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HomeMy WebLinkAbout1995-2134 - Ordinance - 07/12/1995CERTIFICATE FOR ORDINANCE We, the undersigned Mayor and City Secretary of the City of College Station, Texas (the "City"), hereby certify as follows: 1. The City Council of the City (the "Council") convened in regular session, open to the public, on July 12, 1995, at the meeting place designated in the notice (the "Meeting"), and the roll was called of the members, to wit: Larry J. Ringer, Mayor, and the following City Councilmembers: William Fox, David Hickson, Lynn Mcllhan~li, Hubbard~ennadY, Lf!rrlaMarriot,saad David Hickson. All members of the Council were present, excepi-- '- ...... ' ° ' . , constituting a quorum. Whereupon among other busin~aFnsacted at the Meeting a written ordinance entitled: ORDINANCE AUTHORIZING THE ISSUANCE OF $7,125,000 CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS, TAXABLE SERIES 1995; EXECUTION OF AN ESCROW AGREEMENT, BOND PURCHASE AGREEMENTS, AND A PAYING AGENT/REGISTRAR AGREEMENT; AND APPROVING ALL OTHER MATTERS RELATED TO ISSUANCE OF THE BONDS, INCLUDING iMMEDIATE EFFECTIVENESS (the "Ordinance") was duly introduced for the consideration of the Council and read in full. It was then duly moved and seconded that the Ordinance be finally passed and adopted; and after due discussion, such motion, carrying with it the adoption of the Ordinance prevailed and carried by the following vote: YES: ,~ NOES: 0 ABSTENTIONS: O 2. A tree, full, and correct copy of the Ordinance adopted at the Meeting is attached to and follows this Ct:rtificate; the Ordinance has been duly recorded in the Council's minutes of the Meeting; the above and foregoing paragraph is a true, full, and correct excerpt from the Council's minutes of the Meeting pertaining to th; adoption of the Ordinance; the persons named in the above and foregoing paragraph are duly chosen, quali- fk:d, and acting officers and members of the Council as indicated therein; each of the officers and members of th~ Council was duly and sufficiently notified officially and personally, in advance, of the time, place, and ptrpose of the Meeting, and that the Ordinance would be intrcduced and considered for adoption at the Meeting ard each of such officers and members consented, in advance, to the holding of the Meeting for such purpose; ar d the Meeting was open to the public, and public notice of the time, place, and purpose of the Meeting was given, all as required by Chapter 55 I, Texas Government Code. 3. Connie Hooks is the duly appointed and acting City Secretary of the City. SIGNED AND SEALED THIS July 12, 1995. City Secretary City of College Station, Texas City of College Station,~'fi~rexas (CITY SEAL) ORDINANCE NO. 2 ~13 4 ORDINANCE AUTHORIZING THE ISSUANCE OF $7,125,000 CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENIJE REFUNDING BONDS, TAXABLE SERIES 1995; EXECUTION OF BOND PURCHASE AGREEMENTS AND A PAYING AGENT/REGISTRAR AGREEMENT; AND APPROVING ALL OTHER MATTERS RELATED TO ISSUANCE OF THE BONDS, INCLUDING IMMEDIATE EFFECTIVENESS WHEREAS, the City has heretofore issued the following described outstanding bonds (collectively, the "Previously Issued Parity Bonds") to-wit: CITY OF COLLEGE STATION, TEXAS, UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 1985, dated January 15, 1985, originally issued in the principal amount of $34,185,000 (the "Series 1985 Bonds"); and CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1990 in The principal amount of $4,800,000 (the "Series 1990 Bonds"); CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE AND REFUNDING BONDS, SERIES 1993 in the principal amount of $5,850,000 (the "Series 1993 Bonds"); CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1994 in the principal amount of $16,500,000 (the "Series 1994 Bonds"); WHEREAS, all of the Previously Issued Parity Bonds are secured by a pledge of the net revenues from the operation of the City's combined waterworks 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); WHEREAS, the City Council desires issue refunding bonds to refund the "Refunded Bonds" described below; THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS THAT: Section 1. Bonds Authorized. Pursuant to Article 717k and Article I 111 et. seq., Vemon's Texas Civil Statutes, as amended, and other applicable law, the City's bonds are hereby authorized to be issued to be designated as the "City of College Station, Texas Utility System Revenue Refunding Bonds, Taxable Series 1995" in the aggregate principal amount of $7,125,000 for the purpose of providing money for the refunding of the following outstanding Utility System Revenue Refunding Bonds, Series 1985 of the City (collectively, the "Refunded Bonds") on August I, 1995, and paying the costs of issuance of the Bonds: Maturities Amount to be to be Refunded Refunded 1997 $2,055,000 1998 2,000,000 1999 !,525,000 2000 600,000 2001 905,000 Total $7,085,000 Section 2. Dates~ Maturities~ and Interest Rates. The Bonds shall be dated July 1, 1995, shall be in the minimum denomination of $100,000 or any integral $5,000 multiple in excess thereof, shall be numbered I-I and I-2 for the Initial Bonds and consecutively from R-1 upward for the definitive bonds, and shall mature on I-2 for the Initial Bonds and consecutively from R-I upward for the defmitive bonds, and shall mature on February 1, in each of the years, and in the amounts, respectively, as set forth in the following schedule and shall bear interest at the following rates per annum: INTEREST YEAR AMOUNTS RATES 1996 $ 65,000 6.40% 1997 2,125,000 6.75 1998 2,025,000 7.00 1999 1,510,000 7.10 2000 560,000 7.15 2001 840,000 7.20 Such interest shall be payable on February 1, 1996, and semiannually thereafter on August 1 and February 1. Said interest shall be payable to the registered owner of any such Bond in the manner provided in the FORM OF BONDS set forth in this Ordinance. Section 3. Right of Prior Redemption. The City does not reserve the right to redeem the Bonds prior to maturity. Section 4. Pavino AnentfRe~istrar. (a) The City shall keep or cause to be kept at the principal corporate trust office of the Paying Agent/Registrar herein named, or such other bank, trust company, financial institution, or other entity duly qualified and legally authorized to serve and perform duties of and services of Paying Agent/Registrar, named in accordance with the provisions of (g) of this Section (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 kccp such books or records and make such transfers and registrations under such reasonable regulations as the City 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 such registered owner of each Bond to which payments with respect to the Bonds shall be mailed, as herein provided. The City or its designee shall have the right to inspect the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity. Registration of each Bond may be transferred in the Registration Books only upon presentation and surrender of such bond to the Paying Agent/Registrar for transfer of registration and cancellation, together with proper written instruments of assignment, in form and with guarantee of signatures satisfactory to thc Paying Agent/Registrar, evidencing the assignment of the bond, or any portion thereof 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. (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 or not 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 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 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 balance or principal amount thereof, may, upon surrender of such bond at the principal corporate trust office of the Paying Agent/Registrar, together with a written request therefor duly executed by the registered owner or the assignee or assignees thereof, or its or their duly authorized 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 BONDS set forth in this Ordinance (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 appropriate 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, a substitute bond or bonds having the same maturity date, bearing interest at the same rate, in the denomination or denomina- tions of any integral multiple of $5,000 at the 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 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. It is specifically provided, however, that any bond delivered in exchange for or replacement of another bond prior to the first scheduled interest payment date on the Bonds (as stated on the face thereof) shall be dated the same date as such bond, but each substitute bond 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 bond is delivered, unless such bond 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 bond the interest on the bond for which it is being exchanged has not been paid, then such bond shall be dated as of the date to which such interest has been paid in full. 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 Agent/Registrar's Authentication Certificate, in the form hereinafter set forth. An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such bond, date such by dating the Authentication Certificate in the manner set forth above, and manually sign such Certificate, and no such bond shall be deemed to be issued or outstanding unless such Certificate is so executed. 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, and said bonds shall be of type composition printed on paper with lithographed or steel engraved borders of customary weight and strength pur- suant to Article ?l?k-6, V.T.C.S, and particularly Section 6 thereof, the duty of such exchange or replacement of bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and upon the execution of the aforementioned Paying AgentfRegistrar's 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 issue, transfer, or exchange any Bond subject to redemption 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, that such limitation shall not be applicable to an exchange by the owner of the uncalled principal balance of a Bond. (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 BONDS 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 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 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, f'mancial 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 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 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 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, postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar. Section S. Forms. The form oft he Bonds, including the form of Paying AgentfRegistrar's Certificate, the form of Assignment, the form of Statement of Insurance, 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: FORM OF BONDS: FORM OF DEFINITIVE BONDS NO. United States of America State of Texas CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE REFUNDING BOND, TAXABLE SERIES 1995 MATURITY DATE INTEREST RATE ISSUE DATE REGISTERED OWNER: % July 1, 1995 DELIVERY DATE CUSIP 4 PRINCIPAL AMOUNT: $ THE CITY OF COLLEGE STATION, TEXAS (the "City") hereby promises to pay to the Registered Owner, specified above, or the registered assignee (the "registered owner") the Principal Amount, specified above, and to pay interest thereon from the Delivery Date, specified above, to the Maturity Date, specified above, at the Interest Rate, specified above, with said interest being payable on February 1, 1996, and semiannually on each August 1 and February 1 thereafter. 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 surrender of this Bond at maturity at the principal corporate trust office of FIRST INTERSTATE BANK OF TEXAS, N.A., HOUSTON, TEXAS, 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 regis- tered owner hereof as shown by the Registration Books kept by the Paying Agent/Registrar at the close of business on the Record Date 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, postage prepaid, on each such interest payment date, to the registered owner at its address as it appears on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. The record date ("Record Date") for the interest payable on any interest payment date means the fifteenth calendar day of the month preceding a scheduled interest payment. 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 calendar 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 adopted by the City Council of the City on July 12, 1995 (the "Ordinance"). THE TERMS AND PROVISIONS of this Bond are continued on the reverse side hereof and shall for all purposes have the same effect as though fully set forth at this place. *IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday, a Sunday, a legal holiday, or a day on which banking institutions in the city where 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 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, issued in the aggregate principal amount of $7,125,000 for the purpose of providing money for the refunding of certain outstanding bonds of the City (the "Refunded Bonds), and paying the costs of issuance of the Bonds. *ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest coupons. 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 denomination or denominations at a $100,000 minimum but in any integral multiple of $5,000 in excess of $100,000 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 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 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 taxes or governmental charges required to be paid with respect thereto shall be paid by the one requesting such transfer, conversion, and exchange. *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 ali of the terms and provisions of the 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 Ordinance) on a parity with the previously issued parity bonds including 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. 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. COUNTERSIGNED: City Secretary, City of College Station (CITY SEAL) Mayor, City of College Station 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 Ordinance described on the face 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 FIRST INTERSTATE BANK OF TEXAS, N.A., HOUSTON, TEXAS Paying Agent/Registrar B~ Authorized Representative FORM OF ASSIGNMENT *ASSIGNMENT FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly authorized representative or attorney thereof, hereby assigns this Bond to / / (Assignce's Social Security or Tax Payer Identification number) (Print or type Assigncc's names and address including zip code) and hereby irrevocably constitutes and appoints attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books 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. 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. The following abbreviations, when used in the assignment above or on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenant with right of survivorship and not as tenants in common UNIF GIFT MIN ACT - Custodian under Uniform Gifts to Minor Act (Cust) (Minor) (State) Additional abbreviations may also be used though not in the list above. NOTE TO PRINTER: *¶s to be on reverse side of def'mitive bonds FORM OF INITIAL BONDS The Initial Bonds shall be in the form set forth above for the Definitive Bonds, except the following shall replace the heading and the first three paragraphs: NO. [1-1][1-2] [$3,000,000][$4,125,000] United States of America State of Texas CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE REFUNDING BOND, TAXABLE SERIES 1995 ISSUE DATE July 1, 1995 DELIVERY DATE: Registered Owner: Principal Amount: [FIRST AMERICAN BANK] [FIRST INTERSTATE BANK OF TEXAS, N.A.] [THREE MILLION DOLLARS ($3,000,000)] [FOUR MILLION ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($4,125,000)] THE CITY OF COLLEGE STATION, TEXAS, for value received, acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner, specified above, or the registered assigns thereof (the "Registered Owner"), the Principal Amount, specified above, with principal installments payable on February I in each of the years, and bearing interest at per annum rates in accordance with the following schedule: YEARS OF PRINCIPAL INTEREST STATED MATURITIES INSTALLMENTS RATES [FIRST AMERICAN BANK] 1996 $ 65,000 6.400/6 1997 2,125,000 6.75 1998 810,000 7.00 [FIRST INTERSTATE BANK OF TEXAS, N.A.] 1998 $1,215,000 7.00% 1999 1,510,000 7.10 2000 560,000 7.15 2001 840,000 7.20 INTEREST on the unpaid Principal Amount hereof from the Delivery Date, specified above, or from the most recent interest payment date to which interest has been paid or duly provided for until the Principal Amount has become due and payment thereof has been made or duly provided for shall be paid computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on February 1 and August 1 of each year, commencing February 1, 1996. 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 final payment of principal of this Bond shall be paid to the Registered Owner hereof upon presentation and surrender of this Bond at final maturity, at the principal corporate trust office of FIRST INTERSTATE BANK OF TEXAS, N.A., Houston, Texas, which is the "Paying Agent/Registrar" for this Bond. The payment of principal installments and 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 by check drawn by the Paying Agent/Registrar on, and payable solely f~om, 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, postage prepaid, on each such payment date, to the registered owner hereof at its address as it appears on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. The record date ("Record Date") for payments hereon means the fifteenth calendar day of the month preceding a scheduled payment. 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 payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment thereof have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due payment (the "Special Payment Date", which shall be 15 calendar 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 the Registered Owner 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 that no later than each principal installment 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 adopted by the City Council of the City on July 12, 1995 (the "Ordinance"). FORM OF COMPTROLLER'S CERTIFICATE (ATTACHED TO THE INITIAL BONDS) OFFICE OF COMPTROLLER: REGISTER NO. STATE OF TEXAS: 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 (SEAL) Comptroller of Public Accounts of the State of Texas [END OF FORMS] Section 6. Definitions. As used in this Ordinance, in addition to other defined terms herein, 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 15 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 Section 13 of the Ordinance authorizing the issuance of the Series 1985 Bonds. "City" and "Issuer" mean the City of College Station, Texas, or where appropriate the City Council thereof. "City Council" means the governing body of the City. "Junior Lien Certificates" means the following certificates of obligation issued by the City bearing the dates, in the original principal amounts, and finally maturing as set forth below, to-wit: Date Principal Amount Final Maturity 6/15/85 $393,000 6/15/99 "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 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". **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 bonds named in the preamble to this Ordinance. "Refunded Bonds" means those bonds described in the preamble to the Ordinance. "Reserve Minimum" is def'med in Section 12(e) hereof. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "Series 1985 Bonds" means the bonds described in the preamble to this Ordinance. "Series 1990 Bonds" means the bonds described in the preamble to this Ordinance. "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. "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 9 hereof. "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 7. Pledne. 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 10 to be raised by taxation, or ~om any source 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 8. Rates. The City covenants and agrees with the holders of the Parity Bonds that it will: (a) ftx 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 betterment 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 9 hereof); and (4) to pay all indebtedness outstanding against the Systems, other than the Parity Bonds, including the Junior Lien Certificates 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 9. Flow of Funds. There has been created and established on the books of the City, and accounted for separate and apart from all other funds of the 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 falling due on or before the next maturity date of the Parity Bonds. The City shall, at least five days prior to February 1, 1996, and each August I and February I thereafter, 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, if any, coming due on the Parity Bonds such February I 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 of the interest on or principal of the 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 the Systems, and after paying the amounts required to be paid into the Bond Fund, may be used for any lawful purpose. Section 10. Investments. 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 11. Funds Secured. 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 12. Additional Bonds. 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 11 Bonds is adopted, were equal to each of the provisions following in items (eXi) and (ii) below, determined independently and certified by an independent rum of certified public accountants, based upon an annual audit of the books of the Systems; (c) After all the Series 1985 Bonds are no long outstanding, (I) 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 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 f'u'm 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 I 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 Group in the same or a higher rating category than the insured obligations of the Municipal Bond Investors Assurance 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 not insured in manner similar to the Previously Issued Parity Bonds, and (z) any Additional Bonds thereafter issued which are not so insured. 12 Section 1;~. General Covenants. 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 Ordinances, 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, includ- ing 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 enforceable 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 nil 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 governmental 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 necessary to dispose of any other property 13 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. (j) 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~nchise 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 14. Amendment of Ordinance. (a) 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 permit the amendment of the terms and conditions in this Ordinance or in the Parity Bonds so as to: (1) Make any change in the maturity of the outstanding Parity Bonds; (2) Reduce the rate of interest borne by any of the outstanding Parity Bonds; (3) Reduce the amount of the principal payable on the outstanding Parity Bonds; (4) Modify the terms of payment of principal of or interest on the outstanding Parity Bonds or impose any conditions with respect to such payment; (5) Affect the rights of the holders of less than all of the Parity Bonds; or (6) 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 f'mancial newspaper or journal published in The City of New York, New York, and in The Texas Bond Reporter, if then published, 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 14 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 fn'st 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 fi'om 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 and the City, but such revocation shall not be effective if the holders of 51% 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: (1) To add to the covenants and agreements of the City in this Ordinance contained, other covenants and agreements thereafter to be observed, grant additional rights or remedies to bondholders, or to surrender, restrict, or limit any right or power herein reserved to or conferred upon the City; (2) To make such provisions for the purpose of curing any ambiguity, or curing, correcting, or supple- menting 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; (3) To modify any of the provisions of this Ordinance in any other respect whatever, provided that (i) such modification shall be, and be expressed to be, effective only after ali Parity Bonds outstanding at the date of the adoption of such modification shall cease to be outstanding, and (ii) 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 15. Damaged~ Mutilated~ Lost~ Stolen~ or Destroyed Bond,, (a) 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. Co) 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 fi.om 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. 15 (c) Notwithstanding the foregoing provisions of this Section, in the event any such Bond shall have matured, and no default has o~curred 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 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 Section 6 of Article 717k-6, V.T.C.S., this Section of this Ordinance shall constitute authority for the issuance of any such replacement bond without necessity of fitrther action by the governing body of the City 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 4(d) of this Ordinance for Bonds issued in exchange for other Bonds. Section 16. Defeasance of the Bonds. (a) Any Bond and the interest thereon shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Bond") within the meaning of this Ordinance, 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, upon redemption, or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof (including the giving of any required notice of redemption), 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 for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) direct obligations of the United States of America, or obligations the principal of and interest on which are unconditionally gunrnnteed by the United States of America, which may be United States Treasury obligations such as its State and Local Government Series, and which may be book entry form (herein "Government Obligations") which mature as to principal and interest in such amounts and at such time 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 revenue herein levied and pledged as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Government Obligations. (b) Any money so deposited with the Paying Agent/Registrar may at the written direction of the City also be invested as hereinbefore set forth, and all income from such Government Obligations received by the Paying Agent/Registrar which is not required for the payment of the 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. (c) Until all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defensed 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. Section 17. Sale and Delivery of Bond,, (a) Sale. The sale of the Bonds to the Purchasers named in and pursuant to the respective Purchase Contract and Investment Letter attached hereto ns Exhibit "A" and Exhibit "B" is hereby confirmed nnd delivery of the Bonds to the Purchasers shall be made ns soon as practicable after the adoption of this Ordinance, upon payment therefor, in accordance with such agreements. The Mayor or the Mayor Pro Tem is hereby authorized to sign and deliver such agreements. 16 (b) Lel~al Opinion. The Purchasers' obligation to accept delivery of the Bonds is subject to their being furnished an opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., Attorneys, such opinion to be dated and delivered as of the date of delivery and payment for the Bonds. (c) ReRistration and Delivery. Upon the registration of the Initial Bonds, the Comptroller of Public Accounts of the State of Texas is authorized and instruct to deliver the Initial Bonds pursuant to the instruction of the Mayor for delivery to the Purchasers. Section 18. Continuing Disclosure Undertakim~. This Ordinance does not provide for continuing disclosure under the Rule with respect to Bonds based upon Subsection (d)(l) of the Rule in that the Bonds are in authorized denominations of $100,000 or more and are sold to entities which qualify under Subsection (d)(1)(i) of the Rule. Section 19. Use of Proceeds. The proceeds from the sale of the Bonds shall be as follows: $7,085,000 of the proceeds shall be deposited to credit of the "Bond Fund", which proceeds, together with other funds on deposit therein, shall be used to retire the Refunded Bonds and the balance of the proceeds shall be deposited to the general fund held at the City's depository bank and used to pay the costs of issuing the Bonds. Section 20. Matters Related to Refunding. (a) In order that the City shall satisfy in a timely manner all of its obligations under this Ordinance, the Mayor and all other appropriate officers and agents of the City are hereby authorized and directed to take all other actions that are reasonably necessary to provide for the refunding of the Refunded Bonds, including, without limitation, executing and delivering on behalf of the City all certificates, consents, receipts, requests, notices, and other documents as may be reasonably necessary to satisfy the City's obligations under this Ordinance and to direct the transfer and application of funds of the City consistent with the provisions of this Ordinance. (b) The City hereby irrevocably calls the Refunded Bonds for redemption prior to maturity on the dates set forth in, and authorizes and directs notice of such redemption to be given as provided in, the form attached hereto as Exhibit "D". (c) The Council finds that the City will realize a present value savings of $383,209.19 as a result of refunding the Refunded Bonds. Section 21. Pa¥in~ Aeent/Rel~istrar Agreement. The Paying Agent/Registrar Agreement, between the City and First Interstate Bank of Texas, N.A., Houston, Texas attached hereto as Exhibit "C" is hereby approved, and the Mayor is authorized to execute and the City Secretary is authorized to attest same. Section 22. Miscellaneous Provisions. (a) Titles Not Restrictive. 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) Preamble Adopted. The preamble to this Ordinance is hereby adopted as a part of this Ordinance. (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) Severabilit¥. 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. 17 (e) Governin~ 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. Notwithstanding any charter provision or other applicable laws, this Ordinance shall immediately effective upon its adoption by the City Council. PASSED AND APPROVED this July 12, 1995. City Secretary, City of College Station, Texas Mayor, City of College Station, Texas (CITY SEAL) 18 EXHIBIT A PURCHASE CONTRACT ANT) lrNVESTMENT LETTER (FIRST IrNTERSTATE BANK OF TEXAS, N.A.) $4,125,000 CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS, TAXABLE SERIES 1995 PURCHASE CONTRACT AND INVESTMENT LETTER July 12, 1995 The Honorable Mayor and City Council City of College Station 1101 Texas Avenue College Station, TX 77842 Ladies and Gentlemen: The undersigned, First Interstate Bank of Texas, N.A., Houston, Texas (the "Purchaser") offers to enter into this Purchase Contract and Investment Letter (this "Contract") with the City of College Station, Texas (the "City"). This offer is made subject to the City's acceptance of this Contract on or before 10:00 p.m., Central Daylight Time on July 12, 1995. I. PURCHASE AND SALE OF THE CONTRACTUAL OBLIGATIONS. Upon the terms and conditions and upon the basis of the representations set forth herein, the Purchaser hereby agrees to purchase from the City, and the City hereby agrees to sell and deliver to the Purchaser an aggregate of $4,125,000 principal amount of "City of College Station, Texas Utility System Revenue Refunding Bonds, Taxable Series 1995" (the "Bonds"). The Bonds shall be dated July 1, 1995, shall mature, and shall bear interest from the date of their initial delivery to the Purchaser (the "Closing" as hereinafter defined) as described in the Ordinance adopted on this date by the City Council of the City (the "Ordinance"). The purchase price for the Bonds shall be $4,125,000. 2. ORDINANCE. The Bonds shall be as described in and shall be issued and secured under the provisions of the Ordinance. The Bonds shall not be subject to optional redemption and shall be payable as provided in the Ordinance. 3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF CITY. On the date hereof, the City represents, warrants, and agrees as follows: (a) The City is a municipal corporation of the State of Texas and a body politic and corporate, and has full legal right, power, and authority to enter into this Contract, to adopt the Ordinance, to sell the Bonds, and to issue and deliver the Bonds to the Purchaser as provided herein and to carry out and consummate all other transactions described in the Ordinance and this Contract. (b) By official action of the City prior to or concurrently with the acceptance hereof, the City has duly adopted the Ordinance, has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations contained in the Bonds and this Contract and has duly authorized and approved the performance by the City of its obligations contained in the Ordinance and in this Contract. A-1 (c) The City is not in breach of or default under any applicable law or administrative regulation of the State of Texas or the United States or any applicable judgment or decree or any loan agreement, note, resolution, agreement, or other instrument to which the City is a party or is otherwise subject, which would have a material and adverse effect upon the business or f'mancial condition of the City; and the execution and delivery of this Contract by the City and the execution and delivery of the Bonds and the adoption of the Ordinance by the City. and compliance with the provisions of each thereof will not violate or constitute a breach of or default under any existing law, administrative regulation, judgment, decree, or any agreement or other instrument to which the City is a party or is otherwise subject. (d) All approvals, consents, and orders of any governmental authority or agency having jurisdiction of any matter which would constitute a condition precedent to the performance by the City of its obligations to sell and deliver the Bonds hereunder will have been obtained prior to the Closing. (e) Between the date of this Contract and the Closing, the City will not, without the prior written consent of the Purchaser, issue any additional bonds, notes, or other obligations for borrowed money payable from and secured by a lien on and pledge of the revenues of the System (as described in the Ordinance), and the City will not incur any material liabilities, direct or contingent, nor will there be any adverse change of a material nature in the financial position of the City. (f) No litigation is pending in any court in Brazos County, Texas or, to the knowledge of the City, threatened in any court affecting the corporate existence of the City, the title of its officers to their respective offices, or seeking to restrain or enjoin the issuance or delivery of the Bonds, the collection of revenues pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the issuance, execution, delivery, payment, security, or validity of the Bonds, or in any way contesting or affecting the validity or enforceability of the Ordinance or this Contract, or contesting the powers of the City, or any authority for the Bonds, the Ordinance, or this Contract. (g) The Bonds, when validly executed, authenticated, and delivered in accordance with the Ordinance and sold to the Purchaser as provided herein, will be validly issued and outstanding obligations of the City, enforceable in accordance with their terms, entitled to the benefits of, and subject to the limitations contained in, the Ordinance. (h) Between the date of this Contract and the date of the Closing the City shall disclose to, discuss with, and provide any information reasonably requested by the Purchaser in connection with any breach, default, or failure to comply, of whatever nature and of which the City, has knowledge regarding any law, loan agreement, indenture, bond, note, resolution, agreement, or other instrument to which the City is a party or to which the City, or any of the property or assets of the City is otherwise subject. 4. REPRESENTATIONS, WARRANTIES~ AND AGREEMENTS OF PURCHASER. The Purchaser hereby makes the following representations and warranties to the City: (a) The Purchaser has the full right, power and authority to enter into this Contract, and this Contract constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, moratorium, reorganization, or other laws of general application affecting the enforcement of creditors' rights or by equitable principles, and subject to the unavailability in any jurisdiction of specific performance or any other equitable remedy. (b) The Purchaser is a sophisticated and well informed investor, has knowledge and experience in financial and business matters relating to the investment in the Bonds, and is capable of evaluating the merits and risks (including the security pledged to the payment of the Bonds) of such investment and protecting its interests in connection with this financing. The Purchaser has the financial ability to bear the economic risks of purchasing the Bonds, including the complete loss of the investment. A-2 (c) The Purchaser understands the term "accredited investor" as used in Regulation D promulgated under the Securities Act of 1933, as amended and Purchaser represents and warrants that such Purchaser is an "accredited investor" for purposes of acquiring the Bonds. (d) The Purchaser has made its own inquiry and analysis with respect to the Bonds, the security therefor, the equipment to be f'manced with the proceeds of the Bonds, and other material factors affecting the security and payment of the Bonds, and, except as set forth in this Contract and the documents, instruments, and agreements executed in connection herewith, the Purchaser has not relied upon any statement (other than those set forth in such documents, instruments, and agreements) by the City, its officers, trustees, or employees, or its financial consultants or legal advisors in connection with such inquiry and analysis or in connection with the offer and sale of the Bonds. (e) The Purchaser acknowledges that it and its representatives have been furnished, prior to the date hereof, or will be furnished at or prior to the Closing pursuant to the terms of this Contract, all documents and certificates executed in connection with the authorization and issuance of the Bonds and all information concerning the fmancing needed to make an informed decision with respect to its investment in the Bonds. The Purchaser further acknowledges that it has full opportunity to ask questions and receive answers from officers and representatives of the City concerning the financing and to obtain any additional information which the City possesses which was necessary to verify the accuracy of the information regarding the City, the financing, or otherwise desired in connection with its evaluation of the decision to purchase the Bonds. (f) The Purchaser is purchasing the Bonds for its own account for investment only and the Purchaser has no present intention of reselling or distributing the Bonds. In making the foregoing representation, the Purchaser is aware that it must bear the economic risk of such investment for an indefinite period of time, and, in the event that the Bonds are sold by the Purchaser, such sale may only be made to persons who are able to and do confirm in writing to the City in advance of such sale the representations contained in paragraphs (a) through (f) hereof. 5. CLosr~G. At 10:00 A.M., Central Time, on July 19, 1995, or such other date as the parties agree to (the "Closing"), the City will deliver Initial Bond No. I-2 (as defined in the Ordinance) to the Purchaser, in the form requested by the Purchaser, duly executed and authenticated, together with the other documents hereinat~er mentioned, and the Purchaser will accept such delivery and pay the purchase price of the Bonds as set forth in Paragraph I hereof in immediately available funds. Delivery and payment as aforesaid shall be made at the offices of the Purchaser or such other place as shall have been mutually agreed upon by the City and the Purchaser. The Bonds shall be delivered in typed form as requested by the Purchaser; shall be prepared and delivered as a fully registered obligation in the single denomination of $4,125,000; and shall be registered in the name of the Purchaser. 6. CONDITIONS. The Purchaser has entered into this Contract in reliance upon the representations and warranties of the City contained herein and to be contained in the documents and instruments to be delivered at the Closing, and upon the performance by the City of its obligations hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the Purchaser's obligations under this Contract to purchase and pay for the Bonds shall be subject to the performance by the City of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following conditions: (a) The representations and warranties of the City contained herein shall be true, complete, and correct in all material respects on the date hereof and on and as of the date of Closing, as if made on the date of Closing; (b) At the time of the Closing, the Ordinance shall be in full force and effect and shall not have been amended or supplemented except as may have been agreed to by the Purchaser; (c) At the time of the Closing, all official action of the City related to the Ordinance shall be in full force and effect and shall not have been amended, modified, or supplemented; A-3 (d) The City shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money; (e) At or prior to the Closing, the Purchaser shall have received one copy of each of the following documents: (1) The Ordinance certified by the Mayor and the City Secretary of the City under its seal as having been duly adopted by the City and as being in effect, with such changes or amendments as may have been agreed to by the Purchaser; (2) An opinion, dated the date of Closing, of Akin, Gump, Strauss, Hauer & Feid, L.L.P., Bond Counsel to the City, in form and substance attached as Exhibit A to this Contract; (3) An unqualified opinion, dated on or prior to the date of Closing, of the Attorney General of Texas, approving the Bonds as required by law; (4) A certificate, dated the date of Closing, signed by the Mayor and the Executive Director of Fiscal and Human Resources of the City, to the effect that (i) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (ii) no litigation is pending in any court in Brazos County, Texas or, to the knowledge of such persons, threatened in any court to restrain or enjoin the issuance or delivery of the Bonds, or the collection of taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds, the Ordinance, or this Contract, or contesting the powers of the City or contesting the authorization of the Bonds or the Ordinance (but in lieu of or in conjunction with such certificate the Purchaser may, in its sole discretion, accept certificates or opinions of such Attorney that, in his opinion, the issues raised in any such pending or threatened litigation are without substance or that the contentions of all plaintiffs therein are without merit); and (iii) to the best of their knowledge, no event affecting the City has occurred which should be disclosed to the Purchaser. (5) Such additional legal opinions, certificates, instruments, and other documents as Bond Counsel or the Purchaser may reasonably request to evidence the truth, accuracy, and completeness, as of the date hereof and as of the date of Closing, of the City's representations and warranties contained herein and the due performance and satisfaction by the City at or prior to the date of Closing of all agreements then to be performed and all conditions then to be satisfied by the City. All of the opinions, letters, certificates, instruments, and other documents mentioned above or elsewhere in this Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are satisfactory to the Purchaser and Bond Counsel. If the City shall be unable to satis~ the conditions to the obligations of the Purchaser to purchase, to accept delivery of, and to pay for the Bonds as set forth in this Contract, or if the obligations of the Purchaser to purchase, to accept delivery of, and to pay for the Bonds shall be terminated for any reason permitted by this Contract, this Contract shall terminate and neither the Purchaser nor the City shall be under further obligation hereunder, except that the respective obligations of the City and the Purchaser set forth in Paragraphs g and 10 hereof shall continue in full force and effect. A-4 7. TERMINATION. The Purchaser may terminate its obligation to purchase at any time before the Closing if any of the following should occur: (a) Any action shall have been taken by the Securities and Exchange Commission or by a court which would require registration of any security under the Securities Act of 1933, as amended, or qualification of any indenture under the Trust Indenture Act of 1939, as amended, in connection with the Bonds. (b) (i) The Constitution of the State of Texas shall be amended or an amendment shall be proposed, or (ii) legislation shall be enacted, or (iii) a decision shall have been rendered as to matters of Texas law, or (iv) any order, ruling or regulation shall have been issued or proposed by or on behalf of the State of Texas by an official, agency or department thereof, affecting the tax status of the City, its property or income, or its bonds (including the Bonds), which in the judgment of the Purchaser would materially affect the market price of the Bonds. (c) (i) A general suspension of trading in securities shall have occun'ed on the New York Stock Exchange or (ii) the United States shall have become engaged in hostilities which have resulted in the declaration, on or after the date of this Purchase Contract, of a national emergency or war, the effect of which, in either case described in clause (i) and (ii), is, in the judgment of the Purchaser, so material and adverse as to make it impracticable or inadvisable to proceed with the purchase or the delivery of the Bonds on the terms and in the manner contemplated in this Conmict. (d) A general banking moratorium shall have been declared by authorities of the United States, the State of New York or the State of Texas. 8. EXPENSES. The Purchaser shall be under no obligation to pay, and the City shall pay, any expenses incident to the performance of the City's obligations hereunder, including but not limited to: (i) the cost of the preparation and, if necessary, printing of the Bonds; (ii) the fees and expenses of Bond Counsel to the City; and (ii) the fees and disbursements of the City's accountants, advisors, and of any other experts or consultants retained by the City. 9. NOTICES. Any notice or other communication to be given to the City under this Contract may be given by delivering the same in writing at the address for the City set forth above, and any notice or other communication to be given to the Purchaser under this Contract may be given by delivering the same in writing to First Interstate Bank of Texas, N.A., Atto: Claude Leatherwood, P.O. Box 3326, Houston, TX 77253-3326. 10. PARTIES IN INTEREST. This Contract is made solely for the benefit of the City and the Purchaser (including the successors or assigns of the Purchaser) and no other person shall acquire or have any right hereunder or by virtue hereof. The City's representations, warranties, and agreements contained in this Contract shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of the Purchaser and (ii) delivery of any payment for the Bonds hereunder; and the City's representations and warranties contained in Paragraph 4 of this Contract and the Purchaser's representations and warranties contained in Paragraph 4 of this contract, shall remain operative and in full force and effect, regardless of any termination of this Contract. (Remainder of this page intentionally left blank) A-5 11. EFFECHVE DATE. This Contract shall become effective upon the execution of the acceptance hereof by the Mayor of the City and shall be valid and enforceable as of the time of such acceptance. Very truly yours, FIRST INTERSTATE BANK OF TEXAS, N.A. Accepted: This 12th day of July, 1995 CITY OF COLLEGE STATION, TEXAS By¸ Name: Title: By Mayor, City of College Station, Texas A-6 Exhibit A (of Purchase Contract and Investment Letter) FORM OF BOND COUNSEL OP/NION [LETTERHEAD OF AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.] .July ._, 1995 CITY OF COLLEGE STATION, TEXAS, UTILITY SYSTEM REVENUE REFUNDING BONDS, TAXABLE SERIES 1995 DATED JULY 1, 1995 IN THE AGGREGATE PRINCIPAL AMOUNT OF $4,125,000 WE HAVE ACTED AS BOND COUNSEL FOR THE CITY OF COLLEGE STATION, TEXAS (the "Issuer"), the issuer of the Bonds described above (the "Bonds"), and in that connection we have examined into the legality and validity of the Bonds for the sole purpose of rendering an opinion with respect to the legality and validity of the Bonds under the laws of the State of Texas and for no other reason or purpose. We have not been requested to investigate or verify, and have not independently investigated or verified, any records, data, or other material relating to the financial condition or capabilities of the Issuer, and we have not assumed any responsibility with respect thereto. We have relied solely on certificates executed by officials of the Issuer as to the current outstanding indebtedness of, and assessed valuation of taxable property within, the Issuer. WE HAVE EXAMINED the applicable and pertinent provisions of the laws of the State of Texas, a transcript of certified proceedings of the Issuer, and other pertinent instruments authorizing and relating to the issuance of the Bonds, including one of the executed Bonds. BASED ON SAID EXAMINATION, IT IS OUR OPINION that the Bonds have been authorized, issued, and delivered in accordance with law; that except as may be limited by laws applicable to the Issuer relating to bankruptcy, reorganization, and other similar matters affecting creditors' rights generally, the Contractual Bonds constitute valid and legally binding obligations of the Issuer, enforceable in accordance with their terms; and Net Revenues of the City's combined Utility Systems sufficient to provide for the payment of the interest on and principal of the Bonds have been pledged for such purpose. Respectfully submitted, A-7 EXHIBIT B PURCHASE CONTRACT AND INVESTMENT LETTER (FIRST AMERICAN BANK) $3,000,000 CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS, TAXABLE SERIES 1995 PURCHASE CONTRACT AND INVESTMENT LETTER July 12, 1995 The Honorable Mayor and City Council City of College Station 1101 Texas Avenue College Station, TX 77842 Ladies and Oentlemen: The undersigned, First American Bank, Bryan, Texas (the "Purchaser") offers to enter into this Purchase Contract and Investment Letter (this "Contract") with the City of College Station, Texas (the "City"). This offer is made subject to the City's acceptance of this Contract on or before 10:00 p.m., Central Daylight Time on July 12, 1995. 1. PURCHASe- AND SALE OF THY. CONTRACTUAL OBLIGATIONS. Upon the terms and conditions and upon the basis of the representations set forth herein, the Purchaser hereby agrees to purchase from the City, and the City hereby agrees to sell and deliver to the Purchaser an aggregate of $3,000,000 principal amount of "City of College Station, Texas Utility System Revenue Refunding Bonds, Taxable Series 1995" (the "Bonds"). The Bonds shall be dated July 1, 1995, shall mature, and shall bear interest from the date of their initial delivery to the Purchaser (the "Closing" as hereinafter defmed) as described in the Ordinance adopted on this date by the City Council of the City (the "Ordinance"). The purchase price for the Bonds shall be $3,000,000. 2. ORDINANCE. The Bonds shall be as described in and shall be issued and secured under the provisions of the Ordinance. The Bonds shall not be subject to optional redemption and shall be payable as provided in the Ordinance. 3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF CFTY. On the date hereof, the City represents, warrants, and agrees as follows: (a) The City is a municipal corporation of the State of Texas and a body politic and corporate, and has full legal right, power, and authority to enter into this Contract, to adopt the Ordinance, to sell the Bonds, and to issue and deliver the Bonds to the Purchaser as provided herein and to carry out and consummate all other transactions described in the Ordinance and this Contract. (b) By official action of the City prior to or concurrently with the acceptance hereof, the City has duly adopted the Ordinance, has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations contained in the Bonds and this Contract and has duly authorized and approved the performance by the City of its obligations contained in the Ordinance and in this Contract. B-I (c) The City is not in breach of or default under any applicable law or administrative regulation of the State of Texas or the United States or any applicable judgment or decree or any loan agreement, note, resolution, agreement, or other instrument to which the City is a party or is otherwise subject, which would have a material and adverse effect upon the business or financial condition of the City; and the execution and delivery of this Contract by the City and the execution and delivery of the Bonds and the adoption of the Ordinance by the Ci.ty and compliance with the provisions of each thereof will not violate or constitute a breach of or default under any existing law, administrative regulation, judgment, decree, or any agreement or other instrument to which the City is a party or is otherwise subject. (d) All approvals, consents, and orders of any governmental authority or agency having jurisdiction of any matter which would constitute a condition precedent to the performance by the City of its obligations to sell and deliver the Bonds hereunder will have been obtained prior to the Closing. (e) Between the date of this Contract and the Closing, the City will not, without the prior written consent of the Purchaser, issue any additional bonds, notes, or other obligations for borrowed money payable from and secured by a lien on and pledge of the revenues of the System (as described in the Ordinance), and the City will not incur any material liabilities, direct or contingent, nor will there be any adverse change of a material nature in the f'mancial position of the City. (f) No litigation is pending in any court in Brazos County, Texas or, to the knowledge of the City, threatened in any court affecting the corporate existence of the City, the title of its officers to their respective offices, or seeking to restrain or enjoin the issuance or delivery of the Bonds, the collection of revenues pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the issuance, execution, delivery, payment, security, or validity of the Bonds, or in any way contesting or affecting the validity or enforceability of the Ordinance or this Contract, or contesting the powers of the City, or any authority for the Bonds, the Ordinance, or this Contract. (g) The Bonds, when validly executed, authenticated, and delivered in accordance with the Ordinance and sold to the Purchaser as provided herein, will be validly issued and outstanding obligations of the City, enforceable in accordance with their terms, entitled to the benefits of, and subject to the limitations contained in, the Ordinance. (h) Between the date of this Contract and the date of the Closing the City shall disclose to, discuss with, and provide any information reasonably requested by the Purchaser in connection with any breach, default, or failure to comply, of whatever nature and of which the City, has knowledge regarding any law, loan agreement, indenture, bond, note, resolution, agreement, or other instrument to which the City is a party or to which the City, or any of the property or assets of the City is otherwise subject. 4. REPRESENTATIONS, WARRANTIES, AND AGREEMENTS OF PURCHASER. The Purchaser hereby makes the following representations and warranties to the City: (a) The Purchaser has the full right, power and authority to enter into this Contract, and this Contract constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, moratorium, reorganization, or other laws of general application affecting the enforcement of creditors' rights or by equitable principles, and subject to the unavailability in any jurisdiction of specific performance or any other equitable remedy. (b) The Purchaser is a sophisticated and well informed investor, has knowledge and experience in financial and business matters relating to the investment in the Bonds, and is capable of evaluating the merits and risks (including the security pledged to the payment of the Bonds) of such investment and protecting its interests in connection with this f'mancing. The Purchaser has the financial ability to bear the economic risks of purchasing the Bonds, including the complete loss of the investment. B-2 (c) The Purchaser understands the term "accredited investor" as used in Regulation D promulgated under the Securities Act of 1933, as amended and Purchaser represents and wan'ants that such Purchaser is an "accredited investor" for purposes of acquiring the Bonds. (d) The Purchaser has made its own inquiry and analysis with respect to the Bonds, the security therefor, the equipment to be financed with the proceeds of the Bonds, and other material factors affecting the security and payment of the Bonds, and, except as set forth in this Contract and the documents, instruments, and agreements executed in connection herewith, the Purchaser has not relied upon any statement (other than those set forth in such documents, instruments, and agreements) by the City, its officers, trustees, or employees, or its financial consultants or legal advisors in connection with such inquiry and analysis or in connection with the offer and sale of the Bonds. (e) The Purchaser acknowledges that it and its representatives have been furnished, prior to the date hereof, or will be furnished at or prior to the Closing pursuant to the terms of this Contract, all documents and certificates executed in connection with the authorization and issuance of the Bonds and all information concerning the f'mancing needed to make an informed decision with respect to its investment in the Bonds. The Purchaser further acknowledges that it has full opportunity to ask questions and receive answers from officers and representatives of the City concerning the financing and to obtain any additional information which the City possesses which was necessary to verify the accuracy of the information regarding the City, the financing, or otherwise desired in connection with its evaluation of the decision to purchase the Bonds. (f) The Purchaser is purchasing thc Bonds for its own account for investment only and the Purchaser has no present intention of reselling or distributing the Bonds. In making the foregoing representation, the Purchaser is aware that it must bear the economic risk of such investment for an indefinite period of time, and, in the event that the Bonds are sold by the Purchaser, such sale may only be made to persons who are able to and do confirm in writing to the City in advance of such sale the representations contained in paragraphs (a) through (f) hereof. 5. CLOSING. At 10:00 A.M., Central Time, on July 19, 1995, or such other date as the parties agree to (the "Closing"), the City will deliver Initial Bond No. I-1 (as defined in the Ordinance) to the Purchaser, in the form requested by the Purchaser, duly executed and authenticated, together with the other documents hereinafter mentioned, and the Purchaser will accept such delivery and pay the purchase price of the Bonds as set forth in Paragraph I hereof in immediately available funds. Delivery and payment as aforesaid shall be made at the offices of the Purchaser or such other place as shall have been mutually agreed upon by the City and the Purchaser. The Bonds shall be delivered in typed form as requested by the Purchaser; shall be prepared and delivered as a fully registered obligation in the single denomination of $3,000,000; and shall be registered in the name of the Purchaser. 6. CONDITIONS. The Purchaser has entered into this Contract in reliance upon the representations and warranties of the City contained herein and to be contained in the documents and instruments to be delivered at the Closing, and upon the performance by the City of its obligations hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the Purchaser's obligations under this Contract to purchase and pay for the Bonds shall be subject to the performance by the City of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following conditions: (a) The representations and warranties of the City contained herein shall be true, complete, and correct in all material respects on the date hereof and on and as of the date of Closing, as if made on the date of Closing; (b) At the time of the Closing, the Ordinance shall be in full force and effect and shall not have been amended or supplemented except as may have been agreed to by the Purchaser; (c) At the time of the Closing, all official action of the City related to the Ordinance shall be in full force and effect and shall not have been amended, modified, or supplemented; B-3 (d) The City shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money; (e) At or prior to the Closing, the Purchaser shall have received one copy of each of the following documents: (1) The Ordinance certified by the Mayor and the City Secretary of the City under its seal as having been duly adopted by the City and as being in effect, with such changes or amendments as may have been agreed to by the Purchaser; (2) An opinion, dated the date of Closing, of Akin, Oump, Strauss, Hauer & Feld, L.L.P., Bond Counsel to the City, in form and substance attached as Exhibit A to this Contract; (3) An unqualified opinion, dated on or prior to the date of Closing, of the Attorney General of Texas, approving the Bonds as required by law; (4) A certificate, dated the date of Closing, signed by the Mayor and thc Executive Director of Fiscal and Human Resources of the City, to the effect that (i) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (ii) no litigation is pending in any court in Brazos County, Texas or, to the knowledge of such persons, threatened in any court to restrain or enjoin the issuance or delivery of the Bonds, or the collection of taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds, the Ordinance, or this Contract, or contesting the powers of the City or contesting the authorization of the Bonds or the Ordinance (but in lieu of or in conjunction with such certificate the Purchaser may, in its sole discretion, accept certificates or opinions of such Attorney that, in his opinion, the issues raised in any such pending or threatened litigation are without substance or that the contentions of all plaintiffs therein are without merit); and (iii) to the best of their knowledge, no event affecting the City has occurred which should be disclosed to the Purchaser. ($) Such additional legal opinions, certificates, instruments, and other documents as Bond Counsel or the Purchaser may reasonably request to evidence the truth, accuracy, and completeness, as of the date hereof and as of the date of Closing, of the City's representations and warranties contained herein and the due performance and satisfaction by the City at or prior to the date of Closing of all agreements then to be performed and all conditions then to be satisfied by the City. All of the opinions, letters, certificates, instruments, and other documents mentioned above or elsewhere in this Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are satisfactory to the Purchaser and Bond Counsel. If the City shall be unable to satisfy the conditions to the obligations of the Purchaser to purchase, to accept delivery of, and to pay for the Bonds as set forth in this Contract, or if the obligations of the Purchaser to purchase, to accept delivery of, and to pay for the Bonds shall be terminated for any reason permitted by this Contract, this Contract shall terminate and neither the Purchaser nor the City shall be under further obligation hereunder, except that the respective obligations of the City and the Purchaser set forth in Paragraphs 8 and 10 hereof shall continue in full force and effect. 7. TERMINATION. The Purchaser may terminate its obligation to purchase at any time before the Closing if any of the following should occur: (a) Any action shall have been taken by the Securities and Exchange Commission or by a court which would require registration of any security under the Securities Act of 1933, as amended, or qualification of any indenture under the Trust Indenture Act of 1939, as amended, in connection with the Bonds. (b) (i) The Constitution of the State of Texas shall be amended or an amendment shall be proposed, or (ii) legislation shall be enacted, or (iii) a decision shall have been rendered as to matters of Texas law, or (iv) any B-4 order, ruling or regulation shall have been issued or proposed by or on behalf of the State of Texas by an official, agency or department thereof, affecting the tax status of the City, its property or income, or its bonds (including the Bonds), which in the judgment of the Purchaser would materially affect the market price of the Bonds. (c) (i) A general suspension of trading in securities shall have occurred on the New York Stock Exchange or (ii) the United States shall have become engaged in hostilities which have resulted in the declaration, on or at, er the date of this Purchase Contract, of a national emergency or war, the effect of which, in either case described in clause (i) and (ii), is, in the judgment of the Purchaser, so material and adverse as to make it impracticable or inadvisable to proceed with the purchase or the delivery of the Bonds on the terms and in the manner contemplated in this Contract. (d) A general banking moratorium shall have been declared by authorities of the United States, the State of New York or the State of Texas. g. EXPENSES. The Purchaser shall be under no obligation to pay, and the City shall pay, any expenses incident to the performance of the City's obligations hereunder, including but not limited to: (i) the cost of the preparation and, if necessary, printing of the Bonds; (ii) the fees and expenses of Bond Counsel to the City; and (ii) the fees and disbursements of the City's accountants, advisors, and of any other experts or consultants retained by the City. 9. NOTICES. Any notice or other communication to be given to the City under this Contract may be given by delivering the same in writing at the address for the City set forth above, and any notice or other communication to be given to the Purchaser under this Contract may be given by delivering the same in writing to First American Bank, Atto: Ivan Olson, 1111 Briarcrest, Bryan, TX 77802. 10. PARTIES IN INT~. This Contract is made solely for the benefit of the City and the Purchaser (including the successors or assigns of the Purchaser) and no other person shall acquire or have any right hereunder or by virtue hereof. The City's representations, warranties, and agreements contained in this Contract shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of the Purchaser and (ii) delivery of any payment for the Bonds hereunder; and the City's representations and warranties contained in Paragraph 4 of this Contract and the Purchaser's representations and warranties contained in Paragraph 4 of this contract, shall remain operative and in full force and effect, regardless of any termination of this Contract. (Remainder of this page intentionally let blank) B-5 11. EFFECrlVE DATE. This Contract shall become effective upon the execution of the acceptance hereof by the Mayor of the City and shall be valid and enforceable as of the time of such acceptance. Very truly yours, FIRST AMERICAN BANK Accepted: This 12th day of July, 1995 CITY OF COLLEGE STATION, TEXAS By Name: Title: By Mayor, City of College Station, Texas B-6 Exhibit A (of Purchase Contract and Investment Letter) FORM OF BOND COUNSEL OPINION [LETTERHEAD OF AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.] July __, 1995 CITY OF COLLEGE STATION, TEXAS, UTILITY SYSTEM REVENUE REFUNDING BONDS, TAXABLE SERIES 1995 DATED JULY 1, 1995 IN THE AGGREGATE PRINCIPAL AMOUNT OF $3,000,000 WE HAVE ACTED AS BOND COUNSEL FOR THE CITY OF COLLEGE STATION, TEXAS (the "Issuer"), the issuer of the Bonds described above (the "Bonds"), and in that connection we have examined into the legality and validity of the Bonds for the sole purpose of rendering an opinion with respect to the legality and validity of the Bonds under the laws of the State of Texas and for no other reason or purpose. We have not been requested to investigate or verify, and have not independently investigated or verified, any records, data, or other material relating to the financial condition or capabilities of the Issuer, and we have not assumed any responsibility with respect thereto. We have relied solely on certificates executed by officials of the Issuer as to the current outstanding indebtedness of, and assessed valuation of taxable property within, the Issuer. WE HAVE EXAMINED the applicable and pertinent provisions of the laws of the State of Texas, a transcript of certified proceedings of the Issuer, and other pertinent instruments authorizing and relating to the issuance of the Bonds, including one of the executed Bonds. BASED ON SAID EXAMINATION, IT IS OUR OPINION that the Bonds have been authorized, issued, and delivered in accordance with law; that except as may be limited by laws applicable to the Issuer relating to bankruptcy, reorganization, and other similar matters affecting creditors' rights generally, the Contractual Bonds constitute valid and legally binding obligations of the Issuer, enforceable in accordance with their terms; and Net Revenues of the City's combined Utility Systems sufficient to provide for the payment of the interest on and principal of the Bonds have been pledged for such purpose. Respectfully submitted, B-7 EXHIBIT C PAYING AGENT/REGISTRAR AGREEMENT THIS PAYING AGENT/REGISTRAR AGREEMENT entered into as of July I, 1995 (the "Agreement"), by and between the CITY OF COLLEGE STATION, TEXAS (the "Issuer"), and FIRST INTERSTATE BANK OF TEXAS, N.A., Houston, Texas, a banking association duly organized and existing under the laws of the United States of America (the "Bank"). RECITALS WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of College Station, Texas Utility System Revenue Refunding Bonds, Taxable Series 1995" (the "Securities"), such Securities to be issued in fully registered form only as to the payment of principal and interest thereon; WHEREAS, the Securities are scheduled to be delivered to the initial purchaser thereof as provided in the "Ordinances*' (hereinafter defined); WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest on the Securities and with respect to the registration, transfer, and exchange thereof by the registered owners thereof; WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE I. APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities. As Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the Securities as the same become due and payable to the registered owners thereof, all in accordance with this Agreement and the Ordinance. The Issuer hereby appoints the Bank as Registrar with respect to the Securities. As Registrar for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the ownership of said Securities and with respect to the transfer and exchange thereof as provided herein and in the Ordinance. The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for the Securities. Section 1.02. Compensation. As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in Schedule A attached hereto for the first year of this Agreement and thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (including the reasonable compensation and the expenses and disbursements of its agents and counsel). C-! ARTICLE Il. DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Bank Office" means the designated corporate trust office of the Bank as indicated on the signature page hereof. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Fiscal Year" means the fiscal year of the Issuer, ending September 30. "Holder" and "Security Holder" each means the Person in whose name a Security is registered in the Security Register. "Issuer Request" and "Issuer Order'* means a written request or order signed in the name of the Issuer by the Mayor of the Issuer, the Director of Finance of the Issuer, the City Administrator, or the City Secretary of the Issuer, any one or more of said officials, delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized to be closed. "Ordinance" mean the ordinance of the governing body of the Issuer pursuant to which the Securities are issued, certified by the City Secretary or any other officer of the Issuer and delivered to the Bank. "Person" means any individual, corporation, parmership, joint venture, association, joint stock company, uust, unincorporated organization or government or any agency or political subdivision of a government. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this def'mition, any mutilated, lost, destroyed, or stolen Security for which a replacement Security has been registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the Ordinance). "Redemption Date" when used with respect to any Bond to be redeemed means the date fixed for such redemption pursuant to the terms of the Ordinance. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice-Chairman of the Board of Directors, the Chairman or Vice-chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Security Register" means a register maintained by the Bank on behalf of the Issuer providing for the registration and transfer of the Securities. "Stated Maturity" means the date specified in the Ordinance the principal of a Security is scheduled to be due and payable. Section 2.02. Other Definitions. The terms "Bank," Issuer," and "Securities (Security)" have the meanings assigned to them in the recital paragraphs of this Agreement. The term "Paying Agent/RegisUar" refers to the Bank in the performance of the duties and functions of this Agreement. C-2 ARTICLE III. PAYING AGENT Section 3.01. Duties of Pavlnt Anent. As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the Bank Office. As Paying Agent, the Bnnk shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by computing the amount of interest to be paid each Holder and preparing and sending checks by United States Mail, first class postage prepaid, on each payment date, to the Holders of the Securities (or their Predecessor Securities) on the respective Record Date, to the address appearing on the Security Register or by such other method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and expense. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities on the dates specified in the Ordinance. ARTICLE IV. REGISTRAR Section 4.01. Security Register - Transfers and Exchanges, The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein sometimes referred to as the "Security Register") for recording the names and addresses of the Holders of the Securities, the transfer, exchange, and replacement of the Securities, and the payment of the principal of and interest on the Securities to the Holders and containing such other information as may be reasonably required by the Issuer and subject to such reasonable regulations as the Issuer and the Bank may prescribe. All transfers, exchanges, and replacement of Securities shall be noted in the Security Register. Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written insmunent of transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in writing. The Bank may request any supporting documentation it feels necessary to effect a re-registration, transfer, or exchange of the Securities. To the extent possible and under reasonable circumstances, the Bank agrees that, in relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assignee oftbe Holder in not more than three business days after the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Regisl~tr. Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept in safekeeping pending their use, and reasonable care will be exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than the care maintained by the Bnnk for debt securities of other political subdivisions or corporations for which it serves as registrar, or that is maintained for its own securities. Section 4.03. Form of Security Reaister. The Bank, as RegisUar, will maintain the Security Register relating to the registration, payment, transfer, and exchange of the Securities in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such C-3 Security Register in any form other than those which the Bank has currently available and currently utilizes at The Security Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information contained in the Security Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. Unless required by law, the Bank will not release or disclose the contents of the Security Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of the contents of the Security Register. Section 4.05. Return of Cancelled Certificates. The Bank will, at such reasonable intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for which other Securities have been issued, or which have been paid. Section 4.06. Mutilated, Destroyed~ Lost or Stolen Securities~ The Issuer hereby instructs the Bank, subject to the applicable provisions of the Ordinance, to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the same does not result in an over issuance. In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank, in its discretion, may execute and deliver a replacement Security of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only after (i) the filing by the Holder thereof with the Bank of evidence satisfactory to the Bank of the destruction, loss, or theft of such Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges associated with such indemnity and with the preparation, execution, and delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or destroyed, lost, or stolen. Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request ~om the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the Wansfer or exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06. ARTICLE V. THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and agrees to usc reasonable care in the performance thereof. Section 5.02. Reliance on Documents~ Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank. Co) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. C=4 (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its fights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Securities, but is protected in acting upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document supplied by Issuer. (e) The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (fi The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. Section 5.05. Money Held by Bank. The Bank shall deposit any money received from the Issuer into a trust account to be held in trust for the payment of the Securities, with such money in the account that exceed the deposit insurance, available to the Issuer, provided by the Federal Deposit Insurance Corporation to be fully collateralized with securities or obligations that are eligible under the laws of the State of Texas to secure and be pledged as collateral for trust accounts until the principal and interest on such securities have been presented for payment and paid to the owner thereof. Payments made from such trust account shall be made by check drawn on such trust account unless the owner of such Securities shall, at its own expense and risk, request such other medium of payment. All funds at any time and from time to time provided to or held by the Bank hereunder shall be deemed, construed, and considered for all purposes as being provided to or held by the Bank in trust. The Bank acknowledges, covenants, and represents that it is acting herein in Uust in relation to such funds, and is not accepting, holding, administering, or applying such funds as a banking depository, but solely as a paying agent for and on behalf of the Security thereto. The Holders shall be entitled to the same preferred claim and first lien on the funds so provided as are enjoyed by the beneficiaries of trust funds generally. The funds provided to the Bank hereunder shall not be subject to warrants, drafts or checks drawn by the Issuer and, except as expressly provided herein, shall not be subject to compromise, setoff, or other charge or diminution by the Bank. The Bank shall be under no liability for interest on any money received by it hereunder. C-$ Subject to the unclaimed property laws of the State of Texas and any provisions in the Ordinance to the contrary, any money deposited with the Bank for the payment of the principal, premium (if any), or interest on any Security and remaining unclaimed for three years after final maturity of the Security has become due and payable will be paid by the Bank to the issuer, and the Holder of such Security shall thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to such money shall thereupon cease. If thc Issuer does not elect, the Bank is directed to report and dispose of the funds in compliance with Title 6 of the Texas Property Code, as amended. Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred without negligence or bad faith on its part, arising out of or in connection with its acceptance or administration of its duties hereunder, including the cost and expense against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in either a Federal or State District Court located in the State and County where either the Bank Office or the administrative offices of the Issuer is located, and agree that service of process by certified or registered mail, return receipt requested, to the address referred to in Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction to determine the rights of any Person claiming any interest herein. Section 5.08. Depository Trust Company Services. It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for '*Depository Trust Company* services or equivalent depository ~ust services by other organizations, the Bank has the capability and, to the extent within its control, will comply with the "Operational Arrangements,*' effective August 1, 1987, which establishes requirements for securities to be eligible for such type depository trust services, including, but not limited to, requirements for the timeliness of payments and funds availability, transfer turnaround time, and notification of redemptions and calls. Section 5.09. Reoortine Reouirements of Pavina Atent/Reaistrar. To the extent required by the Code and the regulations promulgated and pertaining thereto, it shall be the duty of the Paying Agent/Registrar, on behalf of the Issuer, to report to the owners of the Bonds and the Internal Revenue Service (i) the amount of '*reportable payments", if any, subject to backup withholding during each year and the amount of tax withheld, if any, with respect to payments of the Bonds and (ii) the amount of interest or amount treating ns interest on the Bonds and required to be included in gross income of the owner thereof. ARTICLE VI. MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 6.02. Assitnment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on the signature page of this Agreement. Section 6.04. Effect of HeadinRs. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. C-6 Section 6.0S. Successors and Assigns. Ali covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not. Section 6.06. Severabilitv. In case any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 6.07. Benefits of A~reement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder. Section 6.08. Entire A~reement. This Agreement and the Ordinance constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between this Agreement and the Ordinance, the Ordinance shall govern. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and thc same Agreement. Section 6.10. Termination. This Agreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon 60 days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Paying Agant/Registrar has been appointed by the Issuer and such appointment accepted and (b) notice has been given to the Holders of the Securities of the appointment of a successor Paying Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an early termination of this Agreement shall not occur at any time which would disrupt, delay, or otherwise adversely affect the payment of the Securities. Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver the Security Register (or a copy thereof), together with other pertinent books and records relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer. The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the termination of this Agreement. (Remainder of this page intentionally left blank) C-7 Seetion 6.11..~. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. Attest: FIRST INTERSTATE BANK OF TEXAS, N.A. Houston, Texas By. Title (BANK SEAL) By Title Address: P.O. Box 3326 Houston, Texas 77253-3326 Attest: CITY OF COLLEGE STATION, TEXAS By¸ City Secretary (ISSUER SEAL) By Address: Mayor 1101 Texas Avenue College Station, Texas 77840 C-8 SCHEDULE A Paying Agent/Regis'n'ar Fee Schedule C-9 EXHIBIT D NOTICE OF PRIOR REDEMPTION To the Holders of THE FOLLOWING DESCRIBED CITY OF COLLEGE STATION, TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 1985 NOTICE IS HEREBY GIVEN that the City of College Station, Texas (the "Issuer") has called for redemption ON AUGUST 1, 1995 AT 100% OF PAR PLUS ACCRUED INTEREST the following described outstanding Utility System Revenue Refunding Bonds (the "Bonds") of the Issuer as follows: SERIES 1985, DATED JANUARY 15, 1985 PRINCIPAL MATURITY DATES PRESENT CUSIP AMOUNT INTEREST February I NUMBERS REFUNDED RATE 1997 194493 HS 4 $2,055,000 9.10% 1998 194493 HU 9 2,000,000 9.25% 1999 194493 GB 2 1,525,000 9.40% 2000 194493 HW 5 600,000 9.50% 2001 194493 GD 8 905~000 9.50% TOTAL $7,085,000 NOTICE IS FURTHER GIVEN that due and proper arrangements have been made for providing Texas Commerce Bank National Association, Houston, Texas, as the successor to First City, Texas - Houston, Houston, Texas, the successor to First City National Bank of Houston, Houston, Texas, the Paying Agent for the Bonds called for redemption, with funds sufficient to pay the redemption price of the Bonds equal to the principal amount of the Bonds and the interest thereon to the redemption date. In the event the Bonds, or any of them are not presented for redemption by the date fixed for their redemption, they shall not thereafter bear interest. If due provision for the payment of the redemption price is made, then the Bonds automatically shall be deemed to have been redeemed prior to their scheduled maturity, and they shall not bear interest after the redemption date, and they shall not be regarded as being outstanding except for the fight of the owner thereof to receive the redemption price fi.om the Paying Agent. THIS NOTICE is issued and given pursuant to the redemption provisions in the proceedings authorizing the issuance of the Bonds and in accordance with the recitals and provisions of each of the Bonds. NOTICE IS FURTHER GIVEN THAT the Bonds will be payable at and should be submitted either in person or by certified or registered mail to the following address: TEXAS COMMERCE BANK NATIONAL ASSOCIATION By Hand c/o Bond Payment Unit 1900 Pacific Avenue, 15th Floor Dallas, Texas 75201 OR By Mail c/o Bond Payment Unit P.O. Box 2320 Dallas, Texas 75221-2320 D-I