Ord. 0981-07-31-00DRAFT
ORDINANCE NO. 981
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, AUTHORIZING AND ORDERING THE ISSUANCE OF CITY OF
PEARLAND, TEXAS PERMANENT IMPROVEMENT REFUNDING BONDS,
SERIES 2000; PRESCRIBING THE TERMS AND FORM THEREOF;
PROVIDING FOR THE PAYMENT OF THE PRINCIPAL THEREOF AND
INTEREST THEREON; AWARDING THE SALE THEREOF; AUTHORIZING
THE PREPARATION AND DISTRIBUTION OF AN OFFICIAL STATEMENT
TO BE USED IN CONNECTION WITH THE SALE OF THE BONDS;
AUTHORIZING THE PURCHASE OF BOND INSURANCE; MAKING
OTHER PROVISIONS REGARDING SUCH BONDS, INCLUDING USE OF
THE PROCEEDS THEREOF, AND MATTERS INCIDENT THERETO; AND
DECLARING AN EMERGENCY BECAUSE THE NEED TO OBTAIN A NET
PRESENT VALUE DEBT SERVICE SAVINGS INURES TO THE BENEFIT OF
THE PUBLIC AND, THEREFORE, BEARS DIRECTLY UPON THE HEALTH,
SAFETY AND WELFARE OF THE CITIZENRY.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
"ARTICLE I.
FINDINGS AND DETERMINATIONS
Section 1.1. Findings and Determinations. The City Council hereby officially finds
and determines that:
(a) The City of Pearland, Texas (the "City"), acting through its City Council, has
heretofore issued, assumed or undertaken and there remain outstanding the
bonds and other obligations described in Exhibit F attached hereto
(the "Refunded Bonds");
(b) The City desires to refund the Refunded Bonds in advance of their maturities
which will benefit the City by resulting in a net present value debt service
savings to the City;
(c) The City is authorized by Chapter 1207, Texas Government Code, as
amended, to accomplish such refunding by depositing directly with any place
of payment for the Refunded Bonds proceeds from the sale of the refunding
bonds authorized herein, together with any other legally available funds,
which shall be sufficient to provide for the payment of the Refunded Bonds
on their date of redemption, and such deposit shall constitute the making of
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ORDINANCE NO. 981
firm banking and financial arrangements for the discharge and final payment
of the Refunded Bonds;
(d) The City desires to enter into an escrow agreement (the "Escrow
Agreement") with Chase Bank of Texas, National Association, Houston,
Texas, as escrow agent, as authorized in Chapter 1207, pursuant to which
a portion of the proceeds of the refunding bonds herein authorized, and other
legally available funds of the City, will be deposited and applied in a manner
sufficient to provide for the full and timely payment of all principal of,
premium, if any, and interest on the Refunded Bonds;
(e) Upon the issuance of the refunding bonds herein authorized and the creation
of the escrow referred to above, the Refunded Bonds shall no longer be
regarded as being outstanding, except for the purpose of being paid
pursuant to such Escrow Agreement, and the pledges, liens, trusts and all
other covenants, provisions, terms and conditions of the ordinance
authorizing the issuance of the Refunded Bonds shall be, with respect to the
Refunded Bonds, discharged, terminated and defeased; and
The City Council is of the opinion and hereby affirmatively finds that it is in
the best interest of the City to issue bonds in the amounts and for the
purposes herein stated.
ARTICLE II.
DEFINITIONS AND INTERPRETATIONS
Section 2.1. Definitions. As used herein, the following terms shall have the
meanings specified, unless the context clearly indicates otherwise:
"Act" shall mean Chapter 1207, Texas Government Code, as amended.
"Attorney General" shall mean the Attorney General of the State of Texas.
"Bond" or "Bonds" shall mean any or all of the City of Pearland, Texas Permanent
Improvement Refunding Bonds, Series 2000, authorized by this Ordinance.
"Bond Insurance Policy" shall mean the municipal bond new issue insurance policy
issued by the Bond Insurer that guarantees the scheduled payment of principal of and
interest on the Bonds when due.
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"Bond Insurer" shall mean Financial Security Assurance Inc., a New York stock
insurance company, or any successor thereto or assignee thereof.
"City" shall mean the City of Pearland, Texas and, where appropriate, its City
Council.
"City Council" shall mean the governing body of the City.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas.
"Escrow Agent" shall mean Chase Bank of Texas, National Association, Houston,
Texas, and its successors in that capacity.
"Escrow Agreement" shall mean the agreement between the City and the Escrow
Agent relating to the deposit of funds to pay the Refunded Bonds.
"Fiscal Year" shall mean the City's then designated fiscal year, which currently is the
twelve-month period beginning on the first day of October of a calendar year and ending
on the last day of September of the next succeeding calendar year and each such period
may be designated with the number of the calendar year in which such period ends.
"Interest Payment Date," when used in connection with any Bond, shall mean
March 1, 2001, and each September 1 and March 1 thereafter until maturity or earlier
redemption of such Bond.
"Issuance Date" shall mean the date on which the Bonds are delivered to and paid
for by the Underwriter.
"Ordinance" shall mean this Ordinance and all amendments hereof and
supplements hereto.
"Outstanding", when used with reference to the Bonds, shall mean, as of a particular
date, all Bonds theretofore and thereupon delivered pursuant to this Ordinance except:
(a) any Bonds canceled by or on behalf of the City at or before such date; (b) any Bonds
defeased pursuant to the defeasance provisions of this Ordinance or otherwise defeased
as permitted by applicable law; and (c) any Bonds in lieu of or in substitution for which a
replacement Bond shall have been delivered pursuant to this Ordinance.
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"Paying Agent/Registrar" shall mean Wells Fargo Bank Texas, N.A., and its
successors in that capacity.
"Record Date" shall mean the close of business on the fifteenth calendar day of the
calendar month immediately preceding the applicable Interest Payment Date.
"Refunded Bonds" shall mean those bonds and other obligations described in
Exhibit F attached hereto, which are being refunded and defeased with the proceeds of the
Bonds and other legally available funds of the City, if any.
"Register" shall mean the registration books for the Bonds kept by the Paying
Agent/Registrar in which are maintained the names and addresses of, and the principal
amounts registered to, each Registered Owner of Bonds.
"Registered Owner" or "Owner" shall mean the person or entity in whose name any
Bond is registered in the Register.
"Report" shall mean the report of Grant Thornton LLP verifying the accuracy of
certain mathematical computations relating to the Bonds and the Refunded Bonds.
"Underwriter" shall mean the entity or entities specified in Section 7.1 hereof.
Section 2.2. Interpretations. All terms defined herein and all pronouns used in this
Ordinance shall be deemed to apply equally to singular and plural and to all genders. The
titles and headings of the articles and sections of this Ordinance have been inserted for
convenience of reference only and are not to be considered a part hereof and shall not in
any way modify or restrict any of the terms or provisions hereof. This Ordinance and all
the terms and provisions hereof shall be liberally construed to effectuate the purposes set
forth herein and to sustain the validity of the Bonds and the validity of the levy of ad
valorem taxes to pay the principal of and interest on the Bonds.
ARTICLE III.
TERMS OF THE BONDS
Section 3.1. Amount, Purpose and Authorization.
(a) The Bonds shall be issued in fully registered form, without coupons, under
and pursuant to the authority of the Act in the total authorized aggregate
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principal amount of TEN MILLION EIGHT HUNDRED FIFTY-FIVE
THOUSAND AND NO/100 DOLLARS ($10,855,000) for the purpose of
refunding the Refunded Bonds. Proceeds of the Bonds also will be used to
pay costs of issuance of the Bonds.
(b) It is hereby found and determined that the refunding of the Refunded Bonds
and the issuance of the Bonds will benefit the City by resulting in a net
present value debt service savings of $ to the City, and that
such benefit is sufficient consideration for the issuance of the refunding
portion of the Bonds.
Section 3.2. Designation, Date and Interest Payment Dates. The Bonds shall be
designated as the "City of Pearland, Texas Permanent Improvement Refunding Bonds,
Series 2000," and shall be dated August 1, 2000. The Bonds shall bear interest at the
rates set forth in Section 3.3 below, from the later of August 1, 2000 or the most recent
Interest Payment Date to which interest has been paid or duly provided for, calculated on
the basis of a 360-day year of twelve 30-day months, payable on March 1, 2001, and each
September 1 and March 1 thereafter until maturity or earlier redemption.
If interest on any Bond is not paid on any Interest Payment Date and continues
unpaid for thirty (30) days thereafter, the Paying Agent/Registrar shall establish a new
record date for the payment of such interest, to be known as a Special Record Date. The
Paying Agent/Registrar shall establish a Special Record Date when funds to make such
interest payment are received from or on behalf of the City. Such Special Record Date
shall be fifteen (15) days prior to the date fixed for payment of such past due interest, and
notice of the date of payment and the Special Record Date shall be sent by United States
mail, first class, postage prepaid, not later than five (5) days prior to the Special Record
Date, to each affected Registered Owner as of the close of business on the day prior to
mailing of such notice.
Section 3.3. Numbers, Denomination, Interest Rates and Maturities.
(a) The Bonds shall be initially issued bearing the numbers, in the principal
amounts and bearing interest at the rates set forth in the following schedule,
and may be transferred and exchanged as set out in this Ordinance. The
Bonds shall mature on March 1 in each of the years and in the amounts set
out in such schedule. Bonds delivered in transfer of or in exchange for other
Bonds shall be numbered in order of their authentication by the Paying
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Agent/Registrar, shall be in the denomination of $5,000 or integral multiples
thereof and shall mature on the same date and bear interest at the same rate
as the Bond or Bonds in lieu of which they are delivered.
Bond Year of Principal Interest
Number Maturity Amount Rate
R-1 2002
R-2 2003
R-3 2004
R-4 2005
R-5 2006
R-6 2007
R-7 2008
R-8 2009
Section 3.4. Manner of Payment, Characteristics, Execution and Authentication.
The Paying Agent/Registrar is hereby appointed the paying agent for the Bonds. The
Bonds shall be payable, shall have the characteristics and shall be executed, sealed,
registered and authenticated, all as provided and in the manner indicated in the FORM OF
BONDS set forth in Article IV of this Ordinance. If any officer of the City whose manual or
facsimile signature shall appear on the Bonds shall cease to be such officer before the
authentication of the Bonds or before the delivery of the Bonds, such manual or facsimile
signature shall nevertheless be valid and sufficient for all purposes as if such officer had
remained in such office.
The approving legal opinion of Mayor, Day, Caldwell & Keeton, L.L.P., Houston,
Texas, Bond Counsel, may be printed on the back of the Bonds over the certification of the
City Secretary, which may be executed in facsimile. CUSIP numbers also may be printed
on the Bonds, but errors or omissions in the printing of either the opinion or the numbers
shall have no effect on the validity of the Bonds.
Section 3.5. Authentication. Except for the Bonds to be initially issued, which need
not be authenticated by the Paying Agent/Registrar, only such Bonds as shall bear thereon
a certificate of authentication, substantially in the form provided in Article IV of this
Ordinance, manually executed by an authorized representative of the Paying
Agent/Registrar, shall be entitled to the benefits of this Ordinance or shall be valid or
obligatory for any purpose. Such duly executed certificate of authentication shall be
conclusive evidence that the Bond so authenticated was delivered by the Paying
Agent/Registrar hereunder.
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Section 3.6. Ownership. The City, the Paying Agent/Registrar and any other
person may treat the person in whose name any Bond is registered as the absolute owner
of such Bond for the purpose of making and receiving payment of the principal thereof and
interest thereon and for all other purposes, whether or not such Bond is overdue, and
neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge
to the contrary. All payments made to the person deemed to be the Registered Owner of
any Bond in accordance with this Section shall be valid and effective and shall discharge
the liability of the City and the Paying Agent/Registrar upon such Bond to the extent of the
sums paid.
Section 3.7. Registration, Transfer and Exchange. The Paying Agent/Registrar is
hereby appointed the registrar for the Bonds. So long as any Bond remains Outstanding,
the Paying Agent/Registrar shall keep the Register at its office in Houston, Texas in which,
subject to such reasonable regulations as it may pre -scribe, the Paying Agent/Registrar
shall provide for the registration and transfer of the Bonds in accordance with the terms of
this Ordinance.
Each Bond shall be transferable only upon the presentation and surrender thereof
at the office of the Paying Agent/Registrar, accompanied by an assignment duly executed
by the Registered Owner or his authorized representative in form satisfactory to the Paying
Agent/Registrar. Upon due presentation of any Bond for transfer, the Paying
Agent/Registrar shall authenticate and deliver in exchange therefor, within seventy-two (72)
hours after such presentation, a new Bond or Bonds, registered in the name of the
transferee or transferees, in authorized denominations and of the same maturity and
aggregate principal amount and bearing interest at the same rate as the Bond or Bonds
so presented and surrendered.
All Bonds shall be exchangeable upon the presentation and surrender thereof at the
office of the Paying Agent/Registrar for a Bond or Bonds, maturity and interest rate and in
any authorized denomination, in an aggregate principal amount equal to the unpaid
principal amount of the Bond or Bonds presented for exchange. The Paying
Agent/Registrar shall be and is hereby authorized to authenticate and deliver exchange
Bonds in accordance with the provisions of this Section. Each Bond delivered by the
Paying Agent/Registrar in accordance with this Section shall be entitled to the benefits and
security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such
Bond is delivered.
All Bonds issued in transfer or exchange shall be delivered to the Registered
Owners thereof at the office of the Paying Agent/Registrar or sent by United States mail,
first class, postage prepaid.
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ORDINANCE NO. 981
The City or the Paying Agent/Registrar may require the Registered Owner of any
Bond to pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with the transfer or exchange of such Bond. Any fee or charge of
the Paying Agent/Registrar for such transfer or exchange shall be paid by the City.
Section 3.8. Replacement Bonds. Upon the presentation and surrender to the
Paying Agent/Registrar of a damaged or mutilated Bond, the Paying Agent/Registrar shall
authenticate and deliver in exchange therefor a replacement Bond, of the same maturity,
interest rate and principal amount, bearing a number not contemporaneously outstanding.
The City or the Paying Agent/Registrar may require the Registered Owner of such Bond
to pay a sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith and any other expenses connected therewith, including the fees
and expenses of the Paying Agent/Registrar and the City.
If any Bond is lost, apparently destroyed or wrongfully taken, the City, pursuant to
the applicable laws of the State of Texas and ordinances of the City, and in the absence
of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall
execute, and the Paying Agent/Registrar shall authenticate and deliver, a replacement
Bond of the same maturity, interest rate and principal amount, bearing a number not
contemporaneously outstanding, provided that the Registered Owner thereof shall have:
(a) furnished to the City and the Paying Agent/Registrar satisfactory evidence
of the ownership of and the circumstances of the Toss, destruction or theft of
such Bond;
(b) furnished such security or indemnity as may be required by the Paying
Agent/Registrar and the City to save and hold them harmless;
(c) paid all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Paying Agent/Registrar and
any tax or other governmental charge that may be imposed; and
(d) met any other reasonable requirements of the City and the Paying
Agent/Registrar.
If, after the delivery of such replacement Bond, a bona fide purchaser of the original
Bond in lieu of which such replacement Bond was issued presents for payment such
original Bond, the City and the Paying Agent/Registrar shall be entitled to recover such
replacement Bond from the person to whom it was delivered or any person taking
therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security
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ORDINANCE NO. 981
or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred
by the City or the Paying Agent/Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrong -fully taken Bond has
become or is about to become due and payable, the City in its discretion may, instead of
issuing a replacement Bond, authorize the Paying Agent/Registrar to pay such Bond.
Each replacement Bond delivered in accordance with this Section shall be entitled
to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in
lieu of which such replacement Bond is delivered.
Section 3.9. Cancellation. All Bonds paid or redeemed in accordance with this
Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are
authenticated and delivered in accordance herewith, shall be canceled and destroyed upon
the making of proper records regarding such payment or redemption. The Paying
Agent/Registrar shall periodically furnish the City with certificates of destruction of such
Bonds.
ARTICLE IV.
FORM OF BONDS
The Bonds, including the Form of Comptroller's Registration Certificate, Form of
Paying Agent/Registrar's Authentication Certificate, Form of Assignment and Statement
of Insurance, shall be in substantially the following forms, with such omissions, insertions
and variations as may be necessary or desirable, and not prohibited by this Ordinance:
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF PEARLAND, TEXAS
PERMANENT IMPROVEMENT REFUNDING BOND, SERIES 2000
NUMBER DENOMINATION
R- $
REGISTERED REGISTERED
INTEREST RATE: DATED DATE: MATURITY DATE: CUSIP:
August 1, 2000 March 1,
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REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
THE CITY OF PEARLAND, TEXAS, a municipal corporation of the State of Texas
(the "City"), for value received, hereby promises to pay to the Registered Owner identified
above or its registered assigns, on the maturity date specified above (or on earlier
redemption as herein provided), upon presentation and surrender of this Bond at the office
of Wells Fargo Bank Texas, N.A., or its successor (the "Paying Agent/Registrar"), the
principal amount identified above (or so much thereof as shall not have been paid or
deemed to have been paid upon prior redemption) payable in any coin or currency of the
United States of America which on the date of payment of such principal is legal tender for
the payment of debts due to the United States of America, and to pay interest thereon at
the rate shown above, calculated on a basis of a 360-day year composed of twelve 30-day
months, from the later of the Dated Date identified above or the most recent interest
payment date to which interest has been paid or duly provided for. Interest on this Bond
is payable on March 1, 2001, and each September 1 and March 1 thereafter until maturity
of this Bond, by check sent by United States mail, first class, postage prepaid, by the
Paying Agent/Registrar to the Registered Owner of record as of the close of business on
the fifteenth calendar day of the calendar month immediately preceding the applicable
interest payment date, as shown on the registration books kept by the Paying
Agent/Registrar. Any accrued interest payable at maturity or earlier redemption shall be
paid upon presentation and surrender of this Bond at the office of the Paying
Agent/Registrar.
THIS BOND IS ONE OFA DULY AUTHORIZED SERIES OF BONDS (the "Bonds")
in the aggregate principal amount of $10,855,000 issued pursuant to an ordinance adopted
by the City Council of the City on July 25, 2000 (the "Ordinance") for the purpose of
refunding certain outstanding obligations of the City, under and pursuant to the authority
of Chapter 1207, Texas Government Code. Proceeds of the Bonds will also be used to
pay costs of issuance of the Bonds.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE
THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE.
THIS BOND shall not be valid or obligatory for any purpose or be entitled to any
benefit under the Ordinance unless this Bond either (i) is registered by the Comptroller of
Public Accounts of the State of Texas by due execution of the registration certificate
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ORDINANCE NO. 981
endorsed hereon or (ii) is authenticated by the Paying Agent/Registrar by due execution
of the authentication certificate endorsed hereon.
IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed
or placed in facsimile hereon and this Bond to be signed by the Mayor and countersigned
by the City Secretary by their manual, lithographed or printed facsimile signatures.
(AUTHENTICATION OR CITY OF PEARLAND, TEXAS
REGISTRATION CERTIFICATE)
(SEAL)
Mayor
COUNTERSIGNED:
City Secretary
* * *
[REVERSE OF BOND]
THIS BOND IS TRANSFERABLE only upon presentation and surrenderatthe office
of the Paying Agent/Registrar, accompanied by an assignment duly executed by the
Registered Owner or its authorized representative, subject to the terms and conditions of
the Ordinance.
THIS BOND IS EXCHANGEABLE at the office of the Paying Agent/Registrar for a
Bond or Bonds of the same maturity and interest rate and in the principal amount of $5,000
or any integral multiple thereof, subject to the terms and conditions of the Ordinance.
THE PAYING AGENT/REGISTRAR is not required to accept for transfer or
exchange any Bond called for redemption, in whole or in part, during the forty-five (45) day
period immediately prior to the date fixed for redemption; provided, however, that such
limitation shall not apply to the transfer or exchange by the Registered Owner of an
unredeemed portion of a Bond called for redemption in part.
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THE CITY OR PAYING AGENT/REGISTRAR may require the Registered Owner
of any Bond to pay a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with the transfer or exchange of a Bond. Any fee or charge
of the Paying Agent/Registrar for a transfer or exchange shall be paid by the City.
THE REGISTERED OWNER of this Bond by acceptance hereof, acknowledges and
agrees to be bound by all the terms and conditions of the Ordinance.
IT IS HEREBY DECLARED AND REPRESENTED that this Bond has been duly and
validly issued and delivered; that all acts, conditions and things required or proper to be
performed, exist and to be done precedent to or in the issuance and delivery of this Bond
have been performed, exist and have been done in accordance with law; that the Bonds
do not exceed any constitutional or statutory limitation; and that annual ad valorem taxes
sufficient to provide for the payment of the interest on and principal of this Bond, as such
interest comes due and such principal matures, have been levied and ordered to be levied,
within the limits prescribed by law, against all taxable property in the City and have been
irrevocably pledged for such payment.
REFERENCE IS HEREBY MADE TO THE ORDINANCE, a copy of which is filed
with the Paying Agent/Registrar, for the full provisions thereof, to all of which the
Registered Owners of the Bonds assent by acceptance of the Bonds.
* * *
STATEMENT OF INSURANCE
Financial Security Assurance Inc. ("Financial Security"), New York, New York, has
delivered its municipal bond insurance policy with respect to the scheduled payments due
of principal of and interest on this Bond to Wells Fargo Bank Texas, N.A., Houston, Texas,
or its successor, as paying agent for the Bonds (the "Paying Agent"). Said Policy is on file
and available for inspection at the principal office of the Paying Agent and a copy thereof
may be obtained from Financial Security or the Paying Agent.
* * *
FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE
The following form of Comptroller's Registration Certificate shall be attached or
affixed to each of the Bonds initially delivered:
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ORDINANCE NO. 981
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
THE STATE OF TEXAS
REGISTER NO.
I hereby certify that this bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and that this bond has been
registered by the Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
Comptroller of Public Accounts
(SEAL) of the State of Texas
* * *
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
The following form of authentication certificate shall be printed on the face of each
of the Bonds other than those initially delivered:
AUTHENTICATION CERTIFICATE
This Bond is one of the Bonds described in and delivered pursuant to the within -
mentioned Ordinance; and, except for the Bonds initially delivered, 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.
WELLS FARGO BANK TEXAS, N.A.
as Paying Agent/Registrar
By:
Authorized Signature
Date of Authentication:
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* * *
FORM OF ASSIGNMENT
The following form of assignment shall be printed on the back of each of the Bonds:
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer such bond on the
books kept for registration thereof, with full power of substitution in the premises.
DATED:
Signature Guaranteed:
Registered Owner
NOTICE: The signature above must
correspond to the name of the Registered
Owner as shown on the face of this bond
in
NOTICE: Signature must be guaranteed by every particular, without any alteration,
member firm of the New York Stock Exchange enlargement or change whatsoever.
or a commercial bank or trust company.
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ARTICLE V.
SECURITY FOR THE BONDS
Section 5.1. Pledge and Levy of Taxes. (a) To provide for the payment of principal
of and interest on the Bonds, there is hereby levied, within the limits prescribed by law, for
the current year and each succeeding year thereafter, while the Bonds or any part of the
principal thereof and the interest thereon remain outstanding and unpaid, an ad valorem
tax upon all taxable property within the City sufficient to pay the interest on the Bonds and
to create and provide a sinking fund of not less than 2% of the principal amount of the
Bonds or not Tess than the principal payable out of such tax, whichever is greater, with full
allowance being made for tax delinquencies and the costs of tax collection, and such
taxes, when collected, shall be applied 'to the payment of principal of and interest on the
Bonds by deposit to the Debt Service Fund and to no other purpose.
(b) The City hereby declares its purpose and intent to provide and levy a tax
legally sufficient to pay the principal of and interest on the Bonds, it having been
determined that the existing and available taxing authority of the City for such purpose is
adequate to permit a legally sufficient tax. As long as any Bonds remain outstanding, all
moneys on deposit in, or credited to, the Debt Service Fund shall be secured by a pledge
of security, as provided by law for cities in the State of Texas.
Section 5.2. Debt Service Fund. The Permanent Improvement Refunding Bonds,
Series 2000 Debt Service Fund (the "Debt Service Fund") is hereby created as a special
fund solely for the benefit of the Bonds. The City shall establish and maintain such fund
at an official City depository and shall keep such fund separate and apart from all other
funds and accounts of the City. Any amount on deposit in the Debt Service Fund shall be
maintained by the City in trust for the Registered Owners of the Bonds. Such amount, plus
any other amounts deposited by the City into such fund and any and all investment
earnings on amounts on deposit in such fund, shall be used only to pay the principal of,
premium, if any, and interest on the Bonds.
Section 5.3. Further Proceedings. After the Bonds to be initially issued have been
executed, it shall be the duty of the Mayor to deliver the Bonds to be initially issued and all
pertinent records and proceedings to the Attorney General for examination and approval.
After the Bonds to be initially issued shall have been approved by the Attorney General,
they shall be delivered to the Comptroller for registration. Upon registration of the Bonds
to be initially issued, the Comptroller (or a deputy lawfully designated in writing to act for
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the Comptroller) shall manually sign the Comptroller's registration certificate prescribed
herein to be affixed or attached to the Bonds to be initially issued, and the seal of said
Comptroller shall be impressed, or placed in facsimile, thereon.
ARTICLE VI.
CONCERNING THE PAYING AGENT/REGISTRAR
Section 6.1. Acceptance. The Wells Fargo Bank Texas, N.A., is hereby appointed
as the initial Paying Agent/Registrar for the Bonds pursuant to the terms and provisions of
the Paying Agent/Registrar Agreement by and between the City and the Paying
Agent/Registrar. The Paying Agent/Registrar Agreement shall be substantially in the form
attached hereto as Exhibit A, the terms and provisions of which are hereby approved, and
the Mayor is hereby authorized to execute and deliver such Paying Agent/Registrar
Agreement on behalf of the City in multiple counterparts and the City Secretary is hereby
authorized to attest thereto and affix the City's seal. Such initial Paying Agent/Registrar
and any successor Paying Agent/Registrar, by undertaking the performance of the duties
of the Paying Agent/Registrar hereunder, and in consideration of the payment of any fees
pursuant to the terms of any contract between the Paying Agent/Registrar and the City
and/or the deposits of money pursuant to this Ordinance, shall be deemed to accept and
agree to abide by the terms of this Ordinance.
Section 6.2. Trust Funds. All money transferred to the Paying Agent/Registrar in
its capacity as Paying Agent/Registrar for the Bonds under this Ordinance (except any
sums representing Paying Agent/Registrar's fees) shall be held in trust for the benefit of
the City, shall be the property of the City and shall be disbursed in accordance with this
Ordinance.
Section 6.3. Bonds Presented. Subject to the provisions of Section 6.4, all matured
Bonds presented to the Paying Agent/Registrar for payment shall be paid without the
necessity of further instructions from the City. Such Bonds shall be canceled as provided
herein.
Section 6.4. Unclaimed Funds Held by the Paying Agent/Registrar. Funds held by
the Paying Agent/Registrar that represent principal of and interest on the Bonds remaining
unclaimed by the Registered Owner thereof after the expiration of three years from the
date such funds have become due and payable (a) shall be reported and disposed of by
the Paying Agent/Registrar in accordance with the provisions of Title 6 of the Texas
Property Code, as amended, to the extent such provisions are applicable to such funds,
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ORDINANCE NO. 981
or (b) to the extent such provisions do not apply to the funds, such funds shall be paid by
the Paying Agent/Registrar to the City upon receipt by the Paying Agent/Registrar of a
written request therefor from the City.
The Paying Agent/Registrar shall have no liability to the Registered Owners of the
Bonds by virtue of actions taken in compliance with this Section.
Section 6.5. Paying Agent/Registrar May Own Bonds. The Paying Agent/Registrar
in its individual or any other capacity, may become the owner or pledgee of Bonds with the
same rights it would have if it were not the Paying Agent/Registrar.
Section 6.6. Successor Paying Agents/Registrars. The City covenants that at all
times while any Bonds are Outstanding it will provide a legally qualified bank, trust
company, financial institution or other agency to act as Paying Agent/Registrar for the
Bonds. The City reserves the right to change the Paying Agent/Registrar for the Bonds on
not less than sixty (60) days' written notice to the Paying Agent/Registrar, as long as any
such notice is effective not less than 60 days prior to the next succeeding principal or
interest payment date on the Bonds. Promptly upon the appointment of any successor
Paying Agent/Registrar, the previous Paying Agent/Registrar shall deliver the Register or
a copy thereof to the new Paying Agent/Registrar, and the new Paying Agent/Registrar
shall notify each Registered Owner, by United States mail, first class, postage prepaid, of
such change and of the address of the new Paying Agent/Registrar. Each Paying
Agent/Registrar hereunder, by acting in that capacity, shall be deemed to have agreed to
the provisions of this Ordinance.
ARTICLE VII.
PROVISIONS CONCERNING SALE AND
APPLICATION OF PROCEEDS OF BONDS
Section 7.1. Sale of Bonds; Insurance. The sale of the Bonds to Dain Rauscher
Incorporated and First Southwest Company (collectively, the "Underwriter") at a price of
$ (representing the par value thereof) plus accrued interest on the Bonds,
is hereby approved, and delivery of the Bonds to the Underwriter shall be made upon
payment therefor in accordance with the terms of the Bond Purchase Agreement
presented to and hereby approved by the City Council, in substantially the form attached
hereto as Exhibit B, which price and terms are hereby found and determined to be the
most advantageous reasonably obtainable by the City. The Mayor and other appropriate
officials of the City are hereby authorized and directed to execute such Bond Purchase
Agreement on behalf of the City, and the Mayor and all other officials, agents and
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ORDINANCE NO. 981
representatives of the City are hereby authorized to do any and all things necessary or
desirable to satisfy the conditions set out therein and to provide for the issuance and
delivery of the Bonds.
Section 7.2. Approval, Registration and Delivery. The Mayor is hereby authorized
to have control and custody of the Bonds and all necessary records and proceedings
pertaining thereto pending their delivery, and the Mayor and other officers and employees
of the City are hereby authorized and directed to make such certifications and to execute
such instruments as may be necessary to accomplish the delivery of the Bonds and to
assure the investigation, examination and approval thereof by the Attorney General and
the registration of the initial Bonds by the Comptroller. Upon registration of the Bonds, the
Comptroller (or the Comptroller's certificates clerk or an assistant certificates clerk lawfully
designated in writing to act for the Comptroller) shall manually sign the Comptroller's
Registration Certificates prescribed herein to be attached or affixed to each Bond initially
delivered and the seal of the Comptroller shall be impressed or printed or lithographed
thereon.
Section 7.3. Offering Documents; Ratings. The City hereby approves the form and
contents of the Preliminary Official Statement and the final Official Statement, dated as of
the date hereof, relating to the Bonds, and any addenda, supplement or amendment
thereto, and ratifies and approves the distribution of such Preliminary Official Statement
and Official Statement in the offer and sale of the Bonds and in the reoffering of the Bonds
by the Underwriter with such changes therein or additions thereto as the officials executing
same may deem advisable, such determination to be conclusively evidenced by their
execution thereof. The Mayor is hereby authorized and directed to execute, and the City
Secretary is hereby authorized and directed to attest, the final Official Statement. It is
further hereby officially found, determined and declared that the statements and
representations contained in the Preliminary Official Statement and final Official Statement
are true and correct in all material respects, to the best knowledge and belief of the City
Council, and that, as of the date thereof, the Preliminary Official Statement was an official
statement of the City with respect to the Bonds that was deemed "final" by an authorized
official of the City except for the omission of no more than the information permitted by
subsection (b)(1) of Rule 15c2-12 of the Securities and Exchange Commission.
Further, the City Council hereby ratifies, authorizes and approves the actions of the
Mayor, the City's financial advisor and other consultants in seeking ratings on the Bonds
from Moody's Investors Service, Inc. and Standard & Poor's Ratings Group and such
actions are hereby ratified and confirmed.
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ORDINANCE NO. 981
Section 7.4. Application of Proceeds of Bonds; Appropriation. (a) Proceeds from
the sale of the Bonds shall, promptly upon receipt by the City, be applied as follows:
(1) Accrued interest shall be deposited into the Debt Service Fund created in
Section 5.2 of this Ordinance;
(2) A portion of the proceeds shall be applied to pay expenses arising in
connection with the issuance of the Bonds and the refunding of the
Refunded Bonds, including the bond insurance premium;
(3)
A portion of the proceeds shall be deposited into the escrow fund, as more
fully provided in the Escrow Agreement;
(4) Any proceeds from the sale of the Bonds remaining after making all the
foregoing deposits and payments shall be deposited into the Debt Service
Fund and used to pay debt service on the Bonds.
(b) From the existing interest and sinking funds for the Refunded Bonds there
shall be transferred to the escrow fund established pursuant to the Escrow Agreement the
amount of $ and to the Debt Service Fund the amount of $
Section 7.5. Tax Exemption. The City intends that the interest on the Bonds shall
be excludable from gross income of the owners thereof for federal income tax purposes
pursuant to Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as
amended, (the "Code") and all applicable temporary, proposed and final regulations (the
"Regulations") and procedures promulgated thereunder and applicable to the Bonds. For
this purpose, the City covenants that it will monitor and control the receipt, investment,
expenditure and use of all gross proceeds of the Bonds (including all property the
acquisition, construction or improvement of which is to be financed directly or indirectly with
the proceeds of the Bonds) and take or omit to take such other and further actions as may
be required by Sections 103 and 141 through 150 of the Code and the Regulations to
cause interest on the Bonds to be and remain excludable from the gross income, as
defined in Section 61 of the Code, of the owners of the Bonds for federal income tax
purposes. Without limiting the generality of the foregoing, unless and until the City has
received a written opinion of nationally recognized Bond Counsel to the effect that failure
to comply with such covenant will not adversely effect the exclusion of interest on the
Bonds from the gross income of the owners thereof for federal income tax purposes, the
City shall comply with each of the following covenants:
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ORDINANCE NO. 981
(a) The City will use all of the Net Proceeds of the Bonds (as defined below) to
(i) acquire Escrowed Securities (as defined in the Escrow Agreement)
sufficient to pay the principal of, premium, if any, and interest on the
Refunded Bonds, and (ii) to pay the costs of issuing the Bonds, except for
amounts, if any, described in the Report as the rounding amount and the
ending cash balance in the Escrow Fund.
(b) With respect to both the Refunded Bonds and the Bonds, the City has limited
and will limit, the amount of original or investment proceeds of the Refunded
Bonds and the Bonds, respectfully, to be used (other than use as a member
of the general public) in the trade or business of any person other than a
governmental unit to an amount which, in the case of the Refunded Bonds,
does not exceed ten percent of the Net Proceeds of the Refunded Bonds
and in the case of the Bonds ten percent of the Net Proceeds of the Bonds
("private -use proceeds"). For purposes of this Section, the term "person"
includes any individual, corporation, partner -ship, unincorporated association
or any other entity capable of carrying on a trade or business; and the term
"trade or business" means, with respect to any natural person, any activity
regularly carried on for profit and, with respect to persons other than natural
persons, means any activity other than an activity carried on by a
governmental unit. Any use of proceeds of the Refunded Bonds and of the
Bonds in any manner contrary to the guidelines set forth in Revenue
Procedure 93-19, including any revisions or amendments thereto, shall
constitute the use of such proceeds in the trade or business of one who is
not a governmental unit.
(c) The City has not permitted and will not permit, more than five percent of the
Net Proceeds of the Refunded Bonds and ten percent of the Net Proceeds
of the Bonds, respectively, to be used in the trade or business of any person
other than a governmental unit if such use is unrelated to the governmental
purpose of the Refunded Bonds and the Bonds, respectively. Further, the
amount of private -use proceeds of the Refunded Bonds and of the Bonds in
excess of five percent of the Net Proceeds of the Refunded Bonds and of the
Bonds, respectively ("excess private -use proceeds") did not and will not
exceed the proceeds of the Refunded Bonds and the Bonds, respectively,
expended for the governmental purpose of the Refunded Bonds and the
Bonds, respectively, which such excess private -use proceeds relate;
(d) The City has not permitted, with respect to the Refunded Bonds, and will not
permit to be used, an amount of proceeds of the Refunded Bonds or of the
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ORDINANCE NO. 981
Bonds, respectively, exceeding the lesser of (i) $5,000,000 or (ii) five percent
of the net proceeds of the Refunded Bonds or the Bonds, respectively, to be
used, directly or indirectly, to finance loans to persons other than
governmental units;
(e) Based upon all facts and estimates now known or reasonably expected to be
in existence on the date the Bonds are delivered, the City reasonably
expects that the proceeds of the Bonds will not be used in a manner that
would cause the Bonds or any portion thereof to be an "arbitrage bond"
within the meaning of Section 148 of the Code;
(f)
(g)
The City will monitor the yield on the investment of the proceeds of the
Bonds and moneys pledged to the repayment of the Bonds and will restrict
the yield on such investments to the extent required by the Code or the
Regulations. Without limiting the generality of the foregoing, the City will take
appropriate steps to restrict the yield on all original and investment proceeds
of the Bonds remaining on hand on or after that date which is three years
from the date of delivery of the Bonds and all other proceeds (other than
amounts constituting a "minor portion" of the proceeds or a "bona fide debt
service fund") to a yield which is not materially higher than the lower of
(a) the yield on the Bonds or (b) the combined yield on the Bonds and all
other obligations of the City which are issued at substantially the same time
as the Bonds, sold pursuant to a common plan of financing with the Bonds
and will be paid out of substantially the same source of funds (or will have
the same claim to be paid out of the same source of funds) as the Bonds
(in all cases calculated in accordance with the Code and Regulations);
The City will not take any action, or as the case may be, knowingly omit to
take any action, within its control that, if taken or omitted, would cause the
Bonds to be treated as "federally guaranteed" obligations for purposes of
Section 149(b) of the Code and applicable regulations thereunder (as may
be modified in any applicable rules, rulings, policies, procedures, regulations
or other official statements promulgated or proposed by the Department of
the Treasury or the Internal Revenue Service with respect to "federally
guaranteed" obligations described in Section 149(b) of the Code) except as
permitted by Section 149(b)(3) of the Code and such regulations;
(h) The City represents that not more than fifty percent of the proceeds of any
new money portion of, or any new money issue refunded by, the Refunded
Bonds was invested in nonpurpose investments (as defined in section
148(f)(6)(A) of the Code) having a substantially guaranteed yield for four
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ORDINANCE NO. 981
(i)
(i)
years or more within the meaning of section 149(g)(3)(A)(ii) of the Code, and
the City reasonably expected at the time each issue of the Refunded Bonds
was issued that at least eighty-five percent of the spendable proceeds of
such issue of the Refunded Bonds would be used to carry out the
governmental purposes of such Refunded Bonds within the corresponding
three-year period beginning on the respective dates of such Refunded
Bonds.
The City will take all necessary steps to comply with the requirement that
certain amounts earned by the City on the investment of the "gross
proceeds" of the Bonds (within the meaning of section 148(f)(6)(B) of the
Code), if any, be rebated to the federal government. Specifically, the City will
(i) maintain records regarding the receipt, investment, and expenditure of the
gross proceeds of the Bonds as may be required to calculate and
substantiate the amount earned on the investment of the gross proceeds of
the Bonds separately from records of amounts on deposit in the funds and
accounts of the City allocable to other obligations of the City or moneys
which do not represent gross proceeds of any obligations of the City, and
retain such records for at least six years after the date the last Outstanding
Bond is discharged or for such large period of time as may be required or
appropriate under the Code or applicable regulations, (ii) account for all
gross proceeds under a reasonable, consistently applied method of
accounting, not employed as an artifice or device to avoid, in whole or in
part, the requirements of Section 148 of the Code, including any specified
method of accounting required by applicable regulations to be used for all or
a portion of the gross proceeds, (iii) calculate, at such times as are required
by applicable regulations, the amount earned from the investment of the
gross proceeds of the Bonds and (iv) timely pay, all amounts required to be
rebated to the federal government. In addition, the City will exercise
reasonable diligence to assure that no errors are made in the calculations
required in the preceding sentence and, if such an error is made, to discover
and promptly correct the error within a reasonable amount of time thereafter,
including the payment to the federal government of any delinquent amounts
owed to it, including interest thereon and penalty, if any, as may be
necessary or appropriate to assure that interest on the Bonds is not
includable in the gross income, as defined in Section 61 of the Code, of the
owners of the Bonds for federal income tax purposes.
The City will not directly or indirectly pay any amount otherwise payable to
the federal government pursuant to the foregoing requirements to any
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ORDINANCE NO. 981
person other than the federal government by entering into any investment
arrangement with respect to the gross proceeds of the Bonds that might
result in a reduction in the amount required to be paid to the federal
government under Section 148(f) of the Code or the applicable regulations,
such as through an arrangement that results in a smaller profit or a larger
Toss than would have resulted if the arrangement had been at arm's length
and had the yield on the Bonds not been relevant to either party.
(k) The City will timely file or cause to be filed with the Secretary of the Treasury
of the United States, an information statement required by Section 149(e) of
the Code and applicable regulations thereunder with respect to the Bonds,
on such form and in such place as the Secretary may prescribe from time to
time.
(I)
(m)
The City will determine the amounts constituting gross proceeds of the
Refunded Bonds as of the date of delivery of the Bonds and thereafter until
the Refunded Bonds are paid at maturity or upon earlier optional redemption.
All of such gross proceeds which constitute proceeds of the Refunded Bonds
are necessary for, and will used for, the governmental purposes for which
such Refunded Bonds were issued, and will, on and after the date of delivery
of the Bonds, be invested at a yield not higher than the yield on the prior
issue of Refunded Bonds to which such amounts are allocable. If, prior to
expenditure for such governmental purposes, any of such proceeds become
transferred proceeds of the Bonds, such transferred proceeds and all
investment proceeds therefrom will be invested at a yield not higher than the
yield on the Bonds until so expended. In addition, the City has determined
that all amounts constituting gross proceeds of the Refunded Bonds, other
than proceeds of the Refunded Bonds, will consist of amounts held for the
payment of debt service on the Refunded Bonds. On and after the date of
delivery of the Bonds, such gross proceeds will be held for the payment of
debt service on the Bonds and will be expended for such purpose prior to the
expenditure of any other amounts, other than interest on the Bonds accruing
through the date of delivery of the Bonds. To the extent such gross
proceeds do not qualify as a bona fide debt service fund or a reasonably
required reserve or replacement fund for the Bonds, such amounts will be
invested at a yield not higher than the yield on the Bonds.
The City hereby designates the Bonds as "qualified tax-exempt obligations"
as defined in Section 265(b)(3) of the Code. With respect to such designa-
tion, the City represents the following: (a) that during the calendar year
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ORDINANCE NO. 981
1999, the City (including all entities which issue obligations on behalf of the
City) has not designated nor will designate obligations, which when
aggregated with the Bonds will result in more than $10,000,000 of "qualified
tax-exempt obligations" being issued and (b) that the City has examined its
financing needs for the calendar year 1999 and reasonably anticipates that
the amount of bonds, leases, loans or other obligations, together with the
Bonds and any other tax-exempt obligations heretofore issued by the City
(plus those of all entities which issue obligations on behalf of the City) during
the calendar year 1999, when the higher of the face amount or the issue
price of each such tax-exempt obligation issued for the calendar year 1999
by the City is taken into account, will not exceed $10,000,000.
When used in this Section, the term Net Proceeds of the Bonds shall mean the
proceeds from the sale of the issue of the Bonds, including investment earnings on the
proceeds of such issue, less accrued interest with respect to such issue.
All officers, employees and agents of the City are hereby authorized and directed
to provide certifications of facts and estimates that are material to the reasonable
expectations of the City regarding the foregoing as of the date the Bonds are delivered.
In complying with the foregoing covenants, the City may rely from time to time upon an
opinion issued by a nationally recognized bond counsel to the effect that any action by the
City or reliance upon any interpretation of the Code or Regulations contained in such
opinion will not cause interest on the Bonds to be includable in gross income for federal
income tax purposes under existing law.
Notwithstanding any other provision of this Ordinance, the City's obligations under
the covenants and provisions of this Section 7.5 shall survive the defeasance and
discharge of the Bonds.
Section 7.6. Escrow Agreement. The discharge and defeasance of the Refunded
Bonds shall be effectuated pursuant to the terms and provisions of the Escrow Agreement
to be entered into by and between the City and the Escrow Agent, which shall be
substantially in the form attached hereto as Exhibit G, the terms and provisions of which
are hereby approved, subject to such insertions, additions and modifications as shall be
necessary (a) to carry out the City's finance program, (b) to maximize the City's present
value savings and to minimize the City's costs of refunding, (c) to comply with all applicable
laws and regulations relating to the refunding of the Refunded Bonds and (d) to carry out
the other intents and purposes of this Ordinance, and the Mayor is hereby authorized to
execute and deliver such Escrow Agreement on behalf of the City in multiple counterparts
and the City Secretary is hereby authorized to attest thereto and affix the City's seal.
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ORDINANCE NO. 981
Section 7.7. Redemption Prior to Maturity of Refunded Bonds. To maximize the
City's present value savings and to minimize the City's costs of refunding, the City hereby
authorizes and directs that certain of the Refunded Bonds shall be called for redemption
prior to maturity in the amounts, at the dates and at the redemption prices set forth in
Exhibit F attached hereto, and the Mayor is hereby authorized and directed to take all
necessary and appropriate action to give or cause to be given a notice of redemption
and/or a notice of defeasance to the holders or paying agent/ registrars, as appropriate,
of such Refunded Bonds, and, if required, to publish such notices, all in the manner
required by the documents authorizing the issuance of such Refunded Bonds.
Section 7.8. Purchase of Escrowed Securities. To assure the purchase of the
Escrowed Securities referred to in the Escrow Agreement, the Mayor or other authorized
officer of the City is hereby authorized to subscribe for, agree to purchase and purchase
such obligations of the United States of America, in such amounts and maturities and
bearing interest at such rates as may be provided for in the Report to be attached to the
Escrow Agreement, and to execute any and all subscriptions, purchase agreements,
commitments, letters of authorization and other documents necessary to effectuate the
foregoing, and any actions heretofore taken by such officials for such purpose are hereby
ratified and approved.
Section 7.9. Related Matters. In order that the City shall satisfy in a timely manner
all of its obligations under this Ordinance, the Mayor, City Secretary and all other
appropriate officers, agents, representatives and employees of the City are hereby
authorized and directed to take all other actions that are reasonably necessary to provide
for the issuance and delivery of the 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.
Section 7.10. Insurance on the Bonds. In order to obtain the lowest attainable
interest rates on the Bonds, the City shall purchase a Bond Insurance Policy issued by the
Bond Insurer for the Bonds. The Mayor is authorized to execute and the City Secretary
is authorized to attest and affix the City's seal to any documents required in connection
with the purchase of such policy.
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ORDINANCE NO. 981
ARTICLE VIII.
CONTINUING DISCLOSURE UNDERTAKING
Section 8.1. Annual Reports. The City shall provide annually to each NRMSIR and
any SID, within six months after the end of each fiscal year, financial information and
operating data with respect to the City of the general type included in the final Official
Statement authorized by Section 7.3 of this Ordinance, being the information described in
Exhibit E hereto. Any financial statements so to be provided shall be (1) prepared in
accordance with the accounting principles described in Exhibit E hereto and (2) audited,
if the City commissions an audit of such statements and the audit is completed within the
period during which they must be provided. If audited financial statements are not so
provided, then the City shall provide audited financial statements for the applicable fiscal
year to each NRMSIR and any SID, when and if audited financial statements become
available.
If the City changes its fiscal year, it will notify each NRMSIR and any SID of the
change (and of the date of the new fiscal year end) prior to the next date by which the City
otherwise would be required to provide financial information and operating data pursuant
to this Section.
The financial information and operating data to be provided pursuant to this Section
may be set forth in full in one or more documents or may be included by specific reference
to any document (including an official statement or other offering document, if it is available
from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed
with the SEC.
Section 8.2. Material Event Notices. The City shall notify any SID and either each
NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to
the Bonds, if such event is material within the meaning of the federal securities laws:
(a) Principal and interest payment delinquencies;
(b) Non-payment related defaults;
(c) Unscheduled draws on debt service reserves reflecting financial difficulties;
(d) Unscheduled draws on credit enhancements reflecting financial difficulties;
(e) Substitution of credit or liquidity providers, or their failure to perform;
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ORDINANCE NO. 981
Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
Modifications to rights of holders of the Bonds;
Bond calls;
Defeasances;
Release, substitution, or sale of property securing repayment of the Bonds;
and
(k) Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely
manner, of any failure by the City to provide financial information or operating data in
accordance with Section 8.1 of this Ordinance by the time required by such Section.
Section 8.3. Limitations, Disclaimers and Amendments. The City shall be obligated
to observe and perform the covenants specified in this Article for so long as, but only for
so long as, the City remains an "obligated person" with respect to the Bonds within the
meaning of the Rule, except that the City in any event will give the notice required by
Section 8.2 of any Bond calls and defeasance that cause the City to be no longer such an
"obligated person."
The provisions of this Article are for the sole benefit of the holders and beneficial
owners of the Bonds, and nothing in this Article, express or implied, shall give any benefit
or any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements,
and notices which it has expressly agreed to provide pursuant to this Article and does not
hereby undertake to provide any other information that may be relevant or material to a
complete presentation of the City's financial results, condition, or prospects or hereby
undertake to update any information provided in accordance with this Article or otherwise,
except as expressly provided herein. The City does not make any representation or
warranty concerning such information or its usefulness to a decision to invest in or sell
Bonds at any future date.
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ORDINANCE NO. 981
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY
COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY
SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its obligations under this Article
shall constitute a breach of or default under the Ordinance for purposes of any other
provision of this Ordinance.
Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit
the duties of the City under federal and state securities laws.
The provisions of this Article may be amended by the City from time to time to adapt
the changed circumstances that arise from a change in legal requirements, a change in
law, or a change in the identity, nature, status, or type of operations of the City, but only
if (1) the provisions of this Article, as so amended, would have permitted an underwriter to
purchase or sell the Bonds in the primary offering of the Bonds in compliance with the
Rule, taking into account any amendments or interpretations of the Rule to the date of such
amendment, as well as such changed circumstances, and (2) either (a) the holders of a
majority in aggregate principal amount (or any greater amount required by any other
provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds
consent to such amendment or (b) a person that is unaffiliated with the City (such as
nationally recognized bond counsel) determines that such amendment will not materially
impair the interests of the holder and beneficial owners of the Bonds. If the City so
amends the provisions of this Article, it shall include with any amended financial
information or operating data next provided in accordance with Section 8.1 an explanation,
in narrative form, of the reasons for the amendment and of the impact of any change in the
type of financial information or operating data so provided. The City may also amend or
repeal the provisions of this Article if the SEC amends or repeals the applicable provisions
of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule
are invalid, and the City also may amend the provisions of this Article in its discretion in any
other manner or circumstance, but in either case only if and to the extent that the
provisions of this sentence would not have prevented an underwriter from lawfully
purchasing or selling Bonds in the primary offering of the Bonds.
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ORDINANCE NO. 981
Section 8.4. Definitions. As used in this Article, the following terms have the
meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the
Rule from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized
department, officer, or agency thereof as, and determined by the SEC or its staff to be, a
state information depository within the meaning of the Rule from time to time.
ARTICLE IX.
MISCELLANEOUS
Section 9.1. Defeasance. The City may defease the provisions of this Ordinance
and discharge its obligations to the Registered Owners of any or all of the Bonds to pay
the principal of and interest thereon in any manner permitted by law, including by
depositing with the Paying Agent/Registrar or with the Comptroller, as successor to the
powers and duties of the State Treasurer, either:
(a) cash in an amount equal to the principal amount of such Bonds plus interest
thereon to the date of maturity or redemption; or
(b) pursuant to an escrow or trust agreement, cash and/or (i) direct noncallable
obligations of United States of America, including obligations that are
unconditionally guaranteed by the United States of America; (ii) noncallable
obligations of an agency or instrumentality of the United States, including
obligations that are unconditionally guaranteed or insured by the agency or
instrumentality and that, on the date the governing body of the issuer adopts
or approves the proceedings authorizing the issuance of refunding bonds,
are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent; or (iii) noncallable obligations
of a state or an agency or a county, municipality, or other political subdivision
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ORDINANCE NO. 981
of a state that have been refunded and that, on the date the governing body
of the issuer adopts or approves the proceedings authorizing the issuance
of refunding bonds, are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent, which,
in the case of (i), (ii) or (iii), may be in book -entry form, and the principal of
and interest on which will, when due or redeemable at the option of the
holder, without further investment or reinvestment of either the principal
amount thereof or the interest earnings thereon, provide money in an amount
which, together with other moneys, if any, held in such escrow at the same
time and available for such purpose, shall be sufficient to provide for the
timely payment of the principal of and interest thereon to the date of maturity
or earlier redemption;
provided, however, that if any of the Bonds are to be redeemed prior to their respective
dates of maturity, provision shall have been made for giving notice of redemption as
provided in this Ordinance. Upon such deposit, such Bonds shall no longer be regarded
to be Outstanding or unpaid. Any surplus amounts not required to accomplish such
defeasance shall be returned to the City.
Section 9.2. Ordinance a Contract -Amendments. This Ordinance shall constitute
a contract with the Registered Owners from time to time, be binding on the City, and shall
not be amended or repealed by the City so long as any Bond remains Outstanding except
as permitted in this Section. The City may, without the consent of or notice to any
Registered Owners, from time to time and at any time, amend this Ordinance in any
manner not detrimental to the interests of the Registered Owners, including the curing of
any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City
may, with the consent of Registered Owners who own in the aggregate 51% of the
principal amount of the Bond then Outstanding, amend, add to, or rescind any of the
provisions of this Ordinance; provided that, without the consent of all Registered Owners
of Outstanding Bonds, no such amendment, addition, or rescission shall (i) extend the time
or times of payment of the principal of and interest on the Bonds, reduce the principal
amount thereof, the redemption price, or the rate of interest thereon, or in any other way
modify the terms of payment of the principal of or interest on the Bonds, (ii) give any
preference to any Bond over any other Bond, or (iii) reduce the aggregate principal amount
of Bonds required to be held by Registered Owners for consent to any such amendment,
addition, or rescission.
Section 9.3. Legal Holidays. In any case where the date interest accrues and
becomes payable on the Bonds or principal of the Bonds matures or the date fixed for
redemption of any Bonds or a Record Date shall be in the City a Saturday, Sunday, legal
30
ORDINANCE NO. 981
holiday or a day on which banking institutions are authorized by law to close, then payment
of interest or principal need not be made on such date, or the Record Date shall not occur
on such date, but payment may be made or the Record Date shall occur on the next
succeeding day which is not in the City a Saturday, Sunday, legal holiday or a day on
which banking institutions are authorized by law to close with the same force and effect as
if (i) made on the date of maturity or the date fixed for redemption and no interest shall
accrue for the period from the date of maturity or redemption to the date of actual payment
or (ii) the Record Date had occurred on the fifteenth day of that calendar month.
Section 9.4. No Recourse Against City Officials. No recourse shall be had for the
payment of principal of or interest on any Bonds or for any claim based thereon or on this
Ordinance against any official of the City or any person executing any Bonds.
Section 9.5. Further Proceedings. The Mayor, City Secretary and other appropriate
officials of the City are hereby authorized and directed to do any and all things necessary
and/or convenient to carry out the terms of this Ordinance.
Section 9.6. Power to Revise Form of Documents. Notwithstanding any other
provision of this Ordinance, the Mayor is hereby authorized to make or approve such
revisions, additions, deletions, and variations to this Ordinance and in the form of the
documents attached hereto as exhibits as, in the judgment of the Mayor, and in the opinion
of Bond Counsel to the City, may be necessary or convenient to carry out or assist in
carrying out the purposes of this Ordinance, or as may be required for approval of the
Certificates by the Attorney General of Texas; provided, however, that any changes to
such documents resulting in substantive amendments to the terms and conditions of the
Certificates or such documents shall be subject to the prior approval of the City Council.
Section 9.7. Severability. If any Section, paragraph, clause or provision of this
Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or
unenforceability of such Section, paragraph, clause or provision shall not affect any of the
remaining provisions of this Ordinance.
Section 9.8. Open Meeting. It is hereby found, determined and declared that a
sufficient written notice of the date, hour, place and subject of the meeting of the City
Council at which this Ordinance was adopted was posted at a place convenient and readily
accessible at all times to the general public at City Hall for the time required by law
preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas
Government Code, and that this meeting has been open to the public as required by law
at all times during which this Ordinance and the subject matter thereof has been discussed,
considered and formally acted upon. The City Council further ratifies, approves and
confirms such written notice and the contents and posting thereof.
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ORDINANCE NO. 981
Section 9.9. Repealer. All orders, resolutions and ordinances, or parts thereof,
inconsistent herewith are hereby repealed to the extent of such inconsistency.
Section 9.10. Declaration of Emergency. It is hereby officially found and
determined that a case of emergency and urgent public necessity exists that requires that
this Ordinance be passed finally and take effect immediately on the date of its introduction,
such emergency and urgent public necessity being that the proceeds from the sale of the
Bonds are required as soon as possible and without delay for the purposes set forth
herein.
Section 9.11. Effective Date. This Ordinance shall be in force and effect from and
after its passage on the date shown below.
PASSED and APPROVED on First and Only Reading this the day of
, A.D., 2000.
TOM REID
MAYOR
ATTEST:
YOUNG LORFING
CITY SECRETARY
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
Exhibits:
Exhibit A - Paying Agent/Registrar Agreement
Exhibit B - Bond Purchase Agreement
Exhibit C - Preliminary Official Statement and Official Notice of Sale
Exhibit D - Official Statement
Exhibit E - Description of Annual Financial Information and Operating Data
Exhibit F - Description of Refunded Bonds
Exhibit G - Escrow Agreement
32
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
See Tab
33
EXHIBIT B
BOND PURCHASE AGREEMENT
See Tab
34
EXHIBIT C
PRELIMINARY OFFICIAL STATEMENT
See Tab
35
EXHIBIT D
OFFICIAL STATEMENT
See Tab
36
EXHIBIT E
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION AND OPERATING DATA
The following information is referred to in Section 8.1 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix
or under the headings of the Official Statement referred to) below:
1. The audited financial statements of the City, but for the most recently
concluded fiscal year, and, to the extent that such statements are not completed
and available, unaudited financial statements for such fiscal year.
2. The quantitative and financial information and operating data with
respect to the City of the general type included under the headings "INVESTMENT
AUTHORITY AND INVESTMENT OBJECTIVES OF THE CITY — Investment
Policies," "CITY TAX DEBT" (except for information under the subheading
"Estimated Overlapping Debt"), "TAX DATA — Historical Analysis of Tax Collection,"
"TAX DATA — Analysis of Tax Base, "TAX DATA — Sales Tax" and "SELECTED
FINANCIAL DATA."
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to in paragraph 1 above.
37
EXHIBIT F
DESCRIPTION OF REFUNDED BONDS
Name
Maturities
Principal
Amount
Redemption
Price
Redemption
Date
Refunding Bond, Series 1990
March 1, 2002
$315,000
100%
.10/04/2000
March 1, 2003
390,000
100%
10/04/2000
March 1, 2004
1,220,000
100%
10/04/2000
March 1, 2005
1,315,000
100%
10/04/2000
March 1, 2006
1,415,000
100%
10/04/2000
March 1, 2007
1,760,000
100%
10/04/2000
March 1, 2008
1,820,000(a
103%
10/04/2000
March 1, 2009
1,765,000(a
)
103%
10/04/2000
Combination Tax and Revenue
Certificates of Obligation,
Series 1991
March 1, 2003
$180,000
100%
03/01/2001
March 1, 2004
200,000
100%
03/01/2001
March 1, 2005
210,000
100%
03/01/2001
March 1, 2006
220,000
100%
03/01/2001
Street Improvement Bonds,
Series 1992
March 1, 2004
$140,000
100%
03/01/2002
March 1, 2005
150,000
100%
03/01/2002
March 1, 2006
160,000
100%
03/01/2002
March 1, 2007
175,000
100%
03/01/2002
March 1, 2008
190,000
100%
03/01/2002
March 1, 2009
260,000
100%
03/01/2002
(a) Maturing Amount of Capital Appreciation Bonds.
38
::ODMA\PCDOCS\HOUSTON\742015\4
EXHIBIT G
ESCROW AGREEMENT
See Tab
39