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Ord. 1041 2001-11-12 In ProcessThis Document is being Processed ORDINANCE NO. 1041 ORDINANCE AUTHORIZING AND, ORDERING THE ISSUANCE OF CITY OF PEARLAND, TEXAS GENERAL OBLIGATION . REFUNDING BONDS, SERIES 2001; PRESCRIBING THE TERMS AND FORM THEREOF; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL THEREOF AND INTEREST THEREON; AWARDING THE SALE THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS, INCLUDING USE OF THE PROCEEDS THEREOF, AND MATTERS INCIDENT THERETO; AND DECLARING AN EMERGENCY. 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 entered into a Development Agreement (as hereinafter defined) and in accordance with the terms of such Development Agreement, the City, has incurred the Developer Obligation (as hereinafter defined); (b) The City and the Developer have agreed pursuant to a Letter Agreement (the "Letter Agreement") to a discounted payment (the "Discharge Payment"), as full payment of the Developer Obligation; (c) The City desires to provide for the payment of and refund the Developer Obligation in advance of its due date which will benefit the City by discounting the amount of the Developer Obligation and thereby resulting in a net present value debt service savings to the City; (d) The City is authorized by Chapter 1207, Texas Government Code, as amended, to accomplish such refunding by depositing directly with the person at whose location payment of the Developer Obligation is to be made, the proceeds from the sale of the refunding bonds authorized herein, together with any other legally available funds, in an amount equal to the Discharge Payment, as provided in the Letter Agreement, which amount shall be sufficient to provide for the payment of the Discharge Payment; (e) Upon the issuance of the refunding bonds herein authorized and the payment to the Developer by the City of the Discharge Payment, the Developer Obligation shall no longer be regarded as being outstanding, and the pledges, liens, trusts and all other covenants, provisions, terms 1 ORDINANCE NO. 1041 and conditions of the contract or other legal documents authorizing the Developer Obligation shall be, with respect to the Developer Obligation, discharged, terminated and defeased; and (f) 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 General Obligation Refunding Bonds, Series 2001, authorized by this Ordinance. "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. "Developer" shall mean Beazer Homes Texas, L.P., a Texas limited partnership. "Developer Obligation" shall mean the payment obligation of the City to the Developer under the Development Agreement, a copy of which is attached hereto as Exhibit E. "Development Agreement" shall mean that Development and Financing Agreement by and between the City, the Zone and the Developer relating to the financing of the Project and the reimbursement of the Developer for certain costs associated with the Project. 2 ORDINANCE NO. 1041 "Discharge Payment" shall mean the discounted payment obligation of the City to the Developer under the Development Agreement as set forth in the Letter Agreement, a copy of which is attached hereto as Exhibit D, which is being defeased with the proceeds of the Bonds and other legally available funds of the City, if any. "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, 2002 and each September 1 and March 1 thereafter until maturity of such Bond. "Issuance Date" shall mean the date on which the Bonds are delivered to and paid for by the Purchaser. "Letter Agreement" shall mean the letter agreement between the City and the Developer dated October 11, 2001, providing for payment of a discounted amount by the City to the Developer in full satisfaction of the City's financial obligation to the Developer under the Development Agreement. "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. "Paying Agent/Registrar" shall mean Wells Fargo Bank Texas, N.A., and its successors in that capacity. "Project" shall have the meaning given such term in the Development Agreement. "Purchaser" shall mean Zions First National Bank, Salt Lake City, Utah. "Record Date" shall mean the close of business on the fifteenth calendar day of the calendar month immediately preceding the applicable Interest Payment Date. 3 ORDINANCE NO. 1041 "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. "Zone" shall mean Reinvestment Zone Number One, City of Pearland Texas, a reinvestment zone created by the City pursuant to Chapter 311 of the Texas Tax Code, as amended, acting by and through its governing body, the Board of Directors. 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 considereda 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 principal amount of ONE MILLION NINE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,900,000) for the purpose of refunding the Developer Obligation. 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 Developer Obligation and the issuance of the Bonds will benefit the City by resulting in a net present value debt service savings of $1,295,489.00 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 General Obligation Refunding Bonds, Series 2001" and shall be dated December 1, 2001. The Bonds shall bear interest at the rates set forth in Section 3.3 below, from the later of December 1, 2001 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, 2002 and each September 1 and March 1 thereafter until maturity. 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. 4 ORDINANCE NO. 1041 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 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 $ 140,000 % R-2 2003 195,000 % R-3 2004 205,000 % R-4 2005 215,000 % R-5 2006 225,000 % R-6 2007 235,000 % R-7 2008 250,000 % R-8 2009 260,000 % R-9 2010 175,000 % 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 Andrews & Kurth 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 5 ORDINANCE NO. 1041 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. 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 prescribe, 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 6 ORDINANCE NO. 1041 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. 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 loss, 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 7 ORDINANCE NO. 1041 therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security 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 wrongfully 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. 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 GENERAL OBLIGATION REFUNDING BOND, SERIES 2001 NUMBER R- REGISTERED INTEREST RATE: DATED DATE: REGISTERED OWNER: DENOMINATION REGISTERED MATURITY DATE: CUSIP: December 1, 2001 March 1, PRINCIPAL AMOUNT: DOLLARS ORDINANCE NO. 1041 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, upon presentation and surrender of this Bond at the office of Wells Fargo Bank Texas, N.A. in Minneapolis, Minnesota, or its successor (the "Paying Agent/Registrar"), the principal amount identified above 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, 2002, 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 shall be paid upon presentation and surrender of this Bond at the office of the Paying Agent/Registrar. THIS BOND IS ONE OF A DULY AUTHORIZED SERIES . OF BONDS (the "Bonds") in the aggregate principal amount of $1,900,000 issued pursuant to an ordinance adopted by the City Council of the City on November , 2001 (the Ordinance") for the purpose of refunding certain outstanding Obligation 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 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. 9 ORDINANCE NO. 1041 (AUTHENTICATION OR CITY OF PEARLAND, TEXAS REGISTRATION CERTIFICATE) Mayor (SEAL) COUNTERSIGNED: City Secretary * * * [REVERSE OF BOND] THIS BOND IS TRANSFERABLE only upon presentation and surrender at the 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 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 10 ORDINANCE NO. 1041 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. * * * * * * 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: OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NO. THE 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 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. 11 ORDINANCE NO. 1041 WELLS FARGO BANK TEXAS, N.A. as Paying Agent/Registrar By Authorized Signature Date of Authentication: * * * 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 a every particular, without any alteration, member firm of the New York Stock Exchange enlargement or change whatsoever. or a commercial bank or trust company. *** 12 ORDINANCE NO. 1041 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 Tess 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 General Obligation Refunding Bonds, Series 2001 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 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. 13 ORDINANCE NO. 1041 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, 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 14 ORDINANCE NO. 1041 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 Zions First National Bank (the "Purchaser") at a price of $ (representing the par value thereof, plus a net premium of $ , less an underwriter's discount of $ , ) plus accrued interest on the Bonds, is hereby approved, and delivery of the Bonds to the Purchaser 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 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) 15 ORDINANCE NO. 1041 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.: Application of Proceeds of Bonds; Appropriation. Proceeds from the sale of the Bonds shall, promptly upon receipt by the City, be applied as follows: (a) Accrued interest shall be deposited into the Debt Service Fund created in Section 5.2 of this Ordinance; (b) 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 Developer Obligation; (c) A portion of the proceeds shall be deposited with the Developer in full payment of the Developer Obligation, as described in the Letter Agreement; (d) 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. Section 7.4.: 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: (a) The City will use all of the Net Proceeds of the Bonds (as defined below) to (i) fully discharge the Developer Obligation, and (ii) to pay the costs of issuing the Bonds. 16 ORDINANCE NO. 1041 (b) With respect to the Bonds, the City has limited and will limit, the amount of original or investment proceeds of the Bonds 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 does not exceed ten percent of the Net Proceeds of the Bonds ("private -use proceeds"). For purposes of this Section, the term "person" includes any individual, corporation, partnership, 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 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 ten percent of the Net Proceeds of the Bonds 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 Bonds. Further, the amount of private -use proceeds of the Bonds in excess of five percent of the Net Proceeds of the Bonds ("excess private -use proceeds") did not and will not exceed the proceeds of the Bonds expended for the governmental purpose of the Bonds to which such excess private -use proceeds relate; (d) The City will not permit to be used, an amount of proceeds of the Bonds exceeding the lesser of (i) $5,000,000 or (ii) five percent of the net proceeds of the Bonds 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; 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 (f) 17 ORDINANCE NO. 1041 (i) (g) Bonds and all other Obligation 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 claimto 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" Obligation 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" Obligation 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 Obligation was invested in nonpurpose investments (as defined in section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four 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 Obligation was issued that at least eighty-five percent of the spendable proceeds of such issue of the Refunded Obligation would be used to carry out the governmental purposes of such Refunded Obligation within the corresponding three-year period beginning on the respective dates of such Refunded Obligation. 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 Obligation of the City or moneys which do not represent gross proceeds of any Obligation 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 18 ORDINANCE NO. 1041 U) 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 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) The City will determine the amounts constituting gross proceeds of the Refunded Obligation as of the date of delivery of the Bonds and thereafter until the Refunded Obligation are paid at maturity or upon earlier optional redemption. All of such gross proceeds which constitute proceeds of the Refunded Obligation are necessary for, and will be used for, the governmental purposes for which such Refunded Obligation 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 Obligation 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 Obligation, other 19 ORDINANCE NO. 1041 than proceeds of the Refunded Obligation, will consist of amounts held for the payment of debt service on the Refunded Obligation. 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. 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 riot 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 Obligation under the covenants and provisions of this Section 7.5 shall survive the defeasance and discharge of the Bonds. Section 7.5.: Letter Agreement. The discharge and defeasance of the Developer Obligation shall be effectuated in accordance with the terms and provisions of the Letter Agreement between the City and the Developer, which is attached hereto as Exhibit D, the terms and provisions of which are hereby approved, and the Mayor is hereby authorized to execute and deliver such Letter 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. Section 7.6.: Related Matters. In order that the City shall satisfy in a timely manner all of its Obligation 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 Obligation under this Ordinance and to direct the transfer and application of funds of the City consistent with the provisions of this Ordinance. 20 ORDINANCE NO. 1041 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 and containing the type of information described in Exhibit C hereto. Any financial statements so to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit C 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; (f) Adverse tax opinions or events affecting the tax-exempt status of the Bonds; (g) Modifications to rights of holders of the Bonds; 21 ORDINANCE NO. 1041 (h) Bond calls; (i) Defeasances; (j) 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. 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 Obligation 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. 22 ORDINANCE NO. 1041 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. 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. 23 ORDINANCE NO. 1041 ARTICLE IX. MISCELLANEOUS Section 9.1.: Defeasance. The City may defease the provisions of this Ordinance and discharge its Obligation 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 (b) pursuant to an escrow or trust agreement, cash and/or (i) direct noncallable Obligation of United States of America, including Obligation that are unconditionally guaranteed by the United States of America; (ii) noncallable Obligation of an agency or instrumentality of the United States, including Obligation 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 Obligation of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date the governing body of the 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. 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, 24 ORDINANCE NO. 1041 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 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 a Record Date shall be in the City a Saturday, Sunday, legal 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 and no interest shall accrue for the period from the date of maturity 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 25 ORDINANCE NO. 1041 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. 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 ADOPTED on first and final reading this,.2 -AM/ / , 2001 ATTEST (SEAL) CITY OF PEARLA , TEXAS Mayor 26 ORDINANCE NO. 1041 Exhibits: Exhibit A - Paying Agent/Registrar Agreement Exhibit B - Bond Purchase Agreement Exhibit C- Description of Annual Financial Information and Operating Data Exhibit D- Letter Agreement Exhibit E- Development Agreement EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT See Tab 6 EXHIBIT B BOND PURCHASE AGREEMENT See Tab 5 DAL:325934.4 EXHIBIT C 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 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 type generally included in the City's offering documents for its general obligation tax financings, including specifically financial information and operating data relating to the City's current investments, its debt service schedules for outstanding general obligation tax debt and its ad valorem tax information. 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. DAL:325934.4 EXHIBIT D THE LETTER AGREEMENT DAL:325934.4 EXHIBIT E DEVELOPMENT AGREEMENT See Tab nAL:325934.4