f) The City shall pay the Paying Agent/Registrar's reasonable and customary fees and
charges for making transfers of Certificates, but the registered owner of any Certificates requesting
such transfer shall pay any taxes or other governmental charges required to be paid with respect
thereto. The registered owner of any Certificates requesting any exchange shall pay the Paying
Agent/Registrar's reasonable and standard or customary fees and charges for exchanging any such
certificate or portion thereof, together with any taxes or governmental charges required to be paid
with respect thereto, all as a condition precedent to the exercise of such privilege of exchange,
except, however, that in the case of the exchange of an assigned and transferred certificate or
certificates or any portion or portions thereof in any integral multiple of $5,000, as provided in
this Ordinance, such fees and charges will be paid by the City. In addition, the City hereby
covenants with the registered owners of the Certificates that it will (i) pay the reasonable and
standard or customary fees and charges of the Paying Agent/Registrar for its services with respect
to the payment of the principal of and interest on Certificates, when due, and (ii) pay the fees and
charges of the Paying Agent/Registrar for services with respect to the transfer or registration of
Certificates solely to the extent above provided, and with respect to the exchange of Certificates
solely to the extent above provided.
(g) The City covenants with the registered owners of the Certificates that at all times while
the Certificates are outstanding the City will provide a competent and legally qualified bank, trust
company, financial institution, or other agency to act as and perform the services of Paying
Agent/Registrar for the Certificates under this Ordinance, and that the Paying Agent/Registrar will
be one entity. The City reserves the right to, and may, at its option, change the Paying
Agent/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 super-
vision 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 Certificates, 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
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registered owner of the Certificates, by United States Mail, 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 Certificates of
Obligation as set forth in Section 3 hereof, the Paying Agent/Registrar shall give notice of
redemption of Certificates of Obligation by United States mail, first-class, postage prepaid, at least
thirty (30) days prior to a redemption date to the SID and each NRMSIR. In addition, in the event
of a redemption caused by an advance refunding of the Certificates of Obligation, the Paying
Agent/Registrar shall send a second notice of redemption to the persons specified 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 Certificates of Obligation who has not sent the Certificates of Obligation 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 Certificate of
Obligation.
(ii) Each redemption notice, whether required in the FORM OF CERTIFICATE or
otherwise by this Ordinance, shall contain a description of the Certificates of Obligation to be
redeemed including the complete name of the Certificates of Obligation, the Series, the date of
issue, the interest rate, the maturity date, the CUSIP number, the amounts called of each
Certificate of Obligation, 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
Certificate of Obligation 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 Certificates of Obligation shall include a CUSIP number relating to each amount
paid to such registered owner.
Section 6. FORM OF CERTIFICATES. The form of the Certificates, including the form
of Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of
Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached
to the Certificates initially issued and delivered pursuant to this Ordinance, shall be, respectively,
substantially as follows, with such appropriate variations, omissions, or insertions as are permitted
or required by this Ordinance:
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FORM OF CERTIFICATE
NO.
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF BRAZOS
CITY OF COLLEGE STATION, TEXAS
CERTIFICATES OF OBLIGATION
SERIES 2002
MATURITY DATE INTEREST RATE ORIGINAL ISSUE DATE
%
CUSIP
ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF COLLEGE
STATION, TEXAS, in Brazos County (the "City" or the "Issuer"), being a political subdivision
of the State of Texas, hereby promises to pay to
, or to the registered assignee hereof (either
being hereinafter called the "registered owner") the principal amount of
DOLLARS
and to pay interest thereon, from the Original Issue Date specified above, to the Maturity Date
specified above, or the date of its redemption prior to scheduled maturity, at the interest rate per
annum specified above, with said interest payable on August 15, 2002, and semiannually on each
February 15 and August 15 thereafter; except that if this Certificate is required to be authenticated
and the date of its authentication is later than August 15, 2002, such interest is payable
semiannually on each February 15 and August 15 following such date.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money
of the United States of America, without exchange or collection charges. At maturity or
redemption prior to maturity, the principal of this Certificate shall be paid to the registered owner
hereof upon presentation and surrender of this Certificate 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 Certificate. The payment of interest on this Certificate shall be made
by the Paying Agent/Registrar to the registered owner hereof on each interest payment date by
check, dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and
payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of this
Certificate (the "Certificate Ordinance") 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 regis-
tered owner hereof, at its address as it appeared on the last business day of the month preceding
each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar,
as hereinafter described. Any accrued interest due at maturity as provided herein shall be paid to
the registered owner upon presentation and surrender of this Certificate for payment at the
Designated Trust Office of the Paying Agent/Registrar. The Issuer covenants with the registered
owner of this Certificate that on or before each principal and interest payment date for this
Certificate it will make available to the Paying Agent/Registrar, from the "Interest and Sinking
Fund" created by the Certificate Ordinance, the amounts required to provide for the payment, in
immediately available funds, of all principal of and interest on the Certificates, when due.
IN THE EVENT OF 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 Issuer. Notice of the Special Record Date and of the scheduled payment
date of the past due interest ("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 Certificate
appearing on the Registration Books kept by the Paying Agent/Registrar at the close of business
on the last business day next preceding the date of mailing of such notice.
IF THE DATE for the payment of the principal of or interest on this Certificate shall be
a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the
Designated Trust Office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day which
is not such a Saturday, Sunday, 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.
THIS CERTIFICATE is one of a Series of Certificates dated as of the Original Issue Date
stated above, authorized in accordance with the Constitution and laws of the State of Texas in the
principal amount of $14,480,000, for the purpose of paying contractual obligations to be incurred
by the City, to-wit, the construction of various City improvements, as described in the Certificate
Ordinance, and the payment of fiscal, engineering and legal fees incurred in connection therewith.
ON FEBRUARY 15, 2012, or on any date thereafter, the Certificates of this Series
maturing on February 15, 2013 and thereafter may be redeemed prior to their scheduled
maturities, at the option of the Issuer, in whole, or in part, at par and accrued interest to the date
fixed for redemption. The years of maturity of the Certificates called for redemption at the option
of the City prior to stated maturity shall be selected by the City. The Certificates or portions
thereof redeemed within a maturity shall be selected by lot or other method by the Paying
Agent/Registrar; provided, that during any period in which ownership of the Certificates is
determined only by a book entry at a securities depository for the Certificates, if fewer than all
of the Certificates of the same maturity and bearing the same interest rate are to be redeemed, the
particular Certificates of such maturity and bearing such interest rate shall be selected in
accordance with the arrangements between the Issuer and the securities depository.
AT LEAST 30 days prior to the date fixed for any such redemption, a written notice of
such redemption shall be given to the registered owner of each Certificate 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 Issuer with the Paying Agent/Registrar for the payment of the required redemption
price for this Certificate 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 Certificate, 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 Certificate or any portion
hereof. If a portion of any Certificate shall be redeemed a substitute Certificate or Certificates
having the same maturity date, bearing interest at the same rate, in any denomination or denomina-
tions in any integral multiple of $5,000, at the written request of the registered owner, and in
aggregate principal amount equal to the unredeemed portion thereof, will be issued to the
registered owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as
provided in the Ordinance.
ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered certificates,
without interest coupons, in the denomination of any integral multiple of $5,000. As provided in
the Certificate Ordinance, this Certificate 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 certificates, without interest coupons, payable to the appropriate
registered owner, assignee, or assignees, as the case may be, having the same maturity date, and
bearing interest at the same rate, in any denomination or denominations in any integral multiple
of $5,000 as requested in writing by the appropriate registered owner, assignee, or assignees, as
the case may be, upon surrender of this Certificate to the Paying Agent/Registrar at its Designated
Trust Office for cancellation, all in accordance with the form and procedures set forth in the
Certificate Ordinance. Among other requirements for such assignment and transfer, this
Certificate must be presented and surrendered to the Paying Agent/Registrar at its Designated
Trust Office, together with proper instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Certificate or
any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in
whose name or names this Certificate or any such portion or portions hereof is or are to be
transferred and registered. The form of Assignment printed or endorsed on this Certificate may
be executed by the registered owner to evidence the assignment hereof, but such method is not
exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be
used to evidence the assignment of this Certificate or any portion or portions hereof from time to
time by the registered owner. The foregoing notwithstanding, in the case of the exchange of an
assigned and transferred Certificate or Certificates or any portion or portions thereof, such fees
and charges of the Paying Agent/Registrar will be paid by the Issuer. The one requesting such
exchange shall pay the Paying Agent/Registrar's reasonable standard or customary fees and
charges for exchanging any Certificate or portion thereof. In any circumstance, any taxes or
governmental charges required to be paid with respect thereto shall be paid by the one requesting
such assignment, transfer, or exchange as a condition precedent to the exercise of such privilege.
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WHENEVER the beneficial ownership of this Certificate is determined by a book entry
at a securities depository for the Certificates, the foregoing requirements of holding, delivering
or transferring this Certificate shall be modified to require the 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 Certificates is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance
that it promptly will appoint a competent and legally qualified substitute therefor, and promptly
will cause written notice thereof to be mailed to the registered owners of the Certificates.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and
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 Certificate have been performed, existed, and been done in accordance with law; that this
Certificate is a direct obligation of said Issuer, issued on the full faith and credit thereof; and that
annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of
this Certificate, as such interest comes due and such principal matures, have been levied and
ordered to be levied against all taxable property in said Issuer, and have been pledged for such
payment, within the limit prescribed by law; and that a limited pledge (not to exceed $1,000) of
the surplus revenues from the operation of the City's combined municipal electric light and power,
waterworks and sewer system remaining after payment of all operation and maintenance expenses
thereof and any other obligations heretofore or hereafter incurred to which such revenues have
been or shall be encumbered by a lien on and pledge of such revenues superior to the lien on and
pledge of such revenues to the Certificates, have been pledged as additional security for the
Certificates.
BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by
such terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and
available for inspection in the official minutes and records of the Issuer, and agrees that the terms
and provisions of this Certificate and the Certificate Ordinance constitute a contract between each
registered owner hereof and the Issuer.
IN WITNESS WHEREOF, this Certificate has been signed with the manual or facsimile
signature of the Mayor of the City, attested by the manual or facsimile signature of the City
Secretary, and the official seal of the Issuer has been duly affixed to, or impressed, or placed in
facsimile, on this Certificate.
XXXXX XXXXX
City Secretary
Mayor
11
(SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate of Obligation has been issued under the provisions
of the proceedings adopted by the City as described in the text of this Certificate of Obligation;
and that this Certificate of Obligation has been issued in exchange for or replacement of a
certificate of obligation of an issue which originally was approved by the Attorney General of the
State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
Dated
JPMORGAN CHASE BANK,
Paying Agent/Registrar
By
Authorized Representative
*FORM OF COMPTROLLER'S CERTIFICATE ATTACHED TO
THE CERTIFICATES UPON INITIAL DELIVERY THEREOF
OFFICE OF COMPTROLLER
STATE OF TEXAS
REGISTER NO.
I hereby certify that there is on file and of record in my office a certificate of the Attorney
General of the State of Texas to the effect that this Certificate has been examined by him as
required by law, and that he finds that it has been issued in conformity with the Constitution and
laws of the State of Texas, and that it is a valid and binding obligation of the City of College
Station, Texas, payable in the manner provided by and in the ordinance authorizing same, and said
Certificate has this day been registered by me.
WITNESS MY HAND and seal of office at Austin, Texas this
12
(SEAL)
Comptroller of Public Accounts of
the State of Texas
NOTE:*¶ to accompany initial certificates only
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(Please insert Social Security or Taxpayer Identification Number of Transferee)
/ /
(Please print or typewrite name and address, including zip code of Transferee)
the within Certificate of Obligation and all rights thereunder, and hereby irrevocably
constitutes
and appoints
attorney to
register the transfer of the within Certificate of Obligation on books kept for registration
thereof,
with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
13
NOTICE: The signature above must
correspond with the name of the Registered
Owner as it appears upon the front of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.
The printer of the Certificates is hereby authorized to print on the Certificates (i) the form of bond
counsel's opinion relating to the Certificates, and (ii) an appropriate statement of insurance
furnished by a municipal bond insurance company providing municipal bond insurance, if any,
covering all or any part of the Certificates.
14
Section 7. DEFINITIONS. That the terms "Certificates" and "Certificates of Obligation"
shall mean the City of College Station, Texas Certificates of Obligation, Series 2002, authorized
to be issued and delivered by this Ordinance; and the term "Surplus Revenues" shall mean those
revenues from the operation of the City's combined municipal electric light and power,
waterworks and sewer system remaining after payment of all operation and maintenance expenses
thereof and other obligations heretofore or hereafter incurred to which such revenues have been
or shall be encumbered by a lien on and pledge of such revenues superior to the lien on and pledge
of such revenues to the Certificates.
Section 8. INTEREST AND SINKING FUND. That a special fund or account, to be
designated the "City of College Station, Texas Series 2002 Certificate of Obligation Interest and
Sinking Fund" is hereby created and shall be established and maintained by the Issuer. Said
Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of
said Issuer, and shall be used only for paying the interest on and principal of said Certificates.
All ad valorem taxes levied and collected for and on account of said Certificates shall be
deposited, as collected, to the credit of said Interest and Sinking Fund. During each year while
any of said Certificates are outstanding and unpaid, the governing body of said Issuer shall
compute and ascertain the rate and amount of ad valorem tax, based on the latest approved tax
rolls of said Issuer, with full allowances being made for tax delinquencies and the cost of tax
collections, which will be sufficient to raise and produce the money required to pay the interest
on said Certificates as such interest comes due, and to provide a sinking fund to pay the principal
(including mandatory sinking fund redemption payments, if any) of said Certificates as such
principal matures or comes due through operation of the mandatory sinking fund redemption, if any,
but never less than 2 % of the original amount of said Certificates as a sinking fund each year.
Said rate and amount of ad valorem tax is hereby ordered to be levied against all taxable property
in said Issuer for each year while any of said Certificates are outstanding and unpaid, and said ad
valorem tax shall be assessed and collected each such year and deposited to the credit of the
aforesaid Interest and Sinking Fund. Said ad valorem taxes necessary to pay the interest on and
principal of said Certificates, as such interest comes due and such principal matures, are hereby
pledged for such payment, within the limit prescribed by law. There shall be appropriated from
the General Fund of the City for deposit into the Interest and Sinking Fund moneys as may be
necessary to pay the principal and interest payments on the Certificates of Obligation scheduled to
occur on or before February 15, 2003.
Section 9. REVENUES. That the Certificates of Obligation are additionally secured by
and shall be payable from the Surplus Revenues. The Surplus Revenues are pledged by the City
pursuant to authority of Chapter 1502, Texas Government Code, specifically Section 1502.058
thereof. The City shall promptly deposit the Surplus Revenues upon their receipt to the credit of
the Interest and Sinking Fund created pursuant to Section 8, to pay the principal and interest on
the Certificates of Obligation. The amount of Surplus Revenues pledged to the payment of the
Certificates of Obligation shall not exceed $1,000.
Section 10. TRANSFER. That the City shall do any and all things necessary to
accomplish the transfer of monies to the Interest and Sinking Fund of this issue in ample time to
pay such items of principal and interest due on the Certificates of Obligation.
15
Section 11. SECURITY FOR FUNDS. That the Interest and Sinking Fund created by this
Ordinance shall be secured in the manner and to the fullest extent permitted or required by law for
the security of public funds, and such Fund shall be used only for the purposes and in the manner
permitted or required by this Ordinance.
Section 12. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES. (a) Replacement Certificates. That in the event any outstanding Certificate
is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be
printed, executed, and delivered, a new certificate of the same principal amount, maturity, and
interest rate, as the damaged, mutilated, lost, stolen, or destroyed Certificate, in replacement for
such Certificate in the manner hereinafter provided.
(b) Application for Replacement Certificates. That application for replacement of
damaged, mutilated, lost, stolen, or destroyed Certificates shall be made by the registered owner
thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Certificate,
the registered owner applying for a replacement certificate 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 Certificate, the registered owner shall furnish to the City and to the Paying
Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Certificate,
as the case may be. In every case of damage or mutilation of a Certificate, the registered owner
shall surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or
mutilated.
(c) No Default Occurred. That notwithstanding the foregoing provisions of this Section,
in the event any such Certificate shall have matured, and no default has occurred which is then
continuing in the payment of the principal of, redemption premium, if any, or interest on the
Certificate, the City may authorize the payment of the same (without surrender thereof except in
the case of a damaged or mutilated Certificate) instead of issuing a replacement certificate,
provided security or indemnity is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Certificates. That prior to the issuance of any
replacement certificate, the Paying Agent/Registrar shall charge the registered owner of such
Certificate with all legal, printing, and other expenses in connection therewith. Every replacement
certificate issued pursuant to the provisions of this Section by virtue of the fact that any Certificate
is lost, stolen, or destroyed shall constitute a contractual obligation of the City whether or not the
lost, stolen, or destroyed Certificate shall be found at any time, or be enforceable by anyone, and
shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all
other Certificates duly issued under this Ordinance.
(e) Authority for Issuing Replacement Certificates. That in accordance with Section
1201.067, Texas Government Code, this Section of this Ordinance shall constitute authority for
the issuance of any such replacement certificate without necessity of further action by the City or
any other body or person, and the duty of the replacement of such certificates is hereby authorized
16
and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate
and deliver such Certificates in the form and manner and with the effect, as provided in Section
5(a) of this Ordinance for Certificates issued in conversion and exchange of other Certificates.
Section 13. FEDERAL INCOME TAX MATTERS. That the City covenants to refrain
from any action which would adversely affect, or to take such action as to ensure, the treatment
of the Certificates of Obligation as obligations described in Section 103 of the Code, the interest
on which is not includable in the "gross income" of the holder for purposes of federal income taxa-
tion. In furtherance thereof, the City covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of
the Certificates of Obligation (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 City,
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 Certificates of Obligation, 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 Certificates of
Obligation (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 gov-
ernmental use;
(c) to take any action to assure that no amount which is greater than the lesser
of $5,000,000, or five percent of the proceeds of the Certificates of Obligation (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
Certificates of Obligation being treated as "private activity bonds" within the meaning of
Section 141(b) of the Code;
(e) to refrain from taking any action that would result in the Certificates of
Obligation 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 Certificates of
Obligation, 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 materially higher yield over the term of the Certificates of Obligation,
other than investment property acquired with -
17
(1) proceeds of the Certificates of Obligation invested for a reasonable
temporary period of three years or less or, in the case of a refunding bond, for a
period of 30 days or less until such proceeds are needed for the purpose for which
the certificates of obligation 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 pro-
ceeds of the Certificates of Obligation;
(g) to otherwise restrict the use of the proceeds of the Certificates of Obligation
or amounts treated as proceeds of the Certificates of Obligation, as may be necessary, so
that the Certificates of Obligation 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 Certificates of Obligation) an amount that
is at least equal to 90 percent of the "Excess Earnings," within the meaning of Section
148(f) of the Code and to pay to the United States of America, not later than 60 days after
the Certificates of Obligation have been paid in full, 100 percent of the amount then
required to be paid as a result of Excess Earnings under Section 148(0 of the Code.
For purposes of the foregoing (a) and (b), the Issuer understands that the term "proceeds" includes
"disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds,
transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of
issuance of the Certificates of Obligation. It is the understanding of the City 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 ruling are hereafter promulgated which modify or expand provisions of the Code,
as applicable to the Certificates of Obligation, the City 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 Certificates of Obligation under Section 103 of the Code. In the event that regula-
tions or rulings are hereafter promulgated which impose additional requirements which are
applicable to the Certificates of Obligation, the City agrees to comply with the additional
requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to
preserve the exemption from federal income taxation of interest on the Certificates of Obligation
under Section 103 of the Code. In furtherance of such intention, the City hereby authorizes and
directs the Mayor, the City Manager, any Assistant City Manager and the Director of Fiscal
Services to execute any documents, certificates or reports required by the Code, and to make such
elections on behalf of the City which may be permitted by the Code as are consistent with the
purpose for the issuance of the Certificates of Obligation.
18
In order to facilitate compliance with clause (h) above, a "Rebate Fund" is hereby
established by the City for the sole benefit of the United States of America, and such Fund shall
not be subject to the claim of any other person, including without limitation the bondholders. The
Rebate Fund is established for the additional purpose of compliance with Section 148 of the Code.
Section 14. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE
PROJECT. That the Issuer covenants to account for the expenditure of proceeds from the sale of
the Certificates and any investment earnings thereon to be used for the purposes described in
Section 1 of this Ordinance (such purpose referred to herein and Section 15 hereof as a "Project")
on its books and records by allocating proceeds to expenditures within 18 months of the later of
the date that (a) the expenditure on a Project is made or (b) such Project is completed. The
foregoing notwithstanding, the Issuer shall not expend such proceeds or investment earnings more
than 60 days after the earlier of (a) the fifth anniversary of the date of delivery of the Certificates
or (b) the date the Certificates are retired, unless the Issuer obtains an opinion of nationally-
recognized bond counsel substantially to the effect that such expenditure will not adversely affect
the tax-exempt status of the Certificates. For purposes hereof, the Issuer shall not be obligated
to comply with this covenant if it obtains an opinion that such failure to comply will not adversely
affect the excludability for federal income tax purposes from gross income of the interest.
Section 15. DISPOSITION OF PROJECT. That the Issuer covenants that the property
constituting a Project will not be sold or otherwise disposed in a transaction resulting in the receipt
by the Issuer of cash or other compensation, unless the Issuer obtains an opinion of nationally-
recognized bond counsel substantially to the effect that such sale or other disposition will not
adversely affect the tax-exempt status of the Certificates. For purposes of the foregoing, the
portion of the property comprising personal property and disposed in the ordinary course shall not
be treated as a transaction resulting in the receipt of cash or other compensation. For purposes
hereof, the Issuer shall not be obligated to comply with this covenant if it obtains an opinion that
such failure to comply will not adversely affect the excludability for federal income tax purposes
from gross income of the interest.
Section 16. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES.
That the City Manager of the City is hereby authorized to have control of the Certificates initially
issued and delivered hereunder and all necessary records and proceedings pertaining to the
Certificates 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 Certificates said Comptroller of Public
Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Certificate attached to such Certificates, and the seal of said Comp-
troller shall be impressed, or placed in facsimile, on such certificate.
Section 17. DTC REGISTRATION. That the Certificates of Obligation initially shall be
issued and delivered in such manner that no physical distribution of the Certificates of Obligation
will be made to the public, and The Depository Trust Company ("DTC"), New York, New York,
initially will act as depository for the Certificates of Obligation. DTC has represented that it is
19
a limited purpose trust company incorporated under the laws of the State of New York, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered under Section 17A of the
Securities Exchange Act of 1934, as amended, and the City accepts, but in no way verifies, such
representations. The Certificates of Obligation initially authorized by this Ordinance shall be
delivered to and registered in the name of CEDE & CO., the nominee of DTC. It is expected that
DTC will hold the Certificates of Obligation on behalf of the Purchaser (as defined in Section 19
of this Ordinance) and its participants. So long as each Certificate of Obligation is registered in
the name of CEDE & CO., the Paying Agent/Registrar shall treat and deal with DTC the same
in all respects as if it were the actual and beneficial owner thereof. It is expected that DTC will
maintain a book-entry system which will identify ownership of the Certificates of Obligation in
integral amounts of $5,000, with transfers of ownership being effected on the records of DTC and
its participants pursuant to rules and regulations established by them, and that the Certificates of
Obligation initially deposited with DTC shall be immobilized and not be further exchanged for
substitute Certificates of Obligation except as hereinafter provided. The City is not responsible
or liable for any functions of DTC, will not be responsible for paying any fees or charges with
respect to its services, will not be responsible or liable for maintaining, supervising, or reviewing
the records of DTC or its participants, or protecting any interests or rights of the beneficial owners
of the Certificates of Obligation. It shall be the duty of the DTC Participants, as defined in the
Official Statement herein approved, to make all arrangements with DTC to establish this book-
entry system, the beneficial ownership of the Certificates of Obligation, and the method of paying
the fees and charges of DTC. The City does not represent, nor does it in any way covenant that
the initial book-entry system established with DTC will be maintained in the future.
Notwithstanding the initial establishment of the foregoing book-entry system with DTC, if for any
reason any of the originally delivered Certificates of Obligation is duly filed with the Paying
Agent/Registrar with proper request for transfer and substitution, as provided for in this
Ordinance, substitute Certificates of Obligation will be duly delivered as provided in this
Ordinance, and there will be no assurance or representation that any book-entry system will be
maintained for such Certificates of Obligation. In connection with the initial establishment of the
foregoing book-entry system with DTC, the City heretofore has executed a "Blanket Letter of
Representations" prepared by DTC in order to implement the book-entry system described above.
Section 18. CONTINUING DISCLOSURE OBLIGATION. (a) Definitions. That as
used in this Section, the following terms have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"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.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
20
"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 from time to time.
(b) Annual Repons. (i) The City shall provide annually to each NRMSIR and any SID,
within six months after the end of each fiscal 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 20 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 shall provide audited financial statements for the applicable fiscal year to each
NRMSIR and any SID, when and if the audit report on such statements become available.
(ii) If the City changes its fiscal year, it will notify each NRMSIR and any SID of the
change (and of the date of the new fiscal 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.
(c) 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 Certificates of
Obligation, if such event is material within the meaning of the federal securities laws:
2.
3.
4.
5.
6.
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
Certificates of Obligation;
Modifications to rights of holders of the Certificates of Obligation;
Certificates of Obligation calls;
Defeasances;
Release, substitution, or sale of property securing repayment of the
Certificates of Obligation; and
Rating changes.
21
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any
failure by the City to provide financial information or operating data in accordance with subsection
(b) of this Section by the time required by such subsection.
(d) Limitations, Disclaimers, attd 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 Certificates of Obligation 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 Certificates of Obligation no longer to be
outstanding.
(ii) The provisions of this Section are for the sole benefit of the registered owners and
beneficial owners of the Certificates of Obligation, 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 make any representation or warranty concerning
such information or its usefulness to a decision to invest in or sell Certificates of Obligation at any
future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OF
OBLIGATION 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 the 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
Certificates of Obligation in the primary offering of the Certificates of Obligation in compliance
with the Rule, taking into account any amendments or interpretations of the Rule since such
offering as well as such changed circumstances and (2) either (a) the registered owners of a
majority in aggregate principal amount (or any greater amount required by any other provision of
22
this Ordinance that authorizes such an amendment) of the outstanding Certificates of Obligation
consent to such amendment or (b) a person that is unaffiliated with the City (such as nationally
recognized bond counsel) determined that such amendment will not materially impair the interest
of the registered owners and beneficial owners of the Certificates of Obligation. 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 (b) 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 Certificates of Obligation in the primary
offering of the Certificates of Obligation.
Section 19. DEFEASANCE. (a) Deemed Paid. Any Certificate of Obligation and the
interest thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased
Certificate") within the meaning of this Ordinance, except to the extent provided in subsection (e)
of this Section, when payment of the principal of such Certificate of Obligation, plus interest
thereon to the due date (whether such due date be by reason of maturity or otherwise) either (i)
shall have been made or caused to be made in accordance with the 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 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
Certificates shall have become due and payable. At such time as a Certificate of Obligation shall
be deemed to be a Defeased Certificate hereunder, as aforesaid, such Certificate of Obligation and
the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the
ad valorem taxes or revenues herein levied and pledged as provided in this Ordinance, and such
principal and interest shall be payable solely from such money or Defeasance Securities.
Notwithstanding any other provision of this Ordinance to the contrary, it is hereby provided that
any determination not to redeem Defeased Certificates that is made in conjunction with the
payment arrangements specified in subsection 19(a)(i) or (ii) shall not be irrevocable, provided
that: (1) in the proceedings providing for such payment arrangements, the Issuer expressly
reserves the right to call the Defeased Certificates for redemption; (2) gives notice of the
reservation of that right to the owners of the Defeased Certificates immediately following the
making of the payment arrangements; and (3) directs that notice of the reservation be included in
any redemption notices that it authorizes.
(b) Investments. 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 Certificates of Obligation and
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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 Certificates
may contain provisions permitting the investment or reinvestment of such moneys in Defeasance
Securities or the substitution of other Defeasance Securities upon the satisfaction of the
requirements specified in subsection (a)(i) or (ii) above. All income from such Defeasance
Securities received by the Paying Agent/Registrar which is not required for the payment of the
Defeased Securities, 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.
(c) Selection of Defeased Certificates. In the event that the City elects to defease less than
all of the principal amount of Certificates of Obligations of a maturity, the Paying Agent/Registrar
shall select, or cause to be selected, such amount of Certificates of Obligations by such random
method as it deems fair and appropriate.
(d) Defeasance Obligations. The term "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 fu'm not less
than AAA or its equivalent, and (iii) noncallable obligations of a 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.
(e) Continuing Duty of Paying Agent/Registrar. Until all Certificates of Obligation
defeased under this Section of this Ordinance shall become due and payable, the Paying
Agent/Registrar for such Certificates of Obligation shall perform the services of Paying
Agent/Registrar for such Certificates of Obligation the same as if they had not been defeased, and
the City shall make proper arrangements to provide and pay for such services.
Section 20. SALE OF CERTIFICATES. (a) That the sale of the Certificates
to , as syndicate manager (the "Initial Purchasers"), at a price of par and accrued interest
to the date of delivery, plus a premium of $ ., is hereby authorized, ratified and confirmed.
One Certificate 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 Pumhasers shall have the fight to
exchange such Certificates as provided in Section 5 hereof without cost. It is hereby officially found,
determined and declared that the Certificates were sold to the highest bidder at terms that were the
most advantageous reasonably obtained. The Initial Pumhasers included in their bid that the
Certificates 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 Certificates is hereby authorized to be printed on the Certificates.
(b) 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 Certificates, are
hereby approved. The use of the "Preliminary Official Statement" dated ., 2002,
prepared in connection with the sale of the Certificates, 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 Certificates.
Section 21. APPROVAL AND REGISTRATION OF CERTIFICATES. That the Director
of Fiscal Services is hereby authorized to have control of the Certificates and all necessary records
and proceedings pertaining to the Certificates 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 Certificates, the
Comptroller of Public Accounts (or a deputy designated in writing to act therefor) shall manually
sign the Comptroller's Registration Certificate. The Certificates thus registered shall remain in the
custody of the City Manager (or the designee thereof) until delivered to the Initial Purchasers.
Section 22. FURTHER PROCEDURES. That the Mayor, the City Secretary, the City
Manager, the Director of Fiscal Services, any Assistant City Manager, and all other officers,
employees, and agents of the City, and each of them, shall be and they are hereby expressly
authorized, empowered, and 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 Certificates and fixing all details in connection therewith.
Section 23. USE OF PROCEEDS. That the proceeds fi'om the sale of the Certificates shall
be as follows: (i) accrued interest and premium on the Certificates shall be deposited to the credit
of the Certificate 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 13 hereof, and THEREAFTER to the Certificate Fund.
Section 24. INTEREST EARNINGS. That the interest earnings derived from the investment
of proceeds from the sale of the Certificates may be used along with other proceeds for the
construction of the permanent improvements set forth in Section 1 hereof for which the Certificates
are issued; provided that after completion of such permanent improvements, if any of such interest
earnings remain on hand, such interest eamings shall be deposited in the Interest and Sinking Fund.
It is further provided, however, that any interest earnings on proceeds which are required to be
rebated to the United States of America pursuant to this Ordinance hereof in order to prevent the
Certificates from being arbitrage bonds shall be so rebated and not considered as interest earnings
for the purposes of this Section.
Section 25. PREAMBLE. That the preamble to this Ordinance is incorporated by reference
and made a part hereof for all purposes.
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Section 26. 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.
(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) Severabilio,. 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.
[EXECUTION PAGE FOLLOWS]
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PASSED AND APPROVED this March 14, 2002
City S~rctary, Ciu' of College Station, T~xas
Mayor, f~{ly of College Starion~e~s
1~ ond~C'o~e~ - '
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Exhibit A
to
Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 18 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.
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