HomeMy WebLinkAboutORD 2003-19 - Contractual Obligations4201
CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS §
COUNTY OF WILLIAMSON §
CITY OF GEORGETOWN §
We, the undersigned officers and members of the City of Georgetown, Texas (the "City"),
hereby certify as follows:
1. The City Council of the City convened in REGULAR MEETING ON THE 25TH
DAY OF MARCH, 2003, at the Georgetown Municipal Complex (the "Meeting"), and the roll was
called of the duly constituted officers and members of the City, to -wit:
Gary Nelon, Mayor
Doug Smith - Mayor Pro Tem and Councilmember District 3
Llorente Navarrette - Councilmember District 1
Gabe Sansing - Councilmember District 2
Jack Noble - Councilmember District 4
Sam Pfiester - Councilmember District 5
Farley Snell - Councilmember District 6
Ken Evans - Councilmember District 7
Sandra Lee - City Secretary
Patricia Carls - City Attorney
and all of the persons were present, except the following absentees: Vb ble , thus constituting
a quorum. Whereupon, among other business, the following was transacted at the Meeting: a written
�.�, 1 � •. is ii 1 11
01 FM1Vr aof WA V DI 1B FLO • i s If'
was duly introduced for the consideration of the City Council. It was then duly moved and seconded
that the Ordinance be passed on first reading; and, after due discussion, said motion carrying with it
the passage of the Ordinance, prevailed and carried by the following vote:
AYES:
NOES:
2. A true, full and correct copy of the Ordinance passed at the Meeting described in the
above and foregoing paragraphs is attached to and follows this Certificate; that the Ordinance has
GEORGTWNCO2003:
% '`,1> ' A
been duly recorded in the City Council's minutes of the Meeting; that the above and foregoing
paragraphs are a true, full and correct excerpt from the City Council's minutes of the Meeting
pertaining to the passage of the Ordinance; that the persons named in the above and foregoing
paragraphs are the duly chosen, qualified and acting officers and members of the City Council as
indicated therein; that each of the officers and members of the City Council was duly and sufficiently
notified officially and personally, in advance, of the time, place and purpose of the Meetings, and that
the Ordinance would be introduced and considered for passage at the Meetings, and each of the
officers and members consented, in advance, to the holding of the Meeting for such purpose, and that
the Meeting was open to the public and public notice of the time, place and purpose of the meeting
was given, all as required by Chapter 551, Texas Government Code.
3. The Mayor of the City has approved and hereby approves the Ordinance; that the
Mayor and the City Secretary of the City have duly signed the Ordinance; and that the Mayor and the
City Secretary of the City hereby declare that their signing of this Certificate shall constitute the
signing of the attached and following copy of the Ordinance for all purposes.
GEORGT W NCO2003: ORDINANCECERT
SIGNEM AND SEALED the : ♦•
Sandra Lee, City Secretary
[CITY SEAL]
GEORGT W NCO2003: ORDINANCECERT
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E
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF GEORGETOWN,
TEXAS PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS, SERIES
2003; AUTHORIZING THE LEVY OF AN AD VALOREM TAX; APPROVING A
PAYING AGENT/REGISTRAR AGREEMENT, AND OTHER AGREEMENTS
RELATED TO THE SALE AND ISSUANCE OF THE OBLIGATIONS; AND
AUTHORIZING OTHER MATTERS RELATED TO THE ISSUANCE OF THE
OBLIGATIONS
ORDINANCE
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF GEORGETOWN,
TEXAS PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS, SERIES
2003; AUTHORIZING THE LEVY OF AN AD VALOREM TAX; APPROVING A
PAYING AGENT/REGISTRAR AGREEMENT, AND OTHER AGREEMENTS
RELATED TO THE SALE AND ISSUANCE OF THE OBLIGATIONS; AND
AUTHORIZING OTHER MATTERS RELATED TO THE ISSUANCE OF THE
OBLIGATIONS
TABLE OF CONTENTS
PAGE
RECITALS....................................................................1
SECTION 1. RECITALS, AMOUNT PURPOSE OF THE
CONTRACTUAL OBLIGATIONS ................................... 1
(a) Recitals and Purpose ................................................... 1
(b) Century Plan.........................................................2
SECTION 2, DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND
MATURITIES OF CONTRACTUAL OBLIGATIONS .................... 2
SECTION
3.
INTEREST
2
SECTION
4.
.........................................................
CHARACTERISTICS OF THE CONTRACTUAL OBLIGATIONS
2
(a) Registration Transfer, Conversion and Exchange, Authentication 1 1 1 1 .......... 2
(b) Payment of Contractual Obligations and Interest ............................ 3
(c) In General..........................................................4
(d) Substitute Paving Agent/Registrar ....................................... 4
(e) Initial Contractual Obligation(s) ............................. 1 1 1 1 111.1... 5
SECTION 5. FORM OF CONTRACTUAL OBLIGATION ............................. 5
SECTION 6, INTEREST AND SINKING FUND .................................... 11
SECTION 7, DEFEASANCE OF CONTRACTUAL OBLIGATIONS .................... 12
SECTION 8. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CONTRACTUAL OBLIGATIONS .................................. 13
(a) Replacement Contractual Obligations 1 11 11 .. 13
(b) Application for Replacement Contractual Obligations ................ 1 1 1 1...13
(c) No Default Occurred .............................................. 1..14
(d) Charge for Issuing Replacement Contractual Obligations .....1111... 1 .. 1 1 1..14
(e) Authority for Issuing Replacement Contractual Obligations ions ............ I .... 114
SECTION 9, CUSTODY, APPROVAL, AND REGISTRATION OF
CONTRACTUAL OBLIGATIONS; BOND COUNSEL'S
OPINION; CUSIP NUMBERS AND CONTINGENT
INSURANCE PROVISION, IF OBTAINED ........................... 14
SECTION 10, COVENANTS REGARDING TAX EXEMPTION OF
INTEREST ON THE CONTRACTUAL OBLIGATIONS ................. 15
(a) Covenants.........................................................15
(b) Rebate Fund........................................................16
GEORGTWNCO2003: ORDINANCE I
(c) Proceeds...........................................................16
(d) Allocation Of, and Limitation On, Expenditures for the Project 1 1 1 1 ........... 17
(e) Disposition of Project ................................................ 17
(f) Designation as Qualified Tax -Exempt Contractual Obligations , 1 1 1 .......... 1 . 17
SECTION 11. SALE OF CONTRACTUAL OBLIGATIONS 1111............ 1 1 1 1.......18
SECTION 12, REMEDIES IN EVENT OF DEFAULT . 1 ............... 1 .............. 18
SECTION 13. INTEREST EARNINGS ON CONTRACTUAL OBLIGATION PROCEEDS .. 19
SECTION 14. APPROVAL OF PAYING AGENT/REGISTRAR AGREEMENT,
AND COMMITMENT AND INVESTMENT LETTER ....1111..:....... 19
SECTION 15. NO RECOURSE AGAINST CITY OFFICIALS ...... 1 1 1 1.19
SECTION 16, FURTHER ACTIONS .............................................. 19
SECTION 17. APPROPRIATIONS ............................. I .. , .... 1 1.1.1....20
SECTION 18. INTERPRETATIONS .............................................. 20
SECTION 19. INCONSISTENT PROVISIONS ...................................... 20
SECTION 20. INTERESTED PARTIES ................................ 1 1 1 1.......20
SECTION 21. INCORPORATION OF RECITALS ................................... 20
SECTION 22. SEVERABILITY ................................................. 120
SECTION 23. REPEALER......................................................20
SECTION 24. EFFECTIVE DATE ................................................ 20
SECTION 25. PERFECTION.................................................... 21
SECTION 26. ARBITRATION...................................................21
Signatures and Seal...........................................................22
Exhibit A - Commitment and Investment Letter
Exhibit B - Paying Agent/Registrar Agreement
GEORG NVNCO2003: ORDINANCE 11
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF GEORGETOWN,
TEXAS PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS, SERIES
2003; AUTHORIZING THE LEVY OF AN AD VALOREM TAX; APPROVING AN
OFFICIAL STATEMENT, A PAYING AGENT/REGISTRAR AGREEMENT, AND
OTHER AGREEMENTS RELATED TO THE SALE AND ISSUANCE OF THE
OBLIGATIONS; AND AUTHORIZING OTHER MATTERS RELATED TO THE
ISSUANCE OF THE OBLIGATIONS
THE STATE OF TEXAS §
COUNTY OF WILLIAMSON §
CITY OF GEORGETOWN§
WHEREAS, the City Council of the City of Georgetown, Texas (the "City") deems it
advisable to issue contractual obligations in the amount of $325,000 (the "Contractual Obligations")
for the purpose of (1) purchasing or otherwise acquiring personal property including police patrol
cars and a sewer vacuum truck and (2) paying the costs of issuing the Contractual Obligations; and
WHEREAS, the Contractual Obligations hereinafter authorized and designated are to be
issued and delivered pursuant to the Public Property Finance Act, Subchapter A of Chapter 271,
Local Government Code, as amended; and
WHEREAS, the City hereby finds that the issuance of the Contractual Obligations
implements Finance Policy 14.00 of the Century Plan and further finds that the enactment of this
Ordinance is not inconsistent or in conflict with any other Century Plan Policies; and
WHEREAS, it is hereby officially found and determined that the meeting at which this
Ordinance was passed was open to the public, and public notice of the time, place and purpose of
said meeting was given, all as required by Chapter 551, Texas Government Code; and
WHEREAS, it is considered to be in the best interest of the City that the Contractual
Obligations be issued.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS.
SECTION 1. RECITALS, AMOUNT PURPOSE OF THE CONTRACTUAL
OBLIGATIONS AND CENTURY PLAN. (a) Recitals and Purpose. The recitals set forth in the
preamble hereof are incorporated by reference herein and shall have the same force and effect as if
set forth in this Section. The contractual obligations of the City of Georgetown, Texas (the "City")
are hereby authorized to be issued and delivered in the aggregate principal amount of $325,000 for
GE•ORGTNVNCO2003: ORDINANCE I
the purpose of : (1) purchasing or otherwise acquiring personal property including police patrol cars
and a sewer vacuum truck and (2) paying the costs of issuing the Contractual Obligations.
(b)
CenM Plan.
The City
Council hereby finds
that the issuance
of the Contractual
Obligations
implements the
following
policy of the Century
Plan - Policy Plan
Element:
Finance Policy End 14.00 which states; "All municipal operations are conducted in
an efficient, business -like manner and sufficient financial resources for both current
and future needs are provided."
SECTION 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND
MATURITIES OF CONTRACTUAL OBLIGATIONS. Each Contractual Obligation issued
pursuant to this Ordinance shall be designated: "CITY OF GEORGETOWN, TEXAS PUBLIC
PROPERTY FINANCE CONTRACTUAL OBLIGATION, SERIES 2003," and initially there shall
be issued, sold, and delivered hereunder fully registered Contractual Obligations, without interest
coupons, dated April 1, 2003, in the respective denominations and principal amounts hereinafter
stated, numbered consecutively from R-1 upward (except the initial Contractual Obligation delivered
to the Attorney General of the State of Texas which shall be numbered T-1), payable to the
respective initial registered owners thereof (as designated in Section 11 hereof), or to the registered
assignee or assignees of said obligations or any portion or portions thereof (in each case, the "Regis-
tered Owner"), and said obligations shall mature and be payable serially on July 1 in each of the
years and in the principal amounts, respectively, as set forth in the following schedule:
YEAR AMOUNT
2006 $325,000
The term "Contractual Obligations" as used in this Ordinance shall mean and include collectively
the Contractual Obligations initially issued and delivered pursuant to this Ordinance and all
substitute Contractual Obligations exchanged therefor, as well as all other substitute Contractual
Obligations and replacement Contractual Obligations issued pursuant hereto, and the term
"Contractual Obligation" shall mean any of the Contractual Obligations.
SECTION 3. INTEREST. The Contractual Obligations scheduled to mature during the years,
respectively, set forth below shall bear interest from the dates specified in the FORM OF
CONTRACTUAL OBLIGATION set forth in this Ordinance to their respective dates of maturity
at the following rates per annum:
YEAR RATE
2006 2.6$%
Interest shall be further payable in the manner provided and on the dates stated in the FORM OF
CONTRACTUAL OBLIGATION set forth in this Ordinance.
SECTION 4. CHARACTERISTICS OF THE CONTRACTUAL OBLIGATIONS. (a)
Registration, Transfer, Conversion and Exchange; Authentication. The City shall keep or cause to
be kept at Bank of America, N.A., (the "Paying Agent/Registrar") books or records for the regis-
GEORGTWNCO2003: ORDINANCE 2
tration of the transfer, conversion and exchange of the Contractual Obligations (the "Registration
Books"), and the City hereby appoints the Paying Agent/Registrar as its registrar and transfer agent
to keep such books or records and make such registrations of transfers, conversions and exchanges
under such reasonable regulations as the City and Paying Agent/Registrar may prescribe; and the
Paying Agent/Registrar shall make such registrations, transfers, conversions and exchanges as herein
provided. The Paying Agent/Registrar shall obtain and record in the Registration Books the address
of the Registered Owner of each Obligation to which payments with respect to the Contractual
Obligations shall be mailed, as herein provided; but it shall be the duty of each Registered Owner
to notify the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and
such interest payments shall not be mailed unless such notice has been given. The City shall have
the right to inspect the Registration Books during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books
confidential and, unless otherwise required by law, shall not permit their inspection by any other
entity. The Paying Agent/Registrar shall make the Registration Books available within the State of
Texas. The City shall pay the Paying Agent/Registrar's standard or customary fees and charges for
making such registration, transfer, conversion, exchange and delivery of a substitute Contractual
Obligation or Contractual Obligations. Registration of assignments, transfers, conversions and
exchanges of Contractual Obligations shall be made in the manner provided and with the effect
stated in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance. Each
substitute Obligation shall bear a letter and/or number to distinguish it from each other Contractual
Obligation.
Except as provided in Section 4(c) of this Ordinance, an authorized representative of the
Paying Agent/Registrar shall, before the delivery of any such Contractual Obligation, date and
manually sign said Contractual Obligation, and no such Contractual Obligation shall be deemed to
be issued or outstanding unless such Contractual Obligation is so executed. The Paying
Agent/Registrar promptly shall cancel all paid Contractual Obligations and Contractual Obligations
surrendered for conversion and exchange. No additional ordinances, orders, or resolutions need be
passed or adopted by the governing body of the City or any other body or person so as to accomplish
the foregoing conversion and exchange of any Contractual Obligation or portion thereof, and the
Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute
Contractual Obligations in the manner prescribed herein, and said Contractual Obligations shall be
printed or typed on paper of customary weight and strength. Pursuant to Chapter 1201, Texas
Government Code, as amended, and particularly Subchapter D thereof, the duty of conversion and
exchange of Contractual Obligations as aforesaid is hereby imposed upon the Paying
Agent/Registrar, and, upon the execution of said Contractual Obligation, the converted and
exchanged Contractual Obligation shall be valid, incontestable, and enforceable in the same manner
and with the same effect as the Contractual Obligations which initially were issued and delivered
pursuant to this Ordinance, approved by the Attorney General and registered by the Comptroller of
Public Accounts.
(b) Payment of Contractual Obligations and Interest. The City hereby further appoints the
Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on the
Contractual Obligations, all as provided in this Ordinance. The Paying Agent/Registrar shall keep
GEORGTWNCO2003: ORDINANCE 3
proper records of all payments made by the City and the Paying Agent/Registrar with respect to the
Contractual Obligations, and of all conversions and exchanges of Contractual Obligations, and all
replacements of Contractual Obligations, as provided in this Ordinance. However, in the event of
a nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, a new
record date for such interest payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from the
City. Notice of the past due interest shall be sent at least five (5) business days prior to the Special
Record Date by United States mail, first-class postage prepaid, to the address of each Registered
Owner appearing on the Registration Books at the close of business on the last business day next
preceding the date of mailing of such notice.
(c) In General. The Contractual Obligations (i) shall be issued in fully registered form,
without interest coupons, with the principal of and interest on such Contractual Obligations to be
payable only to the Registered Owners thereof, (ii) may be converted and exchanged for other
Contractual Obligations, (iii) maybe transferred and assigned, (iv) shall have the characteristics, (v)
shall be signed, sealed, executed and authenticated, (vi) the principal of and interest on the
Contractual Obligations shall be payable, and (vii) shall be administered and the Paying
Agent/Registrar and the City shall have certain duties and responsibilities with respect to the
Contractual Obligations, all as provided, and in the manner and to the effect as required or indicated,
in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance. The Contractual
Obligations initially issued and delivered pursuant to this Ordinance are not required to be, and shall
not be, authenticated by the Paying Agent/Registrar, but on each substitute Contractual Obligation
issued in conversion of and exchange for any Contractual Obligation or Contractual Obligations
issued under this Ordinance the Paying Agent/Registrar shall execute the PAYING
AGENT/REGISTRAR'S AUTHENTICATION CONTRACTUAL OBLIGATION, in the form set
forth in the FORM OF CONTRACTUAL OBLIGATION.
(d) Substitute PayingAgent/Registrar. The City covenants with the Registered Owners of
the Contractual Obligations that at all times while the Contractual Obligations are outstanding the
City will provide a competent and legally qualified bank, trust company, financial institution, or
other agency to act as and perform the services of Paying Agent/Registrar for the Contractual
Obligations under this Ordinance, and that the Paying Agent/Registrar will be one entity. The City
reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not less than
30 days written notice to the Paying Agent/Registrar, to be effective at such time which will not
disrupt or delay payment on the next principal or interest payment date after such notice. In the event
that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition,
or other method) should resign or otherwise cease to act as such, the City covenants that promptly
it will appoint a competent and legally qualified bank, trust company, financial institution, or other
agency to act as Paying Agent/Registrar under this Ordinance. Upon any change in the Paying
Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the
Registration Books (or a copy thereof), along with all other pertinent books and records relating to
the Contractual Obligations, to the new Paying Agent/Registrar designated and appointed by the
City. Upon any change in the Paying Agent/Registrar, the City promptly will cause a written notice
thereof to be sent by the new Paying Agent/Registrar to each Registered Owner of the Contractual
GEORGTWNCO2003: ORDINANCE 4
Obligations, by United States mail, first-class postage prepaid, which notice also shall give the
address of the new Paying Agent/Registrar. By accepting the position and performing as such, each
Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a
certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar,
(e) Initial Contractual Obligation. The Contractual Obligations herein authorized shall be
initially issued as fully registered contractual obligations, being one contractual obligation for each
maturity in the denomination of the applicable principal amount and the initial Contractual
Obligation shall be registered in the name of the Purchaser or the designees thereof as set forth in
Section 11 hereof. The initial Contractual Obligations shall be submitted to the Office of the
Attorney General of the State of Texas for approval, certified and registered by the Office of the
Comptroller of Public Accounts of the State of Texas and delivered to the Purchaser.
SECTION 5. FORM OF CONTRACTUAL OBLIGATION. The form of the Contractual
Obligation, including the form of Paying Agent/Registrar's Authentication Certificate, the form of
Assignment and the form of Registration Certificate of the Comptroller of Public Accounts of the
State of Texas to be attached to the Contractual Obligations initially issued and delivered pursuant
to this Ordinance, shall be, respectively, substantially as follows, with such appropriate variations,
omissions or insertions as are permitted or required by this Ordinance.
FORM OF CONTRACTUAL OBLIGATION
NO. R- UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
COUNTY OF WILLIAMSON $
CITY OF GEORGETOWN, TEXAS
PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS
INTEREST
RATE
SERIES 2003
DATE OF
CONTRACTUAL
OBLIGATIONS
April 1, 2003
REGISTERED OWNER.
VQtiit;tQ j A'jWA'jU
DATE OF
DELIVERY
April 17, 2003
MATURITY
DATE
DOLLARS
CUSIP NO,
ON THE MATURITY DATE specified above, the CITY OF GEORGETOWN, in
Williamson County, Texas (the "City"), being a political subdivision of the State of Texas, hereby
promises to pay to the Registered Owner set forth above, or registered assigns (hereinafter called the
GEORGTWNCO2003: ORDINANCE 5
"Registered Owner") the principal amount set forth above, and to pay interest thereon from the Date
of Delivery set forth above, on July 1, 2003 and semiannually on each January 1 and July 1 thereafter
to the maturity date specified above, at the interest rate per annum specified above; except that if this
Contractual Obligation is required to be authenticated and the date of its authentication is later than
the first Record Date (hereinafter defined), such principal amount shall bear interest from the interest
payment date next preceding the date of authentication, unless such date of authentication is after
any Record Date but on or before the next following interest payment date, in which case such
principal amount shall bear interest from such next following interest payment date; provided,
however, that if on the date of authentication hereof the interest on the Contractual Obligation or
Contractual Obligations, if any, for which this Contractual Obligation is being exchanged or
converted from is due but has not been paid, then this Contractual Obligation shall bear interest from
the date to which such interest has been paid in full. Provided, however, that if a "Yield Adjustment
Event" (hereinafter defined) occurs, the rate of interest on the Contractual Obligations shall be
adjusted as provided in the formula described in the definition of "Yield Adjustment Event" below;
provided further, however that if an 'Event of Taxation" (hereinafter defined) occurs, the rate of
interest on the Contractual Obligations shall increase by 3.00% per annum. In no event, however,
may the rate of interest on the Contractual Obligations exceed the maximum rate permitted by
Chapter 1204, Texas Government Code, as amended. The term 'Event of Taxation" means any
breach by the City of the representations and covenants in Section 10 of the Contractual Obligation
Ordinance which in the opinion of nationally recognized bond counsel results in interest on the
Contractual Obligations no longer being excludable from gross income of the Owner for federal
income tax purposes.
The term "Yield Adjustment Event" means the receipt by the City of a written notification
from the Owner that a change in the interest rate on the Contractual Obligations would result from
the following calculation:
Current Interest Rate on the Contractual Obligations X (1 - New Corporate Tax Rate) = Adjusted Interest
Rate
(1-0,35)
where the term "New Corporate Tax Rate" means the then current maximum federal income tax rate
applicable to for-profit corporations.
THE PRINCIPAL OF AND INTEREST ON this Contractual Obligation are payable in
lawful money of the United States of America, without exchange or collection charges. The
principal of this Contractual Obligation shall be paid to the Registered Owner hereof upon presenta-
tion and surrender of this Contractual Obligation at maturity at Bank of America, N.A. which is the
"Paying Agent/Registrar" for this Contractual Obligation at their office in Austin, Texas (the
"Designated Payment/Transfer Office"). The payment of interest on this Contractual Obligation shall
be made by the Paying Agent/Registrar to the Registered Owner hereof on each interest payment date
by check or draft, dated as of such interest payment date, drawn by the Paying Agent/Registrar on,
and payable solely from, funds of the City required by the ordinance authorizing the issuance of this
Contractual Obligation (the "Contractual Obligation Ordinance") to be on deposit with the Paying
GEORG r WNCO2Im3: ORDINANCE 6
Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be sent by
the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the fifteenth business
day of the month preceding each such date (the "Record Date") on the registration books kept by the
Paying Agent/Registrar (the "Registration Books"). In addition, interest may be paid by such other
method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the
Registered Owner. In the event of a non-payment of interest on a scheduled payment date, and for
30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest have
been received from the City. Notice of the Special Record Date and of the scheduled payment date
of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least
five business days prior to the Special Record Date by United States mail, first-class postage prepaid,
to the address of each owner of a Contractual Obligation appearing on the Registration Books at the
close of business on the last business day next preceding the date of mailing of such notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Contractual
Obligation prior to maturity as provided herein shall be paid to the Registered Owner upon
presentation and surrender of this Contractual Obligation for redemption and payment at the
Designated Payment/Transfer Office of the Paying Agent/Registrar. The City covenants with the
Registered Owner of this Contractual Obligation that on or before each principal payment date,
interest payment date, and accrued interest payment date for this Contractual Obligation it will make
available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the
Contractual Obligation Ordinance, the amounts required to provide for the payment, in immediately
available funds, of all principal of and interest on the Contractual Obligations, when due.
IF THE DATE for the payment of the principal of or interest on this Contractual Obligation
shall be a Saturday, Sunday, a legal holiday or a day on which banking institutions in the city where
the principal corporate trust office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day which is
not such a Saturday, Sunday, legal holiday or day on which banking institutions are authorized to
close; and payment on such date shall have the same force and effect as if made on the original date
payment was due.
THIS CONTRACTUAL OBLIGATION is one of a Series of Contractual Obligations
dated April 1, 2003, authorized in accordance with the Constitution and laws of the State of Texas
in the principal amount of $325,000, for the purpose of paying contractual obligations incurred or
to be incurred by the City for: (1) purchasing or otherwise acquiring personal property including
police patrol cars and a sewer vacuum truck and (2) paying the costs of issuing the Contractual
Obligations.
THE CONTRACTUAL OBLIGATIONS maturing on July 1, 2006 are subject to
mandatory sinking fund redemption by lot prior to maturity in the following amounts, on the
following dates and at a price of par plus accrued interest to the redemption date.
GEORGTWNCO2003: ORDINANCE 7
Bonds Maturing July 1, 2006
Redemption Date
July 1, 2004
July 1, 2005
July 1, 2006*
*Final Maturity
Principal Amount
$105,000
$110,000
$110,000*
THE PRINCIPAL AMOUNT of the Term Contractual Obligations required to be redeemed
pursuant to the operation of the mandatory sinking fund redemption provisions shall be reduced, at
the option of the City by the principal amount of any Term Contractual Obligations of the stated
maturity which, at least 50 days prior to a mandatory redemption date, (1) shall have been acquired
by the City, at a price not exceeding the principal amount of such Term Contractual Obligations plus
accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for
cancellation or (2) shall have been purchased and canceled by the Paying Agent/Registrar at the
request of the City with monies in the Interest and Sinking Fund at a price not exceeding the
principal amount of the Term Contractual Obligations plus accrued interest to the date of purchase
thereof
THE CONTRACTUAL OBLIGATIONS are not subject to optional redemption prior to
maturity.
ALL CONTRACTUAL OBLIGATIONS OF THIS SERIES are issuable solely as fully
registered Contractual Obligations, without interest coupons, in the denomination of any integral
multiple of $100,000. As provided in the Contractual Obligation Ordinance, this Contractual
Obligation may, at the request of the Registered Owner or the assignee or assignees hereof, be
assigned, transferred, converted into and exchanged for a like aggregate principal amount of fully
registered Contractual Obligations, without interest coupons, payable to the appropriate Registered
Owner, assignee or assignees, as the case may be, having the same denomination or denominations
in any integral multiple of $100,000 as requested in writing by the appropriate Registered Owner,
assignee or assignees, as the case may be, upon surrender of this Contractual Obligation to the
Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in
the Contractual Obligation Ordinance. Among other requirements for such assignment and transfer,
this Contractual Obligation must be presented and surrendered to the Paying Agent/Registrar,
together with proper instruments of assignment, in form and with guarantee of signatures satisfactory
to the Paying Agent/Registrar, evidencing assignment of this Contractual Obligation or any portion
or portions hereof in any integral multiple of $100,000 to the assignee or assignees in whose name
or names this Contractual Obligation or any such portion or portions hereof is or are to be registered.
The form of Assignment printed or endorsed on this Contractual Obligation may be executed by the
Registered Owner to evidence the assignment hereof, but such method is not exclusive, and other
instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the
GEORGT%VNCO2003: ORDINANCE 8
assignment of this Contractual Obligation or any portion or portions hereof from time to time by the
Registered Owner. The Paying Agent/Registrar's reasonable standard or customary fees and charges
for assigning, transferring, converting and exchanging any Contractual Obligation or portion thereof
will be paid by the City. In any circumstance, any taxes or governmental charges required to be paid
with respect thereto shall be paid by the one requesting such assignment, transfer, conversion or
exchange, as a condition precedent to the exercise of such privilege.
WHENEVER the beneficial ownership of this Contractual Obligation is determined by a
book entry at a securities depository for the Contractual Obligations, the foregoing requirements of
holding, delivering or transferring this Contractual Obligation shall be modified to require the
appropriate person or entity to meet the requirements of the securities depository as to registering
or transferring the book entry to produce the same effect.
IN THE EVENT any Paying Agent/Registrar for the Contractual Obligations is changed by
the City, resigns, or otherwise ceases to act as such, the City has covenanted in the Contractual
Obligation Ordinance that it promptly will appoint a competent and legally qualified substitute
therefor, and cause written notice thereof to be mailed to the Registered Owners of the Contractual
Obligations.
IT IS HEREBY certified, recited and covenanted that this Contractual Obligation has been
duly and validly authorized, issued and delivered; that all acts, conditions and things required or
proper to be performed, exist and be done precedent to or in the authorization, issuance and delivery
of this Contractual Obligation have been performed, existed and been done in accordance with law;
and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal
of this Contractual Obligation, as such interest comes due and such principal matures, have been
levied and ordered to be levied against all taxable property in said City, and have been pledged for
such payment, within the limit prescribed by law.
BY BECOMING the Registered Owner of this Contractual Obligation, the Registered
Owner thereby acknowledges all of the terms and provisions of the Contractual Obligation
Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Contractual
Obligation Ordinance is duly recorded and available for inspection in the official minutes and
records of the governing body of the City, and agrees that the terms and provisions of this
Contractual Obligation and the Contractual Obligation Ordinance constitute a contract between each
Registered Owner hereof and the City.
IN WITNESS WHEREOF, the City has caused this Contractual Obligation to be signed
with the manual or facsimile signature of the Mayor of the City and countersigned with the manual
or facsimile signature of the City Secretary of said City, and has caused the official seal of the City
to be duly impressed, or placed in facsimile, on this Contractual Obligation.
Sandra Lee, City Secretary
GEORGT%VNCO2003: ORDINANCE 9
Gary Nelon, Mayor
(SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Contractual Obligation is not accompanied by an
executed Registration Contractual Obligation of the Comptroller
of Public Accounts of the State of Texas)
It is hereby certified that this Contractual Obligation has been issued under the provisions
of the Contractual Obligation Ordinance described in the text of this Contractual Obligation; and that
this Contractual Obligation has been issued in conversion or replacement of, or in exchange for, a
contractual obligation, contractual obligations, or a portion of a contractual obligation or contractual
obligations of a Series which originally was approved by the Attorney General of the State of Texas
and registered by the Comptroller of Public Accounts of the State of Texas.
Dated:
BANK OF AMERICA, N.A.
Paying Agent/Registrar
By:
Authorized Representative
FORM OF ASSIGNMENT.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer
Identification Number of Transferee
(Please print or typewrite name and address,
including zip code, of Transferee)
GEORGRVNCO2003: ORDINANCE 10
the within Contractual Obligation and all rights thereunder, and hereby irrevocably constitutes and
appoints , attorney, to register the transfer of
the within Contractual Obligation on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
NOTICE: The signature above must
correspond with the name of the Registered
Owner as it appears upon the front of this
Contractual Obligation in every particular,
without alteration or enlargement or any
change whatsoever.
FORM OF REGISTRATION CERTIFICATE OF
THE COMPTROLLER OF PUBLIC ACCOUNTS.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Contractual Obligation has been examined, certified as to validity
and approved by the Attorney General of the State of Texas, and that this Contractual Obligation has
been registered by the Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
SECTION 6. INTEREST AND SINKING FUND. A special "Interest and Sinking Fund"
is hereby created and shall be established and maintained by the City at an official depository bank
of said City. Said Interest and Sinking Fund shall be kept separate and apart from all other funds and
accounts of said City, and shall be used only for paying the interest on and principal of said
GEORGTWNCO2003: ORDINANCE 11
Contractual Obligations. All ad valorem taxes levied and collected for and on account of said
Contractual Obligations shall be deposited, as collected, to the credit of said Interest and Sinking
Fund. During each year while any of said Contractual Obligations are outstanding and unpaid, the
governing body of said City shall compute and ascertain a rate and amount of ad valorem tax which
will be sufficient to raise and produce the money required to pay the interest on said Contractual
Obligations as such interest comes due, and to provide and maintain a sinking fund adequate to pay
the principal of said Contractual Obligations as such principal matures (but never less than 2% of
the original amount of said Contractual Obligations as a sinking fund each year); and said tax shall
be based on the latest approved tax rolls of said City, with full allowances being made for tax
delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby
levied, and is hereby ordered to be levied, against all taxable property in said City, for each year
while any of said Contractual Obligations are outstanding and unpaid, and said tax shall be assessed
and collected each such year and deposited to the credit of the aforesaid Interest and Sinking Fund.
Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of said
Contractual Obligations, as such interest comes due and such principal matures, are hereby pledged
for such payment, within the limit prescribed by law. Accrued interest on the Contractual
Obligations shall be deposited in the Interest and Sinking Fund and used to pay interest on the
Contractual Obligations.
SECTION 7. DEFEASANCE OF CONTRACTUAL OBLIGATIONS. (a) Any Contractual
Obligation and the interest thereon shall be deemed to be paid, retired and no longer outstanding (a
"Defeased Contractual Obligation") within the meaning of this Ordinance, except to the extent
provided in subsection (d) of this Section 7, when payment of the principal of such Contractual
Obligation, plus interest thereon to the due date (whether such due date be by reason of maturity,
upon redemption, or otherwise) either (i) shall have been made or caused to be made in accordance
with the terms thereof (including the giving of any required notice of redemption) or (ii) shall have
been provided for on or before such due date by irrevocably depositing with or making available to
the Paying Agent/Registrar for such payment (1) lawful money of the United States of America
sufficient to make such payment, (2) Defeasance Securities, certified by an independent public
accounting firm of national reputation to mature as to principal and interest in such amounts and at
such times as will ensure the availability, without reinvestment, of sufficient money to provide for
such payment and when proper arrangements have been made by the City with the Paying
Agent/Registrar for the payment of its services until all Defeased Contractual Obligations shall have
become due and payable or (3) any combination of (1) and (2). At such time as a Contractual
Obligation shall be deemed to be a Defeased Contractual Obligation hereunder, as aforesaid, such
Contractual Obligation and the interest thereon shall no longer be secured by, payable from, or
entitled to the benefits of, the ad valorem taxes herein levied as provided in this Ordinance, and such
principal and interest shall be payable solely from such money or Defeasance Securities.
(b) The deposit under clause (ii) of subsection (a) shall be deemed a payment of a
Contractual Obligation as aforesaid. Any money so deposited with a paying agent as provided in this
Section may at the discretion of the City also be invested in Defeasance Securities, maturing in the
amounts and at the times as hereinbefore set forth, and all income from all Defeasance Securities in
possession of a paying agent pursuant to this Section which is not required for the payment of such
ORDINANCE 12
Contractual Obligation and premium, if any, and interest thereon with respect to which such money
has been so deposited, shall be turned over to the City, or deposited as directed in writing by the
City.
(c) Notwithstanding any provision of any other Section of this Ordinance which may be
contrary to the provisions of this Section, all money or Defeasance Securities set aside and held in
trust pursuant to the provisions of this Section for the payment of principal of the Contractual
Obligation and premium, if any, and interest thereon, shall be applied to and used solely for the
payment of the particular Contractual Obligations and premium, if any, and interest thereon, with
respect to which such money or Defeasance Securities have been so set aside in trust.
(d) Notwithstanding anything elsewhere in this Ordinance contained, if money or Defeasance
Securities have been deposited or set aside with a paying agent pursuant to this Section for the
payment of Contractual Obligations and such Contractual Obligations shall not have in fact been
actually paid in full, no amendment of the provisions of this Section shall be made without the
consent of the Registered Owner of each Contractual Obligation affected thereby.
As used in this section, "Defeasance Securities" means (i) Federal Securities, (ii) noncallable
obligations of an agency or instrumentality of the United States of America, including obligations
that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date
the City Council adopts or approves proceedings authorizing the issuance of refunding bonds or
otherwise provide for the funding of an escrow to effect the defeasance of the Contractual
Obligations are rated as to investment quality by a nationally recognized investment rating firm not
less than "AAA" or its equivalent, and (iii) noncallable obligations of a state or an agency or a
county, municipality, or other political subdivision of a state that have been refunded and that, on
the date the City Council adopts or approves proceedings authorizing the issuance of refunding
bonds or otherwise provide for the funding of an escrow to effect the defeasance of the Contractual
Obligations, are rated as to investment quality by a nationally recognized investment rating firm no
less than "AAA" or its equivalent. "Federal Securities" as used herein means direct, noncallable
obligations of the United States of America, including obligations that are unconditionally
guaranteed by the United States of America, (including Interest Strips of the Resolution Funding
Corporation).
SECTION 8. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CONTRACTUAL OBLIGATIONS. (a) Replacement Contractual Obli atg ions. In the event any
outstanding Contractual Obligation is damaged, mutilated, lost, stolen or destroyed, the Paying
Agent/Registrar shall cause to be printed, executed and delivered, a new contractual obligation of
the same principal amount, maturity and interest rate, as the damaged, mutilated, lost, stolen or
destroyed Contractual Obligation, in replacement for such Contractual Obligation in the manner
hereinafter provided.
(b) Application for Replacement Contractual Obligations. Application for replacement of
damaged, mutilated, lost, stolen or destroyed Contractual Obligations shall be made by the
Registered Owner thereof to the Paying Agent/Registrar. In every case of loss, theft or destruction
GEORG NVNCO2W3: ORDINANCE 13
of a Contractual Obligation, the Registered Owner applying for a replacement contractual obligation
shall furnish to the City and to the Paying Agent/Registrar such security or indemnity as may be
required by them to save each of them harmless from any loss or damage with respect thereto. Also,
in every case of loss, theft or destruction of a Contractual Obligation, the Registered Owner shall
furnish to the City and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft
or destruction of such Contractual Obligation, as the case may be. In every case of damage or
mutilation of a Contractual Obligation, the Registered Owner shall surrender to the Paying
Agent/Registrar for cancellation the Contractual Obligation so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the
event any such Contractual Obligation shall have matured, and no default has occurred which is then
continuing in the payment of the principal of, redemption premium, if any, or interest on the
Contractual Obligation, the City may authorize the payment of the same (without surrender thereof
except in the case of a damaged or mutilated Contractual Obligation) instead of issuing a
replacement Contractual Obligation, provided security or indemnity is furnished as above provided
in this Section.
(d) Charge for Issuing Replacement Contractual Obligations. Prior to the issuance of any
replacement contractual obligation, the Paying Agent/Registrar shall charge the Registered Owner
of such Contractual Obligation with all legal, printing, and other expenses in connection therewith.
Every replacement contractual obligation issued pursuant to the provisions of this Section by virtue
of the fact that any Contractual Obligation is lost, stolen or destroyed shall constitute a contractual
obligation of the City whether or not the lost, stolen or destroyed Contractual Obligation shall be
found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this
Ordinance equally and proportionately with any and all other Contractual Obligations duly issued
under this Ordinance.
(e) Authority for Issuing Replacement Contractual Obligations. In accordance with
Subchapter D of Chapter 1201, Texas Government Code, this Section 8 of this Ordinance shall
constitute authority for the issuance of any such replacement contractual obligation without necessity
of further action by the governing body of the City or any other body or person, and the duty of the
replacement of such Contractual Obligations is hereby authorized and imposed upon the Paying
Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Contractual
Obligations in the form and manner and with the effect, as provided in Section 4(a) of this Ordinance
for Contractual Obligations issued in conversion and exchange for other Contractual Obligations.
SECTION 9. CUSTODY, APPROVAL, AND REGISTRATION OF CONTRACTUAL
OBLIGATIONS; BOND COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT
INSURANCE PROVISION, IF OBTAINED. The Mayor of the City is hereby authorized to have
control of the Contractual Obligations initially issued and delivered hereunder and all necessary
records and proceedings pertaining to the Contractual Obligations pending their delivery and their
investigation, examination, and approval by the Attorney General of the State of Texas, and their
registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the
Contractual Obligations said Comptroller of Public Accounts (or a deputy designated in writing to
GEORGTWNCO2003: ORDINANCE 14
act for said Comptroller) shall manually sign the Comptroller's Registration Contractual Obligation
attached to such Contractual Obligations, and the seal of said Comptroller shall be impressed, or
placed in facsimile, on such Contractual Obligation. The approving legal opinion of the City's Bond
Counsel and the assigned CUSIP numbers may, at the option of the City, be printed on the
Contractual Obligations issued and delivered under this Ordinance, but neither shall have any legal
effect, and shall be solely for the convenience and information of the Registered Owners of the
Contractual Obligations. In addition, if bond insurance is obtained, the Contractual Obligations may
bear an appropriate legend as provided by the insurer.
SECTION 10. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON
THE CONTRACTUAL OBLIGATIONS. (a) Covenants. The City covenants to take any action
necessary to assure, or refrain from any action which would adversely affect, the treatment of the
Contractual Obligations as obligations described in section 103 of the Internal Revenue Code of
1986, as amended (the "Code"), the interest on which is not includable in the "gross income" of the
holder for purposes of federal income taxation. In furtherance thereof, the City covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the
Contractual Obligations or the projects financed therewith (less amounts deposited to a
reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6)
of the Code or, if more than 10 percent of the proceeds or the projects financed therewith are
so used, such amounts, whether or not received by the City, with respect to such private
business use, do not, under the terms of this Ordinance or any underlying arrangement,
directly or indirectly, secure or provide for the payment of more than 10 percent of the debt
service on the Contractual Obligations, in contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Contractual
Obligations or the projects financed therewith (less amounts deposited into a reserve fund,
if any) then the amount in excess of 5 percent is used for a "private business use" which is
"related" and not "disproportionate," within the meaning of section 141(b)(3) of the Code,
to the governmental use;
(3) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Contractual Obligations (less amounts
deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons,
other than state or local governmental units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action which would otherwise result in the Contractual
Obligations being treated as "private activity bonds" within the meaning of section 141(b)
of the Code;
(5) to refrain from taking any action that would result in the Contractual Obligations
being "federally guaranteed" within the meaning of section 149(b) of the Code;
GEORGTWNCO2003: ORDINANCE 15
(6) to refrain from using any portion of the proceeds of the Contractual Obligations,
directly or indirectly, to acquire or to replace funds which were used, directly or indirectly,
to acquire investment property (as defined in section 148(b)(2) of the Code) which produces
a materially higher yield over the term of the Contractual Obligations, other than investment
property acquired with --
(A) proceeds of the Contractual Obligations invested for a reasonable
temporary period of 3 years or less or, in the case of a refunding bond, for a period
of 30 days or less until such proceeds are needed for the purpose for which the
Contractual Obligations are issued,
(B)
amounts
invested in a bona fide debt
service fund, within the meaning
of section 1.148-1(b)
of the Treasury Regulations,
and
(C) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
Contractual Obligations;
(7) to otherwise restrict the use of the proceeds of the Contractual Obligations or
amounts treated as proceeds of the Contractual Obligations, as may be necessary, so that the
Contractual Obligations do not otherwise contravene the requirements of section 148 of the
Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating
to advance refundings); and
(8) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Contractual Obligations) an amount that is at least
equal to 90 percent of the 'Excess Earnings," within the meaning of section 148(f) of the
Code and to pay to the United States of America, not later than 60 days after the Contractual
Obligations have been paid in full, 100 percent of the amount then required to be paid as a
result of Excess Earnings under section 148(f) of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (8), a "Rebate
Fund" is hereby established by the City for the sole benefit of the United States of America, and such
fund shall not be subj ect to the claim of any other person, including without limitation the Registered
Owners. The Rebate Fund is established for the additional purpose of compliance with section 148
of the Code.
(c) Proceeds. The City understands that the term "proceeds" includes "disposition proceeds"
as defined in the Treasury Regulations and, in the case of refunding Contractual Obligations,
transferred proceeds (if any) and proceeds of the refunded Contractual Obligations expended prior
to the date of issuance of the Contractual Obligations. It is the understanding of the City that the
covenants contained herein are intended to assure compliance with the Code and any regulations or
rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that
regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as
ORDINANCE 16
applicable to the Contractual Obligations, the City will not be required to comply with any covenant
contained herein to the extent that such failure to comply, in the opinion of nationally recognized
bond counsel, will not adversely affect the exemption from federal income taxation of interest on
the Contractual Obligations under section 103 of the Code. In the event that regulations or rulings
are hereafter promulgated which impose additional requirements which are applicable to the
Contractual Obligations, the City agrees to comply with the additional requirements to the extent
necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption from
federal income taxation of interest on the Contractual Obligations under section 103 of the Code.
In furtherance of such intention, the City hereby authorizes and directs the City Manager to execute
any documents, certificates or reports required by the Code and to make such elections, on behalf
of the City, which may be permitted by the Code as are consistent with the purpose for the issuance
of the Contractual Obligations.
(d) Allocation Of, and Limitation On, Expenditures for the Project. The City covenants to
account for the expenditure of sale proceeds and investment earnings to be used for the purposes
described in Section 1 of this Ordinance (the "Project") on its books and records in accordance with
the requirements of the Internal Revenue Code. The City recognizes that in order for the proceeds
to be considered used for the reimbursement of costs, the proceeds must be allocated to expenditures
within 18 months of the later of the date that (1) the expenditure is made, or (2) the Project is
completed; but in no event later than three years after the date on which the original expenditure is
paid. The foregoing notwithstanding, the City recognizes that in order for proceeds to be expended
under the Internal Revenue Code, the sale proceeds or investment earnings must be expended no
more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Contractual
Obligations, or (2) the date the Contractual Obligations are retired. The City agrees to obtain the
advice of nationally -recognized bond counsel if such expenditure fails to comply with the foregoing
to assure that such expenditure will not adversely affect the tax-exempt status of the Contractual
Obligations. For purposes hereof, the City shall not be obligated to comply with this covenant if it
obtains an opinion that such failure to comply will not adversely affect the excludability for federal
income tax purposes from gross income of the interest.
(e) Disposition of Project. The City covenants that the property constituting the Project will
not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or other
compensation, unless the City obtains an opinion of nationally -recognized bond counsel that such
sale or other disposition will not adversely affect the tax-exempt status of the Contractual
Obligations. For purposes of the foregoing, the portion of the property comprising personal property
and disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of
cash or other compensation. For purposes hereof, the City shall not be obligated to comply with this
covenant if it obtains an opinion that such failure to comply will not adversely affect the
excludability for federal income tax purposes from gross income of the interest.
(f) Designation as Qualified Tax -Exempt Obligations. The City hereby designates the
Contractual Obligations as "qualified tax-exempt obligations" as defined in section 265(b)(3) of the
Code. In furtherance of such designation, the City represents, covenants and warrants the following:
(a) that during the calendar year in which the Contractual Obligations are issued, the City (including
GEORGTWNCO2003: ORDINANCE 17
any subordinate entities) has not designated nor will designate obligations, which when aggregated
with the Contractual Obligations, will result in more than $10,000,000 of "qualified tax-exempt
obligations" being issued; (b) that the City reasonably anticipates that the amount of tax-exempt
obligations issued, during the calendar year in which the Contractual Obligations are issued, by the
City (or any subordinate entities) will not exceed $10,000,000; and, (c) that the City will take such
action or refrain from such action as necessary, and as more particularly set forth in this Section, in
order that the Contractual Obligations will not be considered "private activity bonds" within the
meaning of section 141 of the Code.
SECTION 11. SALE OF CONTRACTUAL OBLIGATIONS. The Contractual
Obligations are hereby initially sold and shall be delivered to Bank of America, N.A. (the
"Purchaser") at the price and in accordance with the terms and provisions of the Investment and
Commitment Letter in substantially the form presented to the Council, which the Mayor of the City
is hereby authorized and directed to execute and deliver attached hereto as Exhibit "A". It is hereby
officially found, determined, and declared that the terms of this sale are the most advantageous
reasonably obtainable. The Initial Contractual Obligations shall be registered in the name of Bank
of America, N.A..
While any of the Contractual Obligations remain outstanding, unless waived by the initial
Registered Owner, the City shall provide the following to the initial Registered Owner:
(i) audited
City
financial
statements, to be provided within 1$0 days after the close
of each City fiscal
year
ending on and after September 30, 2003;
(ii)
annual budget reports in a
form
reasonably acceptable to the initial Registered
Owner, to
be provided within 60 days
after
approval by the City Council; and
(iii) such other financial information regarding the City as the initial Registered
Owner shall reasonably request.
SECTION 12. REMEDIES IN EVENT OF DEFAULT. In addition to all of the rights and
remedies provided by the laws of the State of Texas, the City covenants and agrees that in the event
of default in payment of principal or interest on any of the Contractual Obligations when due, or, in
the event it fails to make the payments required to be made into the Interest and Sinking Fund or
defaults in the observance or performance of any other of the contracts, covenants, conditions or
obligations set forth in this Ordinance or in the Contractual Obligations, the following remedies shall
be available:
(a) the Registered Owners shall be entitled to a writ of mandamus issued by a court of
competent jurisdiction compelling and requiring the City and the officials thereof to
observe and perform the contracts, covenants, obligations or conditions prescribed
in this Ordinance; and
GEORGEWNCO2003: ORDINANCE 18
(b) any delay or omission to exercise any right or power accruing upon any default shall
not impair any such right or power nor be construed to be a waiver of any such
default or acquiescence therein, and every such right and power may be exercised
from time to time and as often as may be deemed expedient.
SECTION 13. INTEREST EARNINGS ON CONTRACTUAL OBLIGATION
PROCEEDS. Interest earnings derived from the investment of proceeds from the sale of the
Contractual Obligations shall be used along with other contractual obligation proceeds for the
purpose for which the Contractual Obligations are issued set forth in Section 1 hereof, provided that
after completion of such purpose, if any of such interest earnings remain on hand, such interest
earnings shall be deposited in the Interest and Sinking Fund. It is further provided, however, that
any interest earnings on contractual obligation proceeds which are required to be rebated to the
United States of America pursuant to Section 10 hereof in order to prevent the Contractual
Obligations from being arbitrage bonds shall be so rebated and not considered as interest earnings
for the purposes of this Section.
SECTION 14, APPROVAL OF PAYING AGENT/REGISTRAR AGREEMENT.
Attached hereto as Exhibit "B" is a substantially final form of Paying Agent/Registrar Agreement.
Each the Mayor, the City Manager and the Director of Finance are hereby authorized to amend,
complete or modify such agreement as necessary and are further authorized to execute such
agreement and the City Secretary is hereby authorized to attest such agreement.
SECTION 15. NO RECOURSE AGAINST CITY OFFICIALS. No recourse shall be had
for the payment of principal of or interest on any Contractual Obligations or for any claim based
thereon or on this Ordinance against any official of the City or any person executing any Contractual
Obligations,
SECTION 16. FURTHER ACTIONS. The officers and employees of the City are hereby
authorized, empowered and directed from time to time and at any time to do and perform all such
acts and things and to execute, acknowledge and deliver in the name and under the corporate seal
and on behalf of the City all such instruments, whether or not herein mentioned, as may be necessary
or desirable in order to carry out the terms and provisions of this Ordinance, the Contractual
Obligations, the initial sale and delivery of the Contractual Obligations, the Paying Agent/Registrar
Agreement, and Commitment and Investment Letter. In addition, prior to the initial delivery of the
Contractual Obligations, the Mayor, the City Manager or Assistant City Manager, the City Attorney
and Bond Counsel are hereby authorized and directed to approve any technical changes or
corrections to this Ordinance or to any of the instruments authorized and approved by this Ordinance
necessary in order to (i) correct any ambiguity or mistake or properly or more completely document
the transactions contemplated and approved by this Ordinance and as described in the Official
Statement, (ii) obtain a rating from any of the national bond rating agencies or satisfy requirements
of the Bond Insurer, or (iii) obtain the approval of the Contractual Obligations by the Texas Attorney
General's office.
GEORGTWNCO2003: ORDINANCE 19
In case any officer of the City whose signature shall appear on any Contractual Obligation
shall cease to be such officer before the delivery of such Contractual Obligation, such signature shall
nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office
until such delivery.
SECTION 17. APPROPRIATIONS. The City hereby appropriates from lawfully available
funds the monies necessary to make the principal and interest payments on the Contractual
Obligations on July 1, 2003 and January 1, 2004.
SECTION 18. 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 and the Table of Contents 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 Contractual Obligations.
SECTION 19. INCONSISTENT PROVISIONS. All ordinances, orders or resolutions, or
parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 20. INTERESTED PARTIES. Nothing in this Ordinance expressed or implied
is intended or shall be construed to confer upon, or to give to, any person or entity, other than the
City and the registered owners of the Contractual Obligations, any right, remedy or claim under or
by reason of this Ordinance or any covenant, condition or stipulation hereof, and all covenants,
stipulations, promises and agreements in this Ordinance contained by and on behalf of the City shall
be for the sole and exclusive benefit of the City and the registered owners of the Contractual
Obligations.
SECTION 21. INCORPORATION OF RECITALS. The City hereby finds that the
statements set forth in the recitals of this Ordinance are true and correct, and the City hereby
incorporates such recitals as a part of this Ordinance.
SECTION 22. SEVERABILITY. If any provision of this Ordinance or the application
thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and this governing body
hereby declares that this Ordinance would have been enacted without such invalid provision.
SECTION 23. REPEALER. All orders, resolutions and ordinances, or parts thereof,
inconsistent herewith are hereby repealed to the extent of such inconsistency.
SECTION 24. EFFECTIVE DATE. This Ordinance shall become effective upon the final
passage of this Ordinance.
GEORGTWNCO2003: ORDINANCE 20
SECTION 25. PERFECTION. Chapter 1208, Government Code, applies to the issuance of
the Contractual Obligations and the pledge of ad valorem taxes granted by the City under Section
6 of this Ordinance, and such pledge is therefore valid, effective and perfected. If Texas law is
amended at any time while the Contractual Obligations are outstanding and unpaid such that the
pledge of ad valorem taxes granted by the City under Section 6 of this Ordinance is to be subject to
the filing requirements of Chapter 9, Business & Commerce Code, then in order to preserve to the
registered owners of the Contractual Obligations the perfection of the security interest in said pledge,
the City agrees to take such measures as it determines are reasonable and necessary under Texas law
to comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a
filing to perfect the security interest in said pledge to occur.
SECTION 26. ARBITRATION. (a) Any controversy or claim between or among the City
and the Registered Owner including but not limited to those arising out of or relating to this
Ordinance or any related agreements or instruments, including any claim based on or arising from
an alleged tort, shall be determined by binding arbitration in accordance with the Federal Arbitration
Act (or if not applicable, the applicable state law), the Commercial Arbitration Rules of the
American Arbitration Association ("AAA"), and the "Special Rules" set forth in Section 26(b)
below. In the event of any inconsistency, the Special Rules shall control. Judgment upon any
arbitration award may be entered in any court having jurisdiction. The City or any Registered Owner
may bring an action, including a summary or expedited proceeding, to compel arbitration of any
controversy or claim to which this Ordnance applies in any court having jurisdiction over the action.
(b) The arbitration shall be conducted in Williamson County, Texas and presided over by
an arbitrator provided at the nearest location of Judicial Arbitration & Mediation Services ("JAMS")
office or if JAMS is not able or is legally precluded from providing an arbitrator, then the AAA. All
arbitration will be commenced within 120 days of the demand for arbitration and the decision/award
rendered within 30 days thereafter; further, the arbitrator shall only, upon showing of cause, be
permitted to extend the commencement period of an additional 60 days.
GEORGTWNCO2003: ORDINANCE 21
IN ACCORDANCE WITH SECTION 1201.028, Texas Government Code, passed and
approved on the first and final reading on the 25th day of March, 2003.
ATTEST.
Sandra Lee
City Secretary
Patricia Carls
City Attorney
THE CITY OF GEORGETOWN.
City of Georgetown, Texas
GEORGTWNCO2W3: ORDINANCE SignaturePage
EXHIBIT "A"
INVESTMENT AND COMMITMENT LETTER
GEORGTWNCO2003: ORDINANCE A-1
EXHIBIT "B"
PAYING AGENUREGISTRAR AGREEMENT
GEORGTWN/CO2001: ORDIN.DRI B-1