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HomeMy WebLinkAboutOrdinance - 2005-O0068 - Ordinance General Obligation Refunding Bonds, Series 2005, Not To Exceed $95,000 - 06/10/2005Ordiuance No. 2005-00068 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LUBBOCK, TEXAS, AUTHORIZING THE ISSUANCE OF CITY OF LUBBOCK, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005, IN AN AMOUNT NOT TO EXCEED $95,000,000; PROVIDING FOR THE AW ARD AND SALE THEREOF IN ACCORDANCE WITH SPECIFIED PARAMETERS; LEVYING A TAX IN PAYMENT THEREOF; PRESCRIBING THE FORM OF SAID BONDS; APPROVING EXECUTION AND DELIVERY OF AN ESCROW AGREEMENT AND A BOND PURCHASE AGREEMENT; APPROVING THE OFFICIAL STATEMENT; ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT; AND DECLARING AN EFFECTIVE DA TE WHEREAS, there are presently outstanding certain obligations of the City of Lubbock. Texas (the "City'), described on Schedule I attached hereto (collectively, the "Refunded Obligation Candidates"); WHEREAS, the City now desires to refund all or a portion of such Refunded Obligation Candidates (such refunded obligations to be hereinafter referred to as the "Refunded Obligations''); WHEREAS, Chapter 1207, Texas Government Code, authorizes the City to issue refunding bonds and to deposit the proceeds from the sale thereof, and any other available funds or resources, directly with a commercial bank or trust company, and such deposit, if made before the payment dates for the Refunded Obligations, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; WHEREAS, Chapter 1207 further authorizes the City to enter into an escrow agreement with a commercial bank with respect to the safekeeping, investment, reinvestment, administration and disposition of any such deposit, upon such terms and conditions as the City and such bank may agree, provided that such deposits may be invested and reinvested only in direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, and which shall mature and bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payment or prepayment of the Refunded Obligations; WHEREAS, JPMorgan Chase Bank, National Association, is a commercial bank and does not act as depository for the City and the Escrow Agreement hereinafter authorized constitutes an escrow agreement of the kind authorized and permitted by said Chapter 1207; WHEREAS, the City Council desires to delegate, pursuant to Section 1207.007, Texas Government Code, and the parameters of this Ordinance, to the Chief Financial Officer/ Assistant City Manager, the authority to approve the amount, the interest rate, price and terms of the Bonds authorized hereby and to otherwise take such actions as are necessary and appropriate to effect the sale of the Bonds and to select the specific maturities or series of Refunded Obligation Candidates to be refunded; LUB200/I Dallas 91222 U .DOC WHEREAS. the City Council hereby finds and detennines that the refunding contemplated in this Ordinance will benefit the City by providing a present value savings of debt service payable by the City in an amount to be certified in the Pricing Certificate, and that such benefit is sufficient consideration for the refunding of the Refunded Obligations; WHEREAS, the City Council has found and determined that it is necessary and in the best interest of the City and its citizens that it authorize by this Ordinance the issuance and delivery of its bonds at this time; and WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and public notice of the time, place, and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MA TIERS Section 1.1 Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise in this Ordinance, the following tenns shall have the meanings specified below: "Bond" means any of the Bonds. "Bond Date" means the date designated as the initial date of the Bonds in accordance with Section 3.2(a) of this Ordinance. "Bond Purchase Agreement" means the bond purchase agreement approved in Section 7.l(b) of this Ordinance. "Bonds" means the bonds authorized to be issued by Section 3.1 of this Ordinance and designated as ''City of Lubbock, Texas General Obligation Refunding Bonds, Series 2005." "City" means the City of Lubbock, Texas. ''Closing Date" means the date of the initial delivery of and payment for the Bonds. "Designated Payment/Transfer Office" means (i) with respect to the initial Paying Agent/Registrar named in this Ordinance, the Designated Payment/fransfer Office as designated in the Paying Agent/Registrar Agreement, or at such other location designated by the Paying Agent/Registrar and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the District and such successor. "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. WB200/I Dallas 972221_1.00C: -2- "DTC Participant" shall mean brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "Escrow Agent" means JPMorgan Chase Bank, National Association, as escrow agent wider the tenns of the Escrow Agreement. "Escrow Agreement" means that certain Escrow Agreement between the City and the Escrow Agent pertaining to the defeasance of the Refunded Obligations. "Escrow Fund" means the fund by that name established in the Escrow Agreement. "Event of Default" means any event of default as defined in Section 11. l of this Ordinance. "Fiscal Year" means such fiscal year as shall from time to time be set by the City Council. "Initial Bond" means the initial bond authorized by Section 3.4(d) of this Ordinance. "Interest and Sinking Fund" means the interest and sinking fund established by Section 8.3 of this Ordinance. "Interest Payment Date" means the date or dates on which interest on the Bonds is scheduled to be paid until their respective dates of maturity or prior redemption, such dates being February 15 and August 15 of each year, commencing on the date set forth in the Pricing Certificate. "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. "Owner" means the person who is the registered owner of a Bond or Bonds, as shown in the Register. "Paying Agent/Registrar" means initially JPMorgan Chase Bank, National Association, or any successor thereto as provided in this Ordinance. "Pricing Certificate" means a certificate or certificates to be signed by the Chief Financial Officer/ Assistant City Manager of the City. "Record Date" means the last business day of the month next preceding an Interest Payment Date. LUB200/I Dallas 972221_1.DOC -3- "Refunded Obligation Candidates" means the obligations of the City described in Schedule I attached hereto which are authorized to be designated as Refunded Obligations in the Pricing Certificate. "Refunded Obligations" means those obligations of the City to be designated in the Pricing Certificate from the Refunded Obligation Candidates described in Schedule I attached hereto. "Register" means the Register specified in Section 3.6(a) of this Ordinance. ••Representations Letter" means the Blanket Letter of Representations between the City andDTC. ''Representative" means Morgan Stanley & Co. as representative of the Underwriters named in the Bond Purchase Agreement. "Rule" means SEC Rule l 5c2-12, 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 infonnation depository within the meaning of the Rule from time to time. "Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the payment of principal of, redemption premium, if any, or interest on the Bonds as the same come due and payable or money set aside for the payment of Bonds duly called for redemption prior to maturity. "Underwriters" means the underwriters of the Bonds named in the Bond Purchase Agreement. Section 1.2 Findings. The declarations, detenninations, and findings declared, made, and found in the preamble to this Ordinance are hereby adopted, restated, and made a part of the operative provisions hereof. Section 1.3 Table of Contents, Titles, and Headings. The table of contents, titles, and headings of the Articles and Sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. LUB200/l Dallas 972221_1.DOC -4- Section 1.4 Interpretation. (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be oonstrued to include correlative words of the plural number and vice versa. (b) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. ARTICLE II SECURITY FOR THE BONDS Section 2.1 Tax Levy for Payment of the Bonds. (a) The City Council hereby declares and covenants that it will provide and levy a tax legally and fully sufficient for payment of the Bonds, it having been determined that the existing and available taxing authority of the City for such purpose is adequate to pennit a legally sufficient tax in consideration of all other outstanding obligations of the City. (b) In order to provide for the payment of the debt service requirements on the Bonds, being (i) the interest on the Bonds, and (ii) a sinking fund for their payment at maturity or a sinking fund of two percent per annum (whichever amount is the greater), there is hereby levied for the current year and each succeeding year thereafter while the Bonds or interest thereon remain outstanding and unpaid, a tax within legal limitations on each $100 assessed valuation of taxable property in the City that is sufficient to pay such debt service requirements, full allowance being made for delinquencies and costs of collection. (c) The tax levied by this Section shall be assessed and collected each year and applied to the payment of the debt service requirements on the Bonds, and the tax shall not be diverted to any other purpose. (d) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and committed irrevocably to the payment of the principal of and interest on the Bonds when and as due and payable in accordance with their tenns and this Ordinance. (e) If the liens and provisions of this Ordinance shall be discharged in a manner pennitted by Article XII hereof, then the collection of such ad valorem tax may be suspended or appropriately reduced, as the facts may permit, and further deposits to the Interest and Sinking Fund may be suspended or appropriately reduced, as the facts may permit. In determining the aggregate principal amount of outstanding Bonds, there shall be subtracted the amount of any Bonds that have been duly called for redemption and for which money has been deposited in accordance with Article XII herein. WB200/I Dallas 972221_1.l>CX; -5- ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS Section 3.1 Authorization. The City's bonds to be designated "City of Lubbock, Texas General Obligation Refunding Bonds, Series 2005" (the "Bonds''), are hereby authorized to be issued and delivered in acc.ordance with the Constitution and laws of the State of Texas, specifically Chapter 1207, Texas Government Code, as amended, and Article VIII of the City's Home-Rule Charter. The Bonds shall be issued in the aggregate principal amount designated in the Pricing Certificate, such amount not to exceed $95,000,000, for the purpose of refunding the Refunded Obligations and paying the costs of issuing the Bonds. Section 3.2 Date, Denomination. Maturities, and Interest. (a) The Bonds shall be dated the date set forth in the Pricing Certificate (the "Bond Date"). The Bonds shall be in fully registered form, without coupons, in the denomination of $5,000 or any integral multiple thereof and shall be numbered separately from one upward, except the Initial Bond, which shall be numbered T-1. (b) The Bonds shall mature on February 15 in the years and in the principal amounts set forth in the Pricing Certificate provided that the maximum maturity for the Bonds shall not exceed twenty years. (c) Interest shall accrue and be paid on each Bond respectively until its maturity or prior redemption, from the later of the Bond Date or the most recent Interest Payment Date to which interest has been paid or provided for at the rates per annum for each respective maturity specified in the Pricing Certificate. Such interest shall be payable semiannually on each Interest Payment Date. Interest on the Bonds shall be calculated on the basis of a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each. Section 3.3 Mediwn. Method, and Place of Payment. ( a) The principal of, red.emption premiwn, if any, and interest on the Bonds shall be paid in lawful money of the United States of America. (b) Interest on the Bonds shall be payable to the Owners as shown in the Register at the close of business on the Record Date. (c) Interest shall be paid by check, dated as of the Interest Payment Date, and sent United States mail, first class postage prepaid, by the Paying Agent/Registrar to each Owner, at the address thereof as it appears in the Register, or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the Owner; provided, however, that the Owner shall bear all risk and expense of such alternative banking arrangement. WB200/J Dallas 972221_1.[>0C -6- ( d) The principal of each Bond shall be paid to the Owner thereof on the due date, whether at the maturity date or the date of prior redemption thereof, upon presentation and sUITender of such Bond at the Designated Payment/Transfer Office of the Paying Agent/Registrar. ( e) If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close, then the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall for all purposes be deemed to have been made on the due date thereof as specified in Section 3.2 of this Ordinance. (f) Unclaimed Payments shall be segregated in a special escrow account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owners of the Bonds to which the Unclaimed Payments pertain. Subject to Title 6 of the Texas Property Code, Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment or redemption date shall be applied to the next payment on the Bonds thereafter coming due; to the extent any such moneys remain three years after the retirement of all outstanding Bonds, such moneys shall be paid to the City to be used for any lawful pwpose. Thereafter, neither the City, the Paying Agent/Registrar, nor any other person shall be liable or responsible to any Owners of such Bonds for any further payment of such unclaimed moneys or on account of any such Bonds, subject to Title 6 of the Texas Property Code. Section 3.4 Execution and Registration of Bonds. (a) The Bonds shall be executed on behalf of the City by the Mayor and the City Secretary, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Bonds ceases to be such officer before the authentication of such Bonds or before the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. ( c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on all of the Bonds. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Bond delivered at the Closing Date shall have attached thereto the Comptroller's Registration LUB200/I Dallas 972221_1.1:XX:: -7• Certificate substantially in the fonn provided herein, manually executed by the Comptroller of Public Accounts of the State of Texas, or by his duly authorized agent, which Certificate shall be evidence that the Bond has been duly approved by the Attorney General of the State of Texas, that it is a valid and binding obligation of the City, and that it has been registered by the Comptroller of Public Accounts of the State of Texas. ( d) On the Closing Date, one initial Bond reflecting the tenns set forth in the Pricing Certificate, representing the entire principal amount of all Bonds, payable in stated installments to the Representative, or its designee, executed by the Mayor and City Secretary, approved by the Attorney General, and registered and manually signed by the Comptroller of Public Accounts, will be delivered to the Representative or its designee. Upon payment for the Initial Bond, the Paying Agent/Registrar shall cancel the Initial Bond and deliver a single registered, definitive Bond for each maturity, in the aggregate principal amount thereof, to DTC on behalf of the Underwriters. Section 3.5 Ownership. (a) Toe 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 malcing and receiving payment as herein provided ( except interest shall be paid to the person in whose name such Bond is registered on the Record Date), and for all other pUipOses, 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. (b) All payments made to the Owner of a Bond shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the extent of the sums paid. Section 3.6 Registration, Transfer, and Exchange. (a) So long as any Bonds remain outstanding, the City shall cause the Paying Agent/Registrar to keep at the Designated Payment/fransfer Office a register (the "Register") in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Bonds in accordance with this Ordinance. (b) The ownership of a Bond may be transferred only upon the presentation and surrender of the Bond at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Bond shall be effective until entered in the Register. (c) The Bonds shall be exchangeable upon the presentation and surrender thereof at the Designated Paymentffransfer Office of the Paying Agent/Registrar for a Bond or Bonds of the same maturity and interest rate and in a denomination or denominations of any integral multiple of $5,000, and in an aggregate principal amount equal to the unpaid principal amount of the Bonds presented for exchange. The Paying Agent/Registrar is hereby authorized to authenticate and deliver Bonds exchanged for other Bonds in accordance with this Section. WB200/I Dallas 972221_1.DOC -8- (d) Each exchange Bond delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the City and 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 exchange Bond is delivered. (e) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange for a different denomination of any of the Bonds. The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer, or exchange of a Bond. (f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Bond called for redemption, in whole or in part, where such redemption is scheduled to occur within forty-five (45) calendar days after the transfer or exchange date; provided, however, such limitation shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Bond. Section 3. 7 Cancellation. All Bonds paid or redeemed before scheduled maturity in accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper records made regarding such payment, redemption, exchange, or replacement. The Paying Agent/Registrar shall then return such cancelled Bonds to the City or may in accordance with law destroy such cancelled Bonds and periodically furnish the City with Bonds of destruction of such Bonds. Section 3.8 Temporary Bonds. (a) Following the delivery and registration of the hritial Bond and pending the preparation of definitive Bonds, the City may execute and, upon the City's request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Bonds that are printed, lithographed, typewritten, mimeographed, or otherwise produced, in any denomination, substantially of the tenor of the definitive Bonds in lieu of which they are delivered, without coupons, and with such appropriate insertions, omissions, substitutions, and other variations as the officers of the City executing such temporary Bonds may determine, as evidenced by their signing of such temporary Bonds. (b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the benefit and security of this Ordinance. (c) The City, without unreasonable delay, shall prepare, execute and deliver to the Paying Agent/Registrar; thereupon, upon the presentation and surrender of the Bond or Bonds in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a Bond or Bonds of the same maturity and series, in definitive form, in the authorized denomination, and in the same aggregate principal amount, as the Bond or Bonds in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. WB200/I Dallas 972221_1.DOC -9- Section 3.9 Replacement Bonds. (a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authenticate and deliver a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner first complies with the following requirements: (i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction, or theft of such Bond; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar to save it and the City harmless; (iii) pays 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 is authorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the City and the Paying Agent/Registrar. (c) 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 there:fro~ 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. ( d) In the event that any such mutilated, lost, apparently destroyed, or wrongfully taken Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Bond, may pay such Bond when it becomes due and payable. (e) Each replacement Bond delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and 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. W8200/I l>aJlas 972221_1.DOC -10- Section 3 .10 Book-Entry-Only System. (a) Notwithstanding any other provision hereof, upon initial issuance of the Bonds, the Bonds shall be registered in the name of Cede & Co., as nominee of DTC. The definitive Bonds shall be initially issued in the fonn of a single separate Bond for each of the maturities thereof (b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any OTC Participant or any other person, other than an Owner, as shown on the Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than an Owner, as shown in the Register of any amount with respect to principal of, premiwn, if any, or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute owner of such Bond for the pUipOse of payment of principal ot premium, if any, and interest on Bonds, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the pwpose of registering transfer with respect to such Bond, and for all other pwposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owners as shown in the Register, as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of, premiwn, if any, and interest on the Bonds to the ex.tent of the sum or swns so paid. No person other than an Owner, as shown in the Register, shall receive a Bond evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the word ''Cede & Co." in this Ordinance shall refer to such new nominee of OTC. (c) The Representations Letter previously executed and delivered by the City, and applicable to the City's obligations delivered in book-entry-only form to DTC as securities depository, is hereby ratified and approved for the Bonds. Section 3.11 Successor Securities Depository; Transfer Outside Book-Entry-Only System. In the event that the City determines tliat it is in the best interest of the City and the beneficial owners of the Bonds that they be able to obtain Bonds, or in the event DTC discontinues the services described herein, the City shall (i) appoint a successor securities depository, qualified to act as such under Section l 7(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities UJB200/l Dallas 97222 U ,[X)C -11- depository; or (ii) notify DTC and OTC Participants of the availability through DTC of Bonds and cause the Paying Agent/Registrar to transfer one or more separate registered Bonds to OTC Participants having Bonds credited to their OTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Bonds shall design.ate, in accordance with the provisions of this Ordinance. Section 3.12 Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such Bonds shall be made and given, respectively, in the manner provided in the Representations Letter. ARTICLE IV REDEMPTION OF BONDS BEFORE MATURITY Section 4.1 Redemption. The Bonds are subject to redemption before their scheduled maturity only as provided in this Article IV. Section 4.2 Optional Redemption. (a) The City reserves the option to redeem Bonds in the manner provided in the Form of Bond set forth in Section 6.2 of this Ordinance with such changes as are required by the Pricing Certificate. (b) If less than all of the Bonds are to be redeemed pursuant to an optional redemptio~ the City shall detennine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot the Bonds, or portions thereof, within such maturity or maturities and in such principal amo1.D1ts for redemption. (c) The City, at least forty-five (45) days before the redemption date, unless a shorter period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Bonds to be redeemed. Section 4.3 Mandatory Sinking Fund Redemption. (a) Bonds designated as '"'Term Bonds," if any, in the Pricing Certificate are subject to scheduled mandatory redemption and will be redeemed by the City, in part at a price equal to the principal amount thereof, without premium, plus accrued interest to the redemption date, out of moneys available for such purpose in the Interest and Sinking Fund, on the dates and in the respective principal amounts as set forth in the Pricing Certificate. WB200/I Dallas 972221_1.DOC -12- (b) At least forty-five (45) days prior to each scheduled mandatory redemption date, the Paying Agent/Registrar shall select for redemption by lot, or by any other customary method that results in a random selection, a principal amount of Tenn Bonds equal to the aggregate principal amount of such Term Bonds to be redeemed, shall call such Tenn Bonds for redemption on such scheduled mandatory redemption date, and shall give notice of such redemption, as provided in Section 4.5. (c) The principal amount of the Tenn Bonds required to be redeemed on any redemption date pursuant to subparagraph (a) of this Section 4.3 shall be reduced, at the option of the City, by the principal amount of any Term Bonds which, at least forty-five ( 45) days prior to the mandatory sinking fund redemption date (i) shall have been acquired by the City at a price not exceeding the principal amount of such Tenn Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, or (ii) shall have been redeemed pursuant to the optional redemption provisions hereof and not previously credited to a mandatory sinking fund redemption. Section 4.4 Partial Redemption. (a) A portion of a single Bond of a denomination greater than $5,000 may be redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof. If such a Bond is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000 portion of the Bond as though it were a single Bond for purposes of selection for redemption. (b) Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar, in accordance with Section 3.6 of this Ordinance, shall authenticate and deliver an exchange Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered, such exchange being without charge. (c) The Paying Agent/Registrar shall promptly notify the City in writing of the principal amount to be redeemed of any Bond as to which only a portion thereof is to be redeemed. Section 4.5 Notice of Redemption to Owners. (a) The Paying Agent/Registrar shall give notice of any redemption of Bonds by sending notice by United States mail, first class postage prepaid, not less than thirty (30) days before the date fixed for redemption, to the Owner of each Bond ( or part thereof) to be redeemed, at the address shown on the Register at the close of business on the Business Day next preceding the date of mailing such notice. (b) The notice shall state the redemption date, the redemption price, the place at which the Bonds are to be smrendered for payment, and, if less than all the Bonds outstanding are to be redeemed, an identification of the Bonds or portions thereof to be redeemed. (c) Any notice given as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. UJB200/I Dallas 97222U.DOC -13- Section 4.6 Payment Upon Redemption. (a) Before or on each redemption date, the City shall deposit with the Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Agent/Registrar shall make provision for the payment of the Bonds to be redeemed on such date by setting aside and holding in trust such amounts as are received by the Paying Agent/Registrar from the City and shall use such funds solely for the pwpose of paying the principal of and accrued interest on the Bonds being redeemed. (b) Upon presentation and surrender of any Bond called for redemption at the Designated Paymentrrransfer Office on or after the date fixed for redemption, the Paying Agent/Registrar shall pay the principal of, redemption premium, if any, and accrued interest on such Bond to the date of redemption from the money set aside for such purpose. Section 4. 7 Effect of Redemption. (a) Notice of redemption having been given as provided in Section 4.5 of this Ordinance, the Bonds or portions thereof called for redemption shall become due and payable on the date fixed for redemption and, unless the City defaults in its obligation to make provision for the payment of the principal thereof or accrued interest thereon, such Bonds or portions thereof shall cease to bear interest ftom and after the date fixed for redemption, whether or not such Bonds are presented and sUITendered for payment on such date. (b) If the City shall fail to make provision for payment of all sums due on a redemption date, then any Bond or portion thereof called for redemption shall continue to bear interest at the rate stated on the Bond until due provision is made for the payment of same by the City. Section 4.8 Lapse of Payment. Money set aside for the redemption of Bonds and remaining unclaimed by the Owners of such Bonds shall be subject to the provisions of Section 3.3(t) hereof. ARTICLEV PAYING AGENT/REGISTRAR Section 5.1 Appointment of Initial Paying Agent/Registrar. JPMorgan Chase Banlc, National Association, is hereby appointed as the initial Paying Agent/Registrar for the Bonds. Section 5.2 Qualifications. Each Paying Agent/Registrar shall be a commercial bank, a trust company organized under the laws of the State of Texas, or other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Bonds. UJB200/I Dallas 972221_1.DOC -14- Section 5.3 Maintaining Paying Agent/Registrar. (a) At all times while any of the Bonds are outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 5.2 of this Ordinance. The Mayor is hereby authorized and directed to execute an agreement with the Paying Agent/Registrar specifying the duties and responsibilities of the City and the Paying Agent/Registrar in substantially the form presented at this meeting, such form of agreement being hereby approved. The signature of the Mayor shall be attested by the City Secretary. (b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement. Section 5.4 Termination. The City, upon not less than sixty (60) days notice, reserves the right to tenninate the appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be terminated written notice of such termination. Section 5.5 Notice of Change to Owners. Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will cause notice of the change to be sent to each Owner by United States mail, first class postage prepaid, at the address thereof in the Register, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. Section 5.6 Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar and executing the Paying Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perfonn the duties and functions of Paying Agent/Registrar prescribed thereby. Section 5.7 Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent, promptly upon the appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent books and records relating to the Bonds to the successor Paying Agent/Registrar. ARTICLE VI FORM OF THE BONDS Section 6.1 Form Generally. (a) The Bonds, including the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and the Assignment form to appear on each of the Bonds, (i) shall be substantially in the fonn set forth in this Article, with such appropriate insertions, omissions, substitutions, and other variations as are WB200/l Dallas 972221_1.DOC -15- permitted or required by this Ordinance and the Pricing Certificate, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Bonds, as evidenced by their execution thereof. (b) Any portion of the text of any Bonds may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Bonds. (c) The definitive Bonds, if any, shall be typewritten, photocopied, printed, lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, aJl as determined by the officers executing such Bonds, as evidenced by their execution thereof. (d) The Initial Bond submitted to the Attorney General of the State of Tex.as may be typewritten and photocopied or otherwise reproduced. Section 6.2 Form of the Bonds. The form of the Bonds, including the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Bonds, shall be substantially as follows: (a) Form of Bond. REGISTERED No. __ INTEREST RATE: __ % United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2005 MATURTIYDATE: BOND DATE: ____ , __ REGISTERED $. ___ _ CUSIP NUMBER: The City of Lubbock (the "City"), in the County of Lubbock. State of Texas, for value received, hereby promises to pay to 1 Imert based upon the Pricing Certificate. WB200/I Dallas 972221_1.IX>C or registered assigns, on the Maturity Date specified above, the sum of _________ DOLLARS and to pay interest on such principal amount from the later of the Bond Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing _______ 2• All capitalized terms used herein but not defined shall have the meaning assigned to them in the Ordinance (defined below). The principal of this Bond shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Bond at the cotp0rate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of JPMorgan Chase Banlc, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment!fransfer Office of such successor. Interest on this Bond is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. For the purpose of the payment of interest on this Bond, the registered owner shall be the person in whose name this Bond is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. If the date for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall have the same force and effect as if made on the original date payment was due. This Bond is one of a series of fully registered Bonds specified in the title hereof issued in the aggregate principal amount of $ _____ 3 (herein referred to as the "Bonds"), issued pursuant to a certain ordinance of the City {the ''Ordinance") for the purpose of refunding certain outstanding obligations of the City. [The City has reserved the option to redeem the Bonds maturing on or after February 15, ___ before their respective scheduled maturities in whole or in part in integral multiples of 2 Insert based upon the Pricing Certificate . ., Insert based upon the Pricing Certificate. WB200/I I>allas 972221_1.DOC -17- $5,000 on February 1 S, _____, or on any date thereafter, at a redemption price of par, plus accrued interest to the date fixed for redemption. If less than all of the Bonds are to be redeemed, the City shall detennine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot Bonds, or portions thereof within such maturity or maturities and in such amounts, for redemption.]4 [Bonds maturing on February 15, ___ (the "Tenn Bonds") are subject to mandatory sinking fund redemption prior to their scheduled maturity, and will be redeemed by the City, in part at a redemption price equal to the principal amount thereof, without premium, plus interest accrued to the redemption date, on the dates and in the principal amounts shown in the following schedule: Redemption Date February 15, __ February 15, __ (maturity) Principal Amount $ ___ _ $ ___ _ The Paying Agent/Registrar will select by lot or by any other customary method that results in a random selection the specific Term Bonds (or with respect to Term Bonds having a denomination in excess of $5,000, each $5,000 portion thereof) to be redeemed by mandatory redemption. The principal amount of Tenn Bonds required to be redeemed on any redemption date pursuant to the foregoing mandatory sinking fund redemption provisions hereof shall be reduced, at the option of the City, by the principal amount of any Tenn Bonds which, at least 45 days prior to the mandatory sinking fund redemption date (i) shall have been acquired by the City at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, or (ii) shall have been redeemed pursuant to the optional redemption provisions hereof and not previously credited to a mandatory sinking fund redemption.]5 Notice of such redemption or redemptions shall be given by United States mail, first class postage prepaid, not less than 30 days before the date fixed for redemption, to the registered owner of each of the Bonds to be redeemed in whole or in part. Notice having been so given, the Bonds or portions thereof designated for redemption shall become due and payable on the redemption date specified in such notice; from and after such date, notwithstanding that any of the Bonds or portions thereof so called for redemption shall not have been surrendered for payment, interest on such Bonds or portions thereof shall cease to accrue. As provided in the Ordinance, and subject to certain limitations therein set forth, this Bond is transferable upon surrender of this Bond for transfer at the designated office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to • Insert optional redemption provisions and revise as necessary to conform to the Pricing Certificate. s Insert mandatory sinking fund redemption provisions, if any, and revise as necessary to conform to the Pricing Certificate. WB200/I Dallas 972221_1 .IX>C -18- the Paying Agent/Registrar; thereupon, one or more new fully registered Bonds of the same stated maturity, of authorized denominations, bearing the same rate of interest.. and for the same aggregate principal amount will be issued to the designated transferee or transferees. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided ( except interest shall be paid to the person in whose name this Bond is registered on the Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice to the contrary. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond and the series of which it is a part is du1y authorized by law; that all acts,.conditions and things required to be done precedent to and in the issuance of the Bonds have been properly done and performed and have happened in regular and due time, form and manner, as required by law; that ad valorem taxes upon all taxable property in the City have been levied for and pledged to the payment of the debt service requirements of the Bonds within the limit prescribed by law; and that the total indebtedness of the City, including the Bonds, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City has caused this Bond to be executed by the manual or facsimile signarure of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly impressed or placed in facsimile on this Bond. Mayor, City of Lubbock, Texas City Secretary, City of Lubbock, Texas [SEAL] LUB200/1 Dallas 972221_1.DOC -19- ! (b) Form of Comptroller's Registration Bond. The following Comptroller's Registration Bond may be deleted from the definitive Bonds if such Bond on the Initial Bond is fully executed. OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS OF THE STATE OF TEXAS § § § REGISTER NO. ___ _ I hereby certify that there is on file and of record in my office a Certificate of the Attorney General of the State of Texas to the effect that this Bond has been examined by him as required by law, that be finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding obligation of the City of Lubbock, Texas; and that this Bond has this day been registered by me. Witness my hand and seal of office at Austin, Texas, _______ _ [SEAL] Comptroller of Public Accounts of the State of Texas (c) Fonn of Certificate of Paying Agent/Registrar. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Bond if the Comptroller's Registration Bond appears thereon. CERTIFICATE OF PAYING AGENT/REGISTRAR The records of the Paying Agent/Registrar show that the Initial Bond of this series of Bonds was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas, and that this is one of the Bonds referred to in the within-mentioned Ordinance. Dated: LUB200/I Dallas 972221_1.DOC -20- JPMorgan Chase Bank, National Association as Paying Agent/Registrar By: Authorized Signatory (d) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED, the widersigned hereby sells, assigns, and transfers unto (print or typewrite name. address and Zip Code of transferee): _____________ _ (Social Security or other identifying number: _______ -----., the within Bond and all rights hereunder and hereby irrevocably constitutes and appoints _______ _ attorney to transfer the within Bond on the books kept for registration hereof, with full power of substitution in the premises. Dated: NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular and must be guaranteed in a manner acceptable to the Paying Agent/Registrar. Signature Guaranteed By: Authorized Signatory (e) The Initial Bond shall be in the form set forth in paragraphs (a), (b) and (d) of this Sectio~ except for the following alterations: WB200/I (i) immediately under the name of the Bond the headin~ "INTEREST RATE" and ''MATURITY DATE" shall both be completed with the expression "As shown below"; and (ii) in the first paragraph of the Bond, the words "on the maturity date specified above" shall be deleted and the following will be inserted: "on February 1 S in each of the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule: Dallas 972221_1.DOC -21- Principal Installments Interest Rate (Information to be inserted from the Pricing Certificate pursuant to Section 3.2 of this Ordinance) Section 6.3 CUSIP Registration. The City may secure identification numbers through the CUSIP Service Bureau Division of Standard & Poor's, A Division of the McGraw-Hill Companies, New York, New York, and may authorize the printing of such numbers on the face of the Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Bonds shall be of no significance or effect in regard to the legality thereof and neither the City nor the attorneys approving said Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed on the Bonds. Section 6.4 Legal Opinion. The approving legal opinion of Vinson & Elkins L.L.P ., Bond Counsel, may be attached to or printed on the reverse side of each Bond over the certification of the City Secretary, which may be executed in facsimile. Section 6.5 Bond Insurance. Information pertaining to bond insurance, if any, may be printed on each Bond. ARTICLE VII SALE AND DELIVERY OF BONDS; DEPOSIT OF PROCEEDS Section 7.1 Sale of Bonds; Official Statement. (a) The Bonds shall be sold at negotiated sale to the Underwriters in accordance with the terms of this Ordinance, including this Section 7.l(a) and Exhibit B hereto, provided that all of the conditions set forth in Exhibit B can be satisfied. As authorized by Chapter 1207, Texas Government Code, as amended, the Chief Financial Officer/ Assistant City Manager is authorized to act on behalf of the City upon determining that the conditions set forth in Exhibit B can be satisfied, in selling and delivering the Bonds and carrying out the other procedures specified in this Ordinance, including determining whether to acquire bond insurance for the Bonds, the aggregate principal amount of the Refunded Obligations, the aggregate principal amount of the Bonds and price at which each of the Bonds will be sold, the number and designation of series of Bonds to be issued, the form in which the Bonds shall be issued, the years in which the Bonds will mature, the principal amount to mature in each of such years, the rate of interest to be borne by each such maturity, the first interest payment date, the dates, prices and tenns upon and at which the Bonds shall be subject to redemption prior to maturity at the option of the City and shall be subject to mandatory sinking fund redemption, and all other matters relating to the WB200/l Oa1Jas 972221_1 .DOC -22- issuance, sale and delivery of the Bonds, including the refunding of the Refunded Obligations, all of which shall be specified in the Pricing Certificate. The authority granted to the Chief Financial Officer/ Assistant City Manager under this Section 7. l(a) shall expire at 5:00 p.m., August 31, 2005 unless otherwise extended by the City Council by separate action. Any finding or detennination made by the Chief Financial Officer/ Assistant City Manager relating to the issuance and sale of the Bonds and the execution of the Bond Purchase Agreement in connection therewith shall have the same force and effect as a finding or determination made by the City Council. (b) The Chief Financial Officer/ Assistant City Manager is hereby authorized and directed to execute and deliver, and the City Secretary is hereby authorized and directed to attest, a bond purchase agreement (the "Bond Purchase Agreement") which Bond Purchase Agreement is hereby accepted, approved and authorized in substantially the form submitted to the City and upon completion of the terms of the Bond Purchase Agreement in accordance with the terms of the Pricing Certificate and this Ordinance, the Chief Financial Officer/ Assistant City Manager is authorized and directed to execute such Bond Purchase Agreement on behalf of the City and the Chief Financial Officer/ Assistant City Manager and all other officers, 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. The Bonds shall initially be registered in the name of the Representative. ( c) The form and substance of the Preliminary Official Statement for the Bonds and any addenda, supplement or amendment thereto, are hereby in all respects approved and adopted, and the Preliminary Official Statement is hereby deemed final as of its date within the meaning and for the purposes of paragraph (b)(l) of Rule 15c2~12 under the Securities Exchange Act of 1934, as amended. The Chief Financial Officer/ Assistant City Manager and City Secretary are hereby authorized and directed to cause to be prepared a final Official Statement incorporating applicable pricing information pertaining to the Bonds, and to execute the same by manual or facsimile signature and deliver appropriate numbers of executed copies thereof to the Representative. The Official Statement as thus approved, executed and delivered, with such appropriate variations as shall be approved by the Chief Financial Officer/ Assistant City Manager and the Representative, may be used by the Underwriters in the public offering and sale thereof. The City Secretary is hereby authorized and directed to include and maintain a copy of the Official Statement and any addenda, supplement or amendment thereto thus approved among the pennanent records of this meeting. The use and distribution of the Preliminary Official Statement in the public offering of the Bonds by the Underwriters is hereby ratified, approved and confinned. ( d) All officers of the City are authorized to execute such documents, Bonds and receipts as they may deem appropriate in order to consummate the delivery of the Bonds in accordance with the tenns of sale therefor including, without limitation, the Bond Purchase Agreement. WB200/I Dallas 972221_1.DOC -23- (e) The obligation of the Underwriters identified in subsection (a) of this Section to accept delivery of the Bonds is subject to such purchaser being furnished with the final, approving opinion of Vinson & Elkins L.L.P ., bond counsel for the City, which opinion shall be dated and delivered the Closing Date. Section 7 .2 Control and Delivery of Bonds. (a) The Chief Financial Officer/Assistant City Manager of the City is hereby authorized to have control of the Initial Bond and all necessary records and proceedings pertaining thereto pending investigation, examination, and approval of the Attorney General of the State of Texas, registration by the Comptroller of Public Accounts of the State of Texas and registration with, and initial exchange or transfer by, the Paying Agent/Registrar. (b) After registration by the Comptroller of Public Accounts, delivery of the Bonds shall be made to the Underwriters thereof under and subject to the general supervision and direction of the Chief Financial Officer/ Assistant City Manager, against receipt by the City of all amounts due to the City under the tenns of sale. ARTICLE VIII CREATION OF FUNDS AND ACCOUNTS, INITIAL DEPOSITS AND APPLICATION OF MONEY Section 8.1 Creation of Funds. The City hereby establishes the following funds: (i) the City of Lubbock, Texas, General Obligation Refunding Bonds, Series 2005, Interest and Sinking Fund (the "Interest and Sinking Fund•'); and (ii) the City of Lubbock, Texas, General Obligation Refunding Bonds, Series 2005, Cost oflssuance Fund (the "Cost oflssuance Fund"). Section 8.2 Initial Deposits. On the Closing Date, the City shall cause the proceeds from the sale of the Bonds to be deposited as follows: LUB200/I (i) first, an amount equal to all accrued interest on the Bonds, if any, from the Original Issue Date until the Closing Date shall be deposited to the credit of the Interest and Sinking Fund; (ii) second, a portion of the proceeds from the sale of the Bonds, funds transferred from the interest and sinking funds for the Refunded Obligations, and other funds of the City, if any, as set forth in the Pricing Certificate shall be applied to establish an Escrow Fund to refund the Refunded Obligations and, to the extent not otherwise provided for, to pay all expenses arising in connection Dallas 97222U.OOC -24- with the establishment of such Escrow Fund and the refunding of the Refunded Obligations; and (iii) third, the remaining balance shall be deposited to the credit of the Cost of Issuance Fund to pay the costs of issuance. Section 8.3 Interest and Sinking Fund. (a) The taxes levied under Section 2.1 of this Ordinance shall be deposited to the credit of the Interest and Sinking Fund at such times and in such amounts as necessary for the timely payment of the principal of and interest on the Bonds. (b) If the amount of money in the Interest and Sinking Fwid is at least equal to the aggregate principal amount of the outstanding Bonds plus the aggregate amount of interest due and that will become due and payable on such Bonds, no further deposits to that fund need be made. In determining the aggregate principal amount of outstanding Bonds, there shall be subtracted the amount of any Bonds that have been duly called for redemption and for which money has been deposited with the Paying Agent/Registrar for such redemption. (c) Money on deposit in the Interest and Sinking Fund shall be used to pay the principal of and interest on the Bonds as such become due and payable. Section 8.4 Cost oflssu.ance Fund. The Cost of Issuance Fund shall be used for the purpose of paying expenses incurred in connection with the issuance and delivery of the Bonds. Section 8.5 Excess Bond Proceeds. (a) Upon pa)'1llent of the cost of issuance associated with the Bonds, any amount that remains in the Cost of Issuance Fund shall be transferred to the credit of the Interest and Sinking Fund and segregated in a special escrow account. (b) The money in such special escrow account shall be used for the payment of principal, premium, if any, and interest on the Bonds, on the respective due dates thereof or dates as of which Bonds have been called for redemption. Section 8.6 Security of Funds. All moneys on deposit in the funds referred to in this Ordinance shall be secured in the manner and to the fullest extent required by the laws of the State of Texas for the security of public funds, and moneys on deposit in such funds shall be used only for the purposes permitted by this Ordinance. WB200/I Dallas 97222 u.ooc -25- Section 9. I Investments. ARTICLE IX INVESTMENTS (a) Money in the Interest and Sinking Fund created by this Ordinance, at the option of the City, may be invested in such securities or obligations as permitted under applicable law. (b) Any securities or obligations in which such money is so invested shall be kept and held in trust for the benefit of the Owners and shall be sold and the proceeds of sale shall be timely applied to the making of all payments required to be made from the fund from which the investment was made. Section 9.2 Investment Income. Interest and income derived from investment of the Interest and Sinking Fund shall be credited to such Fund. ARTICLEX PARTICULAR REPRESENTATIONS AND COVENANTS Section I 0.1 Payment of the Bonds. On or before each Interest Payment Date while any of the Bonds are outstanding and unpaid, there shall be made available to the Paying Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such interest on and principal of, redemption premium, if any, and interest on the Bonds as will accrue or mature on the applicable Interest Payment Date or date of prior redemption. Section 10.2 Other Representations and Covenants. (a) The City will faithfully perform, at all times, any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance, each Bond and the ordinances or contracts authorizing the issuance of the Prior Lien Obligations; the City will promptly pay or cause to be paid the principal of, redemption premium, if any, and interest on each Bond on the dates and at the places and manner prescribed in such Bond; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. (b) The City is duly authorized under the laws of the State of Texas to issue the Bonds; all action on its part for the creation and issuance of the Bonds has been duly and effectively taken; and the Bonds in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms. WB200/l Dallas 972221_1.DOC -26- ) ) ) Section 10.3 Provisions Concerning Federal Income Tax Exclusion. The City intends that the interest on the Bonds shall be excludable from gross income for purposes of federal income taxation pursuant to sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and the applicable reguJations promulgated thereunder (the "Regulations"). The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted, respectively, would cause the interest on the Bonds to be includable in the gross income, as defined in section 61 of the Code, of the holders thereof for purposes of federal income taxation. In particular, the City covenants and agrees to comply with each requirement of Sections 10.3 through 10.9 of this Article X; provided, however, that the City shall not be required to comply with any particular requirement of Sections 10.3 through 10.9 of this Article X if the City has received an opinion of nationally recognized bond counsel ("Counsel's Opinion") that such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or if the City has received a Counsel's Opinion to the effect that compliance with some other requirement set forth in Sections 10.3 through I 0.9 of this Article X will satisfy the applicable requirements of the Code, in which case compliance with such other requirement specified in such Counsel's Opinion shall constitute compliance with the corresponding requirement specified in Sections 10.3 through 10.9 of this Article X. Section 10.4 No Private Use or Payment and No Private Loan Financing. The City shall certify, through an authorized officer, employee or agent, that, based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered, the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "private activity bonds" within the meaning of section 141 of the Code and the Regulations. The City covenants and agrees that it will make such use of the proceeds of the Bonds, including interest or other investment income derived from Bond proceeds, regulate the use of property financed, directly or indirectly, with such proceeds, and take such other and further action as may be required so that the Bonds will not be ''private activity bonds" within the meaning of section 141 of the Code and the Regulations. Section I 0.5 No Federal Guaranty. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that, if taken or omitted, respectively, would cause the Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code and the Regulations, except as permitted by section 149(b)(3) of the Code and the Regulations. Section 10.6 Bonds Are Not Hedge Bonds. The City covenants and agrees not to take any action, or knowingly omit to take any action, and has not knowingly omitted and will not knowingly omit to take any action, within its control. that, if taken or omitted, respectively. would cause the Bonds to be "hedge bonds" within the meaning of section 149(g) of the Code and the Regulations. WB200/I lnllas 97222l_l.OOC -27- Section I 0. 7 No-Arbitrage Covenant. The City shall certify, through an authorized officer, employee or agent, that, based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered, the City will reasonably expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of section 148(a) of the Code and the Regulations. Moreover, the City covenants and agrees that it will make such use of the proceeds of the Bonds including interest or other invesbnent income derived from Bond proceeds, regulate invesbnents of proceeds of the Bonds, and take such other and further action as may be required so that the Bonds will not be "arbitrage bonds" within the meaning of section 148(a) of the Code and the Regulations. Section 10.8 Arbitrage Rebate. If the City does not qualify for an exception to the requirements of Section 148(t) of the Code, 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), be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Bonds as may be required to calculate the amount earned on the investment of the gross proceeds of the Bonds separately from reoords of amounts on deposit in the funds and accounts of the City allocable to other bond issues of the City or moneys which do not represent gross proceeds of any Bonds of the City, (ii) calculate at such times as are required by the Regulations, the amount earned from the investment of the gross proceeds of the Bonds which is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Bonds or on such other dates as may be permitted under the Regulations, all amounts required to be rebated to the federal government. Further, the City will not 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 because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at ann 's length and had the yield on the issue not been relevant to either party. Section 10.9 Information Re.porting. The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Bonds are issued, an information statement concerning the Bonds, all under and in accordance with section 149(e) of the Code and the Regulations. Section 10.10 Continuing Obligation. Notwithstanding any other provision of this Ordinance, the City's obligations under the covenants and provisions of Sections I 0.3 through 10.9 of this Article X shall survive the defeasance and discharge of the Bonds. WB200/I Dallas !>72221_1.DOC -28- ARTICLE XI DEFAULT AND REMEDIES Section I I . I Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (i) the failure to make payment of the principal of, redemption premium, if any, or interest on any of the Bonds when the same becomes due and payable; or (ii) default in the performance or observance of any other covenant, agreement, or obligation of the City, which default materially and adversely affects the rights of the Owners, including but not limited to their prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of sixty (60) days after notice of such default is given by any Owner to the City. Section 11.2 Remedies for Default. (a) Upon the happening of any Event of Default, then any Owner or an authorized representative thereof, including but not limited to a trustee or trustees therefor, may proceed against the City for the purpose of protecting and enforcing the rights of the Owners wider this Ordinance by mandamus or other suit, action or special proceeding in equity or at law in any court of competent jurisdiction for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the Owners hereunder or any combination of such remedies. (b) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Owners of Bonds then outstanding. Section 11.3 Remedies Not Exclusive. (a) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Bonds or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available as a remedy under this Ordinance. (b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. WB200/I Dallas 972221_1.~ Section 12.1 Discharge. ARTICLE XII DISCHARGE The Bonds may be defeased. discharged or refunded in any manner permitted by applicable law. ARTICLE XIII CONTINUING DISCLOSURE UNDERTAKING Section 13.1 Annual Reports. (a) The City shall provide annually to each NRMSIR and to any SID, within six (6) months after the end of each fiscal year, financial information and operating data with respect to the City of the general type included in the final Official Statement, being the information described in Exhibit A hereto. Any financial statements so to be provided shall be (i) prepared in accordance with the accounting principles described in Exhibit A hereto, and (ii) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within such period, then the City shall provide notice that audited financial statements are not available and shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID. The City shall provide audited financial statements for the applicable fiscal year to each NRMSIR and to any SID when and if audited financial statements become available. (b) 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 infonnation and operating data pursuant to this Section. (c) 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 referenced 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 13.2 Material Event Notices. (a) 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: (i) principal and interest payment delinquencies; (ii) nonpayment related defaults; LUB200/I Dallas 972221_1.DOC -30- (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions or events affecting the tax-exempt status of the Bonds; (vii) modifications to rights of Owners; (viii) redemption calls; (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Bonds; and (xi) rating changes. (b) 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 infonnation or operating data in accordance with Section 13.1 ofthis Ordinance by the time required by such Section. Section 13.3 Limitations, Disclaimers and Amendments. (a) The City shall be obligated to observe and perfonn 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 notice of any redemption calls and any defeasances that cause the City to be no longer an "obligated person." (b) The provisions of this Article are for the sole benefit of the Owners 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 CTIY BE LIABLE TO TIIE OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR WB200/l Dallas 972221_1.DOC -31- TORT, FOR DAMAGES RESULTING IN WHOLE OR rN 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. (c) No default by the City in observing or perfonning its obligations under this Article shall constitute a breach of or default under the Ordinance for purposes of any other provisions of this Ordinance. (d) 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. (e) The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (i) the provisions of this Article, as so amended, would have pennitted an underwriter to purchase or sell 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 (ii) either (A) the Owners of a majority in aggregate _principal amount ( or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the outstanding Bonds consent to such amendment or (8) an entity or individual 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 Owners 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 13.1 an explanation, in narrative fonn, of the reasons for the amendment and of the impact of any change in type of financial information or operating data so provided. (f) Any filing required to be made pursuant to this Article XIII may be made through the facilities of DisclosureUSA or such other central post office as may be approved in writing by the SEC for such purpose. Any such filing made through such central post office will be deemed to have been filed with each NRMSIR and SID or MSRB as if such filing had been made directly to such entity. ARTICLE XIV REDEMPTION OF BONDS; APPROVAL OF ESCROW AGREEMENT; PURCHASE OF ESCROWED SECURITIES Section 14. l Redemption of Refunded Obligations. (a) The City hereby calls the Refunded Obligations for redemption prior to maturity on the dates and at the prices set forth in the Pricing Certificate. (b) The Chief Financial Officer/ Assistant City Manager is hereby authorized and directed to cause a copy of this Ordinance to be delivered to each paying agent/registrar for the WB200/l Dallas 97222U.DOC -32- Refunded Obligations, the delivery of which shall constitute notice of redemption and notice of defeasance to such paying agent/registrar. Section 14.2 Subscription of Federal Securities. The Mayor and the Chief Financial Officer/ Assistant City Manager, either or both, are hereby authorized to make necessary arrangements for the purchase of the Federal Securities referenced in the Escrow Agreement, as may be necessary for the Escrow Fund and the application for the acquisition of the Federal Securities is hereby approved and ratified. Following the deposits to the Escrow Fund as specified herein and in the Pricing Certificate, the Refunded Obligations shall be payable solely from and secured by such deposits and shall cease to be payable from ad valorem taxes. Section 14.3 Approval of Escrow Agreement. The discharge and defeasance of the Refunded Obligations shall be effectuated pursuant to the terms and provisions of an Escrow Agreement (the "Escrow Agreement') to be entered into by and between the City and the Escrow Agent, which shall be substantially in the form presented at this meeting, the terms and provisions of which are hereby approved, subject to such insertions, additions and modifications as shall be necessary (a) to cany out the program designed for the City, (b) to minimize the City's costs of refunding, (c) to comply with all applicable laws and regulations relating to the refunding of the Refunded Obligations, (d) to carry out the other intents and purposes of this Ordinance and (e) to comply with the terms set forth in the Pricing Certificate. The Chief Financial Officer/ Assistant City Manager is hereby authorized to execute and deliver such Escrow Agreement on behalf of the City in multiple counterparts and the City Secretary is hereby authorized to attest thereto and affix the City's seal. Section 14.4 Notice of Deposit. Each paying agent/registrar for the Refunded Obligations is hereby authorized and directed to give notice of redemption and deposit with respect to the Refunded Obligations as required under the ordinance pursuant to which the Refunded Obligations were issued. ARTICLE XV AMENDMENTS; ATTORNEY GENERAL MODIFICATION Section 15.1 Amendments. This Ordinance shall constitute a contract with the Owners, 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 consent of or notice to any Owners, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Owners, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the written consent of the Owners of the Bonds holding a majority in aggregate principal amount of the Bonds then outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Owners of outstanding Bonds, no such amendment, addition, or rescission shall (i) extend the time or times LUB200/I Dallas 972221_1.DOC -33- of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify the tenns of payment of the principal of, premium, if any, 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 Owners for consent to any such amendment, addition, or rescission. Section 15.2 Attorney General Modification. In order to obtain the approval of the Bonds by the Attorney General of the State of Texas, any provision of this Ordinance may be modified, altered or amended after the date of its adoption if required by the Attorney General in connection with the Attorney General's examination as to the legality of the Bonds and approval thereof in accordance with the applicable law. Such changes, if any, shall be provided to the City Secretary and the City Secretary shall insert such changes into this Ordinance as if approved on the date hereof. [Execution Page Follows] WB200/l Dallas 972221_1.DOC -34- PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 10th day of June, 2005, at a special meeting of the City Council of the City of bbock, T ATTEST: APPROVED AS TO CONTENT: By: LE ANNDUMBAULD, Chief Financial Officer/ Assistant City Manager LUB200/l Dallas 972221_1.DOC -35- JKT:RPL:T AL:maf:jdh DJ 166--012-3 2~5052 Mr. Donald G. Vandiver Attorney of Counsel P.O. Box 2000 Lubbock, Texas 79457 Dear Mr. Vandiver: U.S. Department of Justice Civil Rights Division Vcting ~ction • NWB 950 Pr11,uylva11/Q AW"IIUt, NW lf'ashingtcn, DC ZOJJO August 28, 2006 This refers to two annexations (Ordinance Nos. 2006-00067 andf200f>.,{)(J()fil and their designation to districts, the creation of two voting precincts, and the realignment of a voting precinct for the City of Lubbock in Lubbock County, Texas, submitted to the Attorney General pursuant to Section 5 of the Voting Rights Act, 42 U.S.C. 1973c. We received your submission on July 5, 2006. The Attorney General does not interpose any objection to the specified changes. However, we note that Section 5 expressly provides that the failure of the Attorney General to object does not bar subsequent litigation to enjoin the enforcement of the changes. Procedures for the Administration of Section 5 of the Voting Rights Act (28 C.F.R. 51.41). . R ~ C F·: V \ : ~N t ~-r '. , . t.a -'•' ., AUG 3 1 2006 CITY AfTu.~:·icY Sincerely, ~~,~ ~ r John Tanner Chief, Voting Section LUB200/16000 Dallas 987310_1.doc Ordinance Bo. 2005-00068 TRANSCRIPT OF PROCEEDINGS pertaining to $49,615~000 CITY OF LUBBOCK, TEXAS GENERAL OBLIGATION REFUNDING BONDS SERIES2005 Vinson &Elkins ATTORNEYS AT LAW VINSON & EUaNS Ll..P. 3700 TRAMMELL CROW CENreR 2001 ROSS AYENU£ DALI.AS, lEXAS 75201-2975 TELEPHONE (214) 220-TIDD VOICc IIIAL (214) 220-7999 FAX (2141220-ms ) $49,615,000 CITY OF LUBBOCK, TEXAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2005 TABLE OF DOCUMENTS DOCUMENT TAB NO. I. BOND DOCUMENTS I.I Certified Ordinance Providing for the Issuance of the Bonds 1 1.2 Pricing Certificate 2 1.3 Ordinances Authorizing Refunded Obligations 3 1.4 Paying Agent/Registrar Agreement 4 1.5 Preliminary Official Statement 5 1.6 Official Statement 6 1.7 Bond Purchase Contract 7 1.8 Escrow Agreement 8 1.9 Verification Report 9 1.10 Specimen Bonds 10 1.11 Insurance Commitment 11 1.12 Insurance Policy 12 II. CERTIFICATES. LETTERS AND RECEIPTS 2.1 General and No-Litigation Certificate 13 2.2 Signatw-e Identification and Authority Certificate of Escrow Agent 14 2.3 Instruction Letter to Paying Agent 15 2.4 Attorney General/Comptroller Instruction Letter 16 2.5 Acknowledgement of Receipt of Notice of Redemption 17 2.6 Federal Tax Certificate 18 LUB200nIOOI Dallas 987038_1.DOC ) ) DOCUMENT 2. 7 Form 8038-G and Evidence of Transmittal 2.8 Certificate of Insurer 2.9 Rating Letters 2.10 Certificate Pursuant to Bond Purchase Contract 111. OPINIONS 3.1 3.2 3.3 3.4 3.5 3.6 3.7 LUB2oonJOOI 987038_1.DOC Approving Opinion of Bond Counsel Supplemental Opinion of Bond Counsel Opinion of Underwriter's Cowisel Opinion of Attorney General and Certificate Opinion of Insurer's Counsel Reliance Letter to Insurer Opinion of City Attorney Comptroller's Registration TAB NO. 19 20 21 22 23 24 25 26 27 28 29 MINUTES AND CERTIFICATION PERTAINING TO PASSAGE OF AN ORDINANCE STATE OF TEXAS § COUNTY OF LUBBOCK § CITY OF LUBBOCK § On the 10th day of June, 2005, the City Council of the City of Lubbock, Texas, convened in a special meeting at the regular meeting place thereof, the meeting being open to the public and notice of said meeting, giving the date, place and subject thereof, having been posted as prescribed by Chapter 551, Texas Government Code, as amended; and the roll was called of the duly constituted officers and members of the City Council, which officers and members are as follows: Marc McDougal, Mayor Tom Martin, Mayor Pro Tern Linda DeLeon Floyd Price Gary 0. Boren Phyllis S. Jones Jim Gilbreath ) ) ) ) ) Members of the Council and all of said persons except Gary 0. Boren and Jim Gilbreath were present, thus constituting a quorum. Whereupon, among other business, a written Ordinance bearing the following caption was introduced: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LUBBOCK TEXAS, AUTHORIZING THE ISSUANCE OF CITY OF LUBBOCK, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005, IN AN AMOUNT NOT TO EXCEED $95,000,000; PROVIDING FOR THE AW ARD AND SALE THEREOF IN ACCORDANCE WITH SPECIFIED PARAMETERS; LEVYING A TAX IN PAYMENT THEREOF; PRESCRIBING THE FORM OF SAID BONDS; APPROVING EXECUTION AND DELIVERY OF AN ESCROW AGREEMENT AND A BOND PURCHASE AGREEMENT; APPROVING THE OFFICIAL STATEMENT; ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT; AND DECLARING AN EFFECTNE DATE The Ordinance, a full, true and correct copy of which is attached hereto, was read and reviewed by the City Council. Thereupon, it was duly moved and seconded that the Ordinance be passed and adopted. The Presiding Officer put the motion to a vote of the members of the City Council, and the Ordinance was passed and adopted by the following vote: AYES: 5 NOES: 0 ABSTENTIONS: 0 MINUTES APPROVED AND CERTIFIED TO BE TRUE AND CORRECT, and to correctly reflect the duly constituted officers and members of the City Council of said City, and the attached and following copy of said Ordinance is hereby certified to be a true and correct copy of an official copy thereof on file among the official records of the City, all on this the 10th day of June, 2005. Ci Secretary City of Lubbock, Texas [SEAL] LUB200nt001 Dallas 982454_1.DOC ~2- LUB200/I Dallas 97222 l_l.OOC ORDINANCE relating to CITY OF LUBBOCK, TEXAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2005 Adopted: June 10, 2005 ) Section 1.1 Section 1.2 Section 1.3 Section 1.4 TABLE OF CONTENTS ARTICLE l DEFINITIONS AND OTHER PRELIMINARY MA TIERS Definitions ............................................................................................................... 2 Findings ................................................................................................................... 4 Table of Contents, Titles, and Headings ................................................................. 4 Interpretation ........................................................................................................... 5 ARTICLE II SECURITY FOR THE BONDS Section 2.1 Tax Levy for Payment of the Bonds ....................................................................... 5 Section 3.1 Section 3.2 Section 3.3 Section 3.4 Section 3.5 Section 3.6 Section 3.7 Section 3.8 Section 3.9 Section 3 .10 Section 3 .11 Section 3.12 Section4.1 Section4.2 Section4.3 Section4.4 Section 4.5 Section4.6 Section 4.7 LUB200/1 ARTICLE Ill AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING TIIE BONDS Authorization ........................................................................................................... 6 Date, Denomination, Maturities, and Interest ......................................................... 6 Medium, Method, and Place of Payment ................................................................ 6 Execution and Registration of Bonds ...................................................................... 7 Ownership ............................................................................................................... 8 Registration, Transfer, and Exchange ..................................................................... 8 Cancellation ............................................................................................................. 9 Temporary Bonds .................................................................................................... 9 Replacement Bonds ............................................................................................... 10 Book-Entry-Only System ...................................................................................... 11 Successor Securities Depository; Transfer Outside Book-Entry-Only System .... 11 Payments to Cede & Co ........................................................................................ 12 ARTICLE lV REDEMPTION OF BONDS BEFORE MATURITY Redemption .. : ........................................................................................................ 12 Optional Redem.ption ............................................................................................ 12 Mandatory Sinking Fund Redem.ption .................................................................. 12 Partial Redemption ................................................................................................ 13 Notice of Redemption to Owners .......................................................................... 13 Payment Upon Redem.ption .................................................................................. 14 Effect of Redemption ............................................................................................ 14 Dallas 972221_1.00C (i) Section 4.8 Lapse of Payinent .................................................................................................. 14 ) ARTICLE V ) Section 5.1 Section 5.2 Section 5.3 Section 5.4 Section 5.5 Section 5.6 Section 5.7 Section 6.1 Section 6.2 Section 6.3 Section 6.4 Section 6.5 PAYING AGENT/REGISTRAR Appointment of Initial Paying Agent/Registrar .................................................... 14 Qualifications ........................................................................................................ 14 Maintaining Paying Agent/Registrar ..................................................................... 15 Termination ........................................................................................................... 15 Notice of Change to Owners ................................................................................. 15 Agreement to Perform Duties and Functions ........................................................ 15 Delivery of Records to Successor ......................................................................... 15 ARTICLE VI FORM OF THE BONDS F onn Generali y ..................................................................................................... 15 F onn of the Bonds ................................................................................................. 16 CUSIP Registration ............................................................................................... 22 Legal Opinion ........................................................................................................ 22 Bond Insurance ....................................... : .............................................................. 22 ARTICLE VII SALE AND DELIVERY OF BONDS; DEPOSIT OF PROCEEDS Section 7 .1 Sale of Bonds; Official Statement.. ....................................................................... 22 Section 7 .2 Control and Delivery of Bonds ............................................................................. 24 Section 8.1 Section 8.2 Section 8.3 Section 8.4 Section 8.5 Section 8.6 ARTICLE VIII CREATION OF FUNDS AND ACCOUNTS, INITIAL DEPOSITS AND APPLICATION OF MONEY Creation of Funds .................................................................................................. 24 Initial Deposits ...................................................................................................... 24 Interest and Sinking Fund ..................................................................................... 25 Cost of Issuance Fund ........................................................................................... 25 Excess Bond Proceeds ........................................................................................... 25 Security of Funds .................................................................................................. 25 ARTICLE IX INVESlMENTS Section 9. l Investments ............................................................................................................ 26 LUB200/I Dallas 972221_1.DOC (ii) ) Section 9.2 Investtnent Income ................................................................................................ 26 ARTICLEX PARTICULAR REPRESENTATIONS AND COVENANTS Section 10.1 Payment of the Bonds ........................................................................................... 26 Section 10.2 Other Representations and Covenants ................................................................... 26 Section 10.3 Provisions Concerning Federal Income Tax Exclusion ........................................ 27 Section 10.4 No Private Use or Payment and No Private Loan Financing ................................ 27 Section 10.5 No Federal Guaranty ............................................................................................. 27 Section 10.6 Bonds Are Not Hedge Bonds ................................................................................ 27 Section 10. 7 No-Arbitrage Covenant ......................................................................................... 28 Section I 0.8 Arbitrage Rebate ................................................................................................... 28 Section 10.9 Information Reporting ........................................................................................... 28 Section 10.10 Continuing Obligation ........................................................................................... 28 ARTICLE XI DEFAULT AND REMEDIES Section 11. l Events of Default ................................................................................................... 29 Section 11.2 Remedies for Default ............................................................................................ 29 Section 11.3 Remedies Not Exclusive ....................................................................................... 29 ARTICLE XII DISCHARGE Section 12.1 Discharge ............................................................................................................... 30 ARTICLE XIII CONTINUING DISCLOSURE UNDERTAKING Section 13.1 Annual Reports ...................................................................................................... 30 Section 13.2 Material Event Notices .......................................................................................... 30 Section 13.3 Limitations, Disclaimers and Amendments .......................................................... 31 ARTICLEXN REDEMPTION OF BONDS; APPROVAL OF ESCROW AGREEMENT; PURCHASE OF ESCROWED SECURITIBS Section 14. l Redemption of Refunded Obligations ................................................................... 32 Section 14.2 Subscription of Federal Securities ......................................................................... 33 Section 14.3 Approval of Escrow Agreement ............................................................................ 33 Section 14.4 Notice of Deposit .................................................................................................. 33 WB200/l Dallas 972221_1.DOC (iii) ) ARTICLE XV ) AMENDMENTS; ATTORNEY GENERAL MODIFICATION Section 15.1 Amendments .......................................................................................................... 33 Section 15.2 Attorney General Modification ............................................................................. 34 Schedule I -Schedule of Refunded Obligation Candidates Exhibit A -Description of Annual Disclosure of Financial Infonnation .................................... A-1 Exhibit B -Refunding P arruneters .............................................................................................. B-1 ) ) LUB200/i Dallas 972221_1.DOC (iv) Ordinance No. 2005-00068 AN ORDlNANCE OF THE CITY COUNCIL OF THE CITY OF LUBBOCK, TEXAS, AUTHORIZlNG THE ISSUANCE OF CITY OF LUBBOCK. TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005, IN AN AMOUNT NOT TO EXCEED $95,000,000; PROVIDING FOR THE AW ARD AND SALE THEREOF IN ACCORDANCE WITH SPECIFIED PARAMETERS; LEVYING A TAX IN PAYMENT THEREOF; PRESCRIBING THE FORM OF SAID BONDS; APPROVING EXECUTION AND DELIVERY OF AN ESCROW AGREEMENT AND A BOND PURCHASE AGREEMENT; APPROVING THE OFFICIAL STATEMENT; ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE WHEREAS, there are presently outstanding certain obligations of the City of Lubbock, Texas (the "City'), described on Schedule I attached hereto (collectively, the "Refunded Obligation Candidates"); WHEREAS, the City now desires to refund all or a portion of such Refunded Obligation Candidates (such refunded obligations to be hereinafter referred to as the "Refunded Obligations"); WHEREAS, Chapter 1207, Texas Government Code, authorizes the City to issue refunding bonds and to deposit the proceeds from the sale thereof, and any other available funds or resources, directly with a commercial bank or trust company, and such deposit, if made before the payment dates for the Refunded Obligations, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; WHEREAS, Chapter 1207 further authorizes the City to enter into an escrow agreement with a commercial bank with respect to the safekeeping, investment, reinvestment, administration and disposition of any such deposit, upon such terms and conditions as the City and such bank may agree, provided that such deposits may be invested and reinvested only in direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, and which shall mature and bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payment or prepayment of the Refunded Obligations; WHEREAS, JPMorgan Chase Bank, National Association, is a commercial bank and does not act as depository for the City and the Escrow Agreement hereinafter authorized constitutes an escrow agreement of the kind authorized and permitted by said Chapter 1207; WHEREAS, the City Council desires to delegate, pursuant to Section 1207.007, Texas Government Code, and the parameters of this Ordinance, to the Chief Financial Officer/ Assistant City Manager, the authority to approve the amount, the interest rate, price and terms of the Bonds authorized hereby and to otherwise take such actions as are necessary and appropriate to effect the sale of the Bonds and to select the specific maturities or series of Refunded Obligation Candidates to be refunded; LUB200/I Dallas 972221_1.DOC WHEREAS, the City Council hereby finds and detennines that the refunding contemplated in this Ordinance will benefit the City by providing a present value savings of debt service payable by the City in an amount to be certified in the Pricing Certificate, and that such benefit is sufficient consideration for the refunding of the Refunded Obligations; WHEREAS, the City Council has found and determined that it is necessary and in the best interest of the City and its citizens that it authorize by this Ordinance the issuance and deli very of its bonds at this time; and WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and public notice of the time, place, and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section 1.1 Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise in this Ordinance, the following terms shall have the meanings specified below: "Bond" means any of the Bonds. "Bond Date" means the date designated as the initial date of the Bonds in accordance with Section 3.2(a) of this Ordinance. "Bond Purchase Agreement" means the bond purchase agreement approved in Section 7 .1 (b) of this Ordinance. "Bonds" means the bonds authorized to be issued by Section 3.1 of this Ordinance and designated as "City of Lubbock, Texas General Obligation Refunding Bonds, Series 2005." "City" means the City of Lubbock, Texas. "Closing Date" means the date of the initial delivery of and payment for the Bonds. "Designated Payment/Transfer Office" means (i) with respect to the initial Paying Agent/Registrar named in this Ordinance, the Designated Payment/Transfer Office as designated in the Paying Agent/Registrar Agreement, or at such other location designated by the Paying Agent/Registrar and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the District and such successor. "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. LUB200/I Dallas 972221_1.00C -2- ) ) "DTC Participant" shall mean brokers and dealers, banks, trust companies, clearing cotperations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among OTC Participants. "Escrow Agent" means JPMorgan Chase Bank, National Association. as escrow agent under the terms of the Escrow Agreement. "Escrow Agreement" means that certain Escrow Agreement between the City and the Escrow Agent pertaining to the defeasance of the Refunded Obligations. "Escrow Fund" means the fund by that name established in the Escrow Agreement. "Event of Default" means any event of default as defined in Section 11.1 of this Ordinance. "Fiscal Year'' means such fiscal year as shall from time to time be set by the City Council. "Initial Bond" means the initial bond authorized by Section 3.4(d) of this Ordinance. "Interest and Sinking Fund" means the interest and sinking fund established by Section 8.3 of this Ordinance. "Interest Payment Date" means the date or dates on which interest on the Bonds is scheduled to be paid until their respective dates of maturity or prior redemption, such dates being February 15 and August 15 of each year, commencing on the date set forth in the Pricing Certificate. "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom the SEC or its staff has detennined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Owner" means the person who is the registered owner of a Bond or Bonds, as shown in the Register. ''Paying Agent/Registrar" means initially JPMorgan Chase Bank, National Association, or any successor thereto as provided in this Ordinance. ''Pricing Certificate" means a certificate or certificates to be signed by the Chief Financial Officer/Assistant City Manager of the City. "Record Date" means the last business day of the month next preceding an Interest Payment Date. LUB200/I Dallas 972221_1.00C -3- ) ) "Refunded Obligation Candidates" means the obligations of the City described in Schedule I attached hereto which are authorized to be designated as Refunded Obligations in the Pricing Certificate. "Refunded Obligations" means those obligations of the City to be designated in the Pricing Certificate from the Refunded Obligation Candidates described in Schedule I attached hereto. "Register-'' means the Register specified in Section 3.6(a) of this Ordinance. "Representations Letter" means the Blanket Letter of Representations between the City andDTC. ''Representative" means Morgan Stanley & Co. as representative of the Underwriters named in the Bond Purchase Agreement. "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. "Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the payment of principal of, redemption premium, if any, or interest on the Bonds as the same come due and payable or money set aside for the payment of Bonds duly called for redemption prior to maturity. "'Underwriters" means the underwriters of the Bonds named in the Bond Purchase Agreement. Section 1.2 Findings. The declarations, determinations, and findings declared, made, and found in the preamble to this Ordinance are hereby adopted, restated, and made a part of the operative provisions hereof. Section 1.3 Table of Contents, Titles. and Headings. The table of contents, titles, and headings of the Articles and Sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. WB200/l Dallas 972221_1.DOC -4- ) Section 1.4 Interpretation. (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. ARTICLE II SECURITY FOR THE BONDS Section 2.1 Tax Levy for Payment of the Bonds. (a) The City Council hereby declares and covenants that it will provide and levy a tax legally and fully sufficient for payment of 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 in consideration of all other outstanding obligations of the City. (b) In order to provide for the payment of the debt service requirements on the Bonds, being (i) the interest on the Bonds, and (ii) a sinking fund for their payment at maturity or a sinking fund of two percent per annum (whichever amount is the greater), there is hereby levied for the current year and each succeeding year thereafter while the Bonds or interest thereon remain outstanding and unpaid, a tax within legal limitations on each $100 assessed valuation of taxable property in the City that is sufficient to pay such debt service requirements, full allowance being made for delinquencies and costs of collection. (c) The tax levied by this Section shall be assessed and collected each year and applied to the payment of the debt service requirements on the Bonds, and the tax shall not be diverted to any other purpose. ( d) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and committed irrevocably to the payment of the principal of and interest on the Bonds when and as due and payable in accordance with their tenns and this Ordinance. (e) If the liens and provisions of this Ordinance shall be discharged in a manner permitted by Article XII hereof, then the collection of such ad valorem tax may be suspended or appropriately reduced, as the facts may permit, and further deposits to the Interest and Sinking Fund may be suspended or appropriately reduced, as the facts may permit. In determining the aggregate principal amount of outstanding Bonds, there shall be subtracted the amount of any Bonds that have been duly called for redemption and for which money has been deposited in accordance with Article XII herein. WB200/I Dallas 972221_1.DOC -5- ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS Section 3.1 Authorization. The City's bonds to be designated "City of Lubbock, Texas General Obligation Refunding Bonds, Series 2005" (the "Bonds"), are hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State of Texas, specifically Chapter 1207, Texas Government Code, as amended, and Article VIII of the City's Home-Rule Charter. The Bonds shall be issued in the aggregate principal amount designated in the Pricing Certificate, such amount not to exceed $95,000,000, for the purpose of refunding the Refunded Obligations and paying the costs of issuing the Bonds. Section 3.2 Date. Denomination, Maturities, and Interest. (a) The Bonds shall be dated the date set forth in the Pricing Certificate (the "Bond Date"). The Bonds shall be in fully registered form, without coupons, in the denomination of $5,000 or any integral multiple thereof and shall be numbered separately from one upward, except the Initial Bond, which shall be numbered T-1. (b) The Bonds shall mature on February 15 in the years and in the principal amounts set forth in the Pricing Certificate provided that the maximum maturity for the Bonds shall not exceed twenty years. (c) Interest shall accrue and be paid on each Bond respectively until its maturity or prior redemption, from the later of the Bond Date or the most recent Interest Payment Date to which interest has been paid or provided for at the rates per annwn for each respective maturity specified in the Pricing Certificate. Such interest shall be payable semiannually on each Interest Payment Date. Interest on the Bonds shall be calculated on the basis of a three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each. Section 3.3 Medium, Method, and Place of Payment. (a) The principal of, redemption premium, if any, and interest on the Bonds shall be paid in lawful money of the United States of America. (b) Interest on the Bonds shall be payable to the Owners as shown in the Register at the close of business on the Record Date. (c) Interest shall be paid by check, dated as of the Interest Payment Date, and sent United States mail, first class postage prepaid, by the Paying Agent/Registrar to each Owner, at the address thereof as it appears in the Register, or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the Owner; provided, however, that the Owner shall bear all risk and expense of such alternative banking arrangement. WB200/1 Dallas 972221_1.DOC -6- ( d) The principal of each Bond shall be paid to the Owner thereof on the due date, whether at the maturity date or the date of prior redemption thereof, upon presentation and surrender of such Bond at the Designated Payment/Transfer Office of the Paying Agent/Registrar. ( e) If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close, then the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall for all purposes be deemed to have been made on the due date thereof as specified in Section 3.2 of this Ordinance. (f) Unclaimed Payments shall be segregated in a special escrow account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owners of the Bonds to which the Unclaimed Payments pertain. Subject to Title 6 of the Texas Property Code, Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment or redemption date shall be applied to the next payment on the Bonds thereafter coming due; to the extent any such moneys remain three years after the retirement of all outstanding Bonds, such moneys shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar, nor any other person shall be liable or responsible to any Owners of such Bonds for any further payment of such unclaimed moneys or on account of any such Bonds, subject to Title 6 of the Texas Property Code. Section 3.4 Execution and Registration of Bonds. (a) The Bonds shall be executed on behalf of the City by the Mayor and the City Secretary, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Bonds ceases to be such officer before the authentication of such Bonds or before the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. (c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on all of the Bonds. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Bond delivered at the Closing Date shall have attached thereto the Comptroller's Registration WB200/l Dallas 972221_1 .OOC -7- ) ) Certificate substantially in the fonn provided herein, manually executed by the Comptroller of Public Accowits of the State of Texas, or by his duly authorized agent, which Certificate shall be evidence that the Bond has been duly approved by the Attorney General of the State of Texas, that it is a valid and binding obligation of the City, and that it has been registered by the Comptroller of Public Accounts of the State of Texas. ( d) On the Closing Date, one initial Bond reflecting the terms set forth in the Pricing Certificate, representing the entire principal amount of all Bonds, payable in stated installments to the Representative, or its designee, executed by the Mayor and City Secretary, approved by the Attorney General, and registered and manually signed by the Comptroller of Public Accounts, will be delivered to the Representative or its designee. Upon payment for the Initial Bond, the Paying Agent/Registrar shall cancel the Initial Bond and deliver a single registered, definitive Bond for each maturity, in the aggregate principal amount thereof, to OTC on behalf of the Undeiwriters. Section 3 .5 Ownership. (a) 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 as herein provided (except interest shall be paid to the person in whose name such Bond is registered on the Record Date), 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. (b) All payments made to the Owner of a Bond shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the extent of the swns paid. Section 3 .6 Registration, Transfer, and Exchange. (a) So long as any Bonds remain outstanding, the City shall cause the Paying Agent/Registrar to keep at the Designated Payment/fransfer Office a register (the "Register") in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Bonds in accordance with this Ordinance. (b) The ownership of a Bond may be transferred only upon the presentation and surrender of the Bond at the Designated Payment/fransfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Bond shall be effective until entered in the Register. (c) The Bonds shall be exchangeable upon the presentation and surrender thereof at the Designated Payment/fransfer Office of the Paying Agent/Registrar for a Bond or Bonds of the same maturity and interest rate and in a denomination or denominations of any integral multiple of $5,000, and in an aggregate principal amount equal to the unpaid principal amount of the Bonds presented for exchange. The Paying Agent/Registrar is hereby authorized to authenticate and deliver Bonds exchanged for other Bonds in accordance with this Section. WB200/I Dallas 972221_1.DOC -8- (d) Each exchange Bond delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the City and 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 exchange Bond is delivered. (e) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange for a different denomination of any of the Bonds. The Paying Agent/Registrar, however, may require the Owner to pay a swn sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registratio~ transfer, or exchange of a Bond. (f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Bond called for redemption, in whole or in part, where such redemption is scheduled to occur within forty-five ( 45) calendar days after the transfer or exchange date; provided, however, such limitation shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Bond. Section 3.7 Cancellation. All Bonds paid or redeemed before scheduled maturity in accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper records made regarding such payment, redemption, exchange, or replacement. The Paying Agent/Registrar shall then return such cancelled Bonds to the City or may in accordance with law destroy such cancelled Bonds and periodically furnish the City with Bonds of destruction of such Bonds. Section 3.8 Temporary Bonds. (a) Following the delivery and registration of the Initial Bond and pending the preparation of definitive Bonds, the City may execute and, upon the City's request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Bonds that are printed, lithographed, typewritten, mimeographed, or otherwise produced, in any denomination, substantially of the tenor of the definitive Bonds in lieu of which they are delivered, without coupons, and with such appropriate insertions, omissions, substitutions, and other variations as the officers of the City executing such temporary Bonds may determine, as evidenced by their signing of such temporary Bonds. (b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the benefit and security of this Ordinance. (c) The City, without unreasonable delay, shall prepare, execute and deliver to the Paying Agent/Registrar; thereupon, upon the presentation and SWTender of the Bond or Bonds in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a Bond or Bonds of the same maturity and series, in definitive form, in the authorized denomination, and in the same aggregate principal amount, as the Bond or Bonds in temporary fonn swrendered. Such exchange shall be made without the making of any charge therefor to any Owner. LUB200/I Dallas 972221_1 .DOC -9- Section 3.9 Rq,lacement Bonds. (a} Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Bond is lost, apparently destroyed or wrongfully taken. the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authenticate and deliver a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner first complies with the following requirements: (i} furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction, or theft of such Bond; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar to save it and the City harmless; (iii) pays all expenses and charges in cormection therewith, including, but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar, and any tax or other governmental charge that is authorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the City and the Paying Agent/Registrar. (c) If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security 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. ( d) In the event that any such mutilated, lost, apparently destroyed, or wrongfully taken Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Bond, may pay such Bond when it becomes due and payable. (e) Each replacement Bond delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and 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. UJB200/I Dallas 972221_1.DOC -10- Section 3.10 Book-Entry-Only System. (a) Notwithstanding any other provision hereof, upon initial issuance of the Bonds, the Bonds shall be registered in the name of Cede & Co., as nominee of OTC. The definitive Bonds shall be initially issued in the form of a single separate Bond for each of the maturities thereof. (b) With respect to Bonds registered in the name of Cede & Co., as nominee of OTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any OTC Participant or to any person on behalf of whom such a OTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of OTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any OTC Participant or any other person, other than an Owner, as shown on the Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any OTC Participant or any other person, other than an Owner, as shown in the Register of any amount with respect to principal of, premium, if any, or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute owner of such Bond for the purpose of payment of principal of, premium, if any, and interest on Bonds, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfer with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owners as shown in the Register, as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Register, shall receive a Bond evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that OTC has determined to substitute a new nominee in place of Cede & Co., the word "Cede & Co." in this Ordinance shall refer to such new nominee of DTC. (c) The Representations Letter previously executed and delivered by the City, and applicable to the City's obligations delivered in book-entry-only form to OTC as securities depository, is hereby ratified and approved for the Bonds. Section 3.11 Successor Securities Depository; Transfer Outside Book-Entry-Only System. In the event that the City determines that it is in the best interest of the City and the beneficial owners of the Bonds that they be able to obtain Bonds, or in the event DTC discontinues the services described herein, the City shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and OTC Participants of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities LUB200/I Dallas 972221_1.DOC -11- depository; or (ii) notify DTC and OTC Participants of the availability through DTC of Bonds and cause the Paying Agent/Registrar to transfer one or more separate registered Bonds to OTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. Section 3 .12 Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, prerniwn, if any, and interest on such Bonds, and all notices with respect to such Bonds shall be made and given, respectively, in the manner provided in the Representations Letter. ARTICLEN REDEMPTION OF BONDS BEFORE MATURITY Section 4.1 Redemption. The Bonds are subject to redemption before their scheduled maturity only as provided in this Article N. Section 4.2 Optional Redemption. (a) The City reserves the option to redeem Bonds in the manner provided in the Form of Bond set forth in Section 6.2 of this Ordinance with such changes as are required by the Pricing Certificate. (b) If less than all of the Bonds are to be redeemed pursuant to an optional redemption, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot the Bonds, or portions thereof, within such maturity or maturities and in such principal amounts for redemption. (c) The City, at least forty-five (45) days before the redemption date, unless a shorter period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Bonds to be redeemed. Section 4.3 Mandatory Sinking Fund Redemption. (a) Bonds designated as ''Term Bonds," if any, in the Pricing Certificate are subject to scheduled mandatory redemption and will be redeemed by the City, in part at a price equal to the principal amount thereof, without premiwn, plus accrued interest to the redemption date, out of moneys available for such purpose in the Interest and Sinking Fund, on the dates and in the respective principal amounts as set forth in the Pricing Certificate. WB200/I Dallas 972221_1.lXX:: -12- (b) At least forty-.five (45) days prior to each scheduled mandatory redemption date, the Paying Agent/Registrar shall select for redemption by lot, or by any other customary method that results in a random selection, a principal amount of Term Bonds equal to the aggregate principal amount of such Tenn Bonds to be redeemed, shall call such Term Bonds for redemption on such scheduled mandatory redemption date, and shall give notice of such redemption, as provided in Section 4.5. (c) The principal amount of the Tenn Bonds required to be redeemed on any redemption date pursuant to subparagraph (a) of this Section 4.3 shall be reduced, at the option of the City, by the principal amount of any Tenn Bonds which, at least forty-five (45) days prior to the mandatory sinking fund redemption date (i) shall have been acquired by the City at a price not exceeding the principal amount of such Tenn Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, or (ii) shall have been redeemed pursuant to the optional redemption provisions hereof and not previously credited to a mandatory sinking fund redemption. Section 4.4 Partial Redemption. (a) A portion of a single Bond of a denomination greater than $5,000 may be redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof. If such a Bond is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000 portion of the Bond as though it were a single Bond for purposes of selection for redemption. (b) Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar, in accordance with Section 3.6 of this Ordinance, shall authenticate and deliver an exchange Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered, such exchange being without charge. (c) The Paying Agent/Registrar shall promptly notify the City in writing of the principal amount to be redeemed of any Bond as to which only a portion thereof is to be redeemed. Section 4.5 Notice of Redemption to Owners. (a) The Paying Agent/Registrar shall give notice of any redemption of Bonds by sending notice by United States mail, first class postage prepaid, not less than thirty (30) days before the date fixed for redemption, to the Owner of each Bond ( or part thereof) to be redeemed, at the address shown on the Register at the close of business on the Business Day next preceding the date of mailing such notice. (b) The notice shall state the redemption date, the redemption price, the place at which the Bonds are to be surrendered for payment, and, if less than all the Bonds outstanding are to be redeemed, an identification of the Bonds or portions thereof to be redeemed. (c) Any notice given as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. LUB200/l Dallas 972221_1.DOC -13- Section 4.6 Payment Upon Redemption. ( a) Before or on each redemption date, the City shall deposit with the Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Agent/Registrar shall make provision for the payment of the Bonds to be redeemed on such date by setting aside and holding in trust such amounts as are received by the Paying Agent/Registrar from the City and shall use such funds solely for the purpose of paying the principal of and accrued interest on the Bonds being redeemed. (b) Upon presentation and surrender of any Bond called for redemption at the Designated Payment/Transfer Office on or after the date fixed for redemption, the Paying Agent/Registrar shall pay the principal of, redemption premium, if any, and accrued interest on such Bond to the date of redemption from the money set aside for such purpose. Section 4.7 Effect of Redemption. (a) Notice of redemption having been given as provided in Section 4.5 of this Ordinance, the Bonds or portions thereof called for redemption shall become due and payable on the date fixed for redemption and, unless the City defaults in its obligation to make provision for the payment of the principal thereof or accrue.d interest thereon, such Bonds or portions thereof shall cease to bear interest from and after the date fixed for redemption, whether or not such Bonds are presented and surrendered for payment on such date. (b) If the City shall fail to make provision for payment of all sums due on a redemption date, then any Bond or portion thereof called for redemption shall continue to bear interest at the rate stated on the Bond until due provision is made for the payment of same by the City. Section 4.8 Lapse of Payment. Money set aside for the redemption of Bonds and remaining unclaimed by the Owners of such Bonds shall be subject to the provisions of Section 3.3(f) hereof. ARTICLEV PA YING AGENT/REGISTRAR Section 5.1 Appoin1lllent of Initial Paying Agent/Registrar. JPMorgan Chase Bank, National Association, is hereby appointed as the initial Paying Agent/Registrar for the Bonds. Section 5.2 Oualifications. Each Paying Agent/Registrar shall be a commercial bank, a trust company organized under the laws of the State of Texas, or other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Bonds. LUB200/I Dallas 972221_1.DOC -14- Section 5.3 Maintaining Paying Agent/Registrar. (a) At all times while any of the Bonds are outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 5.2 of this Ordinance. The Mayor is hereby authorized and directed to execute an agreement with the Paying Agent/Registrar specifying the duties and responsibilities of the City and the Paying Agent/Registrar in substantially the form presented at this meeting, such fonn of agreement being hereby approved. The signature of the Mayor shall be attested by the City Secretary. (b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement. Section 5.4 Termination. The City, upon not less than sixty (60) days notice, reserves the right to terminate the appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be terminated written notice of such termination. Section 5.5 Notice of Change to Owners. Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will cause notice of the change to be sent to each Owner by United States mail, first class postage prepaid, at the address thereof in the Register, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. Section 5.6 Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar and executing the Paying Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and :functions of Paying Agent/Registrar prescribed thereby. Section 5.7 Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent, promptly upon the appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent books and records relating to the Bonds to the successor Paying Agent/Registrar. ARTICLE VI FORM OF THE BONDS Section 6.1 Form Generally. (a) The Bonds, including the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and the Assignment fonn to appear on each of the Bonds, (i) shall be substantially in the form set forth in this Article, with such appropriate insertions, omissions, substitutions, and other variations as are LUB200/I Dallas 972221_1.DOC -15- permitted or required by this Ordinance and the Pricing Certificate, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Bonds, as evidenced by their execution thereof. (b) Any portion of the text of any Bonds may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Bonds. (c) The definitive Bonds, if any, shall be typewritte~ photocopied, printed, lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Bonds, as evidenced by their execution thereof. (d) The Initial Bond submitted to the Attorney General of the State of Texas may be typewritten and photocopied or otherwise reproduced. Section 6.2 Form of the Bonds. The form of the Bonds, including the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the fonn of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Bonds, shall be substantially as follows: (a) Form of Bond. REGISTERED No. __ INTEREST RA TE: __ % United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2005 MA TIJRITY DA TE: BOND DATE: ----·-- REGISTERED $ ___ _ CUSIP NUMBER: The City of Lubbock (the "City"), in the County of Lubbock, State of Texas, for value received, hereby promises to pay to 1 Insert based upon the Pricing Certificate. LUB200/l Dallas 97222U.OOC -16- or registered assigns, on the Maturity Date specified above, the sum of __________ DOLLARS and to pay interest on such principal amount from the later of the Bond Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August I 5 of each year, commencing _______ 2• All capitalized terms used herein but not defined shall have the meaning assigned to them in the Ordinance (defined below). The principal of this Bond shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Bond at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office"), of JPMorgan Chase Banlc, National Association, or, with respect to a successor Paying Agent/Registrar, at the Designated Paymeniffransfer Office of such successor. Interest on this Bond is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. For the purpose of the payment of interest on this Bond, the registered owner shall be the person in whose name this Bond is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. If the date for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall have the same force and effect as if made on the original date payment was due. This Bond is one of a series of fully registered Bonds specified in the title hereof issued in the aggregate principal amount of $ _____ 3 (herein referred to as the "Bonds"), issued pursuant to a certain ordinance of the City (the "Ordinance'') for the purpose of refunding certain outstanding obligations of the City. [The City has reserved the option to redeem the Bonds maturing on or after February 15, ___ before their respective scheduled maturities in whole or in part in integral multiples of 2 Insert based upon the Pricing Certificate. 3 Insert based upon the Pricing Certificate. LUB200/I Dallas 972221_1.DOC -17- $5,000 on February 15, ___, or on any date thereafter, at a redemption price of par, plus accrued interest to the date fixed for redemption. If less than all of the Bonds are to be redeemed, the City shall detennine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot Bonds, or portions thereof within such maturity or maturities and in such amounts, for redemption. ]4 [Bonds maturing on February 15, ___ (the "Tenn Bonds") are subject to mandatory sinking fund redemption prior to their scheduled maturity, and will be redeemed by the City, in part at a redemption price equal to the principal amount thereof, without premiwn, plus interest accrued to the redemption date, on the dates and in the principal amounts shown in the following schedule: Redemption Date February 15, __ February 15, __ (maturity) Principal Amount $ ___ _ $ ___ _ The Paying Agent/Registrar will select by lot or by any other customary method th.at results in a random selection the specific Tenn Bonds (or with respect to Tenn Bonds having a denomination in excess of $5,000, each $5,000 portion thereof) to be redeemed by mandatory redemption. The principal amount of Term Bonds required to be redeemed on any redemption date pursuant to the foregoing mandatory sinking fund redemption provisions hereof shall be reduced, at the option of the City, by the principal amount of any Term Bonds which, at least 45 days prior to the mandatory sinking fund redemption date (i) shall have been acquired by the City at a price not exceeding the principal amowit of such Tenn Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, or (ii) shall have been redeemed pursuant to the optional redemption provisions hereof and not previously credited to a mandatory sinking fund redemption. ]5 Notice of such redemption or redemptions shall be given by United States mail, first class postage prepaid, not less than 30 days before the date fixed for redemption, to the registered owner of each of the Bonds to be redeemed in whole or in part. Notice having been so given, the Bonds or portions thereof designated for redemption shall become due and payable on the redemption date specified in such notice; from and after such date, notwithstanding that any of the Bonds or portions thereof so called for redemption shall not have been surrendered for payment, interest on such Bonds or portions thereof shall cease to accrue. As provided in the Ordinance, and subject to certain limitations therein set forth, this Bond is transferable upon surrender of this Bond for transfer at the designated office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to 4 Insert optional redemption provisions and revise as necessary to conform to the Pricing Certificate. 5 Insert mandatory sinking fund redemption provisions, if any, and revise as necessary to conform to the Pricing Certificate. WB200/I Dallas 972221_1 .DOC -18- ) the Paying Agent/Registrar; thereupon, one or more new fully registered Bonds of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided ( except interest shall be paid to the person in whose name this Bond is registered on the Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice to the contrary. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond and the series of which it is a part is duly authorized by law; that all acts,.conditions and things required to be done precedent to and in the issuance of the Bonds have been properly done and performed and have happened in regular and due time, form and manner, as required by law; that ad valorem taxes upon all taxable property in the City have been levied for and pledged to the payment of the debt service requirements of the Bonds within the limit prescribed by law; and that the total indebtedness of the City, including the Bonds, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City has caused this Bond to be executed by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly impressed or placed in facsimile on this Bond. Mayor, City of Lubbock, Texas City Secretary, City of Lubbock, Texas [SEAL] LUB200/I Dallas 97222U .DOC -19- (b) Form of Comptroller's Registration Bond. The following Comptroller's Registration Bond may be deleted from the definitive Bonds if such Bond on the Initial Bond is fully executed. OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS OF THE STATE OF TEXAS § § § REGISTER NO. ___ _ I hereby certify that there is on file and of record in my office a Certificate of the Attorney General of the State of Texas to the effect that this Bond has been examined by him as required by law, that he finds that it has been issued in confonnity with the Constitution and laws of the State of Texas, and that it is a valid and binding obligation of the City of Lubbock, Texas; and that this Bond has this day been registered by me. Witness my hand and seal of office at Austin, Texas, ________ . [SEAL] Comptroller of Public Accounts of the State of Texas (c) Form of Certificate of Paying Agent/Registrar. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Bond if the Comptroller's Registration Bond appears thereon. CERTIFICATE OF PA YING AGENT/REGISTRAR The records of the Paying Agent/Registrar show that the Initial Bond of this series of Bonds was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas, and that this is one of the Bonds referred to in the within-mentioned Ordinance. Dated: LUB200/l Dallas 97222U .I>OC -20- JPMorgan Chase Banlc, National Association as Paying Agent/Registrar By: Authorized Signatory ) ) (d) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or typewrite name, address and Zip Code of transferee): ______________ _ (Social Security or other identifying number: _______ ------., the within Bond and all rights hereunder and hereby irrevocably constitutes and appoints ________ _ attorney to transfer the within Bond on the books kept for registration hereof. with full power of substitution in the premises. Dated: NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular and must be guaranteed in a manner acceptable to the Paying Agent/Registrar. Signature Guaranteed By: Authorized Signatory (e) The Initial Bond shall be in the fonn set forth in paragraphs (a), (b) and (d) of this Section, except for the following alterations: LUB200/I (i) immediately under the name of the Bond the headings "INTEREST RA TE" and "MA TURTIY DATE" shall both be completed with the expression "As shown below"; and (ii) in the first paragraph of the Bond, the words "on the maturity date specified above" shall be deleted and the following will be inserted: "on February 15 in each of the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule: Dallas 972221_1.DOC -21- ) ) Principal Installments Interest Rate (Information to be inserted from the Pricing Certificate pursuant to Section 3.2 of this Ordinance) Section 6.3 CUSIP Registration. The City may secure identification numbers through the CUSIP Service Bureau Division of Standard & Poor's, A Division of the McGraw-Hill Companies, New York, New York, and may authorize the printing of such numbers on the face of the Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Bonds shall be of no significance or effect in regard to the legality thereof and neither the City nor the attorneys approving said Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed on the Bonds. Section 6.4 Legal Opinion. The approving legal opinion of Vinson & Elkins L.L.P., Bond Counsel, may be attached to or printed on the reverse side of each Bond over the certification of the City Secretary, which may be executed in facsimile. Section 6.5 Bond Insurance. Information pertaining to bond insurance, if any, may be printed on each Bond. ARTICLE VII SALE AND DELIVERY OF BONDS; DEPOSIT OF PROCEEDS Section 7 .1 Sale of Bonds; Official Statement. (a) The Bonds shall be sold at negotiated sale to the Underwriters in accordance with the terms of this Ordinance, including this Section 7.l(a) and Exhibit B hereto, provided that all of the conditions set forth in Exhibit B can be satisfied. As authorized by Chapter 1207, Texas Government Code, as amended, the Chief Financial Officer/Assistant City Manager is authorized to act on behalf of the City upon determining that the conditions set forth in Exhibit B can be satisfied, in selling and delivering the Bonds and carrying out the other procedures specified in this Ordinance, including detennining whether to acquire bond insurance for the Bonds, the aggregate principal amowit of the Refunded Obligations, the aggregate principal amount of the Bonds and price at which each of the Bonds will be sold, the number and designation of series of Bonds to be issued, the form in which the Bonds shall be issued, the years in which the Bonds will mature, the principal amount to mature in each of such years, the rate of interest to be borne by each such maturity, the first interest payment date, the dates, prices and terms upon and at which the Bonds shall be subject to redemption prior to maturity at the option of the City and shall be subject to mandatory sinking fund redemption, and all other matters relating to the LUB200/I Dallas 972221_1.DOC -22- ) issuance, sale and delivery of the Bonds, including the refunding of the Refunded Obligations, all of which shall be specified in the Pricing Certificate. The authority granted to the Chief Financial Officer/ Assistant City Manager under this Section 7.l(a) shall expire at 5:00 p.m., August 31, 2005 unless otherwise extended by the City Council by separate action. Any finding or determination made by the Chief Financial Officer/ Assistant City Manager relating to the issuance and sale of the Bonds and the execution of the Bond Purchase Agreement in connection therewith shall have the same force and effect as a finding or determination made by the City Council. (b) The Chief Financial Officer/ Assistant City Manager is hereby authorized and directed to execute and deliver, and the City Secretary is hereby authorized and directed to attest, a bond purchase agreement (the "Bond Purchase Agreement") which Bond Purchase Agreement is hereby accepted, approved and authorized in substantially the form submitted to the City and upon completion of the tenns of the Bond Purchase Agreement in accordance with the terms of the Pricing Certificate and this Ordinance, the Chief Financial Officer/ Assistant City Manager is authorized and directed to execute such Bond Purchase Agreement on behalf of the City and the Chief Financial Officer/ Assistant City Manager and all other officers, 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. The Bonds shall initially be registered in the name of the Representative. (c) The form and substance of the Preliminary Official Statement for the Bonds and any addenda, supplement or amendment thereto, are hereby in all respects approved and adopted, and the Preliminary Official Statement is hereby deemed final as of its date within the meaning and for the purposes of paragraph (b)(l) of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The Chief Financial Officer/Assistant City Manager and City Secretary are hereby authorized and directed to cause to be prepared a final Official Statement incorporating applicable pricing information pertaining to the Bonds, and to execute the same by manual or facsimile signature and deliver appropriate numbers of executed copies thereof to the Representative. The Official Statement as thus approved, executed and delivered, with such appropriate variations as shall be approved by the Chief Financial Officer/ Assistant City Manager and the Representative, may be used by the Underwriters in the public offering and sale thereof The City Secretary is hereby authorized and directed to include and maintain a copy of the Official Statement and any addenda, supplement or amendment thereto thus approved among the permanent records of this meeting. The use and distribution of the Preliminary Official Statement in the public offering of the Bonds by the Underwriters is hereby ratified, approved and confirmed. ( d) All officers of the City are authorized to execute such docwnents, Bonds and receipts as they may deem appropriate in order to consummate the delivery of the Bonds in accordance with the terms of sale therefor including. without limitation, the Bond Purchase Agreement. WB200/I Dallas 972221_1.DOC -23- ) (e) The obligation of the Underwriters identified in subsection (a) of this Section to accept delivery of the Bonds is subject to such purchaser being furnished with the final, approving opinion of Vinson & Elkins L.L.P., bond counsel for the City, which opinion shall be dated and delivered the Closing Date. Section 7.2 Control and Delivery of Bonds. (a) The Chief Financial Officer/Assistant City Manager of the City is hereby authorized to have control of the Initial Bond and all necessary records and proceedings pertaining thereto pending investigation, examination, and approval of the Attorney General of the State of Texas, registration by the Comptroller of Public Accounts of the State of Texas and registration with, and initial exchange or transfer by, the Paying Agent/Registrar. (b) After registration by the Comptroller of Public Accounts, delivery of the Bonds shall be made to the Underwriters thereof under and subject to the general supervision and direction of the Chief Financial Officer/ Assistant City Manager, against receipt by the City of all amounts due to the City under the terms of sale. ARTICLE VIII CREATION OF FUNDS AND ACCOUNTS, INITIAL DEPOSITS AND APPLICATION OF MONEY Section 8.1 Creation of Funds. The City hereby establishes the following funds: (i) the City of Lubbock, Texas, General Obligation Refunding Bonds, Series 2005, Interest and Sinking Fund (the "Interest and Sinking Fund"); and (ii) the City of Lubbock, Texas, General Obligation Refunding Bonds, Series 2005, Cost of Issuance Fund (the "Cost of Issuance Fund"). Section 8.2 Initial Deposits. On the Closing Date, the City shall cause the proceeds from the sale of the Bonds to be deposited as follows: LUB200/l (i) first, an amount equal to all accrued interest on the Bonds, if any, from the Original Issue Date until the Closing Date shall be deposited to the credit of the Interest and Sinking Fund; (ii) second, a portion of the proceeds from the sale of the Bonds, funds transferred from the interest and sinking funds for the Refunded Obligations, and other funds of the City, if any, as set forth in the Pricing Certificate shall be applied to establish an Escrow Fm1d to refund the Refunded Obligations and, to the extent not otherwise provided for, to pay all expenses arising in connection Dallas 9711.21_1.DOC -24- with the establishment of such Escrow Fund and the refunding of the Refunded Obligations; and (iii) third, the remaining balance shall be deposited to the credit of the Cost of Issuance Fund to pay the costs of issuance. Section 8.3 Interest and Sinking Fund. (a) The taxes levied under Section 2.1 of this Ordinance shall be deposited to the credit of the Interest and Sinking Fwid at such times and in such amounts as necessary for the timely payment of the principal of and interest on the Bonds. (b) If the amount of money in the Interest and Sinking Fund is at least equal to the aggregate principal amount of the outstanding Bonds plus the aggregate amount of interest due and that will become due and payable on such Bonds, no further deposits to that fund need be made. In determining the aggregate principal amount of outstanding Bonds, there shall be subtracted the amount of any Bonds that have been duly called for redemption and for which money has been deposited with the Paying Agent/Registrar for such redemption. (c) Money on deposit in the Interest and Sinking Fund shall be used to pay the principal of and interest on the Bonds as such become due and payable. Section 8.4 Cost of Issuance Fund. The Cost of Issuance Fund shall be used for the pwpose of paying expenses incurred in connection with the issuance and delivery of the Bonds. Section 8.5 Excess Bond Proceeds. (a) Upon payment of the cost of issuance associated with the Bonds, any amount that remains in the Cost of Issuance Fwid shall be transferred to the credit of the Interest and Sinking Fund and segregated in a special escrow account. (b) The money in such special escrow account shall be used for the payment of principal, premium, if any, and interest on the Bonds, on the respective due dates thereof or dates as of which Bonds have been called for redemption. Section 8.6 Security of Fwids. All moneys on deposit in the funds referred to in this Ordinance shall be secured in the manner and to the fullest extent required by the laws of the State of Texas for the security of public funds, and moneys on deposit in such funds shall be used only for the purposes permitted by this Ordinance. LUB200/l Dallas 972221_1.DOC -25- Section 9.1 Investments. ARTICLE IX INVESTMENTS (a) Money in the Interest and Sinking Fund created by this Ordinance, at the option of the City, may be invested in such securities or obligations as permitted under applicable law. (b) Any securities or obligations in which such money is so invested shall be kept and held in trust for the benefit of the Owners and shall be sold and the proceeds of sale shall be timely applied to the making of all payments required to be made from the fund from which the investment was made. Section 9 .2 Investment Income. Interest and income derived from investment of the Interest and Sinking Fund shall be credited to such Fund. ARTICLEX PARTICULAR REPRESENTATIONS AND COVENANTS Section 10.1 Payment of the Bonds. On or before each Interest Payment Date while any of the Bonds are outstanding and unpaid, there shall be made available to the Paying Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such interest on and principal of, redemption premium, if any, and interest on the Bonds as will accrue or mature on the applicable Interest Payment Date or date of prior redemption. Section 10.2 Other Rwesentations and Covenants. (a) The City will faithfully perform, at all times, any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance, each Bond and the ordinances or contracts authorizing the issuance of the Prior Lien Obligations; the City will promptly pay or cause to be paid the principal of, redemption premium, if any, and interest on each Bond on the dates and at the places and manner prescribed in such Bond; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. (b) The City is duly authorized under the laws of the State of Texas to issue the Bonds; all action on its part for the creation and issuance of the Bonds has been duly and effectively taken; and the Bonds in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms. LUB200/I Dallas 972221_1.00C -26- Section 10.3 Provisions Concerning Federal Income Tax Exclusion. The City intends that the interest on the Bonds shall be excludable from gross income for purposes of federal income taxation pursuant to sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and the applicable regulations promulgated thereunder (the "Regulations"). The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted, respectively, would cause the interest on the Bonds to be includable in the gross income, as defined in section 61 of the Code, of the holders thereof for purposes of federal income taxation. In particular, the City covenants and agrees to comply with each requirement of Sections 10.3 through 10.9 of this Article X; provided, however, that the City shall not be re.quired to comply with any particular requirement of Sections 10.3 through 10. 9 of this Article X if the City has received an opinion of nationally recognized bond counsel ("Counsel's Opinion") that such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or if the City has received a Counsel's Opinion to the effect that compliance with some other requirement set forth in Sections 10.3 through 10.9 of this ArticleX will satisfy the applicable requirements of the Code, in which case compliance with such other requirement specified in such Counsel's Opinion shall constitute compliance with the corresponding requirement specified in Sections 10.3 through 10.9 of this Article X. Section 10.4 No Private Use or Payment and No Private Loan Financing. The City shall certify, through an authorized officer, employee or agent, that, based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered, the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be ''private activity bonds" within the meaning of section 141 of the Code and the Regulations. The City covenants and agrees that it will make such use of the proceeds of the Bonds, including interest or other investment income derived from Bond proceeds, regulate the use of property financed, directly or indirectly, with such proceeds, and take such other and further action as may be required so that the Bonds will not be "private activity bonds" within the meaning of section 141 of the Code and the Regulations. Section 10.5 No Federal Guaranty. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that, if taken or omitted, respectively, would cause the Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code and the Regulations, except as permitted by section 149(b)(3) of the Code and the Regulations. Section 10.6 Bonds Are Not Hedge Bonds. The City covenants and agrees not to take any action, or knowingly omit to take any action, and has not knowingly omitted and will not knowingly omit to take any action, within its control, that, if taken or omitted, respectively, would cause the Bonds to be ''hedge bonds" within the meaning of section 149(g) of the Code and the Regulations. LUB200/I Dallas 97222 l_l.DOC -27- ) Section 10.7 No-Arbitrage Covenant. The City shall certify, through an authorized officer, employee or agent, that, based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered, the City will reasonably expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of section 148(a) of the Code and the Regulations. Moreover, the City covenants and agrees that it will make such use of the proceeds of the Bonds including interest or other investment income derived from Bond proceeds, regulate investments of proceeds of the Bonds, and take such other and further action as may be required so that the Bonds will not be "arbitrage bonds" within the meaning of section 148(a) of the Code and the Regulations. Section 10.8 Arbitrage Rebate. If the City does not qualify for an exception to the requirements of Section 148(f) of the Code, 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), be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Bonds as may be required to calculate 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 bond issues of the City or moneys which do not represent gross proceeds of any Bonds of the City, (ii) calculate at such times as are required by the Regulations, the amount earned from the investment of the gross proceeds of the Bonds which is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Bonds or on such other dates as may be permitted under the Regulations, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pmsuant 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 because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at ann's length and had the yield on the issue not been relevant to either party. Section 10.9 Information Reporting. The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Bonds are issued, an infonnation statement concerning the Bonds, all under and in accordance with section 149(e) of the Code and the Regulations. Section 10.10 Continuing Obligation. Notwithstanding any other provision of this Ordinance, the City's obligations under the covenants and provisions of Sections 10.3 through 10.9 of this Article X shall survive the defeasance and discharge of the Bonds. LUB200/I Dallas 972221_1.00C -28- ARTICLE XI ) DEFAULT AND REMEDIES Section 11.1 Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (i) the failure to make payment of the principal of, redemption premium, if any, or interest on any of the Bonds when the same becomes due and payable; or (ii) default in the performance or observance of any other covenant, agreement, or obligation of the City, which default materially and adversely affects the rights of the Owners, including but not limited to their prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of sixty (60) days after notice of such default is given by any Owner to the City. Section 11.2 Remedies for Default. (a) Upon the happening of any Event of Default, then any Owner or an authorized representative thereof, including but not limited to a trustee or trustees therefor, may proceed against the City for the purpose of protecting and enforcing the rights of the Owners under this Ordinance by mandamus or other suit, action or special proceeding in equity or at law in any court of competent jurisdiction for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the Owners hereunder or any combination of such remedies. (b) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Owners of Bonds then outstanding. Section 11.3 Remedies Not Exclusive. (a) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Bonds or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available as a remedy under this Ordinance. (b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. LUB200/1 Dallas 972221_1.DOC -29- ARTICLE XII DISCHARGE Section 12.1 Discharge. The Bonds may be defeased, discharged or refunded in any manner permitted by applicable law. ARTICLE XIII CONTINUING DISCLOSURE UNDERTAKING Section 13 .1 Annual Reports. (a) The City shall provide annually to each NRMSIR and to any SID, within six (6) months after the end of each fiscal year, financial information and operating data with respect to the City of the general type included in the final Official Statement, being the information described in Exhibit A hereto. Any financial statements so to be provided shall be (i) prepared in accordance with the accounting principles described in Exhibit A hereto, and (ii) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within such period, then the City shall provide notice that audited financial statements are not available and shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR. and any SID. The City shall provide audited financial statements for the applicable fiscal year to each NRMSIR and to any SID when and if audited financial statements become available. (b) 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. (c) 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 referenced to any document (including an official statement or other offering docwnent, if it is available from the MSRB) that theretofore has been provided to each NRMSIR. and any SID or filed with the SEC. Section 13.2 Material Event Notices. (a) 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: (i) principal and interest payment delinquencies; (ii) nonpayment related defaults; WB200/I Dallas 972221_1.00C -30- {iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions or events affecting the tax-exempt status of the Bonds; (vii) modifications to rights of Owners; (viii) redemption calls; (ix) defeasances; (x) release, substitution. or sale of property securing repayment of the Bonds; and (xi) rating changes. (b) 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 13 .1 of this Ordinance by the time required by such Section. Section 13.3 Limitations, Disclaimers and Amendments. (a) 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 notice of any redemption calls and any defeasances that cause the City to be no longer an "obligated person." (b) The provisions of this Article are for the sole benefit of the Owners 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 OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTIIER PERSON, IN CONTRACT OR LUB200/I Dallas 972221_1.DOC -31- ' 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. (c) No default by the City in observing or performing its obligations under this Article shall constitute a breach of or default under the Ordinance for purposes of any other provisions of this Ordinance. (d) 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. (e) The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (i) the provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell 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 (ii) either (A) the Owners of a majority in aggregate .principal amount ( or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the outstanding Bonds consent to such amendment or (B) an entity or individual 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 Owners 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 13.1 an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in type of financial information or operating data so provided. (f) Any filing required to be made pursuant to this Article XIII may be made through the facilities of DisclosureUSA or such other central post office as may be approved in writing by the SEC for such purpose. Any such filing made through such central post office will be deemed to have been filed with each NRMSIR and SID or MSRB as if such filing had been made directly to such entity. ARTICLE XIV REDEMPTION OF BONDS; APPROVAL OF ESCROW AGREEMENT; PURCHASE OF ESCROWED SECURITIES Section 14.1 Redemption of Refunded Obligations. (a) The City hereby calls the Refunded Obligations for redemption prior to maturity on the dates and at the prices set forth in the Pricing Certificate. (b) The Chief Financial Officer/ Assistant City Manager is hereby authorized and directed to cause a copy of this Ordinance to be delivered to each paying agent/registrar for the LUB200/I Dallas 97222U .DOC -32- ) Refunded Obligations, the delivery of which shall constitute notice of redemption and notice of defeasance to such paying agent/registrar. Section 14.2 Subscription of Federal Securities. The Mayor and the Chief Financial Officer/ Assistant City Manager, either or both, are hereby authorized to make necessary arrangements for the purchase of the Federal Securities referenced in the Escrow Agreement, as may be necessary for the Escrow Fund and the application for the acquisition of the Federal Securities is hereby approved and ratified. Following the deposits to the Escrow Fund as specified herein and in the Pricing Certificate, the Refunded Obligations shall be payable solely from and secured by such deposits and shall cease to be payable from ad valorem taxes. Section 14.3 Approval of Escrow Agreement. The discharge and defeasance of the Refunded Obligations shall be effectuated pursuant to the terms and provisions of an Escrow Agreement (the "Escrow Agreement'') to be entered into by and between the City and the Escrow Agent, which shall be substantially in the form presented at this meeting, the terms and provisions of which are hereby approved, subject to such insertions, additions and modifications as shall be necessary (a) to carry out the program designed for the City, (b) to minimize the City's costs of refunding, (c) to comply with all applicable laws and regulations relating to the refunding of the Refunded Obligations, ( d) to carry out the other intents and purposes of this Ordinance and (e) to comply with the terms set forth in the Pricing Certificate. The Chief Financial Officer/ Assistant City Manager is hereby authorized to execute and deliver such Escrow Agreement on behalf of the City in multiple counterparts and the City Secretary is hereby authorized to attest thereto and affix the City's seal. Section 14.4 Notice of Deposit. Each paying agent/registrar for the Refunded Obligations is hereby authorized and directed to give notice of redemption and deposit with respect to the Refunded Obligations as required under the ordinance pursuant to which the Refunded Obligations were issued. ARTICLE XV AMENDMENTS; ATTORNEY GENERAL MODIFICATION Section 15 .1 Amendments. This Ordinance shall constitute a contract with the Owners, 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 consent of or notice to any Owners, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Owners, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the written consent of the Owners of the Bonds holding a majority in aggregate principal amount of the Bonds th.en outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Owners of outstanding Bonds, no such amendment, addition, or rescission shall (i) extend the time or times WB200/l Dallas 972221_1.IX>C -33- , . of payment of the principal of. premium, if any, and interest on the Bonds, reduce the principal amoW1t thereof, the redemption price, or the rate of interest thereon, or in any other way modify the tenns of payment of the principal of, premium, if any, 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 Owners for consent to any such amendment, addition, or rescission. Section 15.2 Attorney General Modification. In order to obtain the approval of the Bonds by the Attorney General of the State of Texas, any provision of this Ordinance may be modified, altered or amended after the date of its adoption if required by the Attorney General in connection with the Attorney General's examination as to the legality of the Bonds and approval thereof in accordance with the applicable law. Such changes, if any, shall be provided to the City Secretary and the City Secretary shall insert such changes into this Ordinance as if approved on the date hereof. [Execution Page Follows] WB200/I Dallas 972221_1.DOC -34- PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 10th day of June, 2005, at a special meeting of the City Council of the City of bbock, Te ATTEST: APPROVED AS TO CONTENT: By: LEE"ANN DUMBAULD, Chief Financial Officer/ Assistant City Manager APPRO By: CHISON, Bond Counsel WB200/1 Dallas 97222U.DOC -35- SCHEDULE I REFUNDED OBLIGATION CANDlDATES All o fthe City's outstanding obligations of the following series: General Obligation Bonds, Series 1993, 1995-A, 2000, 2001, 2002, 2003, 2004 Tax & Waterworks System Surplus Revenue Certificates of Obligation, Series 1999, 2002, 2003, 2004 Tax & Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 1993, 1995, 1998, 1999 Tax & Electric Light & Power System Surplus Revenue Certificates of Obligation, Series 2003 Tax & Sewer System Surplus Revenue Certificates of Obligation, Series 1999, 2002, 2002A, 2003 Tax & Solid Waste System Surplus Revenue Certificates of Obligation, Series 2001, 2003 Tax & Municipal Drainage Utility System Surplus Revenue Certificates of Obligation, Series 2001,2003 Tax & Tax Increment Revenue Certificates of Obligation, Series 2003 Airport General Obligation Bonds, Series 1993 Tax & Airport Surplus Revenue Certificates of Obligation, Series 1993 LUB200/I Dallas 972221_1.DOC EXHIBIT A DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION The following information is referred to in Article XIII of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or other headings of the Official Statement referred to) below: 1. The portions of the financial statements of the City appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2. Statistical and financial data set forth in Tables 1 through 6 and 8A through 15 of the Official Statement. 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. LUB200/I Dallas 972221_1.DOC A-1 EXHIBITB REFUNDING PARAMETERS In accordance with Section 7.l(a) of the Ordinance, the following conditions with respect to the Bonds must be satisfied in order for the Chief Financial Officer/Assistant City Manager to act on behalf of the City in selling and delivering the Bonds to the Underwriters: (a) the price to be paid for the Bonds shall be not less than 100% of the aggregate principal amount of the Bonds; (b) the Bonds shall not bear interest at a rate greater than the maximum rate allowed by Chapter 1204, Texas Government Code, as amended; (c) the aggregate principal amount of the Bonds authorized to be issued for the purposes described in Section 3 .1 shall not exceed the maximum amount authorized in Section 3.1 and shall equal an amount sufficient to (i) provide for the refunding of the Refunded Obligations and (ii) pay the costs of issuing the Bonds; (d) the maximwn maturity for the Bonds shall not exceed twenty years; (e) the refunding of the Refunded Obligations shall result in a net present value savings of at least 2%; and (f) the Bonds to be issued, prior to delivery, must have been rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for long tenn obligations. WB200/I Dallas 972221_1.DOC B-1 ) ) ) PRICING CERTIFICATE Re: $49,615,000 City of Lubbock, Texas General Obligation Refunding Bonds, Series 2005 (the "Bonds") I, the undersigned officer of the City of Lubbock, Texas (the "City"), do hereby make and execute this Pricing Certificate pursuant to an ordinance adopted by the City Council of the City on June I 0, 2005 (the "Ordinance") captioned as follows: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LUBBOCK, TEXAS, AUTHORIZING THE ISSUANCE OF CITY OF LUBBOCK, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005, IN AN AMOUNT NOT TO EXCEED $95,000,000; PROVIDING FOR THE AW ARD AND SALE THEREOF IN ACCORDANCE WITH SPECIFIED PARAMETERS; LEVYING A TAX IN PAYMENT THEREOF; PRESCRIBING THE FORM OF SAID BONDS; APPROVING EXECUTION AND DELIVERY OF AN ESCROW AGREEMENT AND A BOND PURCHASE AGREEMENT; APPROVING THE OFFICIAL STATEMENT; ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE authorizing the issuance of the Bonds. Capitalized terms used in this Pricing Certificate shall have the meanings given such terms in the Ordinance. General Obligation Refunding Bonds, Series 200S I . As authorized by Section 7 .1 of the Ordinance, I have acted on behalf of the City in selling the Bonds to the Underwriters, for whom Morgan Stanley & Co. Incorporated, acts as representative, pursuant to the terms of a bond purchase contract in substantially the form accepted, approved and authorized pursuant to Section 7.1 of the Ordinance, for the swn of $53,451,535.81 (representing the principal amount of $49,615,000, plus a reofferingpremium of $4,174,892.00 and less an underwriters' discount of$338,356.19), and having the following terms, conditions and provisions, all as authorized pursuant to Section 7 .1 of the Ordinance: A. The Bonds shall be issued in the aggregate principal amount of$49,615,000, shall be dated June 15, 2005 (the "Original Issue Date") and bear interest from such date, shall mature on February 15 in the years and in the principal amowits and shall bear interest payable on February 15 and August 15 of each year, commencing August 15, 2005, at the rates set forth in the following schedule: LUB2oomoo1 Dallas 982252_1.DOC ) ) ' ) Year Principal Installments Interest Rate 2009 $500,000 3.000% 2010 3,020,000 5.000% 2011 3,670,000 5.000% 2012 4,635,000 5.000% 2013 4,400,000 5.000% 2014 4,550,000 5.000% 2015 4,670,000 4.000% 2016 4,290,000 5.000% 2017 4,440,000 5.000% 2018 4,610,000 5.000% 2019 4,775,000 5.000% 2020 3,910,000 5.000% 2021 2,145,000 5.000% B. The Refunded Obligations to be refunded through the issuance of the Bonds are in the aggregate principal amount of $50,455,000 all as set forth in detail in Exhibit A attached hereto. C. All of the City's outstanding obligations listed on Exhibit A attached hereto are hereby irrevocably called for redemption prior to maturity on the redemption dates set forth on Exhibit A, at a price of 100% of par, plus accrued interest to the date fixed for redemption, and notice of such redemption shall be given in accordance with the ordinances authorizing the issuance of such obligations. D. In accordance with the parameters contained in Section 7.1 and Exhibit B of the Ordinance, the undersigned does hereby find, certify and represent that the foregoing tenns of the Bonds satisfy the following requirements and parameters contained within such Section 7.1 and Exhibit B: (i) the price to be paid by the Underwriters for the Bonds shall be 107. 73% of the aggregate principal amount of the Bonds, which is not less than 100% of the aggregate principal amount of the Bonds; (ii) the Bonds do not bear interest at a rate greater than the maximwn rate allowed by Chapter 1204, Texas Government Code, as amended; (iii) the aggregate principal amount of the Bonds does not exceed the maximum amount authorized in Section 3.1 of the Ordinance ($95,000,000), which is an amount sufficient to provide for the refunding of the Refunded Obligations and to pay the costs of issuing the Bonds; (iv) the maximum maturity for the Bonds is 2021 which does not exceed twenty years; LUB2oon1001 Dallas 982252_1.DOC -2- ) ) (v) the refunding of the Refunded Obligations selected from the Refunded Obligation Candidates will result in a net present value savings of $1,886,563.36 and a positive gross savings of $2,505,661.54, all based on bond market conditions and available interest rates for the Bonds on the date of the sale of the Bonds; and (vi) the Bonds have been rated, or will be rated prior to delivery, by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for long term obligations. 2. $53,096,291.79 of the proceeds of the Bonds and $974,000 of prior debt service funds shall be deposited to the Escrow Fund. $215,000.00 from the proceeds of the Bonds shall be deposited to the Cost of Issuance Fund for the purpose of paying costs and expenses incurred with respect to the issuance of the Bonds. $136,000 of the proceeds of the Bonds shall be applied to pay the bond insurance premium. Accrued interest plus $4,244.02 of proceeds of the Bonds shall be deposited to the debt service fund for the Bonds. 3. The Bonds shall be issued substantially in the form attached hereto as Exhibit B. we2oon1001 Dallas 9822S2_1.DOC -3- ) ' ) Executed as of the 24th day of June, 2005. Lee Ann Dumbauld Chief Financial Officer/ Assistant City Manager City of Lubbock, Texas Signature Page for Pricing Certificate EXHIBIT A ) Refunded Obligations Original Original Maturities Amount Issue Issue to be to be Redemption Issue Date Amount Refunded Refunded Date ) Tax & Waterworks 1/1/1998 $10,260,000 2009 $515,000 2/15/2008 System (Limited 2010 515,000 Pledge) Revenue 2011 515,000 Certificates of 2012 515,000 Obligation, Series 2013 515,000 ) 1998 2014 515,000 2015 515.000 $3,605,000 Tax & Waterworks 1/15/1999 $15,355,000 2010 $770,000 2/15/2009 System (Limited 2011 765,000 Pledge) Revenue 2012 765,000 Certificates of 2012 765,000 Obligation, Series 2013 765,000 1999 2014 765,000 2015 765,000 2016 765,000 2017 765,000 2018 765,000 2019 765,000 ) $7,655,000 Tax & Waterworks 9/15/1999 $24,800,000 2010 $1,140,000 2/15/2009 System Surplus 2011 1,200,000 Revenue 2012 1,270,000 Certificates of 2013 1,335,000 ) Obligation, Series 2014 1,410,000 1999 2015 1,490,000 2016 1,575,000 2017 1,665,000 2018 1,760,000 2019 1,860,000 2020 1,9651000 $16.670,000 wa20omoo1 Dallas 982252_1.DOC A-1 ) Original Original Maturities Amount ) Issue Issue to be to be Redemption Issue Date Amount Refunded Refunded Date Tax & Sewer 4/1/1999 $6,100,000 2010 $305,000 2/15/2009 System Surplus 2011 305,000 ) Revenue 2012 305,000 Certificates of 2013 305,000 Obligation, Series 2014 305,000 1999 2015 305,000 2016 305,000 2017 305,000 ) 2018 305,000 2019 305,000 $3,050.000 General Obligation 3/15/2000 $7,000,000 2010 $330,000 2/15/2009 ) Bonds, Series 2000 2011 350,000 2012 370,000 $1,050,000 General Obligation 2/1/2001 $9,100,000 2011 $435,000 2/15/2010 ) Bonds, Series 2001 2012 455,000 2013 480,000 2014 500,000 2015 525,000 2016 555,000 ) 2017 580,000 2018 610,000 2019 640,000 2020 675,000 2021 710,000 $6.165.000 ) Tax & Municipal 6/1/2001 $35,000,000 2012 $855,000 2/15/2011 Drainage Utility 2013 895,000 System Surplus 2014 940,000 Revenue 2015 985,000 ) Certificates of 2016 1,035,000 Obligation, Series 2017 1,085,000 2001 2018 1,145,000 2019 1,205,000 2020 1,270,000 2021 1,335,000 $10,750.000 LUB200nl00l Dallas 982252_1.00C -2- Original Original Maturities Amount ) Issue Issue to be to be Redemption Issue Date AmoWlt Refunded Refunded Date Tax & Solid Waste 2/1/2001 $2,770,000 2011 $140,000 2/15/2010 System Surplus 2012 140,000 ) Revenue 2013 140,000 Certificates of 2014 140,000 Obligation, Series 2015 140,000 2001 2016 135,000 2017 135,000 2018 135,000 ) 2019 135,000 2020 135,000 2021 135,000 $1,510,000 ) ) ) ) ) ) UJB200nIOOI Dalbs 982252_I.OOC -3- ) ) ) ) ) ) ) EXHIBITB Series 2005 Bonds The form of the Series 2005 Bonds, including the fonn of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Bonds, shall be substantially as follows: (a) Form of Bond. REGISTERED No. __ INTEREST RA TE: __ % United States of America State of Texas County of Lubbock CITY OF LUBBOCK, TEXAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2005 MATURITY DATE: BOND DATE: February 15. __ June 1 S, 2005 REGISTERED $ ___ _ CUSIP NUMBER: The City of Lubbock (the "City"), in the County of Lubbock, State of Texas, for value received, hereby promises to pay to or registered assigns, on the Maturity Date specified above, the sum of _________ DOLLARS and to pay interest on such principal amount from the later of the Bond Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 2005. All capitalized terms used herein but not defined shall have the meaning assigned to them in the Ordinance (defined below). The principal of this Bond shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Bond at the coiporate trust office in Dallas, Texas (the "Designated Payment/Transfer Office''), of JPMorgan Chase Bank, National Association. or, with respect to a successor Paying Agent/Registrar, at the Designated Paymentffransfer Office of such successor. Interest on this WB2oonJOOI Dallas 982252_1.DOC B-1 ) ) ) ) ) ) ) ) Bond is payable by check dated as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall bear all risk and expenses of such customary banking arrangement. For the purpose of the payment of interest on this Bond, the registered owner shall be the person in whose name this Bond is registered at the close of business on the "Record Date," which shall be the last business day of the month next preceding such interest payment date. If the date for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall have the same force and effect as if made on the original date payment was due. This Bond is one of a series of fully registered Bonds specified in the title hereof issued in the aggregate principal amount of $49,615,000 (herein referred to as the "Bonds"), issued pursuant to a certain ordinance of the City (the "Ordinance") for the plll])ose of refunding certain outstanding obligations of the City. The City has reserved the option to redeem the Bonds maturing on or after February 15, 2016 before their respective scheduled maturities in whole or in part in integral multiples of $5,000 on February 15, 2015, or on any date thereafter, at a redemption price of par, plus accrued interest to the date fixed for redemption. If less than all of the Bonds are to be redeemed, the City shall detennine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot Bonds, or portions thereof within such maturity or maturities and in such amounts, for redemption. Notice of such redemption or redemptions shall be given by United States mail, first class postage prepaid, not less than 30 days before the date fixed for redemption, to the registered owner of each of the Bonds to be redeemed in whole or in part. Notice having been so given, the Bonds or portions thereof designated for redemption shall become due and payable on the redemption date specified in such notice; from and after such date, notwithstanding that any of the Bonds or portions thereof so called for redemption shall not have been surrendered for payment, interest on such Bonds or portions thereof shall cease to accrue. As provided in the Ordinance, and subject to certain limitations therein set forth, this Bond is transferable upon surrender of this Bond for transfer at the designated office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar; thereupon, one or more new fully registered Bonds of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein LUB20MIOOI Dallas 982252_1.DOC B-2 ) ) ) provided ( except interest shall be paid to the person in whose name this Bond is registered on the Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice to the contrary. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond and the series of which it is a part is duly authorized by law; that all acts, conditions and things required to be done precedent to and in the issuance of the Bonds have been properly done and performed and have happened in regular and due time, form and manner, as required by law; that ad valorem taxes upon all taxable property in the City have been levied for and pledged to the payment of the debt service requirements of the Bonds within the limit prescribed by law; and that the total indebtedness of the City, including the Bonds, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City has caused this Bond to be executed by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly impressed or placed in facsimile on this Bond. Mayor, City of Lubbock, Texas City Secretary, City of Lubbock, Texas [SEAL] LUB200nt00l Dallas 9822S2.J .OOC B-3 ) ) (b) Form of Comptroller's Registration Certificate. The following Comptroller's Registration Certificate may be deleted from the definitive Bonds if such Certificate on the Initial Bond is fully executed. OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS OF THE STATE OF TEXAS § § § REGISTER NO. __ _ I hereby certify that there is on file and of record in my office a Certificate of the Attorney General of the State of Texas to the effect that this Bond has been examined by him as required by law, that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding obligation of the City of Lubbock, Texas; and that this Bond has this day been registered by me. Witness my hand and seal of office at Austin, Texas, ______ _ [SEAL] Comptroller of Public Accounts of the State of Texas (c) Form of Certificate of Paying Agent/Registrar. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Bond if the Comptroller's Registration Certificate appears thereon. CERTIFICATE OF PA YING AGENT/REGISTRAR The records of the Paying Agent/Registrar show that the Initial Bond of this series of Bonds was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas, and that this is one of the Bonds referred to in the within-mentioned Ordinance. Dated: wmoon1001 Dallas 9822S2_1.DOC B-4 JPMorgan Chase Bank, National Association as Paying Agent/Registrar By: Authorized Signatory ) ) (d),Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED, the widersigned hereby sells, assigns, and transfers wito (print or typewrite name, address and Zip Code of transferee): _____________ _ (Social Security or other identifying number: ________ _, the within Bond and all rights hereunder and hereby irrevocably constitutes and appoints _______ _ attorney to transfer the within Bond on the books kept for registration hereof, with full power of substitution in the premises. Dated: NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular and must be guaranteed in a manner acceptable to the Paying Agent/Registrar. Signature Guaranteed By: Authorized Signatory (e) The Initial Bond shall be in the form set forth in paragraphs (a), (b) and (d) of this Section, except for the following alterations: (A) immediately under the name of the Bond the headings "INTEREST RATE" and "MATURITY DATE" shall both be completed with the expression "As shown below"; and (B) in the first paragraph of the Bond, the words "on the maturity date specified above" shall be deleted and the following will be inserted: "on February 15 in each of the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule: LUB200nt001 Dallas 982252.J.OOC Principal Installments Interest Rate (Information to be inserted from the Pricing Certificate pursuant to Section 7 .1 of this Ordinance) B-5 ) -·• !) ) ) CERTIFICATE OF CITY SECRETARY THE STATE OF TEXAS COUNTY OF LUBBOCK CITY OF LUBBOCK § § § § § I, the undersigned, City Sec~etary of the City of Lubbock, Texas, DO HEREBY CERTIFY as follows: 1. On the 11th day of December, 1997, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City· Hall of said City; the duly constituted members of the Council being as follows: WINDY SITTON MAYOR ALEX "TY" COOKE ) MAYOR PRO TEM VICTOR HERNANDEZ ) T. J. PATTERSON ) COUNCI~MBERS DAVID NELSON ) MAX INCE · ) RANDY NEUGEBAUER ) all of said persons were present at s_aid meeting, except the following: --~n~o~n~e~---------------Among other business considered at said meeting, the attached ordinance (the- "Ordinance") entitled: ORDINANCE NO. 10042 11 AN ORDINANCE authorizing the issuance of 'CITY OF LUBBOCK, TEXAS, TAX AND WATERWORKS ·SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998'; specifying the terms and features of said certificates; providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon all taxable property within the City and·a limited pledge of the net revenues from the operation of the City's Waterworks System; and resolving other ~tters incident and related to the issuance, sale, security, payment and delivery of said certificates, in:cluding the approval of a Paying Agent/Registrar Agreement and the approval and distribution of an Official Statement pertaining thereto; and·. providing an effective date.11 .-, /,= ) ) ) was introduced and submitted to the Council for first reading. After presentation and due consideration of the Ordinance1 and upon a motion being made by T. J. Patterson and seconded by David Nelson , the Ordinance was approved on first reading by the Council by the following vote: __ 7_ voted "For" · -0-voted 11Against11 -0-abstained all as shown·in the official Minutes of the Council for the meeting held on the aforesaid date. 2. On the 8th day of January, 1998, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: WINDY SITTON MAYOR ALEX 11TY11 COOKE ) MAYOR PRO TEM VICTOR HERNANDEZ ) T. J. · PATTERSON ) COUNCILMEMBERS DAVID NELSON ) MAX INCE ) RANDY NEUGEBAUER ) all · of said persons were present at said meeting, except the following: T .J. Patterson Among other business considered at said meeting, the Ordinance was submitted to the Council for second reading and final passage and adoption. After presentation and due consideration of the Ordinance, and upon a motion being made by Randy Neugebauer and seconded by Max Ince , the Ordinance was duly passed and adopted on second reading to be effective immediately by the following vote: . 6 voted "For•• -0-voted "Against11 -o-abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. . 3. The attached Ordinance is a t:r;ue and correct copy of the original on file in the official records of the City; the duly qualified and acting members of the City Council of said City on the date of the aforesaid meetings are those persons shown above and1 according to the records of my office, advance notice of the time, place and purpose of each meeting was given to e~ch member of the Council; and that said meetings and the deliberation of the aforesaid public business were open to the public and written notice of said meetings, including the subject of the above entitled Ordinance, was posted and give~ in advance thereof in -2- / ... ) ,.,.· .... compliance with the provisions of V.T.C.A., Government Code, Chapter 551, as amended. IN WITNESS WHEREOF, I have hereunto s igned my name officially and affixed the seal of said City, this the 8th day of January, 1998. Texas (City Seal) -3-. ) :.:-' ORDINANCE NO. 10042 AN ORDINANCE authorizing the issuance of "CITY OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998"; specifying the terms and features of said certificates; providing for the payment of said certificates of, obligation by the levy of an ad valorem tax upon all taxable property within the City and a limited pledge of the net revenues from the operation of the City's Waterworks System; and resolving other matters incident and related to the issuance, sale, security, payment and delivery of said certificates, including the approval of a Faying Agent/Registrar Agreement and the approval and distribution of an Official Statement pertaining thereto; and providing an . effective date. · WHEREAS, . notice of the City Council's intention to issue certificates of obligation in the maximum principal amount of $10,260,000 for the purpose of paying contractual obligations to be incurred for (i) improvements and extensions to the City's Waterworks Sy~tem, (ii} site development for solid waste disposal, and (iii) professional services rendered in connection with such projects and the financing thereof, has been duly published in the Lubbock Avalanche-Journal, a newspaper hereby found and determined to be of general circulation in the City of Lubbock, Texas, on December 21, 1997 and December 28, 1997, the date of the first publication of such notice being not less than fifteen (15) days prior to the tentative date stated therein for the passage of this Ordinance; and WHEREAS, no petition, protesting the issuance of such certificates and bearing valid petition signatures of at least 5% of the qualified voters of the City, has been filed with the City Secretary, any member of the Council or any other official of the City on ·or prior to the date of the passage of this Ordinance; and WHEREAS, the council hereby finds and determines that all of the certificates of obligation described in such notice should be issued and sold at this time; now, therefore, BE IT ORDAINED BY TIIB CITY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1: ·Authorization-Designation-Principal Amount- Purpose. Certificates of obligation of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $10,260,000 to be designated and bear the title ~cITY OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998" (the "Certificates"), for ) ) . ::-. ) ) ) ) ) the purpose of paying contractual obligations to be incurred for (i) improvements and extensions to the City's Waterworks System, (ii) site development for solid waste disposal, and (iii) professional services rendered in connection with such projects and the financing thereof, pursuant to authority conferred by and in conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Local Government Code, Subchapter C of Chapter 271. SECTION 2: Fully Registered Obliaations -Authorized Denominations-Stated Maturities-Date. The Certificates are issuable in fully registered form only; shall be dated Jai:iuary 1, 1998 (the "Certificate Date11 ) and shall be in denominations of $5,000 or any integral multiple thereof (within a Stated Maturity} and the Certificates shall become due and payable on February 15 in each· of the years and in principal amou,nts (the 11Stated Maturities") . and bear interest at the per annum rate{s) in accordance with the.following schedule: Year of Principal Interest Stated Maturity Amount Rate 1999 $510,000 6 .25% 2000 510,000 6.25% 2001 510,000 6.25% 2002 510,000 6.25% 2003 510,000· 6.25% 2004 510,000 6.25% 2005 510,000 6.125%- 2006 510,000 4.25% 2007 515,000 4.30% 2008 515,000 4.35% 2009 515,000 4.45% 2010 s1s,·ooo 4.55% 2011 515,000 4.60% 2012 515,000 4.65% 2013 515,000 4.70% 2014 515,000 4~75% 2015 515,000 4.75%. 2016 515,000 4.25% 2017 515,000 4.25% 2018 515,000 4.25% The Certificates shall bear interest on the unpaid principal amounts from the Certificate Date at the per annum rate(s) shown above in this Section (calculated on the basis of a 360-day year of twelve 30-day months). Interest on the Certificates shall be payaJ;>le on February 15 and August 15 in each year I commending August 15, 1998. -2- " , ) ) .ir •, SECTION 3 : Terms of Payment -Paying Agent /Registrar. The principal · of, premium, if any, and the . interest on the Certificates, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Certificates (hereinafter called the "Holders"} appearing on the registration and transfer books maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of U. S. Trust Company of Texas, N.A., Dallas, Texas to serve as Paying Agent/Registrar for the Certificates is hereby approved and confirmed. Books and reqords relating to the registration, payment, exchange and transfer of the Certificates· (the "Security Register11 ) shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, all as provided herein, in accordance with the terms and provisions of a u Paying Agent/Registrar Agreement" , substantially in the form attached hereto as Exhibit A and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City Secretary of the City are hereby authorized to execute and deliver ·such Agreement in connection with the delivery of the Certificates. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Certificates are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified.and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Certificates ··shall be payable at the Stated Maturities or the redemption thereof only upon presentation and surrender of the Certificates to the Paying Agent/Registrar at its designated offices in New York, New York (the "Designated Payment/Transfer Officen). Interest on the Certificates shall be paid by the Paying Agent/Registrar to the Holders whose name appears in the Security Register at the close of business on the Record Date {the last business day of the month n~t preceding each interest payment date) and payment of such interest shall be (i} by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the -8- ) ) ( .. • .. • principal of or interest on the Certificates shall be a Saturday, Sunday, a iegal holiday, or a day when banking institutions in the City where the Designated Payment/Transfer 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 whic h is not such a Saturday, Sunday, legal holiday, or day when 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. 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 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 (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register · at the close of business on the last business next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. The Certificates having Stated Maturities on and after rebruary 15, 2009, shall be subject to redemption prior to maturity, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof ·(and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2008 or on ariy date thereafter at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redemption Option. At least forty-five (45) days prior to a redemption date for the Certificates (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar),· the City shall notify the Paying Agent/Registrar of the decision to redeem Certificates, the principal amount of each Stated Maturity to be redeemed,. and the ·date of redemption therefor. The decision of the City to exercise the right to redeem Certificates shall be entered in the minutes of the governing body of the City. (c) Selection of Certificates for Redemotion. If less than .. all Outstanding Certificates of the same Stated Maturity are to be redeemed on:a redemption·date, ·the Paying Agent/Registrar shall treat such Certificates as representing the number of Certificates outstanding which is obtained by dividing the principal amount of such Certificates by $5,000 and shall select the Certificates, or principal amount thereof, to be redeemed within such Stated Maturity by lot. -4- ) ) : ·,· ·. ; r, •• ) ) ) ) (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Certificates, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the City's expense, to each Holder of a Certificate to be redeemed in whole or in part ~t the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice· of redemption so mailed shall be conclusively presumed to have been duly given irrespect ive of whether received by the Holder. All notices of redemption shall (i) specify the date of redemption for the Certificates, (ii) identify the Certificates to be redeemed and, in the case of a portion of the principal amount . to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, {iv) state that the Certificates, or the portion of the principal atoount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Certificates, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon pres~ntation and surrend~r thereof by the Holder. If a Certificate is subject by _its terms to prior redemption and has been called for redemption and ·notice of redemption thereof has been duly given as hereinabove provided, such Certificate (or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for the payment of such Certificate (or of the principal ampunt thereof to be redeemed) at the then applicable redemption price are held· for the purpose of such payment by the Paying Agent/Registrar. SECTION 5: Registration Transfer -Exchange of Certificates-Predecessor Certifigates. The Paying.Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of t~e Certificates issued under and pursuant to the provisions of this Ordinance,. or if appropriate, the nominee thereof. Any Certificate may be · transferred or exchanged for Certificates of other authorized denominations by the Holder, in person or by his duly authorized agent, upon · surrender of such Certificate to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. -5- ) ., Upon surrender of any Certificate for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferee s, one· or more new Certificates of authorized denominations and having the. same Stated Maturity and of a like aggregate principal amount as the Certificate or Certificates surrendered for transfer. At the option of the Holder, Certificates may be exchanged for other Certi ficates of authori zed denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the certificates surrendered for exchange, upon surrender of the Certificates to be exchanged at the Designated Payment/Transfer Office of the Paying Agent/ Registrar. Whenever any Certificates are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Certificates to the Holder requesting the exchange. ·;?,. All Certificates issued in any transfer or · exchange of ..... ) ) Certificates shall be delivered to the Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and delivery thereof, the same shall be the valid obligations of tlie City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Certificat~s surrendered in sue~ transfer or exchange. All transfers or exchanges of Certificates pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying· Agent/Registrar shall require payment by the. Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Certificates canceled by reason of an exchange or ~ransfe~ pursuant to the provisions hereof are hereby. defined to be "Predecessor Certificates," evidencing all or a portion, as the case may.be, of the same obligation to pay evidenced by the new certificate or Certificates registered and delivered in the exchange or . transfer therefor. Additionally, the term "Predecessor Certificates• shall include any mutilated, lost, destroyed, or stolen Certificate for which a replacement Certificate has been issued, registered and delivered in lieu thereof pursuant to the provisions of Section 23 hereof and such new replacement Certificate shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Certificate. -6- ~ . ) ) ) ) ,. ,,r ·:' Neither the City nor the Paying Agent/Registrar shall be required -to issue or transfer to an assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Certificate; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a certificate called for redemption in part. SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment and transfer/exchange of the Certificates, the City hereby approves and authorizes the use of "Book-Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company (OTC), a limited purpose trust company organized under the laws of the State of New York, in accorda~ce with the· requirements and procedures identified in the Letter of Representation by and between the City, the Paying Agent/Registrar and OTC (the "Depository Agreement") relating to the Certificates. Pursuant to the Depository Agreement and the rules of OTC, the Certificates shall be deposited with DTC who shall hold said Certificates for its participants (the "DTC Participants11 ). and, while the Certificates are held by OTC under the Depository Agreement, the Holder of the Certificates on the Security Register _for all purposes, including payment and notices, shall be Cede & Co., as nominee of OTC, notwithstanding the ownership of each actual purchaser or owner of each Certificate (the "Beneficial . owners") being recorded in the records of DTC and OTC Participants. In the event DTC determines to discontinue serving as securities depository for the Certificates or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the City determines that OTC is incapable of properly discharging its duties as securities depository for the Certificat.esi the Gity covenants and agrees with the Holders of the Certificates to cause Certificates to be printed in definitive form and provide for the · Certificate certificates to be issued and delivered to DTC Participants and Beneficial owners, as the case may be. Thereafter, the Certificates in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Certificates·shall be made in accordance with the provisions of Sections 3, 4 and.-5 hereof . . SECTION 7: Execution -Registration. The Certificates shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Certificates may . -7- ) ) be manual or facsimile. Certificates bearing the manual or facsimile· signatures of individuals who are or were the proper officers of the City on the Certificate Date shall be deemed to be duly executed on behalf of the City, notwithstanding that one or more of the individuals executing the same shall c ease to be such officer at the time of delivery of the Certificates to the initial purchaser(s) and with respect to Certificates delivered in subsequent exchanges and transfers, all as authorized and provided in the Bond Procedures Act of 1981, as amended. No Certificate shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Certificate either a certificate of registration substantially in the form provided in section 9C, manually executed by the Comptroller of Public Accounts of the State of T~s, or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 9D, manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly certifi~d, registered and delivered. SECTION B: Initial Certificate(s). The Certificates herein authorized shall be initially issued either (i) as a single fully registered certificate in the total principal · amount of $10,260,000 with principal installments to become due and payable as provided in Sect ion 2 hereof and numbered T-1, or (ii) as twenty (20) fully registered certificates, being one certificate for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Certificate(s)") and, in either c~se, the Initiql Certificate(s} shall be registered in the name of the initial purchaser(s) or the designee thereof . The Initial Certificate(s} shall be the Certificates 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 initial purchaser(s). 'Any time after the delivery of the Initial certificate(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser (s), or the designee thereof, shall cancel the · Initial Certificate(s) delivered hereunder and exchange therefor definitive Certificates of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the. Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. -8- ' ✓ ) ) ) · .. :. SECTION 9 = Forms . A. Forms Generally. The Certificates, the Registration Certifi cate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the certificates, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification '(including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends in the event the Certificates, or any maturities thereof, are purchas ed with insurance and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by the officers executing such Certificates as evidenced by their execution. Any portion of the text of any Certificates may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Certificate. The definitive Certificates and the Initial Certificate(s) shall be printed, lithographed, or engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined by the officers executing such Certifi cates as evidenced by t _heir execution thereof. B. Form of Certificat"es. REGISTERED NO. UNITED STATES OF AMERICA STATE OF TEXAS CI'TY OF LUBBOCK, TEXAS, RIDISTERED $ ___ _ TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATE OF OBLIGATION, SERIES 1998 Certificate Date: Interest Rate: Stated Maturity: COSIP NO: January l., _19~8 -----' Registered OWner: Frincipal Amount: DOLLARS The City of Lubbock (hereinafter referre~ to as the "City"), a body corporate and municipal corporation in the County of Lubbock, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered owner -9- ··.::. ) named above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount stated above (or so much thereof as shall not have been paid upon prior redemption) and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid Principal Amount hereof from the Certificate Date at the per annum rate of interest specified above; such interest being payable on February 15 and August 15 of each year, commencing August 15, 1998. Principal of this Certificate is payable at its Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the Designated Payment/Transfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor. Interest is. payable to the registered owner of this Certificate {or one or more Predecessor Certificates, as defined in the Ordinance hereinafter referenced) whose name appears on the "Security Register11 maint~ined by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register on the Record Date or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the ~isk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Certifica~e shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts.· This Certificate is one of the series specified in its title issued in the aggregate principal amount of $10,260,000 (herein referred to as the 11Certificatesn) for the purpose of paying contractual obligations to be· incurred for (i) improvements and extensions to the City's Waterworks System, (ii) site development for solid waste disposal, and (iii) professional services rendered in connection with such projects and the financing thereof, under and in strict conformity with the Constitution and laws of the State of Texas, particularly V.T.C.A., Local Government Code, Subchapter C of Chapter 271, and pursuant to an Ordinance adopted by the governing body of the City (herein referred to as the "Ordinance"). The Certificates maturing on and after February 15, 2009, may be redeemed prior to their Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2008, or on any date thereafter, at the redemption price of par, together.with accrued interest to the date of redemption. -10- At least thirty days prior to a redemption date, the City shall cause a written notice of such redemption to be sent by United States Mail, firs~ class postage prepaid, to the registered owners of each Certificate to be redeemed at the address shown on the Security Register and subject to the terms and provisions relating thereto contained in the Ordinance. If a Certificate (or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon the redemption date such Certificate (or the portion of its principal sum to be redeemed) shall become due and payable, and, if moneys for the payment of the redemption price and the interest accrued on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the· Paying Agent/Registrar, interest shall cease to accrue and be payable from and after the redemption date on the principal amount redeemed. In the event a portion of the principal amount of a Certificate is to be redeemed and the registered owner is someone ·other than Cede & Co., payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of such Certificate to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new certificate or Certificates of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredee~ed balance of the principal sum thereof will be issued to the registered owner, without charge. If a Certificate is selected for redemption, in whole or in part1 the City and 'the Paying Agent/Registrar shall not be required to transfer such Cerbificate to an assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance of a Certificate redeemed in part. The Certificates are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City and from a limited pledge .of the Net Revenues (as defined in the· Ordinance} of the City's Waterworks System (the "System"), such pledge being limited to an amount not in excess of $500 and being junior and subordinate to the lien on and pledge of such Net Revenues securing the payment of "Prior Lien Obligations" (as defined in the Ordinance) now outstanding and hereafter issued by the City. In the Ordinance1 the City reserves and retains the right to issue Prior Lien Obligations without limitation as to principal amount but subject to any applicable terms, conditions or restrictions under law or otherwise. -11- !; •.• Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all the provisions of which the Holder hereof by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Certificates; the nature and extent of the limited pledge of the Net Revenues securing the payment of the Certificates; the terms and conditions relating to the transfer or exchange of this Certificate; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which the tax levy and the pledge of the Net Revenues and covenants made in the Ordinance may be discharged at or prior to the maturity of this Certificate, and this Certificate deemed to be no longer Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. This Certificate, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the ·Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more fully registered Certificates of authorized denominations and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent· of either, may treat the registered owner hereof whose name appears 0n the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii} on the date of surrender of this Certificate as the owner entitled to payment of principal hereof at its Stated Maturity or its .redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/Registrar, . or any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest on a scheduled payment date and for thirty (30) days thereafter, a new record date for such interest payment (a uspecial Record Date11 ) 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 ~e 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United -12- .... States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and covenanted that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue .of the Constitution and.laws of the State of Texas; that the issuance of the Certificates is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Certificates to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Certificates do not exceed any constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Certificates as aforestated. In case any provision in this Certificate or any application thereof shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions and applications shall not in any way be affected or impaired thereby. The terms and provisions of this Certificate and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be duly executed under the official seal of the City as of the Certificate Date. COUNTERSIGNED: City Secretary {SEAL) CITY OF LUBBOCK, .TEXAS Mayor C. * Form of Registration Cert ificate of Comptroller of Public Ac counts to Appear on Initial Certificate{s) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS § § § § REGISTER NO. THE STATE OF TEXAS I H~REBY CERTIFY that this Certi ficate has been examined, certified as to validity and approved by the Attorney General of the State of rexas, and duly registered by the Comptroller of Public Accounts of the State of Texas . WITNESS my (SEAL} *NOTE TO. PRINTER: signature and seal of office Comptroller of Public Accounts of the State of Texas Do not print on definitive Certificates this D. Form of Certificate of Paying Agent/Registrar to Appear on Definitive Ce rtificates. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Certificate has been duly issued and r egister·ed under the provisions of the within-ment•ioned Ordinance; the certificate or cert if i~ates of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as s hown by the records of the Paying Agent/Registrar . The designated offices of the Paying Agent/Registrar located in New York, New York,. is the 11Designated Payment/Transfer Office" for thi s Certificate. Registration Date: CMaC1103 · . U. S. TRUST COMPANY OF TEXAS, N. A . , Dal las, Texas, as Paying Agent/Registrar By--------------Authorized Signature -14- .I : i". i) E. Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee:) (Social Security or other identifying number: _________________ ) the within Certificate and all rights thereunder, and hereby irrevocably· constitutes and appoints attorney to transfer the· within Certificate on the books kept for registration thereof, with full power of substitution in the premises. DATED: Signature Guaranteed: NOTICE: The signature on this assignment must correspond with the name of the registere4 owner as it appears on the face of the within Certificate in every particular. F. The Initial Certificate(s) shall be in the form set forth in paragraph B of this Section. except that the form of a single fully r ·egistered Initial Certificate shall be modified as follows: (i) immediately under the name of the certificate the headings II Interest. Rate ______ 1' and "Stated Maturity _______ ., shall both be omitted; (ii) paragraph one shall read as follows: Registered Owner: Principal Amount: Dollars The City of Lubbock (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Lubbock, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, the Principal Amount hereinabove stated, on February 15 in each of the years and in principal installments in accordance with the following schedule: -15- PRINCIPAL INSTALLMENTS (Information to be inserted from schedule in Section 2 hereof). INTEREST RATE (or so·much principal thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid Principal Amount hereof from the Certificate Date at the per annum rates of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on February 15 and August 15 of each year, commencing August 15, 1998. Principal installments of this Certificate are payable in the year of maturity or on a prepayment date to the registered owner hereof by U.S. Trust Company of Texas, N.A., Dallas, Texas (the 0 Paying Agent/Regis_trar11 ), upon presentation and surrender, at its designated offices in New York, New York (the "Designated Payment/Transfer Office"). Interest is payable to the registered owner of this Certificate whose name appears on the "Security Register'' maintained by the Paying Agent/Registrar at the close of business on the 11Record Date", which is the last business day of the month next preceding each interest payment date hereof and interest shali be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of · the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/ Registrar, requested by, and at the risk and expense of, the registered owner. All · .payments of principal of, premium, if any, and interest on this Certificate shall be without exch;-mge or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts.· SECTION _10: Definitions. For purposes of this Ordinance and· for clarity with respect to the issuance of ~he Certificates, \ :· • and the levy of taxes and appropriation of Net Revenues therefor, the following words or terms, whene-ver the ·same appear herein without qualifying language, are defined to mean as follows: (a) The term "Certificates" shall mean $10,260, ooo '1 CITY OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998" authorized by this Ordinance. (b} The term "Certificate Fund .. shall mean the special Fund created and established under the provisions of Section 11 of this Ordinance. -16- ) 0 l) (c) The term 11Collection Date" s:-,all mean, when reference is being made to the levy and collection of annual ad valorem taxes, the date annual ad valorem taxes levied each year by the City become delinquent. (d) The term "Fiscal Year" shall mean the annual financial accounting period used with respect to the operations of the System now ending on September 30th of each year; provided, however, the City Council may change, by ordinance duly passed, such annual financial accounting period to end on another date if such change is found and determined to be necessary for budgetary or other fiscal purposes. (e) The term "Government Securities" shall mean direct obligations of the United State~ of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, and the United States Treasury obligations such as its State and Local Government Series in book-eritry form. . . (f) The term "Gross Revenues" shall mean all income, receipts and revenues of every nature derived or received from the operation and ownership (excluding gifts and grant moneys, federal or state} of the System, -including earnings and income derived from the investment or deposit of·moneys in any special funds or accounts created and established for the payment and security of the Prior Lien Obligations and other obligations payable in whole or in part from and secured by a lien on and pledge of the Net Revenues. (g) The term "Net Revenues11 shall mean the Gross Revenues of the System, with respect to any period, after deducting the System's Operating and Maintenance Expenses during such period. · (h) The term n0perating and Maintenance Bxpenses11 shall mean .all reasonable and necessary expenses directly related and attributable to the operation and maintenance of the System, including, but not limited to, the cost of insurance7 the purchase and carrying of stores, materials, and supplies, the payment of salaries, labor and other expenses reasonably and properly charged, under generally accepted accounting principles, . to the operation and maintenance of the System and those expenses required by statute· (Article 1113, V.A.T.C.S. or other applicable statute) to be a first lien and charge against the Gross Revenues. -17- .. :'--:.'. Depreciation charges on equipment, machinery, plants and othe~ facilities comprising the System and expenditures classed under generally accepted accounting principles as capital expenditures shall not be considered as "Operating and Maintenance Expenses" for purposes of determining "Net Revenues". {i) The term "Outstanding'' when used in this Ordinance with respect to Certificates means, as of the date of determination, all Certificates theretofore issued and delivered under this Ordinance, except: (1) those certificates canceled by the Paying Agent/Registrar or delivered to the Paying Agent/Registrar for cancellation; (2) those Certificates deemed to be duly paid by the City in accordance with the provisions of Section 19 hereof; and (3) those Certificates that have been mutilated, destroyed, lost, or stolen and replacement Certificates have been registered and delivered in lieu thereof as provided in Section 23 hereof. (j) The term "Prior Lien Obligations" shall mean all bonds or other similar obligations now outstanding and hereafter issued that are payable in whole or in part from and secured by a lien on and pledge of the Net Revenues of the System and such lien and pledge securing the payment thereof is prior and superior in claim, rank and dignity to the lien and pledge of the Net Revenues securing the payment of the Certificates, including, but not limited to, the outstanding obligations of the following issues: (1) "City of Lubbock, Texas, Combination Tax and Waterworks System Subordinate Lien Revenue Certificates of Obligation, Series 1991", dated May 15, 1991, and originally issued in the principal amount _of $16,120,000; (2) "City of Lubbock, Texas, ·Tax and Waterworks System (Limited Pledge} Revenue Certificates of Obligation, Series 1992 n, dated August 15, 1992, and originally issued in the principal amount of $7,565,000; (3) 11City of Lubbock, Texas, Tax and -Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 1993n, dated October 1, 1993, and originally issued in the principal amount of $1,470,000; and (4) "City of Lubbock, Texas, Tax and Waterworks System (Limited Ple'dge). Revenue Certificates of Obligation, Series 1995", dated December 15, 1995, and originally issued in the principal amount of $10,000,000. . (k) The term "System11 shall mean the City's Waterworks System, being all properties, facilities, and plants currently owned, operated, and maintained by the City for the supply, treatment, and transmission of treated potable water, together with all future extensions, improvements, replacements and additions thereto. SECTION 11: _Certificate Fund. For the purpose of paying the interest on and to provide a sinking fund for the payment and retirement of the Certificates, there shall be and is -hereby created a special Fund to be designated "SPECIAL 1998 CITY· OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVBNUE CERTIFICATE OF OBLIGATION FUND", which Fund shall be kept and maintained at the City's depository bank, and moneys deposited in said Fund shall be used for no other purpose. Proper officers of the City are hereby authorized and directed to cause to be transferred to the Paying Agent for the Certificates, from funds on deposit in the Certificate Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Certificates as· the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent for the Certificates at the close of business on the last business day next preceding each interest and/or principal payment date for the Certificates. · Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate Fund may, at the option of the City. be invested in obligations identified in, and in accordance with the provisions of the "Public Funds Investment Act11 (V. T .C .A., Government Code, Chapter 2256) relating to the investment of "bond proceeds"; provided that all such investments shall be made in such a manner that the money required to be expended from said Fund will be available at the proper time or times. All interest and income derived from deposits and investments in said -19- ~ ..... Certificate Fund shall be credited to, and any losses debited to, the said -Certificate Fund. All such investments shall be sold promptly when necessary to prevent any default in connection with the Certificates. SECTION 12: Tax Levy. To provide for the payment of ~he "Debt Service Requirements" on the Certificates being (i) the interest on said Certificates and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the greater}, there shall be and there is hereby levied for the current year and each succeeding year thereafter while sa:i.d Certificates or any interest thereon shall remain Outstanding, a sufficient tax on each one hundred 'dollars' valuation of taxable property in said City, adequate to pay such Debt Service . Requirements, full allowance being made for delinquencies and costs of collection; said tax shall be assessed and collected each year and applied to the payment of the Debt Service Requirements, and the same shall not be diverted to any other purpose. The taxes so levied and collected shall. be paid into the Certificate Fund. The City Council hereby declares its purpose and intent to provide and levy a tax legally and fully sufficient to pay the said Debt service Requirements, 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 in consideration of all other outstanding indebtedness. Accrued interest and premium, if any, received from the purchasers of the Certificates shall be deposited to the Certificate Fund. In addition, any surplus proceeds from the sale of the Certificates not expended for authorized purposes shall be deposited in the Certificate Fund, and such amounts so deposited shall reduce the sums otherwise required to be deposited in said Fund from ad valorem taxes. SECTION 13: Limited Pledge of Net Revenues. The City hereby covenants and agrees that, subject to the prior lien on and pledge of the Net Revenues of the System to the payment and security of Prior Lien Obligations, the Net Revenues 0£ the System in an aggregate amount not to exceed $500 are hereby irrevocably pledged to the payment of the principal of and interest on the Certificates in accordance with the provisions of this Ordinance, and the limited pledge of $500 of the Net Revenues of the System herein .made for the payment of the Certificates shall constitute a lien on the Net Revenues of the System in accordance with the terms and provi.sions hereof. Furth~rmore, such lien on and pledge of the Net Revenues securing the payment of the -Certificates shall be valid and binding without further action by the City and without any filing or recording ·except for the filing of this Ordinance in the records of the City. -20- .. ,' SECTION 14: System Fund. The City hereby covenants and agrees tllat all Gross Revenues (excluding earnings from the investment of money held in any special funds or accounts created for the payment and security of Prior Lien Obligations) shall be deposited from day to day as collected into a 11 City of Lubbock, Texas, Waterworks System Operating Fund11 (hereinafter called 11 System Fund") ·•:hich Fund shall be kept and maintained at an official depository bank of the City. All moneys deposited in the System Fund shall be pledged and appropriated to the extent required for the following purposes and in the order of priority shown, to wit: First: To the payment of all necessary and reasonable Operating and Maintenance Expenses of the System as defined herein or required by statute to be a first charge on and claim against the Gross Revenues. Second: To the payment of the amounts required to be deposited in the special Funds created and established for the payment, security and benefit of Prior Lien Obligations in accordance with the terms and provisions of the ordinances authorizing the issuance of Prior Lien Obligations; and Third: To the payment of the limited amount pledged to the payment of the Certificates. Any Net Revenues remaining in the System Fund after satisfying the foregoing payments, or making adequate and sufficient provision for the payment thereof, may be appropriated and used for any other City purpose now or hereafter permitted by law. SECTION 15: Security of Funds. All moneys on deposit in the Funds for which this Ordinance makes provision (except any portion thereof as may be at any time properly invested) shall be secure~ in the manner -and to the fullest extent required by the laws of Texas for the security· of public funds, and moneys on deposit in such Funds shall be used only for the purposes permitted by this Ordinance . SECTION 16: Special Covenants. The City hereby further covenants as follows·: (a) It has the lawful power to pledge the Net Revenues of the System supporting this issue of Certificates and has lawfully exercised said powers under the Constitution and laws of the State of Texas, including said power existing under Articles 1111 et -21- ... . ' , ...... seq., V.A.T.C.S. and V.T.C.A., Local Government Code, Subchapter C of Chapter 271. {b) Other than for the payment of the Prior Lien Obligations and the Certificates, the Net Revenues of the System have not in any manner been pledged to the payment of any debt or obligation of the City or of the System. SECTION 17: Issuance of Prior Lien Obligations and Additional Certificates. The City hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without limitation as to principal amount but subject to any terms, conditions or restrictions applicable thereto under law or otherwise. Additionally, the City reserves the right to issue obligations payable, in whole or in part, from the Net Revenues of the System and, to the extent provided, secured by a parity lien on and pledge of the Net Revenues of equal rank and dignity with the lien and pledge securing the payment of the Certificates. SBCT!ON 18: Subordinate to Prior Lien Obligations. Covenants and Agreements. It is the intention of this governing body and accordingly hereby recognized and stipulated that the provisions, agreements and covenants contained herein bearing upon t-he management and operations of the system and the administering and application of revenues derived from the operation thereof, shail to the extent possible be harmonized with like provisions, agreements and covenants contained in ordinances authorizing the issuance of Prior Lien Obligations, and to the extent of any irreconcilable conflict between the provisions contained herein and in ordinances authorizing the issuance of Prior Lien Obligations, the provisions, agreements and covenants contained therein shall prevail to the extent of such conflict and be applicable to this Ordinance but in all respects subject t9 t .he · priority of rights and benefits, if any, conferred thereby to the holders or owners of the Prior Lien Obligations. Notwithstanding the above, any change or modification affecting the application of revenues derived from the operation of the System shall not impair the obligation of contract with respect to the pledge of revenues herein made for the payment and security of the Certificates. SECTION 19: Satisfaction of Obligations of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Certificates, at the times and in the manner stipulated in this Ordinance, then the .pledge of taxes levied and the lien on and pledge of the Net Revenues of the System under this Ordinance and all covenants, agreements, and other -22- ) , .. ) obligations of the City to the Holders shall thereupon cease, terminate~ and be discharged and satisfied. Certificates sh~ll be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money s~fficient to pay in full such Certificates or the principal amount(s) thereof at maturity or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made} the redemption date thereof, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an au~horized escrow agent, or (ii) Government securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have ·been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Certificates, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or {if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants that · no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Certificates to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/ Registrar and. all income from Government Securities held in trust· by the Paying Agent/Registrar, or an authorized escrow .agent, pursuant to this Section which is not required for the payment of the Certificates, or any principal amount {s.) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar f~r the payment of the principal of and interest on the Certificates and remaining unclaimed for a period of four (4) years after the maturity, or applicable redemption date, of the Certificates for which such moneys were deposited and are held in trust to pay, shall upo'n the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the·Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. -23- .~·. ) SECTION 20: Ordinance a Contract -Amendments. This Ordinance·shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Certificate reniains Outstanding except as permitted in this Section. The City, may, without the consent of or notice to any Holders of the Certificates, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders of the Certificates, including the curing of any ambigµity, inconsistency, or formal defect or omission herein. In addition, the City may, with the written consent of Holders of the Certificates holding a majority in aggregate principal a~ount of •the Certificates then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the co~sent of all Holders of Outstanding Certificates, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Certificates, reduce the principal amount ·thereof, the redemption price, or the rate of interest thereon, or in any other way· modify the terms of payment of the principal of, premium, if any, or interest on the Certificates, (2) give any preference to any certificate over any other Certificate, or (3) reduce the aggregate principal amount of Certificates required to be held by Holders for consent to any such amendment, addition, or ·rescission. SECTION 21: Notices to Holders -Waivers. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first .class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such not~ce. In any case where not.:i,.ce to Holders is given by mail, neither the failure to mail such·notice co any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Certificates. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver ahall be ~he equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 22: Cancellation. Certificates surrendered for payment, redemption, transfer, or exchange, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if -24~ .. •.. .. surrendered to the City, shall be delivered to the Paying Agent/Reg-istrar and, if not already canceled, shall be promptly canceled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Certificates previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly canceled by the Paying Agent/Registrar. All canceled Certificates held by the Paying Agent/Registrar shall be returned to the City. SECTION 23: Mutilated. Destroyed, Lost and Stolen Certificates. In case any Certificate shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Certificate of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Certificate,·or in lieu of and in substitution for such destroyed, lost or stolen Certificate, only upon the approval of the City and after (i) ~he filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Certificate, and of the authenticity of the ownership thereof and {ii) · the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Certificate shall be borne by the Holder of the Certificate mutilated, or destroyed, lost or stolen. Every replacement Certificate issued pursuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Certificates; notwithstanding the enforceability of payment by anyone of the destroyed, lost or stolen Certificates. The provisions of this Section are exclusive and shall preclude {to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost, or stolen Certificates. SECTION 24: Covenants to Maintain Tax-Exempt Status. A. Definitions. When used in this Se~tion, the following terms have the following meanings: "Closing Date" means the date on which the Certificates are first authenticated and delivered to the initial purchasers against payment therefor. -25- D ) ) ''Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148-l(b) of the Regulations. "Gross Proceeds" means any proceeds as d efined in Sec tion 1.148-l(b) o f the Regulations, and any replacement proceeds as defined in Section 1 .148-1 (c) of the Regulation~, of the Certificates. "Investment" has the meaning set forth in Section 1.148-l(b} of the Regulations. "Nonpurpose Investmentn means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired to carry out the governmental purposes of the Certificates. "Rebate Amount:11 has the meaning set forth in Section 1.148-l(b) of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of ·the Internal Revenue Code of 1954, which are applicable to the Certificates. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. ,, Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the Regulations; and (2) the Certificates has the meaning set forth in Section 1.148-4 of the Regulations. B. Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Certificate to -26- become includable in the gross income, as defined in section 61 of the Code,· of the owner thereof for federal income tax purposes. Without limiting the generality o f the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will z:iot adversely affect the exemption from federal income tax of the interest on any Certificate, t:he City shall comply with each of the specific covenants in this Section. C.. No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Certificates: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Certificates, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any · person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely .as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Certificates or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest .earned on·investments acquired with such Gross Proceeds pending application for their intended purposes. D. No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Certificates to make or finance loans to any p~rson or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be · "loaned" to a person or entity if. (1) property acquired, constructed or improved with -such G:r-oss Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such -27•. f ...... ) property is committed to such person or entity under a take-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction ~hich is the economic equivalent of a loan. E. Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Certificates directly or indirectly invest Gross Proceeds in any Investment {or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with-Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Certificates. F. Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the -Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Certificates to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. G. Information Report. The City shall timely file the information required by section 149 (e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. H. Rebate of Arbitrage P·rofits. otherwise provided in section 148(£) Regulations and rulings thereunder: Except to the extent of the Code and the (1) The City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (~nd receipts,. expenditures and investments thereof) and shall retain all records of accounting for at least· six years after the day on which the last Outstanding Certificate is discharged. However, to the ·extent permitted by law, the City rnay commingle Gross Proceeds of the Certificates with other money of the City, provided that the City separately a~counts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f} of the Code and the Regulations and rulings thereunder. The -28- !) . .., City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Certificates until six years after the final Computation Date. {3) As additional consideration for the purchase of the Certificates by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the i nterest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall pay to the United States out of the Certificate Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Certificates equals {i) in the case of a Final Computation Date as defined in Section l.148-3(e) (2) of the Regulations, one hundred percent {100%) of the Rebate Amount on such date; apd (ii) in the case of any other Computation Date, ninety percent {90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148{f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section l4B(f} of the Code and the Regulations·and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error) , including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-3(h) of the Regulations. I. Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Certificates, enter into any transaction 'that reduces the amount required to be paid to the United States pursuant to Subsection H of this Section because such transaction results in a smaller profit or a iarger loss than would have resulted if the· -29- ) transaction had been at arm's length and had the Yield of the Certificates not been relevant to either party. J .. Elections. The City hereby directs and authorizes the Mayor, City Secretary, City Manager, and First Assistant City Manager, individually or jointly, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Certificates, in the Certificate as to Tax Exemption or similar or other appropriate c~rtificate, form or document. SECTION 25: Sale of the Certificates. Pursuar;.t to a public sale for the Certificates, the bid submitted by Salomon Smith Barney & Associates (herein referred to as the 11Purchasers"} is declared to be -the best bid received producing the lowest net effective interest cost to the City, and the sale of the Certificates to said Purchasers at the price of par and accrued interest to the date of deli very, plus a premium of $377 .11, is hereby approved and confirmed. Delivery of the Certificates to the Purchasers shall occur as soon as possible upon payment being made therefor in accordance with the terms of sale. SBCTION 26: Proceeds of Sale. The proceeds of sale of the Certificates, excluding the accrued interest and premium, if any, received from the Purchasers, shall be deposited in a construction fund maintained at the City's depository bank. Pending expenditure for authorized projects and purposes, such proceeds of sale may be invested in authorized investments and any investment earnings realized may be expended for such authorized projects and purposes or deposited in the Certificate Fund as shall be determined by the City Council. · Accrued interest and premi_um, if any, received from the Purchasers as well as all surplus proceeds of sale of the Certificates, including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Certificate Fund. SECTION 27: Control and Custody of Certificates. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texas, including the printing of the Certificates, and shall take and have charge and control of the Certificates pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers . · Furthermore, the Mayor,· City Secretary, City Manager, First Assistant City Manager, Director of Financial Services, and Finance Manager, any one or more of said officials, are hereby -30- i) ) ,.,·. ) authorized and directed to furnish aqd execute such documents and certifications relating to the City and the i s suance of the Certificates, including a certification as to facts, estimates, circumstances and reasonable expectations pertaining to the use and expenditure and investment of the proceeds of the Certificates as may be necessary for the approval of the Attorney General, registration by the Comptroller of Public Accounts and delivery of the Certificates to the purchasers thereof and, together with the City's financial advisor, bond counsel and the Paying Agent/Regist.rar, make the necessary arrangements for the delivery of the Initial Certificate(s) to the purchasers. SECTION 28: Official Statement. The Official s·tatement prepared in the initial offering and sale of the Certificates by the City, together with all addendas, supplements and amendments thereto issued on behalf of the City, is hereby approved as to form and content, and the City Council hereby tinds that the information and data contained in said Official Statement pertaining to the City and its financial affairs is true and correct in all material respects and no material facts have been omitted therefrom which are necessary to make the statements therein, in light of the circumstances under which they were .made, not misleading. The use of such Official Statement in the reoffering of the Certificates by the Purchasers is hereby approved and authorized. SECTION 29: Legal Opinion. The obligation of the Purchasers to accept delivery of the Certificates is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys, Dallas, Texas, approving such Certificates as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Certificates. A true and correct reproduction of said opinion .is hereby authorized to be printed on the definitive certificates or an executed co~nterpart thereof shall accompany the global Certificates deposited with the pepository Trust Company. SECTION 30: CUSIP Numbers. That CUSIP numbers may be printed or typed on the definitive Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Certificates shail be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving said Certificates as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Certificates. SECTION 31: Benefits of Ordinance. Nothing in this Ordinance,. expressed or implied, is intended or shall be construed to c onfer upon any person other than the City, the Paying Ag_ent/Registrar and the Holder,s, any right1 r:emedy, or claim, -31- ) legal or equitable, under or by reason of this Ordinance or any provision· hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 32: 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 33: Governing Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the Onited States of America .. -SECTION 34: 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 the City Council hereby declares that this ordinance would have been enacted without such invalid provision. SECTION 35: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 36: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to -include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other g~nders. SECTION 37: Continuing Disclosure Undertaking. (a) Definitions. A~ used in this Section, the following terms have the meanings ascribed to such terms below: "MSRBu means the Municipal Securities Rulemaking Board. •1NRMSIR" 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. "SBC" means the United States Securities and Exchange Commission. -32. "SID" means any person designated by the State of Texas or an au~horized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository withi n the meaning of the Rule from time to time. (b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 1997) financial information and operating data with respect to the City of the general type included in the final Official Statement .approved by Section 28 of this Ordinance, being the information described in Exhibit B hereto. Financial statements to be provided shall be (1) prepared in accor dance with the accounting principles described in Exhibit B hereto and (2) audited, if the Cif:.y 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 available at the time the financial information and operating data must be provided, then the · City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial information and operating data and will file the annual audit report; when and if the same becomes 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 pursua~t to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB} that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. (c). Material Event Notices. The City·shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Certificates, if such event is material within the meaning of the federal securities laws: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on ere di t enhancements ref lee ting financial difficulties; · 5. Substitution of credit or liquidity providers, or their failure to perform; :: ... ; , .. .: 6. Adverse tax opinions or events affecting the tax- exempt status of the Certificates; 7. Modifications to rights of holders of the Certificates; 8. Certificate calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Certificates; and 11. 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 wich subsection (b) of this Section· by the time required by such Section. (d) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this section whi1e, but only while, the City remains an "obligated person" with respect, to the Certificates within tlie meaning of the Rule, except that the City in any event will give the notice required by subsection (c} hereof of any Certificate calls and defeasance that cause the City to be no longer such an "obligated person. 11 The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy-, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and·notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may· be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, ·except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to.a decision to invest in or sell Certificates at any future date. · UNDER NO CIRCUMSTANCES SHALL THB CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGBS RESULTING IN WHOLB OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT QR WITHOUT FAULT ON I~S PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OP ANY SUCH PERSON, IN. CONTRACT OR TORT, FOR OR ON AGCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. -34- ) ) No default by the City in observing or performing its obligations under this SeGti on shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or s hall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The provisions of this section may be amended by the City from time to time to adapt to changed circumstances resulting 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 provisi ons of this Section, as so amended, would have permitted an underwriter to purchase or sell Certificates in the primary offering of the Certificates 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 Certificates 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 Holders and beneficial owners of the Certificates. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Certificates from lawfully purchasing or selling Certificates in such offering. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) 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. SECTION 38: Public Meeting. It is officially found,· determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by V.T.C.A.,. Government Code, Chapter 551, as amended. -35- ) SECTION 39: Effective Date. This Ordinance shall take ·effect and be in force immediately from and after its passage on second and final reading, and IT IS SO ORDAINED. PASSED AND ADOPTED ON FIRST READING, December 11, 1997. PASSED AND ADOPTED ON SECOND AND FINAL READING, this the 8th day of·January, 1998. CITY OF.LUBBOCK, TEXAS ATTEST: ~ (City Seal) -36- D D EXHIBI,T A PAYING AGENT/REGISTRAR AGREEMENT See Document Number 5 ) ? ) : .· ) } ) ) DESCRIPTION OF ANNUAL FINANCIAL INFORMATION Exhibit B to Ordinance The following information is referred to in Section 37 of this ordinance. Annua1 Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified {and included in the Appendix or under the headings of the Official Statement referred to) below: 1 . The financial statements of the City appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2 • The information contained in Tables l through 6 and 8A through 20 of the Official Statement. Accounting Principles The accounting principles referred to in such Section are the generally accepted accounting principles as applicable to governmental units as prescribed by The Government Accounting Standards Board. No Text ) CERTIFICATE OF CITY SECRETARY THE STATE OF TEXAS COUNTY OF LUBBOCK CITY OF LUBBOCK § § § § § I, the undersigned, City Secretary of the City of Lubbock, Texas, DO HEREBY CERTIFY as follows: 1. On the 14111 day of January, 1999, the City Council of the City of Lubbock. Texas, convened in reguJar session at its regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: WINDY SITTON MAYOR MAXINCE ) MAYOR PRO TEM VICTOR HERNANDEZ ) T. J. PATTERSON ) COUNCILMEMBERS DAVID NELSON ) ALEX "TY" COOKE ) MARC McDOUGAL ) all of said persons were present at said meeting, except the following: Marc McDougal Among other business considered at said meeting, the attached ordinance (the "Ordinance") entiUed: · •AN ORDINANCE authorizing the issuance of'CITY OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1999'; specifying the tenns and features of said certificates; providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon all taxable property within the City and a limited pledge of the net revenues from the operation of the City's Waterworks System; and resolving other matters incident and related to the issuance, sale, security, payment and delivery of said certificates, including the approval of a Paying Agent/Registrar Agreement and a Purchase Contract and the approval and disbibution of an Official Statement pertaining thereto; and providing an effective date." was introduced and submitted to the Council for first reading. After presentation and due· consideration of the Ordinance, and upon a motion being made by T. J . Patterson and seconded by Alex "Ty'' Cooke • the Ordinance was approved on first reading by the Council by the following vote: 751561.l ) 5 voted "For" 1 voted "Against'' O abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 2. On the 28111 day of January, 1999, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: WINDY SITTON MAXINCE VICTOR HERNANDEZ T.-J. PATTERSON DAVID NELSON ALEX "'TY' COOKE MARC McDOUGAL ) ) ) ) ) ) MAYOR MAYOR PRO TEM COUNCIL.NI EMBERS all of said persons were present at said meeting, except the following: Victor Hernandez Among other business considered at said meeting, the Ordinance was submitted to the Council for second reading and final passage and adoption. After presentation and due consideration of the Ordinance, and upon a motion being made by T. J. Patterson and seconded by Alex ''TV: Cooke , the Ordinance was duly passed and adopted on second reading to be effective immediately by the following vote: All voted "For" 0 voted • Against" 0 abstained all as shown in the official Minutes of the Council for1he meeting held on the aforesaid date. 3. The attached Ordinance is a true and correct copy of the original on file in the official records of the City; the duly qualified and acting members of the City Council of said City on the date of the aforesaid meetings are those persons shown above and, according to the records of my office, adva·nce notice of the time, place and purpose of each meeting was given to each member of the Council; and that said meetings and the deliberation of the aforesaid public business were open to the public and written notice of said meetings, including the subject of the above entiUed Ordinance, was posted and given in advance thereof in compliance with the provisions of V.T.C.A., Government Code, Chapter 551, as amended. 751561.l -2- ) ) ) IN WITNESS WHEREOF, I have hereunto s.igned my name officially and affixed the seal of said City, this the 28th day of January, 1999. (City Seal) 751561.1 -3- ) ORDINANCE NO. 10138 AN ORDINANCE authorizing the issuance of "CITY OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1999"; specifying the terms and features of said certificates: providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon au taxable property within the City and a limited pledge of the net revenues from the operation of the City's Waterworks System; and resolving other matters incident and related to the issuance, sale, security, payment and delivery of said certificates, indudlng the approval of a Paying Agent/Registrar Agreement and a Purchase Contract and the approval and distribution of . an Official Statement pertaining thereto; and providing an effective date. WHEREAS, notice of the City Councirs intention to issue certificates of obligation in the maximum principal amount of $15,355,000 for the purpose of paying contractual obligations to be incurred for {i) improvements and extensions to the City"s Waterworks System, (i~ improvements and extensions to the City's Sewer System, (iiij professional services rendered in connection with such projects and the financing thereof, has been duly published in the Lubbock Avalanche-Joumal, a newspaper hereby found and determined to be of general circulation in the. City of Lubbock, Texas, on December 27, 1998 and January 3, 1999, the date of the first publication of such notice being not less than fifteen (15) days prior to the tentative date stated therein for the passage of this Ordinance; and WHEREAS, no petition, protesting the issuance of such certificates· and bearing valid petition signatures of at least 5% of the qualified voters of the City, has been filed with the City . Secretary, any member of the Council or any other official of the City on or prior to the date of the passage of this Ordinance; and WHEREAS, the Council hereby finds and detennines that au of the certificates of obligation described in such notice should be issued and sold at this time; now, therefore, SE IT ORDAINED BY THE CtlY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1: Authorization-Designation.Principal Amount-Purpose. Certificates of obligation of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $15,355,000 to be designated and bear the title "CITY OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVENUE. CERTIFICATES OF OBUGA TION, SERIES 1999" {the "Certifteales'1, for the purpose of paying contractual obligations to be incurred for (i)° improvements and extensions to the City's Waterworks System, {ii) improvements and extensions to the City's Sewer System, and (iii) professional services rendered in connection with such projects and the financing thereof, pursuant to authority conferred by and in confonnity with the Constitution and laws of the State of Texas, including V.T.C.A., Local Govemment Code, Subchapter C of Chapter 271. SECTION 2: FuJty Registered Obligations -Authorized Denominations-Slated Maturities-Date. The Certificates are issuable in fully registered fonn oruy; shall be dated January 15, 1999 (the "Certificate Datej and shall be in denominations of $5,000 or any integral 7•7832.l ) ) ;,.• muJtipte thereof (~in a Stated Maturity) and the Certificates shall become due and payable on February 15 in each of the years and in principal amounts (the "Stated Maturities") and bear interest at the per annum rate(s) in accordance with the following schedule: Year of Principal Interest Stated Maturity Amount Rate 2000 $770,000 4.00% 2001 no.ooo 4.00% 2002 no.ooo 4.00% 2003 no,ooo 4.00% 2004 770,000 4.00% 2005 no,ooo 4.00% 2006 770,000 4.00% 2007 no.ooo 4.00% 2008 no,ooo 4.10% 2009 no.ooo 4.25% 2010 no,ooo 4.35% 2011 765,000 4.45% 2012 765,000 4.55% 2013 765,000 4.65% 2014 765,000 4.75% 2015 765,000 4.80% 2016 765,000 4.85% 2017 765,000 4.90% 2018 765,000 5.00% 2019 765,000 5.00% The Certificates shall bear interest on the unpaid principal ·amounts from the Certificate Date at the per annum rate(s) shown above in this Section (calculated on the basi~ of a 36o-day year of twelve 30-day months). Interest on the Certificates shall be payable on February 15 and August 15 in each year, commencing August 15, 1999. SECTION 3: Terms of Payment-Paying Agent/Registrar. The principal of, premium, if any, and the interest on the Certificates, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or hoklers of the Certificates (hereinafter called the •Holders") appearing on the registration and tran$fer books maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or coUection charges to the Holders. The selection and appointment of Chase Bank of Texas, National Association to serve as Paying Agent/Registrar for the Certificates is hereby approved and confirmed. Books and records relating to the registration, payment, exchc;1nge and transfer of the Certificates (the "Security Register'') shall at aJI times be kept and maintained on behalf of the City by the Paying Agent/Registrar, all as provided herein, in a·ccordance with the terms and provisions of a "Paying 7•1832.1 -2- ) ) Agent/Registrar Agreement", substantially in the form attached hereto as Exhibit A and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City Secretary of the City are hereby authOrized to execute and deliver such Agreement in connection with the delivery of the Certificates. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Certificates are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mai~ first dass postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principat of and premium, if any, on the Certificates shall be payable at the Stated Maturities or the redemption thereof only upon presentation and surrender of the Certificates to ~e Paying Agent/Registrar at its designated offices in Dallas, Texas (the "Designated Paymenvrransfer Office"). Interest on the Certificates shall be paid by the Paying AgenVRegistrar to the Holders whose name appears in the Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest payment date) and payment of such interest shall be (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or {ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Certifrcates shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the Designated Payment/Transfer 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 when banking institutions are authorized to dose: and payment on such date shaJI have the same force and effect as if made on the original date payment was due. 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") wm be established by the Paying Agent/ Registrar, if and when funds for the payment of SUCh interest have been received from the City. N~tice 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 (5) business days prior to the Special Record Date by United States MaK, first class postage prepaid, to the address of each Holder appearing on the Security Register at the dose of business on the last business next preceding the date of mailing of such notice. SECTION 4: Redemption. (al Optional Redemption. The Certificates having Stated Maturities on and after February 15, 2010, shat! be subject to redemption pnor to maturity, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof {and if within a Stated Maturity by lot ·by the Paying Agent/Registrar), on February 15, 2009 or on any date thereafter at the redemption price of par plus acaued interest to the date of redemption. 7•1832.l -3- ) ) (b) Exercise of Redemption Option. At least forty.five (45) days prior to a redemption date for the Certtfteates {unless a shorter notification period shall be satisfactory to the Paying AgenVRegistrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Certificates, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the City to exercise the right to redeem Certificates shaJI be entered in the minutes of the governing body of the City. (c) Selection of Certificates for RedemptiOn. If less than all Outstanding Certificates of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such Certificates as representing the number of Certificates Outstanding which is obtained by dividing the principal amount of such Certificates by $5,000 and shall select the Certificates, or principal amount thereof, to be redeemed within such Sta!ed Maturity by lot. (d) Notice of Redemption. Not less than thirty {30) days prior to a redemption date for the Certificates, a notice of redemption shall be sent by United States Mail. first dass postage prepaid, in the name of the City and at the City's expense, to each Holder of a Certificate to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given in:espective of whether received by the Holder. All notices of redemption shall (0 specify the date of redemption for the Certificates, (U) identify the Certificates to be redeemed and, in the case of a po,tion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iiO state the redemption price, (iv) state that the Certificates, or the portion of the principal amount thereof to be redeemed, shall become due and payable on ·u,e redemption date specified, and the interest thereon, or on the pQrtion of the principal amount thereof to be redeemed, shaJI cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Certificates, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Certificate is subject by its tenns to prior redemption and has been called for redemption and notice of redemption thereof has been duly given as hereinabove provided, such Certificate {or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue frOm and after the redemption date therefor; provided moneys sufficient for the payment of such Certificate (orof the principal amount thereof to~ redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. SECTION 5: Registration -Transfer -Exchange of Certificates-Predecessor Certificates. The Paying Agent/Registrar shall obtain, record, and maintain in the-Security Register the name and address of each and every owner of the Certificates issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Certificate may be transferred or exchanged for Certificates of other authorized de.nominations by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to the Paying Agent/Registrar for canc:enation, accompanied by a written instrument of transfer or 7•7831.l -4- ) ) ) '. -.... ;·_., request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender of any Certificate for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Certificates of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Certificate or Certificates surrendered for transfer. · At the option of the Holder, Certificates may be exchanged for other Certificates of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Certificates surrendered for exchange, upon surrender of the Certificates to be exchanged at the Designated Payment/Transfer Office of the Paying Agent/ Registrar. Whenever any Certificates are surrendered for exchange, ·the Paying Agent/Registrar shall register and deliver new Certificates to the Holder requesting the exchange. All Certificates issued in any transfer or exchange of Certificates shall be delivered to the Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and delivery thereof, the same shall be the valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Certificates surrendered in such transfer or exchange. All transfers or exchanges of Certificates pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Certificates canceled by reason of an exchang':l or transfer pursuant to the provisions hereof a~ hereby defined to be "Predecessor Certificates·,• evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Certificate or Certificates registered and delivered in the · exchange or transfer therefor. Additionally, the term "Predecessor Certificates• shall indude any mutilated, lost, destroyed, or stolen Certificate for which a replacement Certificate has been issued, ~egistered and delivered in lieu thereof pursuant to the pr:ovisions of Section 23 hereof and such new replacement Certificate shall be deemed to evidence the same obligation as the m~lated, lost, destroyed, or stolen Certificate. Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assignee of a Holder any Certificate called for redemption, in whole or in part, within _45 days of the date fixed for the redemption of such Certificate; provided, however, such limitation on t.ransferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Certificate called for redemption in part. 747832.l '- ) ) SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment and transfer/exchange of the Certificates, the City hereby approves and authorizes the use of "Book-Entry Only" securities clearance, setttement and transfer system provided by The Depository Trust Company (OTC), a limited purpose trust company organized under the laws of the State of New York, in accordance with the operational arrangements referenced. in the Blanket Issuer Letter of Representations by and between the City and OTC (the "Depository Agreement;. Pursuant to the Depository Agreement and the rules of OTC, the Certificates shall be deposited with OTC who shaft hold said Certificates for its participants (the "OTC Participants") and, while the Certificates are held by OTC under the Depository Agreement, the Holder of the Certificates on the Security Register for all purposes: including payment and notices, shall be Cede & Co., as nominee of OTC, notwithstanding the ownership of each actual purchaser or owner of each Certificate {the •Beneficial Owners") being recorded in the records of OTC and OTC Participants. In the event OTC determines to discontinue serving as securities depository for the Certificates or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the City detennines that OTC is incapable of property discharging its duties as securities depository for the Certificates, the City covenants and agrees with the Holders of the Certificates to cause Certificates to be printed in definitive form and provide for the Certificate certificates to be issued and delivered to OTC Participants and Beneficial Owners, as the case may be. Thereafter, the Certificates in definitive fonn shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Certificates shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution -Registration. The Certificates shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Certificate Dale shall be deemed to be duly executed on behalf of the City, notwithstanding that one or more of the individuals executing the same shall cease to be such officer at the time of delivery of the Certificates to the initial purchaser{s) and with respect to Certificates delivered in subsequent exchanges and transfers, all as authorized and provided in the Bond Procedures Act of 1981, as amended. No certificate shall be entitled to any right or benefit under this Ordina~. or be valid or obngatory ·for any purpose, unless there appears on such CertJfic:ate either a certificate of registration substantially in the form provided in Section 9C, manually executed by the Comptroll~rof Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in lhe form provided ·in Section 90, manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Certificate shall be condusive evidence, and the only evidenc;:e, that such Certificate has been duly certified, registered and delivered. 747832.1 -6- ) ) SECTIO~ 8:· Initial Certificate{s}. The Certificates herein authorized shall be initially issued either {i) as a single fully registered certificate in the total principal amount of $15,355,000 with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or (ii) as twenty (20) fully registered certificates, being one certificate for each year of maturity in the applicable principal amount and denomination and to be numbered . consecutivety from T-1 and upward (hereinafter called the "Initial Certificate(s)'1 and. in either case, the Initial Certificate(s) shall be registered in the name of the initial purehaser(s) or the designee thereof. The Initial Certificate(s) shall be the Certificates 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 initial purchaser(s). Any time after the delivery of the Initial Certificate(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser{s), or the designee thereof, shall cancel the Initial Certiflcate(s} delivered hereunder and exchange therefor definitive Certificates of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; au pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Regislrar may reasonably require. SECTION 9: Forms. A. Fonns Generapy. The Certificates, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the fonn of Assignment to be printed on each of the Certificates, shall be substanUalty in the forms set forth in this SectiOn with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (induding identifying numbers and letters of the Committee on Unifonn Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends in the event the Certificates. or any maturities thereof, .are purchased with ins~rance and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by the officers executing such Certificates as evidenced by their execution. Any portion of the text of any Certificates may be set forth on the reverse thereof. with an appropriate reference thereto on the face of the Certificate. The definitive Certificates and the Initial Certificate{s) shall be printed, lithographed, or engraved. typewritten. photocopied or otherwise reproduced in any other s;miJar manner, all as determined by the officers executing such Certificates as evidenced by their execution thereof. 7•7632.t -7- } ) B. Form·of Certificates. REGISTERED REGISTERED NO. $ __ UNITED ST ATES OF AMERICA STATE OF TEXAS CITY OF LUBBOCK. TEXAS. TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATE OF O8UGATION, Certificate Date; Janua,y 15, 1999 Registered OWner: Principal Amount Interest Rate: __ % SERIES 1999 Stated Maturity: CUSIPNO: DOLLARS The City of Lubbock (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Lubbock, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount stated above ( or so much thereof as shall not have been paid upon prior redemption) and to pay interest (computed on the basis of a 360-day year of twelve 3Q.day months) on the unpaid Principal Amount hereof from the Certificate Date at the per annum rate of interest specified above; such interest being payable on February 15 and August 15 of each year, commencing August 15, 1999. Principal of this Certificate is payable at its Stated Maturity or redemption to the registered owner hereof. upon presentation and surrender, at .the Designated Payment!Transfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon. or its successor. Interest is payable to the registered owner of this Certificate {or·one or more Predecessor Certificates, as defined in the Ordinance herein~fter referenced) whose name appears on the "Security Register'' maintained by .the Paying· AgenVRegistrar at the dose of business on the •Record Date", which is the last business day of the month next preceding each interest payment date and interest shaU be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Sea.arity Register on the Record Date or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. AH payments of principal of, premium, if any, and interest on this Certificate shaft be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for lhe payment of public and private debts. This Certificate is one of the series specified in its tiUe issued in the aggregate principal amount of $15,355,000 (herein referred to as the "Certificates") for the purpose of paying 7.(7832.l ) ) contractual obligatiOns to be incurred for {i) improvements and extensions to the City's Waterwor1<.s System, {iQ improvements and extensions to the City's Sewer System, and (iii) professional services rendered in connection with such projects and the financing thereof, under and in strict conformity with the Constitution and laws of the State of Texas, particularly V. T. C.A., Local Govemment Code, Subchapter C of Chapter 271, and pursuant to an Ordinance adopted by the governing body of the City (herein referred to as the "Ordinance''). The Ce~ificates maturing on and after February 15, 2010, may be redeemed prior to 1heir Stated Maturities, at the option of the City, in who1e or in part in principal amounts of $5,000 or any integral mulUple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on Februaty 15, 2009, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. At least thirty days prior to a redemption date, the City shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the registered owners of each Certificate to be redeemed at the address shown on the Security Register and subject to the tenns and provisions relating thereto contained in the Ordinance. If a Certificate (or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon the redemption date such Certificate (or the portion of Its principal sum to be redeemed) shall become due and payable, and, if moneys for the payment of the redemption price and the interest accrued on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar, interest shall cease to accrue and be payable from and after the redemption date on the principal amount redeemed. · In the event a portion of the principal amount of a Certificate is to be redeemed and the registered owner is someone other than Cede & Co., payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of such Certificate to the Designated Payment/Transfer Office of the Paying AgenVRegistrar, and a new Certificate or Certificates of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to the registered owner, without charge. If a Certificate is selected for redemption; in whote or in part, the City and the Paying Agent/Registrar shal not be required to transfer such Certificate to an assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance of a Certificate redeemed in part. The Certificates are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City and from a limited pledge of the Net Revenues (as defined in the Ordinance) of the City's WatelWOfks System (the •system'1, such pledge being limited to an amount not in excess of $500 and being junior and subordinate to the lien on and pledge of such Net Revenues securing the paymentof"Prior lien Obligations" (as defined in the Ordinance) now outstandsng and hereafter issued by the City. In the Ordinance, the City reserves and retains the right to issue Prior Uen Ob!igations without limitation as to principal amount but subject to any applicable tenns, conditions or restrictions under law or otherwise. 7•i'a32.l -9- ) ) Reference is· hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all the provisions of which the Holder hereof by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Certificates; the nature and extent of the limited pledge of the Net Revenues securing the payment of the Certifica~es; the terms and conditions relating to the transfer or exchange of this Certificate; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the tenns and provisions upon which the tax levy and the pledge of the Net Revenues and covenants made in the Ordinance may be discharged at or prior to the maturity of this Certificate, and this Certifacate deemed to be no longer Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized tenns used hereJn have the meanings assigned in the Ordinance. This Certificate, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent When a transfer on the Security Register occurs, one or more fully registered Certificates of authorized denominations and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of either, may treat the registered owner hereof whose name appears on the Security Register {i) on the Record Date as the own« entitled to payment of interest hereon, (ii) on the date of surrender of this Certificate as the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of 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 Oatej 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 (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid. to the address of eaeh Holder appearing on 1he Security Register at the close of business on 1he last business day next preceding the date of mailing of such notice. · ft is hereby certified, recited, represented and covenanted that the City is a body corporate and political subdivision duly organized and legany existing under and by virtue of the Constitution and laws of the State of Texas; ~t the issuance of the Certificates is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Certificates to render the same lawful and valid obligations of the City have been proper1y done, have happened and have been performed in regular and due time, fonn and manner as required by the Constitution and laws of the State of Texas, and the -10- Ordinance; that tbe Certificates do not exceed any constitutional or statuto,y limitation; and that due provision has been made for the payment of the principal of and interest on the Certificates as aforestated. In case any provision in this Certificate or any application thereof shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions and applications shall not in any way be affected or impaired thereby. The terms and provisions of this Certificate and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the City Council of the City has caused this Certiftcate to be duly executed under the official seal of the City as of the Certificate Date. COUNTERSIGNED: City Secretary (SEAL) 7•7832.l CITY OF LUBBOCK, TEXAS Mayor -11- ) ) ) ) C. • Form of Registration Certificate of Comptroller of Public Accounts to Appear on Initial Certificate(s} only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS § § § § THE STATE OF TEXAS REGISTER NO. ______ _ I HEREBY CERTIFY that this Certificate has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this _________ ~ (SEAL) Comptroller of Public Accounts of the State of Texas •NOTE TO PRINTER: Do not print on definitive Certificates D. Form of Certificate of Paving Agent/Registrarto Appear ~n Definitive Certificates. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Certificate has been duly issued and registered under the provisions of the within-mentioned Ordinance; the certificate or certificates of the above entiUed and designated series originally delivered having been approved by the Attorney General of the State o.f Texas and registered by the Comptroller of Public Accounts, as shown by the records o.f the Paying Agent/Registrar. The designated offices of the Paying Agent/Registrar.located in Dallas, Texas, is the "Designated PaymenVf ransfer Office" for this Certificate. · Registration Date: 7•7832.l CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as Paying Agent/Registrar By ______________ _ AuU,orized Signature -12- E. Form· of Assignment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of tran:Sferee:) ________ _ {Social Security or other identifying number. _______________ _ ___________ __, the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints _________________ _ attorney to transfer the within Certificate on the books kept for registration thereof. with full power of substitution in the premises. DATED: ________ _ Signature guaranteed: NOTICE: The signature on this assignment must correspond with the name of the registered owner as it appears on the face of the within Certifrcate in every particular. F. The Initial CertificateCs} shall be in the fonn set forth in paragraph B of this Section, except that the form of a single fully registered Initial Certificate shall be modified as follows: 0) imm_ediately under the name of the certificate the headings "Interest Rate __ " and "Stated Maturity " shall both be omitted; {iij paragraph one shall read c;ts follows: Registered Owner. Principal Amount Do/tars The City of LubbOck (hereinafter referred to as the "City"), a body co,porate and municipal corporation in the County of Lubbock. State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, the Principal Amount hereinabove stated, on February 15 in each of the years and in principal installments in accordance with the following schedule: 747832.t PRINCIPAL INSTALLMENTS INTEREST RATE (lnfonnation to be inserted from schedule in Section 2 hereof). -13- (or so much prtngpal thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid Principal Amount hereof from the Certificate Date at the per annum rates of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on February 15 and August 15 of each year, commencing August 15, 1999. Principal installments of this Certificate are payable in the year of maturity or on a prepayment date to the registered owner hereof by Chase Bank of Texas, National Association (the "Paying Agent/Registrar'1; upon presentation and surrender, at its designated offices in Dallas, Texas (the "Designated Payment/Transfer Office"). Interest is payable to the registered owner of thjs Certificate whose name appears on the "Security Registe(' maintained by the Paying Agent/Registrar at the dose of business on the "Record Date", which is the last business day of the month next preceding each interest payment date hereof and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Sea.arity Register or by such other method, acceptable to the Paying Agent/ Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or coUection charg~ to the owner hereof and in any coin or currency of the United States of. America which at the time of payment is legal tender for the payment of public and private debts. SECTION 10: Definitions. ForpurposesofthisOrdinance and for clarity with respect to the issuance of the Certificates, and the levy of taxes and appropriation• of Net Revenues therefor, the following words or terms, whenever the same appear herein without qualifying language, are defined to mean as follows: 7•7832.l (a) The term .. Certificates" shall mean $15,355,000 "CITY OF LUBBOCK, TEXAS, TAX AND W~ TERWORKS SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1999• authorized by this Ordinance. (b) The term "Certificate Fund" shall mean the special Fund created and established under the provisions of Section 11 of this Ordinance. (c) The tenn "Collection Date" shall mean, when reference Is being made to the levy and collection of annual ad valorem taxes, the date annual ad valorem taxes levied each year by the City become delinquent. (d) The tenn "Fiscal Yeaf" shall mean the annual financial accounting period used with respect to the operations of the System now ending on September 30th of each year; provided, however, the City Council may change, by ordinance duly passed, such annual financial accounting period to end on another date if such change is found and determined to be necessary for budgetary ~r other fiscal purposes. ( e) The term "Government Securities" shall mean direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionaUy guaranteed by the United States of Ametica, and the -14- D ) ) 7.(7852.1 United States Treaswy obligations such as its State and Local Government Series in book-ently form. (f) The tenn "Gross Revenues" shall mean all income, receipts and revenues of every nature derived or received from the operation and ovmership (excluding gifts and grant moneys, federal or state) of the System, including earnings and income derived from the investment or deposit of moneys in any special funds or accounts created and established for the payment and security of the Prior Lien Obligations and other obligations payable in whore or in part from and secured by a lien on and pledge of the Net Revenues. (g) The term •Net Revenues" shall mean the Gross Revenues of the System, with respect lo any period, after deducting the System's Operating and Maintenance Expenses during such period. (h) The term "Operating and Maintenance Expenses• shall mean all reasonable and necessary expenses directly related and attributable to the operation and maintenance of the System, including, but not limited to, the cost of insurance, the purchase and carrying of stores, materials, and supplies, the payment of salaries, labor and other expenses reasonably and proper1y charged, under generally accepted accounting principles, to the operation and maintenance of the System and those expenses required by statute (Article 1113, V.A.T.C.S. or other applicable statute) to be a first lien and charge against the Gross Revenues. Depreciation charges on equipment, machinery, plants and other facmties comprising the System and expenditures classed under generally accepted accounting principles as capital expenditures shaU not be considered as· "Operating and Maintenance Expenses" for purposes of determining "Net Revenues". (i) The term "Outstanding" when used in this Ordinance with respect to Certificates means, as of the date of detenninatlon, all Certificates theretofore issued and delivered under this Ordinance, except. (1) those Certiftcates canceled by the Paying Agent/Registrar ot delivered to the Paying Agent/Registrar for cancellation; · {2) those Certificates deemed to be duly paid by the . City in accordance with the provisions of Section 19 hereof; and (3) those Certificates that have been mutilated, destroyed, lost. or stolen and replacement Certificates have been registered and delivered in lieu thereof as provided in Section 23 hereof. ~15- ) O) The term "Prior Lien Obligations" shall mean all bonds or other obligations now outstanding and hereafter issued that are payabje in whole or in part from and secured by a lien on and pledge of the Net Revenues of the System and such lien and pledge securing the payment thereof is prior and superior in claim, rank and dignity to the lien and pledge of the Net Revenues securing the payment of the Certificates, including, but not limited to, the outstanding obligations of the following issues: (1) "City of Lubbock, Texas, Combination Tax and Waterworks System Subordinate Lien Revenue Certificates of Obligation, Series 1991", dated May 15, 1991, and originally issued in the principal amount of $16,120,000; (2) "City of Lubbock, Texas, Tax and Waterworks System (Limited Pledge) Revenue Certifrcates of Obligation, Series 1992•, dated August 15, 1992, and originally issued in the principal amount of $7,565,000; (3) ''City of Lubbock, Texas, Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 1993", dated October 1, 1993, and originally issued in the principal amount of $1,470,000; (4) "City of Lubboek, Texas, Tax and Wat8fWorks System (Limited Pledge) Revenue Certificates of Obligation, Series 1995", dated Decemb~r 15, 1995, and originally issued in the principal amount of $10,000,000; and (5) "City of Lubbock, Texas, Tax and Wate,works System (Limited Pledge) Revenue Certificates of Obligation, Series 1998", dated January 1, 1998, and originally issued in the principal amount of $10,260,000; and · {k) The term "System• shall mean the City's WatefWOrks System, being all properties, facilities, and plants currently owned, operated, and maintained by the City for the supply, treatment. and transmission of treated potable water, together with all future extensions, improvements, replacements and additions thereto. SECTtON 11: Certificate Fund. For the purpose of paying the interest on and to provide a sinking fund for the payment and retirement of the Certificates, there shall be and is hereby created a speciat Fund to be designated "SPECIAL 1999 CITY OF LUBBOCK. TEXAS, TAX AND WATERWORKS SYSTEM (LIMITED PLEDGE) REVENUE CERTIRCATE OF OBLIGATION FUND•, which Fund shaH be kept and maintained at the City's depository bank, and moneys deposited In said Fund shall be used for no other purpose. Proper officers of the City are hereby authorized and directed to cause to be transferred to the Paying Ag~t for the 7-0'832.l .16- ) ,. ) ) Certificates, from. funds on deposit in the Certificate Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Certificates as the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent for the Certificates at the dose of business on the last business day next preceding each interest and/or principal payment ·date for the Certificates. Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate Fund may, at the option of the City, be invested in obligations identified in, and in accordance with the provisions of the "Public Funds Investment Act" (V.T.C.A., Government Code, Chapter 2256) relating to the investment of "bond proceeds"; provided that all such investments shall be made in such a mannerthatthe money required to be expended from said Fund will be available at the proper time or times. All interest and income derived from deposits and investments in said Certificate Fund shall be credited to, and any losses debited to, the said Certificate Fund. All such investments shall be sold promptly when necessary to prevent any default in connection with the Certificates. SECTION 12: Tax Levy. To provide for the payment of the .. Debt Service Requirements• on the Certificates being (i} the interest on said Certificates and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the greater), there shall be and there is hereby leVied for the current year and each succeeding year thereafter while said Certificates or any interest thereon shall remain Outstanding, a sufficient tax on each one hundred dollars' valuation of taxable property in said City. adequate to pay such Debt Service Requirements, full allowance being made for delinquencies and costs of collection; said tax shall be assessed and collected each year and applied to the payment of the Debt Service Requirements, and the same shall not be diverted to ~ny other purpose. The taxes so levied and collected shall be Pt;lid into the Certificate Fund. The City Council hereby declares its purpose and intent to provide and levy a tax legally and fully sufficient to pay the said Debt Service . Requirements, 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 in consideration of all other outstanding indebtedness. Accrued interest and premium, if any, received from the purchasers of the Certificates shall be deposited to the Certificate Fund. In addition, any surplus proceeds from the sale of the Certificates not expended for authorized purposes shall be deposited in the Certificate Fund, and such amounts so deposited shall reduce the sums othelWise required to be deposited in said Fund from ad valorem taxes. · SECTION 13: Limited Pledge of Net Revenues. The City hereby covenants and agrees that, subject to the prior lien on and pledge of the Net Revenues of the System to the payment · and security of Prior lien Obugations, the Net Revenues of the System in an aggregate amount not to exceed $500 are hereby irrevocably pledged to the payment of the principal of and interest on the Certificates in accordance with the provisions of this Ordinance, and the limited pledge of $500 of the Net Revenues of the System herein made for the payment of the_ Certificates shall constitute a lien on the Net Revenues of the System in accordance with the terms and provisions hereof. Furthennore, such fien on and pledge of the Net Revenues securing the payment of the 7•7832..l D ) ) ) Certificates shall be valid and binding without further action by the City and without any filing or recording except for the filing of this Ordinance in the records of the City. SECTION 14: System Fund. The City hereby covenants aAd agrees that all Gross Revenues {excluding earnings from the investment of money held in any special funds or accounts created for the payment and security of Prior Li~n Obligations) shall be deposited from day to <;iay as collected into a ~city of Lubbock, Texas, Waterworks System Operating Fund" (hereinafter called "System Fundj which Fund shall be kept and maintained at an official depository bank of the City. All moneys deposited in the System Fund shall be pledged and appropriated to the extent required for the following purposes and in the order of priority shown, to wit First: To the payment of all necessary and reasonable Operating and Maintenance Expenses of the System as defined herein or required by statute to be a first charge on and claim against the Gross Revenues. Second: To the payment of the amounts required to be deposited in the special Funds created and established for the payment, security and benefit of Prior Lien Obligations in accordance with the terms and provisions of the ordinances authorizing the issuance of Prior Lien Obligations; and Third: To the payment of the limited amount pledged to the payment of the Certificates. Any Net Revenues remaining in the System Furid after satisfying the foregoing payments, or making adequate and sufficient provision for the payment thereof, may be appropriated and used for any other City purpose now or hereafter permitted by law. SECTION 15: Security of Funds. All moneys on ·deposit in the Funds for which this Ordinance makes provision ( except any portion thereof as may be at any time properly invested) shall be secured in the manner and to the fullest extent required by the laws of Texas for the security of public funds, and moneys on deposit in such Funds shall be used only for the· purposes permitted by this Ordinance. 7•7832.1 SECTION 1~: SpeciaJ Covenants. The City hereby further covenants as follows: (a} It has the lawful power to pledge the Net Revenues of the System supporting this issue of Certificates and has lawfully exercised said powers under the Constitution and laws of the State of Texas, including said power existing under Articles 1111 et seq., V.A.T.C.S. and V.T.C.A., Local Government Code, Subchapter C of Chapter 271. (b) Other than for the payment of the Prior Lien Obligations and the CertifJCates, the Net Revenues of the System have not in any manner been pledged to the payment of any debt or obligation of the City or of_ the System. -18- ) SECTION 17: Issuance of Prior Lien Obligations and Additional Certificates. The City hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without limitation as to principal amount but subject to any tenns, conditions Of' restrictions applicable thereto under law or otherwise. Additionally, the City reserves the right to issue obligations payable, in whole or in part, from the Net Revenues of the System and, to the extent provided, secured by a parity lien on and pledge of the Net Revenues of equal rank and dignity with the lien and pledge securing the payment of the Certificates. SECTION 18: Subordinate to Prior Lien Obligations Covenants and Agreements. It is the intention of this governing body and accordingly hereby recognized and stipulated that the provisions, agreements and covenants contained herein bearing upon the management and operations of the System and the administering and application of revenues derived from the operation thereof, shall to the extent possible be harmonized with Uke provisions, agreements and covenants contained in ordinances authorizing the issuance of PriOr Lien Obligations, and to the extent of any irreconcilable conflict between the provisions contained herein and in ordinances authorizing the issuance of Prior Lien Obligations, the provisions, agreements and covenants contained therein shall prevail to the extent of such conflict and be applicable to this Ordinance but in all respects subject to the priority of rights and benefits, if any, conferred thereby to the holders or owners of the Prior Lien ObtigatiOns. Notwithstanding the above, any change or modification affecting the apptication of revenues derived from Iha operation of the System shall not impair the ooligation of contrad with respect to the pledge of revenues herein made for the payment and security of the Certificates. SECTION 19: Satisfaction of Obligati"ons of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Certificates, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied and the lien on and pledge of the Net Revenues of the System under this Ordinance and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. · Certificates shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Certiftcates or the princip.al amount(s) thereof at maturity or (If notice of redemption has been duly given or waived or if inevocable arrangements therefor acceptable to the Payi"g Agent/Registrar have been made) the redemption date thereof, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar; or an authorized escrow agent, or ~i) Government Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized e·scrow agent. which Government Securities have been certified by an independent accounting firm to mature as to principal and Interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Certificates, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of_ redemption has been duly given or waived or if irrevocable arrangements therefor a~ptable to the . Pc;1ying Agent/Registrar have been made) the 1•7132.l -19- ..., .,, ) ' ) redemption date_ thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Certificates to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/ Registrar and all income from Government Securities held in trust by the Paying Agent/Registrar. or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Certificates, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Certificates and remaining unclaimed for a period of four (4) years after the maturity, or· applicable redemption date, of the Certificates for which such moneys were deposited and are hej<i in trust to pay, shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 20: Ordinance a Contract • Amendments. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Certificate remains Outstanding except as permitted in this Section. The City, may, without the consent of or notice to any Holders of the Certificates, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Hold~rs of the Certificates,· including the curing of any ambiguity, inconsistency, orfom,al defect or omission herein. In addition, the City may, with the written consent of Holders of the Certificates holding a majority in aggregate principal amount of the Certificates then Outstanding affected thereby, amend, add to, or. rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Certificates, no such amendment, addition, or rescission shall (1) extend the time or·times of payment of the principal of, premium, if any, and interest on the Certificates, reduce the principal amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify the tenns of payment of the principal of, premium, if any, or interest on the Certificates, (2) give any preference to any Certificate over any other-Certificate, or (3) reduce the aggregate principal amount of Certificates required to be held by Holders for consent to any such amendment, addition, or rescission. SECTION 21: Notices to Holders -Waivers. Wherever this Ordinance provides for notice to Holders ·or any event, such notice shall be sufflcientfy given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Serurity Register at the close of business on the business day next preceding the mailing of such notice. In any case where notice to Holders is given by mai~ neither the failure to mail such notice to any particular Holders, nor any defect in any notice. so mailed, shall affect the sufficiency.of such notice with respect to all other Certificates. 'Mlere this Ordinance provides for notice in any manner, such notice· may. be waived in writing by the Holder entitled to 7-47832..l .20- D ) receive such notic~. either before or after the event with resped to which such notice is given, and such waiver shall be the equivalent of such no6ce. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken In reliance upon such waiver. SECTION 22: Cancellation. Certificates surrendered forpaymen~ redemption, transfer, or exchange, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already canceled, shall be prompUy canceled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Certifacates previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Certificates so delivered shall be prompHy canceled by the Paying Agent/Registrar. AJI canceled Certificates held by the Paying Agent/Registrar shaQ be returned to the City. SECTION 23: Mutilated, Destroyed. Lost and Stolen Certifacates. In case any Certificate shall be mutilated, or destroyed, Jost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Certificate of like fonn and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Certificate, or in lieu of and in substitution for such destroyed, lost or stolen Certificate, only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfadory to the Paying Agent/Registrar of the destruction, loss or theft of such Certificate, and of the a~thenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfadory to hold the City and the Paying Agent/Registrar hannless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Certificate shall be borne by the Holder of the Certificate mutilated, or destroyed, lost or stolen. Every replacement Certificate issued pursuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Certificates; notwithstanding the enforceability of payment by anyone of the destroyed, lost or stolen Certificates. The provisions of this Section are exclusive and shall preclude {to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost, or stolen Certificates. SECTION 24: Covenants to Maintain Tax-Exempt Status. A. in this Section, the following terms have the following meanings: 741852.l ••CJosing Date• means the date on which the Certificates are first authenticated and delivered to the initial purchasers against payment therefor. ·code• means the Internal Revenue Code of 1988, as amended by all legisJation, if any, effective on or before the Closing Date. -21- ) ) ' ) ' ) ) nc_omputation Date• has the meaning set forth in Section 1. 148-1 (b) of the Regulations. •Gross Proceeds•means any proceeds as defined in Section 1.148-1(b) of the Regulations, and any replacement proceeds as defined in Section 1.148-1 (c) of the Regulations, of the Certificates. 0/nvestment" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired to carry out the governmental purposes of the Certificates. - ·Rebate Amount" has the meaning set fprth in Section 1.148-1(b) of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Certificates. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referericed. "Yield· ot (1) any Investment has the meaning set forth in Section 1.148-5 of the Regulations; and (2) the Certificates has the meaning set forth in Section 1.148-4 of the Regulations. 8. Not to Cause Interest to Become Taxable. The City shall not use. pennit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed direetfy.orindirectly with Gross Proceeds) in a manner which if made or omitted, respectively, wculd cause the interest on any Certificate to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the ge'neratity of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely ~ffect the exemption from federa income tax of the interest on any Certificate, .the City shall comply with each of the specific covenants in this Section. 7.(7832.1 -22- ... ) ) C. No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times 'prior to the last Stated Maturity of Certificates: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be fin~nced or refinanced directly or indirectly with Gross Proceeds of the Certificates, and not use or permit the use of such Gross Proceeds {induding all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Certificates or any property the acquisition, construction or improvement of Which Is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general appfication within the -City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. 0. · No Private Loan. Except to the extent pennitted by section 141 of the .Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Certificates to make or finance loans to any person or entity other than a state or local government For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or. entity if: (~) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction Which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to sudl person or entity under a take-or-pay, output or similar contract or arrangement; or (3) indired benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired1 constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. · . E. Not to Invest at Higher Yield. Except to the extent pennitted by section 148 of lhe Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Certificates directly or indirectly invest Gross Proceeds in any Investment (or use G~oss Proceeds to replace money so invested), if as a result of sueh investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously diSpOsed of, exceeds the Yield of the Certificates. F. Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shaft not take or omit to take any actiqn which would cause the Certificates to be federatty guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. 7•7832.l -23- ..., ., '. :• G. lnfonnation Report The City shall timely file the infonnation required by section 149(e) of the Code with the Secretary of the Treasury on Fonn 8038-0 or such other fonn and in such place as the Secretary may prescribe. H. Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder. 7•1832.l {1) The City shall account for all Gross Proceeds {including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Certificate is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Certificates with other money of the City, provided that the City separatefy accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. {2) Not less frequenUy than each Computation Date, the City shaU calculate the Rebate Amount in accordance with rules set forth in ~ection 148(f) of the Code and the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Certificates until six years after the final Computation Date. · (3) As additional consideration for the purchase of the Certificates by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludabiUty of the interest thereon from the gross income of the owners thereof tor federal income tax purposes, the City shall pay to the United States out of the Certificate Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Certificates equals {i) in the case of a Final Computation Date as defined in Section 1.14S.3(e}(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%} of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times,· in the installments, to the place and in the manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder. and shall be accompanied by Fonn 8038-T or such other fonn~ and infonnation as is or may be required by Section 148(f) of the Code and the Regulations and ruJings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), an~ if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in aH events within one hundred eighty (180} days after discovery of the error). induding payment to the United States -24- i) ,· of any addiijonal Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-3{h) of the Regulations. J. Not to Divert Arbitrage Profits. Except to the extent pennitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the ear1ier of-the Stated Maturity or final payment of the Certificates, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection H of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yiekl of the Certificates not been relevant to either party. J. Elections. The City hereby directs and authorizes the Mayor, City Secretary, City Manager, and First Assistant City Manager, individually or joinlly. to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Certificates, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document SECTION 25~ Sale of Certificates -Official Statement Approval. The Certificates authorized by this Ordinance are hereby sold by the City to Morgan Keegan & Company, Inc., Estrada Hinojosa & Company, Inc., NationsBanc Montgomery Securities LLC and Siebert B,-andford Shank & Co., LLC {herein collectively referred to as the "Purchasersj in accordance with the Purchase Contract, dated January 28, 1999, attached hereto as Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and directed to execute said Purchase Contract for and on behalf of the City and as the act and deed of this Council, and in regard to the approval and execution of the Purchase Contract, the Council hereby finds, determine~ and declares that the representations, warranties and agreements of the City contained therein are true and correct in all material respects and shall be honored and performed by the City. Furthermore, the use of the Official Statement by the Purchasers in connection with the public offering and sale of the Certificates is hereby ratified, confirmed and approved in all respects. The final Official Statement, which reflects the terms of sale, attached as Exhibit A to the Purchase Contract {together with such changes approved by the Mayor. City Manager, First Assistant to City Manager, Managing Director of Finance or City secretary, one or more of said officials), shall be and is hereby in all respects approved and the Purchasers are hereby authorized to use and distribute said final OffJCial Statement, dated January 28, 1999, in the r~ffering, sale and delivery of the Certificates to the public. The Mayor and City Secretary are further authorized .and directed to manually execute and deliver for and· on behalf of the City copies of said Official Statement in final fonn as may be required by the Purchasers, and such final Official Statement in the form and content manually executed by said officials shalJ be deemed to be approved by the City Council and consfitute the Official Statement authorized for distribution and use by the Purchasers. SECTION 26: Proceeds of Sale. The proceeds of safe of the Certificates, excluding the accrued interest and premium, if any, received from the Purchasers, shall be deposited in a construction fund maintained at the City's depository bank. Pending expenditure for authorized 7•7832.l -25- ) projects and purposes, such proceeds of sale may be invested in authorized investments and any investment earnings realized may be expended for such authorized projects and purposes or deposited in the Certificate Fund as shall be determined by the City Council. Accrued interest and premium, if any, received from the Purchasers as well as all surplus proceeds of sale of the Certificates, including investment earnings. remaining after completiOn of all authorized projects or purposes shall be deposited to the credit of the Certificate Fund. SECTION 27: Control and Custody of Certificates. The Mayor of the City shall be and is hereby authorized to take and have _charge of all necessary orders and records pending investigation by the Attorney· General of the State of Texas, induding the printing of the Certificates, and shall take and have charge and control of the Certificates pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers. Furthermore, the Mayor, City Secretary, City Manager, First Assistant City Manager, Managing Director of Finance, and Director of Financial SefVices, any one or more of said officials, are hereby authorized and directed to furnish and execute such documents and certifications relating to the City and the issuance of the Certificates, including a certification as to facts, estimates, circumstances and reasonable expectations pertaining to the use and expenditure and inves1ment of the proceeds of the Certificates as may be necessary for the approval of the Attorney General, registration by the Comptroller of Public Acxounts and delivery of the Certificates to the purchasers thereof and, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Certlficate(s) to the purchasers. SECTION 28: Legal Opinion. The obligation. of the Purchasers to accept delivery of the Certificates is subject to being furnished a final opinion of Fulbright & Jaworski LL. P., Attorneys, Dallas, Texas, approving such· Certificates a~ to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Certificates. A hue and correct reproduction of said opinion is hereby authorized to be printed on the definitive Certificates or an executed counterpart thereof shall accompany the global Certificates deposited with the Depository Trust Company. · SECTION 29: CUSIP Numbers. That CUSIP numbers may be printed or typed on the definitive Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Certificates shaU be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving said CeJtificates as to legality are to be held responsible for CUSJP numbers incorreetly printed or typed on the definitive Certificates. SECTION 30: Benefits of Ordinance. Nothing in this Ordinance, expressed· or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent/Registrar and the Holders, any right, remedy, or claim, lega or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its proVisions being intended to be and being for the sole and exdusive benefit of the City, the Paying Agent/Registrar and the Holders. 7-47832.l -26- D '.) ) ) ) SECTION.31: Inconsistent Provisions. All ordinances, Ofders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repeaJed to the extent of such conflict and the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. SECTION 32: Governing Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. . SECTION 33: 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 the City Council hereby declares that this Ordinance would have been enacted without such invalid provision. SECTION 34: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 35: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular. number shall be considered to indude the plurat, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 36: Continuing Disclosure Undertaking. (a) Definitions. As used in this Section, the following tenns have the meanings ascribed to such terms below: •MSRB" means the Municipal Securities Rulemaking Board. "NRMSJR' 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. "SIU means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. (b) Annual Reports. The City shall provi~e annualry to each NRMSIR and any SID, \\'.ithin six months after the end of each fiscal year (b~ginning with the fiscal year ending September 30, 1998) financial information and operating data with respect to the City of the general type induded in the final Official Statement approved by Section 25 of this Ordinance, being the information described in Exhibit C hereto. Financial statements 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 available 741852.l -27- D ) at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial information and operating data and will file the annual audit report, when and if the same becomes 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 provid~ financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document. if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. ( c) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timety manner, of any of the following events with respect to the Certificates, if such event is material within the meaning of the federal securities laws: 1. 2. 3. difftcultles; 4. 5. 6. Certificates; Principal and interest payment delinquencies; Non-payment related defaults; Unscheduled draws on debt service reserves reflecting finaricial Unscheduled draws on credit enhancements reflecting financial difficulties; Substitution of credit or liquidity providers, or lhelr failure to pertonn; Adverse tax opinions or events affecting the tax-exempt status of the 7. Modifications to rights of holders of the Certificates; 8. Certificate calls; 9. Defeasances; 10. Release, substitution, or saJe of property securing repayment of the Certificates; and 11. Rating changes. The City shalt notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information oro~rating data in ae(:Ordance with subsection (b) of this Section by the time required by such Section. (d) UmltatiOns. Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, the City remains an "obligated person• with respect to the Certificates within the meaning of the Rule, except that the City in any event wHI giVe the notice required by subsection (c) hereof of any Certificate calls and defeasance that cause the City to be no longer such an Nobfigated person." 7•11132.l -28- D ) ll)e provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or daim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby· undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Certificates at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT-OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the City in obse,ving or performing its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The P.tovisions of this Section may be amended by the City from time to time to · adapt to changed circumstances resulting from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sen Certificates in tt:ie primary offering of the Certificates 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 Certificates 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 Holders and beneflciaJ owners of the Certificates. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of frnal jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Certificates from lawfully purchasing or selling Certificates in such offering. If the City so amends lhe provisions of this Section, it shall inciude with any amended financial information or operating data next provided in accordance wilh subsection (b) an explanation, in narrative fonn, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. 747832.l -29- D '.) '.) ) ) SECTION 37: Public Meeting. It is officiaRy found, detennined, and declared that the meeting at which. this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by V. T. C.A., Government Code, Chapter 551, as amended. SECTION 38: Effective Date. This Ordinance shall take effect and be in force immediately from and after its passage on second and final reading, and IT IS SO ORDAINED. PASSED AND ADOPTED ON FIRST READING, January 14, 1999. PASSED AND ADOPTED ON SECOND AND FINAL READING, this the 28th day of January, 1999. CITY OF LUBBOCK. TEXAS ATTEST: (City Seal) 147832.1 -30- D ) .. ,· .. ·· EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT See Document Number 4 0 EXHIBIT B EXECUTED PURCHASE CONTRACT See Document Number 1 O j) 0 D ) • DESCRIPTION OF ANNUAL FINANCIAL INFORMATION ExhlbitC to Ordinance The following infonnation is referred to in Section 36 of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official Statement as Appendix B, but for the mo~ recently condude<tfiscal year. 2. The information contained in Tables 1 through 6 and 8A through 20 of the Official Statement. Accounting Principles The accounting principles referred to in such Section are the generally accepted accounting principles as applicable to governmental units as prescribed by The Government Accounting Stan~ards Board. 7-(7832.l 0 D 0 0 .~' ·. D J CERTIFICATE OF CITY SECRETARY THE STATE OF TEXAS COUNTY OF LUBBOCK CITY OF LUBBOCK § § § § § I, the undersigned, City Secretary of the City of Lubbock. Texas, DO HEREBY CERTIFY as follows: · 1. On the 25th day of March, 1999, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly con~ituted members of the Council being as follows: WINDY SITTON MAXINCE VICTOR HERNANDEZ T. J. PATTERSON DAVID NELSON ALEX "TY" COOKE MARC McDOUGAL ) ) ) ) ) ) MAYOR MAYOR PRO TEM COUNCILMEMBERS all of said persons were present at said meeting, except the following: _...M=ax--""ln..,_ce=----- --------------· Among other business considered at said meeting, the attached ordinance (the "Ordinance; entitled: "AN ORDINANCE authorizing the· issuance of 'Clfv. OF LUBBOCK, TEXAS, TAX AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBUGA TION. SERIE~ 1999'; SP.ecifying ~ tem:is and features of said certificates; providing for the payment of said certificates of obligation by -the levy of an ad valorem tax upon a.II taxable property within the City and a lien on and pledge of the net revenues from the operation of the City's . .Sewer System; and resolving other matters incident and related to the issuance, sale., security, payment an<i <1eHvery of sai<:$. certificates, including the approval of a Paying Agent/Registrar Agreement and tne-app_r~val·and distnbution of an Official Statement pertaining thereto; and providing an effective date." was introduced and submitted to the Council for first reading. After presentation and due consideration of the Ordinance, and upon a motion being made by T.J. Patterson and seconded by Victor Hernandez the Ordinance was a·pproved on first reading by the Council by the ~lowing·vote: 765993.l 0 D 6 voted "Fol" 0 voted "Against" ___ o __ abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 2. On the alh day of April, 1999, the City Council of the City of Lubbock, Texas, co.nvened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: WINDY SITTON MAX INCE VlCTOR HERNANDEZ T. J_ PATTERSON DAVID NELSON ALEX NTY" COOKE MARC McDOUGAL ) ) ) ) ) ) MAYOR MAYOR PRO TEM COUNCILMEMBERS all of said persons were present at said meeting, except the following: .....:..:.N=on,_,_e..._ ____ _ -----------------·· Among other business considered at said meeting, the Ordinance was submitted to the Council for second reading and final passage and adoption. After presentation and due consideration of the Ordinance, and upon a motiOn being made by T.J. Patterson and seconded by Marc McDougal · _______ _. the Ordinance was duly passed and adopted on second reading to be effective immediately by the following vote: 6 voted "Fol" 1 voted "Against" 1 abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 3. The attached Ordinance is a true and correct copy of the original on file in the of:flcial records of the City; the duly quatified and acting members of the City Council of said City on the date of the aforesa~ meetings are those persons sh'(?Wn.ab<:>Y.~-and, according to the · records of my office, advance notice of the time, place and purpose of each meeting was given to each member of the Council; and that said meetings and the deliberatiQn of the aforesaid public business were open to·the pubUcandwritten notice of.said meetings, including the subject of the above_ entitled Ordinance, was posted and given in advance .thereof in compliance with the provisions of V.T.C.A., Government Code, Chapter 551, as amended. 765993.t -2- D ') J ) ) IN WITNESS WHEREOF, I have hereunto signed my name officially and affoced the seal of said City, this the~ day of April, 1999. (City Seal) . -... . -: .-,. 765993.l -3- ORDINANCE NO. 10152 AN ORDINANCE authorizing the issuance of "CITY OF LUBBOCK, TEXAS, TAX AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 1999"; specifying the tenns.and features of said certificates; providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon all taxable property within the City and a lien on and pledge of lhe net revenues from the operation of the City's Sewer System; .an~ resolving other matters incident and related to the issuance, sale, security, payment and delivery of said certificates, including the approval of a Paying Agent/Registrar Agreement and the approval ·and distribution of an Official Statement pertaining thereto; and providing an effective date. WHER~S. notice of the City Council's intention to issue certificates of obligation in the · maximum principal amount of $6, 100,000 for the purpose of paying contractual obligations to be incurred for (i) improvements and extensions to the City's Sewer System, inciuding the purchase of land for the irrigation of effluent, and (ii) professional services rendered in connection with such project and the financing thereof, has been duly published in the Lubbock Avalanche-Journal, a newspaper hereby found and determined to be of general circulation in the City of Lubbock, Texas, on February 14, 1999 and February 21, 1999 the date of the first publication of such notice being not less than fifteen (15) days prior to the tentative date statect therein for the passage of this Ordinance; and WHEREAS. no petition, protesting the issuance of such certificates and bearing valid petition signatures of at least 5% of the qualified voters of the City, has been filed with the City Secretary, any member of the Council or any other official of the City on or prior to the date of the passage of this Ordinance: and WHEREAS, the Council hereby finds and detennines that all of the certificates of obligation descr.ibed in such notice should ne issued and sold at this time; now, therefore, . ·-. . BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LU°EIBOCK: SECTION 1: Authonzation-Desiqnation•Principal . Amount•Purpose. Certificates of obligation of !he City shaU be and are hereby authorized to be issued in the aggregate principal amount of $6,100,000 to be designated and bear the titfe "CITY OF LUBBOCK, TEXAS, TAX AND SEWER SYSTEM·SURPLUS REVENUE CERTIFICATES OF OBUGA TION, SERIES 1999,. (the "Certificatesj, for the purpos~ of paying con~ctual obligations to be incurred for (i) improvements and extensions to the City's Sewer System, including tHe ·purchase.of .l~d Jor--the irrigation of • · ·· effluent, and Oi) professional services rendered in connection with such project and the financing thereof. pursuant to authority conferred by and in conformity with the Constitution and laws of the State of Texas, induding V.T.C.A., LocaJ Government Code, Subchapter C of Chapter 271. ~ECTION 2: Fully Registered Obligations • . Authorized Denominations-Stated Maturities-Date. The Certificates are issuable in fully registered fonn only; shall be dated April 1, 1999 (the "Certificate Date") and shall be in denominations of $5,000 or any integral multiple thereof (within a Stated Maturity) and the Certificates· shall become due and payabte on 761862.1 ) February 15 in each of the years and in principal amounts (the "Stated Maturities'1 and bear interest at the per annum rate(s) in accordance with the foUowing schedule: Year of Principal Interest Stated Maturity Amount Rate 2000 $305,000 5.00% 2001 305,000 5.00% 2002 305,000 5.00% 2003 305,000 5.00% 2004 305,000 5.00% 2005 305,000 5.00% 2006 305,000 4.95% 2007 305,000 4.15% 2008 305,000 4.25% 2009 305,000 4.35% 2010 305,000 4.45% . 2011 305,000 4.55% 2012 305,000 4.65% 2013 305,000 4.70% 2014 305,000 4.75% 2015. 305,000 4.80% 2016 305,000 4.90% 2017 305,000 5.00% 2018 305,000 5.00% 2019 305,000 5.00% The Certificates shall bear interest on the unpaid principal amounts from the Certificate Date at the per annum rate(s) shown above in this Section (calculated on the basis of a 360-day year of twelve 30-day months). Interest on the Certificates shall be payable on February 15 and August 15 in each year, commencing February 15, 2000 .. _ SECTION 3: Terms of Payment-Paying Agent/Registrar. The principal of, premium, if any, and th~ interest on the C~rtificate~. due and payable by reasqn of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Certificates (hereinafter called the "Holders•) appearing on the registration and transfer books maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of_America, which at ttie time of payment is legal tender for the payment of public and private debts, a·nd shall be without exchang~ or colle~on _charg~~ ~ ~-~olders. . . . The selection and appointment of Chase Bank of Texas, National Association to serve as Paying Agent/Registrar for the Certificates is hereby approved and confirmed. Books and records reJating to the regiStration, payment, exchange and transfer of the Certificates (the "Security Register'1 shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, all as provided herein, in accordance with the tenns and provisions of a "Paying Agent/Registrar Agreemenr, substantially in the form attached hereto as Exhibit A and such · 761852.l -2- '") j .. !, :,: "') '.) ) ·,:· .. l reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City Secretary of the City are hereby authortzed to exerute and deliver such Agreement in connection with the delivery of the Certificates. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Certificates are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perfonn the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. _ Principal of and premium, if any, on the Certificates shall be payable at the Stated Maturities or the redemption thereof onty upon presentation and surrender of the Certificates to the Paying Agent/Registrar at its designated offices in Dallas, Texas (the "Designated Payment/Transfer Office•). Interest on the Certificates shall be paid by the Paying Agent/Registrar to the Hotders whose name appears in the Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest payment date) and payment of such interest shall be (i) by check sent United States Mail, first ciass postage prepaid, to the address of the Holder recorded in the Seairity Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Certiftcates shall be a Saturday, Sunday, a legal hotiday. or a day when banking institutions in· the City where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to dose, then the date for such payment shalt be the next succeeding day which is not suctt a Saturday. Sunday, legal hoRday, or day when 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. 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 uSpecial Record Date'1 will" be established by the Paying Agent/ Registrar. if and when filnds for the payment of such interest have been received from the City. Notice of the Special Record·'Oaie 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 ~ve (5).business. days prior to the Spe~I ~acord Date by United States Mail, first clas.s postage prepaid, to the address of each Holder appearing on .the Security Register at the dose of business on the last business next preceding the date of mailing of such notice. SECTION 4: Redemption. {a) Optional Redemption. "ThE,. Certificates having Stated Maturities on and after February 15, 2010, shall" be subject to redemption ·prior·toJnatunty, at the · · · ·•· ~ption of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2009 or on any date thereafter at the redemption price of par plus accrued interest to the date of-redemption. · 761862.l -3- J ) ') ") ) {b) Exercise of Redemption Option. At least forty-five (45) days prior to a redemption date for the Certificates (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Certificates, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the City to exercise the right to redeem Certificates shall be entered in the minutes of the governing body of the City. (c) Selection of Certificates for Redemption. If less than all Outstanding Certificates of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such Certificates as representing the number of Certificates Outstanding which is obtained by dividing the principal amount of such Certificates by $5,000 and shall select the -Certificates,. or principal amount thereof, to be redeemed within such Stated Maturity by lot. (d) Notice of Redemption. Not Jess than thirty (30) days prior to a redemption date for the Certificates, a notice of redemption shall be sent by United States Mail, first class postage prepaid, ·in the name of the City and at the City's expense, to each Holder of a Certific;ate to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. All notices of redemption shall (i) specify the date of redemption for the Certificates, (iQ identify the Certificates to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption pfiee, (iv) state that the Certificates, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion 9f the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Certificates, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. 1f a Certificate is subject by its terms to prior redemption ang ha{i. been called for redemption and notice of redemption thereof has been 'duly given as hereinabove provided, such Certificate (or · the principal amount thereof to be redeemed) shall become due and payabl~ and interest thereon shall cease to acaue from an~ after the. redemptiqn dat~ therefor, provided moneys sufficient for the payment of such Certificate (orof the· principal amount thereof to be redeemed) at the then applicable redemption price are held for the p~rpose of such payment by the Paying Agent/Registrar.. · SECTION s·: · Registration -Transfer -• Exchange of Certificates-Predecessor Certificates. The Paying Agent/Registrar shalr obtain, record, and ·rria(ntain ir_:1_-tt,e Security Register the name and address of each and every owner of the Certificates issued under and pursuant to the provisions of this Ordinance, or if c1ppropriate, the nominee thereof. Any . Certificate may be transferred or exchanged for Certificates of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to 761852.l -4- ') n .;.;t ') ... the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent. in form satisfactory to the Paying Agent/Re9istrar. Upon surrender of any Certificate for transfer at the Designated PaymenVf ransfer Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees. one or more new Certificates of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Certificate or Certificates surrendered for transfer. At the option of the Holder, Certificates may be exchanged for other Certificates of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Certificates surrendered for exchange, upon surrender of the Certificates to be exchanged at the Designated PaymenVTransfer Office · of the Paying Agent/ Registrar. Whenever any Certificates are surrendered for exchange, the ,· .. _,-:. Paying Agent/Registrar shall register and deliver new Certificates to the Holder requesting the exchange. All Certificates issued in any transfer or exchange of Certificates shall be delivered to the Holders. at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and . delivery thereof, the same shall be the. valid qbligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Certificates surrendered in such transfer or exchange. All transfers or exchanges of Certificates pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or _ exchange of any tax or other governmental charges required to be paid with respect to such transf~r or exchange. ·-. Certificates canceled by reason of an exchange or transfer'purauant to the provisions hereof are hereby defined to b~ "Predecessor Certificates," evidencing all or a portion, as the case niay be, of the same obligation to pay evidenced by the n~ Certificate or Certificates registered and delivered in the exchange or transfer therefor. Additionally, the tenn "Predecessor"Certificates• shall include any mutilated, lost. destroyed, or stolen Certificate for which a replacement Certificate has been issued, registered and delivered in lieu thereof pursuant to the proyjsions of Section 23 hereof and such new replacement Certificate shall be deemed to evidence the ·same obligation as the !:flUtilated, lost, destroyed_, or stolen Certificate. ~~ T -=-~-r; .. Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assignee of a Holder any Certificate called for redemption, in whole or in part. within 45 days of the date fixed for the redemption of such Certificate; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Certificate called tor redemption in part 761852.l ~5- 0 0 0 ? SECTION 6: Book~Entry Only Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment and transfer/exchange of the Certificates, the City hereby approves and authorizes the use of •eook-Entry Only'' securities clearance, settlement and transfer system provided by The Depository Trust Company (DTC), a limited purpose trust company organized under the laws of the State of New York, in accordance with the operational arrangements referenced in the Blanket Issuer Letter of Representations by and between the City and OTC {the "Depository Agreementj. Pursuant to the Depository Agreement and the rules of OTC, the Certificates shall be deposited with DTC who shall hold said Certificates for its participants (the "OTC ·Participants'1 and, while the Certificates are held by OTC under the Depository Agreement. the Holder of the Certificates on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Gertificate (the "Beneficial Owners.,} being recorded in the records of OTC and OTC Participants. In the event DTC detennines to discontinue serving· as securities depository for the Certificates or otherwise ceases to provide book-entry ctearance and settlement of securities transactions in general or the City determines that DTC is incapable of property discharging its duties as securities depository for the Certificates, the City covenants and agrees with the Holders of the Certificates to cause Certificates to be printed in definitive fonn and provide for . the Certificate certificates to be issued and delivered to OTC Participants and Beneficial Owners, as the case may be. Thereafter, the Certificates in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of sueh Certificates shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution -Registration. The Certificates shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile signatures of iAdividuijls who are or were the proper officers of the City on the Certificate Date shaii be deemed to be'dul:fexecated on behalf of the City, notwithstanding that one or more of the individuals executing the same shall cease to be such officer at the time of delivery of the Certificates to the initial pµrchaser(s) and with respect to Certificates delivered in subsequent exchanges arid transfers, all as authorized and provided in the Bond Pfocedures Act of 1981, as amended. . · No Certificate. shall be entitled to any right or t;>enefit under this Ordinan~. or be valid or obligatory .for any purpose, unless there appe.i;)rs ·on such Gertifioate ~ither a certificate of registration substantially in the fonn provided in .Section 9C, manualfy--executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in the fonn provjded in Section-9D, manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either sueh certificate duly signed upon any Certificate shall be conclusive evidence, and the only ev{dence, that such Certificate has been duly certified, registered and delivered. 761852.1 -6- 0 ') '") '.) : ) SECTION 8: Initial Certificate(s}. The Certificates herein authorized shall be initially issued either 0) as a single fully registered certificate in the total principal amount of $6,100,000 with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or (ii) as multiple fully registered certificates, being one certificate for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Certificate{s)") and, in either case, the Initial Certificate(s} shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Certificate(s) shall be the Certificates 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 initial purchaser(s). Any time after the delivery of the Initial Certificate(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Certificate(s) delivered hereunder and exchange therefor definitive Certificates of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 9: Forms. A. Forms Generally. The Certificates, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying _ Agent/Registrar, and the form of Assignment to be printed on each of the Certificates. shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification Qncfuding identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements {induding insurance legends in the event the Certificates, or any maturities thereof, are purchased with insurance and any repro_duction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or detennined by the officers executing such Certificates as evidenced by their execution. Any portion of the text of any Certificates may be set forth on the.rev~rse thereof, with an appropriate reference thereto on the face of the Certificate. .,· "The-definitive Certificates and the lnttial Certificate(s) shall. be printed, lithographed, or engraved, typewritten, photocopied or otherwise rep"roduced in any other similar manner, all as detennined by the officers executing such Certificates as evidenced by their execution thereof. ... • -: -.-r: 761852.1 -7- 0 B. Fonn of Certificates. REGISTERED REGlSTERED NO. $ __ Certificate Date: April 1, 1999 Registered Owner. Principal Amount UNITED STATES OF AMERICA STA TE OF TEXAS CITY OF LUBBOCK, TEXAS, TAX ANO SEWER SYSTEM SURPLUS REVENUE CERTIFICATE OF OBLIGATION, • SERIES 1999 Interest Rate: __ % Stated Maturity: CUSIP NO: OOll.ARS The City of Lubbock (hereinafter referred to as the "City•). a body co_rporate and· municipal corporation in the County of Lubbock, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount stated above (or so much thereof as shall not have been paid upon prior redemption) and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid Principal Amount hereof from the Certificate Date at the per annum rate of interest specified above; such interest being payable on February 15 and August 15 of each year, commencing February 15, 2000. Principal of this Certificate Is payable at !ts Stated MatuQty or redemption to the registered owner hereof, upon presentation and surrender, at the Designated Payment/Transf.er O_ffice _of th~ paying Agent/Regisfr.!r executing the registration certificate appealing hereon; or its successor; provided, however, ·wnile this Certificate is registered to Cede & Co., the payment of principal upon a partial redemption of the principal amount hereof may be accompJjshed-without pre~entation and surrender of this CertifK:ate. Interest is payable to the registered owner of this Certiftcate (or one or more Predecessor Certificates, as ~efined in the Ordinance hereinafter referenced) whose name appears on the "Security Registe..-maintained by the Paying Agent/Registrar at the close of business on the "Record Date'•', which is ~e last business dayot_the month next preceding each interest payment date and interest shall be paid by the Paying· Agent/Registrar by cheq<. ~t Ynited States Mail, first class postage p~paid, to the address of the registered owner recorded in the Security Register on the Record Date or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. 761352.l -8- o· This Certificate is one of the series specified in its title issued in the aggregate principal amount of $6,100,000 (herein referred to as the "Certificates") for the purpose of paying contractual obligations to be incurred for (i) improvements and extensions to the City's Sewer System, induding the purchase of land for the irrigation of effluent, and (ii) professional services rendered in connection with such project and the financing thereof, under and in strict confonnity with the Constitution and laws of the State of Texas, particularly V.T.C.A., Local Government Code, Subchapter C of Chapter 271, and pursuant to an Ordinance adopted by the governing body of the City (herein referred to as the "Ordinance•). The Certificates maturing on and after February 15, 2010, may be redeemed prior to their Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2009, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. · At least thirty days prior to a redemption date, the City shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the registered owners of each Certificate to be redeemed at the address sh<>wn on the Security Register and subject to the terms and provisions relating thereto contained in the Ordinance. If a Certificate {or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon the redemption date such Cert,ificate (or the portion of its_ principal sum to be redeemed) shall become due and payab~e, and, if moneys for the payment of the redemption price and the interest accrued on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar, interest shall cease to accrue and be payable from and after the redemption date on the principal amount redeemed. In the event a portion of the principal amount of a Certificate is to be redeemed and the registered owner is someone other than Cede & Co., payment of the redemption price of such principal amount shall be made t9 the registered owner only upon presentation and surrender of such Certificate to the Designated PaymenVTransferO(flce <;>f the Paying Agent/Registrar, and a new Certificate or Certificates of like maturity and interest rate in any aulhorized denominations provided by .the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to the registered owner, with~ charge .. If a Certificate js seleded for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such Certificate toiln assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shaH not be applicable to an exchange by the registere<;t owner of the unredeemed balance of a Certificate redeemed in part. ... . . . ~ ' . .. The Certificates are payable from the proceeds of an·ad vaJorem=fax·fe~ied,"within the ·· limitatio·ns prescribed by law, upon· all taxable property in the City and, together with the Previously Issued Obligations (as defined in the Ordinance), are additionally payable from and secured by a lien on.and pledge of the Net Revenues (as defined in the Ordinance) of-the City's Sewer System (the •system;, such Hen and pledge, however, being junior and subordinate to the fien on and pledge of the Net Revenues of the System securing the payment of "Prior Lien Obligations" (as defined in the Ordinance) hereafter issued by Ole City. In the Ordinance, the 7611152.1 -9- .. .-! ... 0 City reserves and retains the right to issue Prior Lien Obligations while the Certificates are outstanding without limitation as to principal amount but subject to any terms, conditions or restrictions as may be applicable thereto under law or otherwise, as well as the right to issue Additional Obligations {as defined in the Ordinance). Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all the provisions of which the Holder hereof by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and exten~ of the tax levied for the payment of the Certificates; the nature and extent of the limited pledge of the Net Revenues securing the payment of the Certificates; the tenns and conditions relating to the transfer or exchange of this Certificate; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying AgenVRegistrar. the tenns and provisions upon which the tax levy and the pledge of the Net Revenues and covenants made in the Ordinance may be discharged at or prior to the maturity of this Certificate, and this Certificate deemed to be no longer Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized tenns used herein have the meanings assigned in the Ordinance. This Certificate. subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated . Paymenvrransfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in fonn satisf acto,y to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more fully registered Certificates of authorized denominations and of the same aggregate principal amount will ·be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of ·either, may treat the registered owner hereof whose na,ne appears on the Security Register (i) on the Record Date as the·owner entitled to payment of interest hereon, (ii) on the d~~e of surrender of this Certificate as the owner entitled to payment-of principal ·hereof at its Stated Maturity-or its redemption, in whole or in part, and (Hi) on any other date as the owner for all other purposes, and neither the City nor the Paying Agenf/R~istrar, o~ any agen.t of either, shall.be affected by notice to the contrary. In the event of 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 recejyed from the City. Notice of the Special Record Date and of the scheduled payment date.· of the· past due .interest (which shall ·oe .15. days aftec. the Special Record Date) shall be sent at least five (5) business days prior to the Special Record 0ate1>y~Unlted States M.ail, first cf ass postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding.the date of mailing of such notice. It is hereby certified, recited, represented. and covenanted that the yity is a body corporate and political subdivision duly organized and legally existing under and by virtue of the 761862.l -10- 0 !', .•• 0 D ') ) Constitution and laws of the State of Texas; that the issuance of the Certificates is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Certificates to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, fonn and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Certificates do not exceed any constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Certificates as aforestated. In case any provision in this Certificate or any application thereof shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions and applications shall not in any way be affected or impaired thereby. The terms and provisions of this Certificate and the Ordinance shall be construed in accordance wilh and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the City Council•of the City has caused this Certificate to be duly executed under the official seal of the City as of the Certificate Date. COUNTERSIGNED: City Secretary (SEAL) CITY OF LUBBOCK, TEXAS Mayor C. • Form of Registration Certificate of Comptroller of Public Accounts to Appear on Initial ·· Certificatef s) only. ,_ . REGISTRATION C!,=.RTIFICATE OF COMPTROLJ_ER OF PUBLIC ACCOU,rfS OFFICE OF THE COMPTROLLER OF PUBLIC AGCOUNTS THE STATE OF TEXAS § § § §" REGISTER NO. ______ _ .. . . -: --... : . I HEREBY CERTIFY that this Certificate has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the ComptroUer of Public Accounts of the State of Texas. WITNESS my signature and seal of office this_· _________ _ 761852.1 -11- 0 0 (SEAL) Comptroller of Public Accounts of the State of Texas •NOTE TO PRINTER: Do not print on definitive Certificates D. Form of Certificate of Paying Agent/Registrar to Appear on Definitive Certificates. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Certificate has been duly issued and registered under the provisions of the within-mentioned Ordinance; the certificate or certificates of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The designated offices of the Paying Agent/Registrar located in Dallas, Texas, is the "Designated PaymenVTransfer Office" for this Certificate. CHASE BANK OF TEXAS, NATIONAL AS SOCIA llON, as Paying Agent/Registrar Registration Date: By ______________ _ Authorized Signature ·-... 761852.1' -12- 0 0 ,, - ' ) E. Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee:) _________ _ (Social Security or other identifying number: _______________ _ --------------J the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints __________________ _ attorney to transfer the within Certificate on the books kept for registration thereof, with full power of substitution in the premises. DATED: ________ _ Signature guaranteed: NOTICE: The signature on this assignment must correspond with the name of the registered owner as it appears on the face of the within Certificate in every particular. F. The Initial Certificate(s} shall be in the form set forth in paragraph 8 of this Section. except that the form of a single fully registered Initial Certificate shaJI be modified ~~~= , - (i) immediately under the name of the certificate the headings "Interest Rate __ .. and "Stated Maturity ___ " shaH both be omitted; ~ij paragraph one shall read ~ follows: Registered Owner: Principal A_mount Dollars The City of Lubbock (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Lubbock, state of Texas, for value receivf;!d, acknowledges itself. indebted to and hereby promises to pay to the Registered Owner named above, or the Jegistered assigns thereof,. the Principal Amount hereinabove stated, on February 15 in each of the years and in principal installments in acoordaJ_"te&wi~-the·folfowing schedule: 761852.l PRINCIPAL INSTALLMENTS INTEREST · RATE (Information to be inserted from schedule in Section 2 hereof). -13- 0 0 I ••. D (or so much principal thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid Principal Amount hereof from the Certificate Date at the per annum rates of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on February 15 and August 15 of each year, commencing February 15, 2000. Principal installments of this Certificate are payable in the year of maturity or on a prepayment date to the registered owner hereof by Chase Bank of Texas, National Association (the •paying Agent/Registrat1, upon presentation and surrender, at its designated offices in · Dallas, Texas (the "Designated PaymenVTransferOfficej. Interest is payable to the registered owner of this Certificate whose name appears on the "Security Register' maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date hereof and interest shalt be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/ Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 1 O: Definitions. For purposes of this Ordinance and for clarity with respect to the issuance of the Certificates, and the levy of taxes and appropriation of Net Revenues _ therefor, the following words or tenns, whenever the same appear herein without qualifying language, are defined to mean as follows: 761852.l (a) The term •Additional Obligations" shall mean tax and revenue obligations hereafter issued which by their terms are payable from ad valorem taxes and additionally payable from and secured by a parity tien on and pledge of the Net Rev~nues of the System of equal rank and dignity with the lien and pledge securing the payment of the Previously Issued Obligations and the Certificates. (b) The term · "Certificafe-s" shall mean $6, 100,eoo "CITY OF LUBBOCK. TEXAS, TAX AND SEWER SYSTEM SURPLUS PLEDGE) · REVENUE CERTIFICATES OF.OBUGA TJON, SERIES 1~99" authorized by this Ordinance. · · (c) . The tenn "certificate Fund" shall mean the special Fund created and e~~bli~~d _ ~nder the provisions of S~tion 11 or thi~ Ordinance . .. (d) The term "Collection Date" shall mean, ·when refereitte is.·beiiig made to the levy and collection of annual ad valorem taxes, the date annual ad valorem taxes levied each year by the City become delinquent (e) The term "Fiscal Year'' shall mean the annual financial accounting period used with respect to the operations of the System now ending on September 30th of each year; provided, however, the City Council may change, -14- C 0 !· · .. · 0 0 761852.l ) by ordinance duly passed, such annual financial accounting period to end on another date if such change is found and determined to be necessary for budgetary or other fiscal purposes. (f) The term ·Government Securities" shall mean direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, and the United States Treasury obligations sueh as its State and Local Government Series in book-entry form. (g) · The term "Gross Revenues" shall mean, with respect to any period, aJI income, revenues and receipts received from the operation and ownership of the System. (h) Toe tenn "Net Revenues" shall mean the Gross Revenues of the System, with respect to any period, after deducting the System's Operating and Maintenance Expenses during such period. 0) The term "Operating and Maintenance Expenses" shall mean all reasonable and necessary expenses directly related and attributable to the operation and maintenance of the System, induding, but not limited to, the cost of insurance, the purchase and carrying of stores, materials, and supplies, the payment of salaries and labor, and other expenses reasonably and properly charged, under generally accepted accounting principles, to the operation and maintenance of the System. Depreciation charges on equipment, machinery, plants and other facilities comprising the System and expenditures classed under generally accepted accounting principles as capital expenditures shall not be considered as "Operating and Maintenance Expenses" for purposes of determining •Net Revenues". {j) The term "Outstanding" when usedjn tl)is Ordinance with respect to Certificates means, as of the date ·or detennination, aH Cettificates theretofore issued and delivered under this Ordinance, except: (1) those Certificates canceled by· the Paying -Agent/Registrar or delivered to the Paying Agent/Registrar for ~ncellation; (2) . . those Certificates deemed .to be duly. paid by the City in accordance with the provisions of Section 19 liereof;1fn<f'. (3) those Certificates thaJ have been mutilated, destroyed, lost, or stolen and replacement Certificates have been registered and delivered in lieu thereof as provided in Section 23 hereof. -15- . -. . .. 0 :··., ,. 0 ) ) (k) The tern, "Previously Issued Obligations· shall mean the outstanding (i) NCity of Lubbock, Texas, Combination Tax and Sewer System Subordinate Lien Revenue Refunding Bonds, Series 1988," Oi) "City of Lubbock, Texas, Combination Tax and Sewer System Subordinate Lien Revenue Certificates of Obligation, Series 1991," (iii) "City of Lubbock. Texas, Combination Tax and Sewer System Subordinate Lien Revenue Certificates of Obligation, Series 1992", and (iv) "City of Lubbock, Texas, Combination Tax and Sewer System Subordinate Lien Revenue Certificates of Obligation, Series 1993". (I) The term "Prior Lien ObligatiOns" shall mean all bonds or other similar obligations hereafter issued that are payable in whole or in part from and secured by a lien on and pledge of the Net Revenues of the System and such Den · and pledge securing the payment thereof is prior and superior in claim,• rank and dignity to the lien and P.ledge of the Net Revenues securing the payment of the Certificates. (m) The term "Similarly Secured Obligations" shall mean collectively the Certificates, the Previously lssueq Obligations, and any Additional Obligations, (n) The term "System" shall mean the City's sanitary sewer system, being all sanitary sewage collection system, effluent treatment and disposal facilities and/or other works and equipment SECTION 11: Certificate Fund. For the purpose of paying the interest on and to provide- a sinking fund for the payment and retirement of the Certificates, there shall be and is hereby created a special Fund to be designated "SPECIAL 1999 CITY OF LUBBOCK, TEXAS, TAX AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATE OF OBLIGATION FUND", which Fund shall be kept and maintaine~ at ~e City'.s depository-bank, an~. moneys deposited in said Fu~ shall be used for no other purpose. Proper officers of the City' are--hereby authorized and direct~ to cause to be transferred to the Paying Agent for the Certificates, from funds on deposit in the Certificate Fund, amounts sufficient to fully. pay and discharge promptly each installment of interest and principal of the Certificates as the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause immediately available fl,Jnds to be deposited with the Paying Agent for the Certificates at the close of business_ 9n the last business d~y next preceding-each interest and/or principal payment date for the Certificates. · Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate Fund may, at the option of the City, be invested in obligations idei;rtified in, and in accordance with the provisions of the "PubUc Funds Investment Act'' (V.T.C.A., Government Code, Chapter 2256) relating to the investment of "bond proceeds"; provided that all such investments shall be made in such a manner that the money required to be expended from said Fund will be available at the proper time or times. All interest and income derived from deposits and investments in 761852.l -16- 0 0 '.) said Certificate Fund shall be credited to, and any losses debited to, the said Certificate Fund. All such investments shall be sold promptly when necessary to prevent any default in connection with the Certificates. SECTION 11: Tax Levy. That to provide for the payment of the "Debt Service Requirements" on the Certificates being (i) the interest on said Certificates and (iij a sinking-fund for their redemption at maturity or a sinking fund of 2% {whichever amount shall be the greater), there shall be and there is hereby levied for the current year and each succeeding year thereafter while said Certificates or any interest thereon shall remain Outstanding, a sufficient tax on each one hundred dollars' valuation of taxable property in said City, adequate to pay such Debt Service Requirements, full allowance being made for delinquencies and costs of collection; said tax shall be assessed and collected each year and applied to the payment of the Debt Service Requirements, and the same shall not be diverted to any other purpose. The taxes so levied and collected shall be deposited into the Certificate Fund. This governing body hereby declares its purpose and intent to provide and levy a tax legally and fully sufficient to pay the said Debt Service Requirements, it having been determined that the existing and available taxing authority of the City for such purpose is adequate to pennit a legally sufficient tax in consideration of all other outstanding indebtedness. The amount of taxes to be provided annually for the payment of the principal of and interest on the Certificates herein authorized to be issued shall be detennined and accomplished _ in the foJlowing manner: · (a) Prior to the date the City Council establishes the annual tax rate and passes an ordinance levying ad valorem taxes each year, the City Council shall deten1'.line: 761852J (1) The amount on deposit in the Certificate Fund after (a} deducting therefrom the total amount of Debt Service Requirements to become due on Certificates prior to the Collection Date for the ad valorem taxes to be levied and {b) adding thereto the amount of Net Rev_enues of the System appropriated and allocated to pay such Debt Service Requirements ·pnorto the Collection Date for the ad valorem taxes to be levied. · (2) The amount of Net Revenues if any, appropriated and to be set aside for the payment of the Debt Service Requirements on the Certificates between the Collection Date for ,,the taxes. ~en to be levied and ttle C.ollection Date for the taxes to be levied during the next succe,eding calendijr year. _ _ n • ':' •-'• (3) The amount of Debt Service Requirements to become• due and payable on the Certificates between the Collection Date for the taxes then to be levied and the Collection Date for the taxes to be levied during the next succeeding calendar year. -17- 0 : ' : ~. (b) The amount of taxes to be levied annually each year to pay the Debt Service Requirements on the Certificates shall be the amount established in paragraph (3) above less the sum total of the amounts established in paragraphs ( 1 )and (2), after taking into consideration delinquencies and costs of collecting such annual taxes. SECTION 12: Pledge of Revenues. The City hereby covenants and agrees that. subject only to a prior lien on and pledge of the Net Revenues of the System for the payment and security of Prior Lien Obligations, the Net Revenues of the System, with the exception of those in excess of the amounts required to be deposited to the Certificate Fund as hereafter provided, are hereby irrevocably pledge_d, equally and ratably, to the payment of the principal of and interest on the Similarly Secured Obligations as herein provided, and the pledge of the Net Revenues of the System herein made for the payment of the Certificates shall constitute a lien on the Net Revenues of the System in accordance with the terms and provisions hereof and be valid and binding without further action by the City and without any filing or recording except for the filing of this Ordinance in the records of the City. SECTION 13: System Fund. The .City hereby reaffirms its covenant and agreement made in connection with the issuance of the Previously Issued Obligations that all Gross Revenues (excluding earnings from the investment of money held in any special funds or accounts created for the payment and security of Prior Lien Obligations) shall be deposited from day to day _as collected into a "City of Lubbock, Texas, Sewer System Operating Fund'.''. (hereinafter called RSystem Fund") which Fund shall be kept and maintained at an official depository bank of the City. All moneys deposited in the System Fund shall be pledged and appropriated to the extent required for the following purposes and in the order of priority shown, to wit First: To the payment of all necessary and reasonable Operating and Maintenance Expenses of the System as defined herein or required by statute to be a first charge on and claim agains~ the Gross Revenues. Second: To the payment of the amounts required to be deposited in the special Funds created· and established for the-payment; security and benefit of Prior Lien ObUgations in accordance with the tenns and provisions of · the ordinances authorizing the.issuance of prior Li~n Obljgations: and -Third: Equally and ratably to the payment of the amounts required to be deposited in the special funds and accounts created and established for the payme~ of. the ~imila~ Secured O~ligattoos. Any Net Revenues remaining in the Syste·m Fund aftersatisfyirig the foregoing payments, .. or making a~equate and sufficient provision for the payment thereof, may be appropriated and used for any other City purpose now or hereafter-permitted by law. SECTION 14: Deposits to Certificate Fund. The City hereby covenants and agrees to cause to be deposited in the Certificate Fund prior to each interest and principal payment date from the Net Revenues of the System, after deduction of au payments required to be made to 761852.1 -18- 0 0 0 ') ') ) special Funds or accounts created for the payment and security of the Prior Lien Obligations, an amount equal to one hundred per centum (100%) of the amount required to fully pay the accrued interest and principal of the Certificates then due and payable by reason of maturity or redemption prior to maturity, such deposits to pay accrued interest and principal on the Certificates to be made in substantially equal monthly installments on or before the last business day of each month beginning the month the Certificates are delivered to the initial purchaser. Toe monthly deposits to the Certificate Fund, as hereinabove provided, shall be made until such time as such Fund contains an amount equal to pay the principal of and interest on the Certificates to maturity. Ad valorem tmces levied, collected and deposited in the Certificate Fund for and on behalf of the Certificates may be taken into consideration and reduce the amount of the monthly deposits otherwise required to be deposited in the Certificate Fund from the Net Revenues of the System. In addition, any proceeds of sale of the Certificates in excess of the amount required to pay the contractual obligations to be incurred (induding change orders to a construction contract) shall be deposited in the Certificate Fund, which amount shall reduce the sums otherwise required to be deposited in said Fund from ad valorem taxes and the Net Revenues of the System. SECTION 15: Security of Funds. All moneys on deposit in the Funds for which this Ordinance makes provision (except any portion thereof as may be at any time properly invested) shall be secured in the manner and to the fullest extent required by the laws of Texas for the. security of public funds, and moneys on deposit in such Funds shall be used only for the purposes permitted by this Ordinance. SECTION 16: Special Covenants. The City hereby further covenants as follows: (a) It has the lawful power to pledge the Net Revenues of the System supporting this issue of Certificates and has lawfully exercised said powers under the Constitution and laws of the State of Texas, including said power existing under Articles 1111 et seq., V.A.T.C.S. and V.T.C.A., Local Government Code, ·· Subchapter C of Chapter 271. (b) Other than for the payment of the Previously Issued Obligations · and the Certificates, the Net R.evenues of the System have not in any manner . been pledged to the payment of any debt or obligation of the City or of the System. SECTION 17: Issuance of Prior Lien Obligations and Additional Obligations. The City hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without limitation · . .. as to principal amount but subject to any temis, conditions or restrictionS'applicable thereto .. under law or otherwise. In addition, the City reserves the right to issue Additional Obligations, without limitation or any restriction or condition being applicable to their issuance· under the terms of this Ordinance, payable from and secured by a lien on and pledge of the Net Revenues of the 761852.l -19- 0 System of equal rank and dignity, and on a parity in all respects, with the lien thereon and pledge thereof securing the payment of the Certificates. SECTION 18: Subordinate to Prior Lien Obligations Covenants and Agreements. It is the intention of this governing body and accordingly hereby recognized and stipulated that the provisions, agreements and covenants contained herein bearing upon the management and operations of the System and the administering and application of revenues derived from the operation thereof, shall to the extent possible be hannonized with like provisions, agreements and covenants contained in ordinances authorizing the issuance of Prior Lien Obligations, and to the extent of any irreconcilable conflict between the provisions contained herein and in ordinances authorizing the issuance of Prior Lien Obligations, the provisions, agreements and covenants contained therein shall prevail to the extent of such conflid and be applicable to this Ordinance but in all respects sut>;ect to the priority of rights and benefits, if any, conferred thereby to the holders or owners of the Prior Lien Obligations. Notwithstanding the above, any change or modification affecting the application of revenues derived from the operation of the System shall not impair the obligation of contract with respect to the pledge of revenues herein made for the payment and security of the Certificates. SECTION 19: Satisfaction of Obligations of City. If the City shall pay orcauseto be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Certificates, at the times and in the manner stipulated in this Ordinance, then the pledge cf . _taxes levied and the lien on and pledge of the Net Revenues of the System under this Ordinance and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease; tenninate, and be discharged and satisfied. Certificates shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Certificates or the principal amount(s) thereof at maturity or {if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof, together with all interest due thereon, shall have been Irrevocably deposited with and held in trust by the Paying Agent!f3egistrar, or an authorized escrow agent. or (ii) Government Securities· sha.U have been irrevocably-deposited in trust with the Payin_g Agent/Registrar, or an authorized esc:row agent, which Government Securities have been certified by an independent accounting flnn to mature as to.principal and interest in such amounts and at such times as will insure the availability, ·without reinvestment, of sufficient money, togetnerwith any moneys deposited therewith, if any, to pay when due the principal of and interest on such Certificates, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or:. (if notice of redemption has ~n duly given or waived or if irrevocable arrangements therefor .. acceptable to the ·paying Agent/Registrar ha_v~ be~r:i rJ!ade) the redemption date thereof. The City covenants that no deposit of"morieys or: Government· · Securities will be made under this Section and no use made of any such deposit which would cause the Certificates to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/ Registrar and all income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow 761852.t -20- ) ) agent. pursuant to this Section which is not required for the payment of the Certificates, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthennore, any money held by the Paying AgenVRegistrar for the payment of the principal of and interest on the Certificates and remaining unclaimed for a period of four {4) years after the maturity, or applicable redemption date, of the Certificates for which such moneys were deposited and are held in trust to pay, shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the abOve and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 20: Ordinance a Contract -Amendments. This Ordinance shall constitute a contract with the Holders from time to time. be. binding on the City, and shall not be amended or repealed by the City $0 long as any Certificate remains Outstanding except a~ permitted in this Section. The City, may, without the consent of or notice to any Holders of the Certificates, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders of the Certificates, including the aJring of any ambiguity. inconsistency, or fonnal defect or omission herein. In addition, the City may, with the written consent of Holders of the Certificates holding a majority in aggregate principal amount of the Certificates then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding • · Certificates, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Certificates, reduce the principal amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify the tenns of payment of the principal of, premium, if any, or interest on the Certificates, (2) give any preference to any Certificate over any other Certificate, or (3) reduce the aggregate principal amount of Certificates required to be held by Holders for consent to any such amendment, addition, or rescission . .. SECTION 21: Notices to Holders -Waivers. Wherever this Ordinance provides for notice to Holders of any event, su_ch nc;>tice st:iall be sufficiently-giv~n (unless othetWise herein expressly provided) if in writing and sent by United States Mail, firt;t ciassl)b"Stage prepaid, to the addres_s of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such no.lice. In any~case where notice.to Holders is given by mail, neither the failure to mail s1,,1ch notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of s~ch notice with respect to all other Certificates. Where this Ordinance provides for notice in any manner, such notice may be .waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to which ~"uch r-1otice is given, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the ~ying AgenVRegistrar, but such filing shall not be a condition precedent to the ·validity of any action taken in reliance upon such waiver. SECTION 22: Cancellation. Certificates surrendered for payment, redemption, transfer, or exchange, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, 761852.1 -21- ) . ;: · .. ) if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already canceled, shall be promptly canceled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Certificates previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and aJI Certificates so delivered shall be promptly canceled by the Paying Agent/Registrar. All canceled Certificates held by the Paying Agent/Registrar shall be returned to the City. SECTION 23: Mutilated. Destroyed. Lost and Stolen Certificates. In case any Certificate shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Certificate ot like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution tor such mutilated Certificate, or in lieu of and in substitution for such destroyed, lost or stolen Certificate, only upon the approval of the City and after ~) the filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, Joss or theft of such Certificate, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Regi~trar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Certificate shall be borne by the Holder of the Certificate mutilated, or destroyed, lost or stolen. Every replacement Certificate issued pursuant to this Section shaU be a valid and binding. obligation, and shall be entitled to all the benefits of this Ordinance equally and ratabty with all other Outstanding Certificates; notwithstanding the enforceability of payment by anyone of the destroyed, lost or stolen Certificates. The provisions of this Section are exdusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost, or stolen Certificates. SECTION24: CovenantstoMaintain Tax-Exempt Status. A. in this Section, the following tenns have the following meanings: Oefinilions. \IVhen used 761862.l "Closing Date• means the date on which the Certificates are first authenticated and delivered to the initial purchasers agajnst payment therefor. • "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. •compuiation'Oatenhas the me~_ning set forth i~ Section 1 .. 1~~ 1(!>) of_~e Regulations. . ·· · ·" -· · _. •Gross Proceeds• means any proceeds as defined in Section 1.148-1 (b) of the Regulations, and any replacement proceeds· as defined in Section 1.148-1(c) of the Regulations. of the Certificates. -22- ) ) ) "Investment" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Nonpurpose Investment• means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired to carry out the govemmentaJ purposes of the Certificates. "Rebate Amount" has the meaning set forth in Section 1.148--1(b) of the Regulations. "Regulations• means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Certificates. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replac~ the specific Regutation referenced. (1) any lnves~ent has the meaning set forth in Section 1.148-5 of the Regulations; and (2) the Certificates has the meaning set forth in Section 1.148-4 of the Regulations. B. Not to Cause Interest to Become Taxable. The City shall not use, permitthe use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construdion or improvement of which is to be financed directly orindirectJy with Gross Proceeds) in a n:iannerwhich if made or omitted, respectively, would cause the interest on any Certificate to become incJudable in the gross income, as defined in-section ~1. of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality°Ofthe foregoing, unless and until the City receives a written opinion of C01JnseJ nationally recognized in the field of municipal bond Jaw to the effect that .failure to comply wilh such covenant will not adversely affed the exemption from federal income tax of the.interest on any Certificate, the City shaJI -comply with each of the specific covenants in thJs Section. C. .· No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereun~er, the City shaU at all titpes P.rior !o the last . . •. Stated Maturity of Certificates: ·· · · ' .-• · -· · 761852.1 (1) exclusively own, operate and possess an property·the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Certificates, and not use °' permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public} or any property acquired, -23- ) ) ) constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the generaJ public; and (2) not direcUy or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Certificates or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. 0. No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and ruJings thereunder, the City shall not use Gross Proceeds of the Certificates to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take-or-pay, output or similar contract or arrangement; or(3) indirect benefits, or burdens . and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. E. Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Certiftcates direciiy or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all lnvestfl'.lents acquired with Gross Procee(fs ( or with money replaced thereby), whether then held or previou_sly disposed of, ex_~~e~s the_:!feld of the Certificates. F. Not Federally Guaranteed .. Except to the extent permitted by section 149(b) of the Code and the Regulations. and rulings thereunder, the City sha.11 not take or omit to ~e any action which would cause the Certificates to be federal1y gµaranteed within the meaning of section 149~ of the Code and the Regulations and rufings thereunder. G. Information Report The City shall timely file the information required by section 149(e) of the Code ·with the Secretary of the :rreasury on Form 8038-G or such other fonn and in such place as the Secretary may pres~be. ·· · ·· · :-, ·.-•· ... · H. Rebate of Arbitrage Profits. Except to the. extent otherwise provided In section 148(f) of the Code and the Regulations and rulings thereunder: 761852.1 (1) The City shall account for all Gross Proceeds (induding all receipts, expenditures and investments thereof) on its books of account separately and -24.; ) ) apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Certificate is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Certificates with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. {2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code·and the Regulations and rulings thereunder. The City shall maintain such calculations with itS official transcript of proceedings relating to the issuance of the Certificates until six years after the final Computation Date. (3) As additional consideration for the purchase of the Certificates by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall pay to the United States out of the Certificate Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Certificates equals ~) in the case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and ~i) in the case of any other Computation Date, ninety percent {90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may .be required by Section 148(f) of the Code and the Regulations and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors · are made in the calculations ar:td payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly corred such error within a reasonable amount of time thereafter (and in all events within one h~ndred eighty {180) days_after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-3(h) of tli~ Regulations._ .. _ _ .. _ .. .. . : -... I. Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Certificates, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection H of this Section because such transaction results in a smaller profit or a larger loss than would have 761852.l -25- ) ) ) -··· resulted if the transaction had been at arm's length and had the Yield of the Certificates not been relevant to either party. J. Elections. The City hereby directs and authorizes the Mayor, City Secretary, City Manager, Managing Director of Finance, and First Assistant Cify Manager, individually or jointly, to make elections pennitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection wilh the Certificates, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document SECTION 25: Sale of Certificates. Pursuant to a public sale for the Certificates, the bid submitted by Morgan Keegan & Co. Inc. and Associates (herein referred to as the •Purchasers") is declared to be the best bid received producing the lowest net effective interest cost to the City, and the sale of the Certificates to said Purchasers at the price of par and accrued interest to the date of delivery, plus a premium of$ -0-, is hereby approved and confirmed. Delivery of th.e Certificates to the Purchasers shall occur as soon as possible upon payment being made therefor in accordance with the ter:ms of sale. SECTION 26: Official Statement The Official Statement prepared in the initial offering and sale of the Certificates by the· City, together with all addendas, supplements and amendments thereto issued on behalf of the City, is hereby approved as to form and content, and the City Council hereby finds that the infonnation and data contained in said Official_ Statement pertaining to the City and its financial-affairs is true and correct in all material respects and no material facts have been omitted therefrom which are necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The use of such Official Statement in the reoffering of the Certificates by the Purchasers is hereby approved and authorized. SECTION 27: Proceeds of Sale. The proceeds of sale of the Certificates, exduding the accrued interest and premium, if any, received from the Purchasers, shall be deposited in a construction fund maintained at the City's depository bank. Pending expenditure for authorized projects and purposes, sudl proceeds of sale may be invss~d in authorized investments and any investment earnings realized·may"be expended for sudl authorized projects and purposes or deposited in the Certificate Fund as shall be determined by the City Council. Accrued interest and premium, if any, received from the .Purchasers as well as all surplus proceeds of sale of the Certificates, ioduding investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Certificate Fund.· SECTlON 28: Control and Custody of Certificates. The Mayor of the City shall be and is hereby authorized to ·take and have charge of all .necessary orders and records pending investigation by the Attorney General of the State of Texas. includii'l~)°flie pnntfng of the .. Certificates, and shall take and have charge and control of the Certificates pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers. Furthennore, the Mayor, City Secretary, City Manager, First Assistant City Manager, Managing Director of Finance, and Director of Financial Services, any one or more of said 761852.l -26- ,. ) ) ~·· .. officials, are hereby authorized and directed to furnish and execute such documents and certifications relating to the City and the issuance of the Certificates, including a certification as to facts, estimates, circumstances and reasonable expectations pertaining to the use and expenditure and investment of the proceeds of the Certificates as may be necessary for the approval of the Attomey General, registration by the Comptroller of Public Accounts and delivery of the Certificates to the purchasers thereof and, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Certificate(s) to the purchasers. SECTION 29: Legal Opinion. The obligation of the Purchasers to accept delivery of the Certificates is subject to being furnished a final opinion of Fulbright & Jaworski LLP .• Attorneys, Oallas, Texas, approving such Certificates as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Certificates. A true and correct reproduction of said opinion is hereby authorized to be printed on the definitive Certificates or an executed counterpart thereof shall accompany the global Certificates deposited with the Depository Trust Company. SECTION 30: CUSIP Numbers. That CUSIP numbers may be printed or typed on the definitive Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Certificates shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving said Certificates as to legality are to be held . responsible for CUSIP numbers incorrectly p(inted or typed on the definitive Certificates. SECTION 31: Benefits of Ordinance. Nothing in this Ofdinance, expressed or impl~. is intended or shall be construed to confer upon any person other than the City, the Paying AgenURegistrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar-and the Holders. ~ SECTION 32: Inconsistent Provisions. All ordinance~. orders or resolutions. or parts thereof, which are in conflict or inconsistent with any provisioA ot'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. . SECT~ON 33: Governing Law. This Ordinance shall be construed and enforced in accordance with_ t11e laws of the State of Texas and the United States of America. SECTiO-N 34: Severabilitv. If any prevision oUhi$ Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of thfs-·ordinance and the · application thereof to other circumstances shaU nevertheless be valid, and the City Council hereby-declares that this Ordinance would have been enacted without such invalid provision. SECTION 35: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. 761852.1 -27- ) ) SECTION 36: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the mascuJine, feminine or neuter gender shall be considered to include the other genders. SECTION 37: Continuing Disclosure Undertaking. (a) Definitions. As used in this Section. the following tenns 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 infonnation repositorywithin 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 Sea.irities and Exchange Commission. "SID' means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and detennined by the SEC or its staff to be, a state information d~pository within the m~aning of the Rule from time to time. (b) Annual Reports. The CUy shall provide annually to each NRMSJR and any SID, within sb< months after the end of each fiscal year (beginning with the fiscal year ending September 30, 1999) financial information and operating data with respect to the City of the general type included in the final Official Statement approved by Section 26 of this Ordinance, being the information described in Exhibit 8 hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit B 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 available at the··ume the financial information and operating data must pe provided, then the City shall provide unaudited financial statements for the applicable fiscal-year to-each NRMSIR and any SID with the financial information and operating data and will file the annual audit report, when . and if the same becomes available. . -If the City changes its fiscal year, it will notify each NRMSIR and· any SID of the :- change (and of µis date of the new fiscal year end} prior to the next date by which the City otherwise wo1,.1ld 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 induded by specific reference to any document (including an official statement or other offering dorument, if it is available from the MSRB} that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. 761852.l -28~ ) ) {c) ·Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Certificates, if such·event is material within the meaning of the federal securities laws: 1. 2. 3. difficulties; 4. 5. 6. Certificates; Principal and interest payment delinquencies; Non-payment related defaults: Unscheduled draws on debt service reserves reflecting financial Unscheduled draws on credit enhancements reflecting financial difficulties; Substitution of credit or liquidity providers, or their failure to perform; Adverse tax opinions or events affecting the tax-exempt status of the 7. Modifications to rights of holders of the Certificates; 8. Certificate calls; 9. beteasances; 10. Release, substitution, or sale of property securing repayment of the Certificates: and · 11. 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 infonnation or operating data in accordance . with subsection (b) of this Section by the time required by such Section. (d) Umitations, Disclaimers, and Amendments. The City shaJI be obligated to observe and perform the covenants specified in this Section while, but only while, the City remains an "obligated person" with respect to the Certificates within the meaning of the Rule, except that the City in any event will give the notice required by subsection (c) hereof of any Certificate calls and defeasance that cause the City to be no longer such an "obliga_ted person." The provisions of this Section are for the sole benefrtof the Holders and beneficial owners of the Certificates, and nothing in this Section, e:xpres_s or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to aiiy ether person. The City · undertakes to provide only the financial information, operating data, financial statements, and notices which it has ~pressly agreed. to provide pursuant to thi~. Section and does not hereby undertake to provide any other information that inay be ·relevant or material to a complete presentation-of the City's financial results, condition, or prospects or hereby undertake to update any infonnation. p_rovided in accordance with this Section or otherwise, except as expressly provided he(ein. The City does not make any representation or warranty concerning such infonnation or its useturness·to a decision to in_yest in or.sell ~ertifi~l~~ _~t_ ~y--~~e date. UNDER NO CIRCUMSTANCES SHALL THE CITYBE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY CERTIFJCATE OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHEfHER NEGLIGENT OR WITHOUT FAUL TON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, 761852.1 -29- ) ) ) ) ) ) ) IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the City in observing or performing its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shaJI act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The provisions of this Section may be amended by the Qty from time to time to adapt to changed circumstances resulting from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Certificates in the primary offering of the Certificates in compliance with the Rufe, 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 lhe Outstanding Certificates 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 Holders and _ beneficial owners of the Certificates. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the apP.licable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Certificates from lawfully purchasing or selling Certificates in such offering. If the City so amends the provisions of this Section, it shall include with any amended financial infonnation or operating data next provided in accordance with subsection (b) an explanation, in narrative form, of the reasons for the amendment and of the impad of any change in the type of financial information or operating data so provided. SECTION 38: Public Meeting. ·it is officially found, detennined,· end declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public bµsiness to .be considered at such meeting, incJuding this Ordinance. wasgiven,alJasrequiredbyV.T.C.A., GovemmeritCode, Chapter551, as amended. . -.. . -: .-,. 71.1852.1 -30- ) ) ' ) ) ) ) ) . SECTION 39: Effective Date. This Ordinance shall take effect and be in force immediately from and after its passage·on second and final reading, and IT IS SO ORDAINED. PASSED ANO ADOPTED ON FIRST READING, Marcil 25, 1999. PASSED ANO ADOPTED ON SECOND ANO FINAL READING, this the 8'1' day of April, 1999. CITY OF LUBBOCK, T ATTEST: cJ~~ JJJtuLL= (City Seal) . ·-: ··.-,: 161452.l -31- ) EXHIBIT A ) PAYING AGENT/REGISTRAR AGREEMENT ) . See Document Number 4 ) ) ) ·-.·. ) ··• .. -: -.-,: ) ) DESCRIPTION OF ANNUAL FINANCIAL INFORMATION Exhibit 8 to Ordinance The following information is referred to in Section 37 of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and induded in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2. The infonnation contained in Tables 1 through 6 and 8A through 20 of the Official Statement Accounting Principles The accounting principles referred to in such Section are the generally accepted accounting principles as appfacable to governmental units as prescribed by The Government Accounting Standards Board. . ·: __ ,,_ 161852.I No Text ) ) THE STATE OF TEXAS COUNTY OF LUBBOCK CITY OF LUBBOCK CERTIFICATE OF CITY SECRETARY § § § § § I, the undersigned, City Secretary of the City of Lubbock, Texas, 00 HEREBY CERTIFY as follows: · 1. On the 24" day of June, 1999, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: WINDY SITTON MAXINCE VICTOR HERNANDEZ T. J. PATTERSON DAVID NELSON ALEX ."TY" COOKE MARC McDOUGAL ) ) ) ) ) ) MAYOR MAYOR PRO TEM COUNCILMEMBERS all of said persons were present at said meeting, except the following: __ _.no=ne....._ ___ _ __________ . Among other business considered at said meeting, the attached ordinance (the •ordinance") entitled: "AN ORDINANCE authorizing the issuance of'CITY OF LUBBOCK, TEXAS. TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF 08L1GA TION, SERiES 19~9'; specifying tne •~rms and features of said certificates; providing for-the payment of said certitica~ of obligation by the levy of an ad valorem tax upon an taxable property within the City and a lien on and pledge of the net revem,1es from the operation of the City's Waterworks System; and ·resolving other matters incident and related to lhe ~.suance, sale, security. payment and delivery of said certificates, including the approval of a Paying Agent/Registrar Agreement, a Purchase Contract and cin Escrow Agreement and the approval and distribution of an Official Statement pertatning thereto; and.providing an effective date.~ .. . .. •• •• • .! ~ •• • was introduced and submitted to the Council for first. reading. After presentation and due consideration of the Ordinance, and upon a motion being made by T. J. Patterson and seconded by Marc McDougal , the Ordinance was approved on first reading by the Council by the following vote: 7 voted "For"' 0 voted "Against~ 0 abstained ) all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 2. On the 23n1 day of September, 1999, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: WINDY SITTON MAXINCE VICTOR HERNANDEZ T. J . PATTERSON DAVID NELSON ALEX "TY" COOKE MARC McDOUGAL ) ) } ) ) ) MAYOR MAYOR PRO TEM COUNCILMEMBERS all of said persons were present at said meeting, except the following: Victor Hernandez Among other business considered at said meeting, the Ordinance was submitted to the Council for second reading and final passage and adoption. After presentation and due consideration of the Ordinance. and upon a motion being made by · T. J. Patterson and seconded by Alex "Ty" Cooke , the Ordinance was duly passed and adopted on second reading to be effective immediately by the following vote: 6 voted "For" 0 voted "Against" 0 abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 3. The attached Ordinance is a true and correct copy of the original on file in the official records of the City; the duly qualified and acting members of the City Council of said City . on the date of the aforesaid meetings are those persons shown above and, according to the records of my office, advance notice of the time, place and purpose of each meeting was given to each member of the Council; and that said meetings and the deliberation of the aforesaid public business were open to the public and written-notice of said-meeiingsrinduding the subject of the above entitled Ordinance, was posted and given in advance thereof in compliance with the provisions c;,f V.T.C.A., Goverr:iment Code, Chapt~r 551, as ~men~ed • ... : --·-. '197655.1 -2- } ) ) IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal of said City, this the 23111 day of September, 1999. (City Seal) '197855.1 ) . ) ) ' ORDINANCE NO. 10170 AN ORDINANCE authorizing the issuance of "CITY OF LUBBOCK. TEXAS, TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 1999"; specifying the terms and features of said certificates; providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon all taxable property within the City and a lien on and pledge of the net revenues from the operation of the City's Waterworks System; and resolving other matters incident and related to the issuance, sale, security, payment and delivery of said certificates, including the approval of a Paying Agent/Registrar Agreement, a Purchase Contract and an Escrow Agreement and the approval and distribution of an Official Statemel)t pertaining thereto; and providing an effective date. WHEREAS, notice of the City Council's intention to issue certificates of obligation in the maximum principal amount of $26,000,000 for the purpose of paying all or part of the City's obligations incurred by contract for interest in and rights to water in connection with a water supply and transmission project to be constructed by the Canadian River Municipal Water Authority, and to pay contracts for professional services rendered in connection with such project and the financing thereof, has been duly published in the Lubbock Avalanche-Journal, a newspaper hereby found and determined to be of general circulation in the City of Lubbock, Texas, on September 8. 1999 and September 12, 1999, the date of the first publication of such notice being not less than fifteen {15) days prior to the tentative date stated therein for the passage of this Ordinance; and ) WHEREAS, the second reading and adoption of this Ordinance was postponed to the date hereof to allow additional time for the Canadian River Municipal Water Authority to affirm the costs of the water supply and transmission project, and WHEREAS, no petition, protesting the issuance of such certificates and bearing valid petition ·signatures of at least 5% of the qualified voters of the City, has been filed with the Qty Secretary, any member of the Council or c!l"~ other official of the City ·on or.-prior: ·to.\~~ date of the passage of this Ordinance; and WHEREAS, the Council hereby ·finds and detennines that $24,800,000 in principal amount of the certificates of obligation described in such notice should be issued and sold at this time and the principal amount of the certificate is an amount equal to the aggregate of the contractual payments or the_total costs allocated and attributable, under generally accounting principles, to the capital costs of the·project; now, therefore, . · ·· : --.... . .. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1: Authorization~Desiqnation-Principal Amount~Puroose. Certificates of obligation of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $24,800,000 to be designated and bear the title "CITY OF LUBBOCK, TEXAS, TAX ANO WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 1999" (the "Certificates"), for the purpose of paying all or part of the City's obligations incurred by contract for interest in and rights to water in connection with a water supply and transmission project 780356.1 ) to be constructed by the Canadian River Municipal Water Authority, and to pay contracts for ) professional services rendered in connection with such project and the financing thereof, pursuan~ to authority conferred by and in conformity with the Constitution and laws of the State of Texas. jncluding V.T.q.A., Local Government Code, Subchapter C of Chapter 271. SECTION 2: Fully Registered Obligations --Authorized Denominations-Stated Maturities-Date. The Certificates are issuable in fully registered form only; shall be dated September 15, 1999 (the "Certificate Date") and shall be in denominations of· $5.000 or any integral multiple thereof (within a Stated Maturity) and the Certificates shall become due and payable on February 15 in each of the years and in principal amounts (the "Slated Maturities"} and bear interest at the per annum rate(s) in accordance with the following schedule: Year of Principal Interest Stated Maturity Amount Rate 2001 $ 745,000 5.00% 2002 785,000 4.25% 2003 815,000 4.40% 2004 855,000 · 4.50% 2005 895,000 4.60% 2006 935,000 4.70% 2007 985,000 4.80% 2008 1,030,000 5.00% 2009 1,oas.000· 5.00% 2010 1,140,000 5.00% 2011 1,200,000 5.50% 2012 1,270,000 5.25% 2013 1,335,000 5.375% 2014 1,410,000 5.375% ·2015 1,490,000 5.50% 2016 1,575,000 5.500/4~ .. 2017 1,665,000 5.60% '2018 1;7.60,000 5.625% 2019 1.860,000 5.25% 2020 .... 1,965,000 5.70% The Certifl¢8l~~ shall bear interest on the unpald principal amounts from the Certificate Date at the per annum rate(s) ·shown above in this-Section (calculated on.the basis of a 36Ckfay year of twelve 3Ck:tay months). Interest on the Certificites shall be payable 6n February.15 and August · 15 in each year. commencing February 15, 2000. SECTION 3: Terms of Payment-Paying Agent/Registrar. The principal of, premium, if any, and the interest on the Certificates, due and payable by re~on of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Certificates (hereinafter called the "Holders•) appearing on the registration and transfer books maintained by the Paying 780356.1 -2-- . . ) ) ) Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of U. S. Trust Company of Texas, N.A., Dallas, Texas to serve as Paying Agent/Registrar for the Certificates is hereby approved and confirmed. Books and records relating to the registration. payment, exchange and transfer of the Certificates (the "Security Register") shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, all as provided herein, in accordance with the terms and provisions of a "Paying Agent/Registrar Agreement", substantially in the fonn attached hereto asExhlbit A and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and Cify Secretary of the City are hereby authorized to execute and deliver such Agreement in connection with the delivery of the Certificates. The City covenants to maintain and proVide a Paying Agent/Registrar at all times until the Certificates are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust company. financial institution or other entity qualffied and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in lhe Paying Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium:·if any, on the Certificates shall be payable atthe Stated Maturities or the redemption thereof only upon presentation and surrender of the Certificates to the Paying Agent/Registrar at its designated offices in New York, New Yori< (the "Designated Payment/Transfer Offjce"). Interest on the Certificates shall be paid by the Paying Agent/Registrar to the Holders whose name appears in the Security Register at the close of business on the . Record Date (the last business day of the month next preceding each interest payment date) and payment of such interest shall be (i) by check sent United States Mail, first class postage prepaid, · to the address of the Holder recprded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by..! a~~ at the risk· and expen~e of, the Holder. If the date for the payment of the ·principal of or interest en lhe. Certificates shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the Designated Pa}'.'menVTransfer Office <?f the Payiiig Agent/~egistr:9r 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 nor-such a Saturday, Sunday, legal holiday, or day ·when banltjng institutions are authorized to clos_e; and payment on such date shall have the same force and effect as if made on the originaJ dat~. P8¥.ment was due. . ~ .. In the event of a nonpayment of interest on a scheduled paymeiJfclate, ~tld for thirty (30) · · ·· days thereafter, a new record date for such interest payment (a "Specjal 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 (5) business days prior to the Special Record O~te by United States _Mail, first '780356.1 -3- ) ) class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. The Certificates having Stated Maturities on and after February 15, 2010, shall be subject to redemption prior to maturity, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying AgenVRegistrar), on February 15, 2009 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redemption Option. At least forty-five (45) days prior to a redemption date for the Certificates (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Certificates, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The. decision of the City to exer~ise the right to redeem Certificates shall be . entered in the minutes of the governing body of the City. { c) Selection of Certificates for Redemption. If less than all Outstanding Certificates of the same Stated Maturity are to be redeemed on a redemption date, the Paying AgenURegistrar shall treat such Certificates as representing the number of Certificates Outstanding which is obtained by dividing the principal amount of such Certificates by $5.000 and shall select the Certificates, or principal amount thereof. to be redeemed within such Stated Maturity by lol · { d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Certificates, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the, City's expense, to each Holder of a Certificate to be redeemed in whole or in part at the address of the Holder appearing on lhe Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. All notices of redemption shall ·(i) specify the date of redemption-for the Certificates, (ii) identify the Certificates to be redeemed and, in the case of a portion of the principal amount to be redeemed,.the princi~I amount thereoHo ~e redeemed, (iii).state ~e redemption price, (iv) state that the Certificates, or the portion of the principal amount tht3reof to be redeemed, shall become due and payable on the redemption date specified; and the interest thereon, or on the portion of the principal amqunt thereof to be redeemed, shall cease to accrue from and after the redemption date,-and (v) .sf}ecif)' that payment of the redempti9f1 price for the Certificates, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender thereoh,9'the. Holder. If a Certificate is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given as hereinabove provided, such Certificate (or the principal amount thereof to be redeemed} shall become due and payab!e and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for the payment of such Certificate (or of the principal amount thereof to be redeemed) at the then 780356.l -4- ) ) applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. SECTION 5: Registration -Transfer -Exchange of Certificates-Predecessor Certificates. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Certificates issued under and pursuant to the prpvisions of this Ordinance, or if appropriate, the nominee thereof. Any Certificate may be transferred or exchanged for Certificates of other authorized denominations by the Holder. in person or by his duly authorized agent, upon surrender of such Certificate to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or reque$t for exchange duly executed by the Holder or by his duly authorized agent, in fonn satisfactory to the Paying Agent/Registrar. Upon surrender of any Certificate for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transfere~ or transferees, one or more new Certificates of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Certificate or Certificates surrendered for transfer. At the option of the Holder. Certificates may be exchanged for other Certificates of authorized denominations and having the same Stated Maturity, bearing the same rate of interest -and of like aggregate principal amount as the Certificates surrendered for exchange, upon surrender of the Certificates to be exchanged at the Designated Payment/Transfer Office of the Paying Agent/ Registrar. Whenever any Certificates are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Certificates to the Holder requesting the exchange. All Certificates issued in any transfer or exchange of Certificates shall be delivered to the Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and delivery thereof, the same shall be the valid obligations of UJ,e City. evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance; as the Certificates surrendered in such transfer or exchange. All transfers or exchanges of Certificates pursuant tb this ·section shall be made without expense or se'rvice charge to the Hokier, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or:other. governmental charges requireg to be paid with respect to such transfer or exchange. ·-· · .. . ·: ........ ~.· ... Certificates canceled by reason of an exchange or transfer pursuant to the pro~ions hereof are hereby defined to be "Predecessor Certificates," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Certificate or Certificates registered and delivered in the exchange or transfer therefor. Additionally. the tenn -Predeces~or Certificates" shall indude any mutilated, lost, destroyed, or stolen Certificate for whieh a replacement Certificate has been issued, registered and delivered in lieu thereof pursuant to the 780356.l -5- ) . provisions of Section 23 hereof and such new replacement Certificate shall be deemed to ) evidence the same obligation as the mutilated, lost, destroyed, or stolen Certificate. Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Certificate; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Certificate called for redemption in part. SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment and transfer/exchange of the Certificates, the City hereby approves and authorizes the use of "Book•Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company (OTC), a limited purpose trust company organized under the laws of the State of Ne:w York, in accordance with the operational arrangements referenced in the Blanket Issuer Letter of Representations by and between the City and OTC (lhe "Depository Agreement"). Pursuant to the Depository Agreement and the rules of OTC, the Certificates shall be deposited with OTC who shall hold said Certificates for its participants (the "OTC Participants·) and, while the Certificates are held by OTC under the Depository Agreement, the Holder of the Certificates on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of.OTC, notwithstanding the ownership of each actual purchaser or owner of each Certificate (the "Beneficial Owners") being recorded in the records of OTC and OTC Participants. In the event" OTC detennines to discontinue serving as securities depository for the Certificates or otherwise ceases to pro~ide book-entry clearance and settlement of securities transactions in general or the City determines that DTC is incapable Qf properly discharging its duties as securities depository for the Certificates, the City covenants and agrees with the Holders of lhe -. Certificates to cause Certificates to be printed ir:t defi_nitive form and provide for the Certificate certificates to be issued and delivered to OTC Participants· and Beneficial Owners, as the case may be. Thereafter, the Certificates in definitive form shall be assigned. transferred and exchariged·on the Security Register maintained by the Paytng Ag!;!nt/Registrar and payment of such Certificates shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof_ .. . SECTION l: Execution -Registration. The Certificates shall be executed on behalf of the City by the May:9r under its seal reproduced or il!lpressed thereon and countersigned by the City Secretary. The signature of said officers <?!"' the .certifi~tes may b~ manual or facsimile. Certificates bearing the manual or facsimile signatures of individuals Who ari".rorw.ere lhe proper · officers of the City on the Certificate Date shall be deemed to be duly executed on behalf of the City," notwithstanding that one or more of the individuals executing the same shall cease to be such officer at the time of de!ivefY of the Certificates to the initial purchaser(s) and with respect to Certificates delivered in subsequent exchanges and transfers, all as authorized and provided in the Bond Procedures Act of 1981, as amended. 780356.l -6- ) No Certificate shall be entitled to any right or benefit under this Ordinance. or be valid or ) obligatory for any purpose, unless there appears on such Certificate either a certificate of registration substantially in the form provided in Section 9C, manually executed by the Comptroller of Public Accc;iunts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 90, manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly certified, registered and delivered. SECTION 8: Initial Certificate(s). The Certificates herein authorized shall be initially issued either (i) as a single fully registered certificate in the total principal amount of $24,800,000 with principal installments to become due and payable as provided in Section 2 hereof and numbered. T-1, or (ii) as multiple fully registered certificates, being one certificate for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Certificate(s)") and, in either case, the Initial Certificate{s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Certificate(s) shall be the Certificates 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 initial purchaser(s ). Any time after the delivery of the Initial Certifrcate(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Certfficate(s) delivered. hereunder and exchange therefor definitive Certificates of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 9: Forms. A. Fonns Generally. The Certificates, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the form of Assignment to be printe!i Of1 .each of the Certificates, shall be substantially in the forms set forth in this Section with such appropriate-•nsertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (including i<;fentifying numbers and letters . of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) ind such legends and endorsements (induding insurance legends in the event the Certificates, or any maturities thereof, are purchased with insurance and any reproduction of an opinion of couns~!) thereon as may, consistently herewith, be established by the City or determined by the· officers executing such Certificates .as. evidenced by their execution. Any portion of the text of any Certificates may be sefforth on the reverse tfleteof;wittian appropriate· .. ·reference thereto on the face of the Certificate. The definitive Certificates and the Initial Certificate(s) shall be printed, lithographed, or engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, au as determined·by the officers executing such Cei:tificates as evidenced by thei~ execution thereof. '180366.L -7- ) B. Form of Certificates. REGISTERED NO. Certificate Date: September 15, 1999 Registered Owner. Principal Amount: UNITED STATES OF AMERICA STATE OF TEXAS CITY OF LUBBOCK, TEXAS, TAX ANO WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATE Of OBLIGATION, Interest Rate: _% SERIES 1999 Stated Maturity: CUSIPNO: REGISTERED $_ DOLLARS The City of Lubbock (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Lubbock, Slate of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount stated above (or so much thereof as shall not have been paid upon prior redemption) and. to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid Principal Amount hereof from the Certificate Date at the per annum rate of interest specified above; such interest being payable on February 15 and August 15 of each year, commencing February 15, 2000.-Principal of this Certificate is payable at its Stated Maturity or redemption to the registered owner hereof, upon presenlati<;>n and surrender, at the Designate_d Pay~~-f!!fTransfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor: provided, t,owever, while this Certificate is registered to Cede & Co., the payment of principal upon a partial redemption of the principal amount hereof may be accomplished without presentation and surrender of #:iis Certificate. Interest is payable to the registered owner of this Certificate (or one or more Predecessor Certificates, as defined in the. Ordinance hereinafter referenced) whose name appears o.n the .. Security Register" maintained by the Paying Agent/Registrar at the close of business on the •Record Date", which is the last bosiness day of the month next preceding each interest payment date and interest shall be paid by the Paying Agent/Registrar by check sent- United States Mail, first ctass postage prepaid, to the address of the registered owner recorded in the Security Register on the Record Date or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charge~ to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. 780356.1 ) ' :, ) ' This Certificate is one of the series specified in its title issued in the aggregate principal amount of $24,800,000 (herein referred to as the "Certificates") for the purpose of paying all or part of the City's obligations incurred by contract for interest in and rights to water in connection with a water s_upply and transmission project to be constructed by the Canadian River Municipal Water Authority, and to pay contracts for professional services rendered in connection with such project and the financing thereof, under and in strict conformity with the Constitution and laws of the State of Texas, particular1y V. T.C.A., Local Government Code, Subchapter C of Chapter 271, and pursuant to an Ordinance adopted by the governing body of the City (herein referred to as the "Ordinance"). The Certificates maturing on and after February 15, 2010, may be redeemed prior to their Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof {and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2009, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. At least thirty days prior to a redemption date, the City shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the registered owners of each Certificate to be redeemed at the address shown on the. Security Register and subject to the terms and provisions relating thereto contained in the Ordinance. If a Certificate (or any portion of its principal sum) shall have been duly called for redemption and notice of such rEHfemption du!y given, then upon the ref:lemption date such Certificate (or the portion of its principal sum to be redeemed) shall become due and payable, and, if moneys for the payment of the redemption price and the interest accrued on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar, interest shall cease to accrue and be payable from and after the redemption date on the principal amount redeemed. In the event a portion of the principal amount of a Certificate is to be redeemed and the registered owner is someone other than Cede & Co., p~men.t of the-redemption price of such principal amount shall be made to the registered owner only upon pfeseF1tation and surrender of . such Certificate to 1he Designated PaymenVTransfer Office of the Paying Agent/Registrar, and a new Certificate or Ce,:tificates of like maw~ty and interest rate in _any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be issue~ to the registered owner, without charge. If a Certificate is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such Certificate to an assignee of tt.i~ registered owner wilhin 45 days of the redemption date therefor; provided, however, such limitation.on transferability shall 119t be applicabl_e to an exctJ~n~e ~Y. the registered . • .. owner of the unredeemed balance of a Certificate redeemed in part. ·· · " -~ ·-· . . · The Certificates are payable from the proceeds of an ad valor~ tax levied, within the limitations prescribed by law, upon all taxable property in the City and, together with the Previously Issued Obligations (as defined in the Ordinance), are additionally payable from and secured by a lien on and pledge of the Net Revenues (as defined in the Ordinance) of the City"s Waterworks System (the "System"), such lien and pledge, however, being junior and subordinate to the lien 780356.1 -9- on and pledge of the Net Revenues of the System securing the payment of "Prior Lien Obligations" {as defined in the Ordinance) hereafter issued by the City. In the Ordinance, the City reserves and retains the right to issue Prior Lien Obligations while the Certificates are outstanding without limitation as to principal amount but subject to any terms. conditions or restrictions as may be applicable thereto under law or otherwise, as well as the right to issue Additional Obligations (as defined in the Ordinance). Ref ere nee is hereby made to the Ordinance. a copy of which is on file in the Designated PaymenVTransfer Office of the Paying Agent/Registrar. and to all the provisions of which the Holder hereof by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Certificates; the nature and extent of the limited pledge of the Net Revenues securing the payment of the Certificates; the ) terms and conditions relating to the transfer or exehange of this Certificate; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders: the rights, duties, and obligations of the City and the Paying Agent/Registrar; the tenns and provisions upon which the tax levy and the pledge of the Net Revenues and covenants made in the Ordinance may be discharged at or prior to the maturity of this Certificate, and this Certificate deemed to be no longer Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. This Certificate, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more fully registered Certifi~tes of authorized denominations and of the same aggregate principal amount Will be issued by the Paying Agent/Registrar to the designated transferee or transferees. ·· The City and the Paying Agent/Registrar, and any agenrof either, may treat the registered owner hereof whose name appears on· the Security Register (i) on th13 Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Certificate as the owner entitled to payment of principal hereof at i~-Stated Maturity o.r its ~edemption, in whole or in part, and (iii} on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/Regist111r, or any agent of either. shan be affected by notice to the cqntrary. In the event of nonpayment of interest on a scheduled payment date and for thirfy (30) days thereafter. a· new record date for sucoJnterest payment (a "Special Re_card Date") will be established by the Paying Agent/Registrar, if and when funds for the payni~nt of such int~rest have p~en Fe?ived -from the City. Notice of the Special Record Date and of the scheduled payriient'date of. the past due interest (which shall be 15 days after the Special Record Date) 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 Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such .notice. 780356.l -10- ) ) . It is hereby certified, recited, represented and covenanted that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Certificates is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Certificates to render the same lawful and valid obligations of the City have been propeny done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Certificates do not excee_d any-constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Certificates as aforestated. In case any provision in this Certificate or any application thereof shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions and applications shall not in any way be affected or impaired thereby. The tenns and provisions of this Certificate and the Ordinance shall be con~trued in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be duly executed under the official seal of the City as of the Certificate Date. CITY OF LUBBOCK. TEXAS COUNTERSiGNED: Mayor City S~cretary (SEAL) 780356.1 ) C. * Form of Registration Certificate of Comptroller of Public Accounts to Appear on Initial Certificate{s) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS § § § § REGISTER NO. ______ _ THE STATE OF TEXAS I HEREBY CERTIFY that this Certificate has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by ihe Comptroller of Public Accounts of the State of Texas. (SEAL) WITNESS my signature and seal of office this _________ _ Comptroller of Public Accounts of the State of Texas "NOTE" TO PRINTER: Do not print on definitive Certificates 0. Form of Certificate of Paying Agent/Registrar to Appear on Definitive Certificates. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR . This Certificate has been duly issued and registered under the provisions of the within-mentioned Ordina.nce; the certificate or certificates_of t_he above entitled and designated series originally delivered having beeri approved by the Attorney General-of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The designated offices of the Paying Agent/Registrar located in New York, New York, is the "Designated .Payment!Transfer Office'" for this Certificate. Registration Date: 780356.1 U. $. TRUST CO!\APANY Of TEXAS, N.A, Dallas, Texas, as Paying Agent7Reg1strar By _____ -_______ _ Authorized Signature ~12- ) . E. Form of Assklnment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee:) _________ _ (Social Security or other identifying number. ________________ _ ____________ ..) the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints __________________ _ attorney to transfer the within Certificate on the books kept for registration thereof, with full power of substitution in the premises. DATED: ------------ .Signature guaranteed: NOTICE: The signature on this assignment must correspond with the name of the registered owner as it appears on the face of the within Certificate in every particular. F. The Initial Certificate{s) shall be in the form set forth in paragraph 8 of this Section. except that the form of a single fully registered Initial Certificate shall be modified as follows: (i) immediately under the name of the certificate the headings "Interest Rate __ " and "Stated Maturity ___ " shall both be omitted; · tii) paragraph one shall read as follows: Registered Owner. Princip_al Amount Dollars The City of Lubbock (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Lubbock. State of Tex.[1s, for value received, acknowledges itself indebted to and .hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, the Principal-Amount hereinabove·s~ted, .on Fe~ary 15 in each of the years and in principal installments in accordance With lhe following schedule: · · -, -.~···· ~--· 780356.l PRINCIPAL INSTALLMENTS INTEREST RATE (lnfonnation to be inserted from schedule in Section 2 hereof). -13- ) (or so much principal thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid Principal Amount hereof from the Certificate Date at the per annum rates of interest specified above computed on the basis of a 360-day year of twelve 30-<fay months: such interest being payable on February 15 and August 15 of each year, commencing February 15, 2000. Principal installments of this Certificate are payable in the year of maturity or on a prepayment date to the registered owner hereof by U.S. Trust Company of Texas, N.A., Dallas, Texas {the "Paying Agent/Registrar''), upon presentation and surrender, at its designated offices in New York, New York (the "Designated Payment/Transfer Office"). Interest is payable to the registered owner of this Certificate whose name appears on the "Security Register" maintained by the Paying AgenVRegistrar at the ciose of business on the "Record Date", which is the last business day of the month next preceding each interest paym~nt date hereof and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first dass postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/ Registrar, requested by, and at the risk and expense of, the registered owner. All payments-of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 10: Definitions. For purposes of this Ordinance and for clarity with respect to the issuance of the Certificates, and the levy of taxes and appropriation of Net Revenues therefor, . the following words or terms, whenever the same appear herein without qualifying language, are defined to mean as follows: 780356.1 (a) The term "Additional Obligations" shall mean tax and revenue obligations hereafter issued which by their terms are payable from ad valorem taxes and additionally payable from and secured by a parity lien on and pledge of the Net Revenues of the System of equal rank and dignity with the lien and pledge securing the payment of tt:ie Previously Issued Obligations and the Certificates. (b) The term· '"Certificates" shall mean' -$24,'800,000 "CITY OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATl;S OF OBLlGAT!ON,.SERI.ES 1999" ~utho~zed by this Ordinance . .., {c) The term "Certificate Fund" shall mean the special Fund created and es~blished under the provisions of Section 11 of lhis Ordinance. · (d) The tenn *Collection Date" ·shaU mean, when reference is being made to the levy and collection of annual ad valorem· taxes, the. date· annual ad valorem taxes levied each year by the City become delinquent (e). The term "Fiscal Year" shall mean the annual financial accounting period used with respect to the operations of the System now ending on September 30th of each year; provided, however. the City Council may change, by ordinance duly passed, such annual financial accounting period to end on -14- 'I . ) 780356.l another date if such change is round and determined to be necessary for budgetary or other fiscal purposes. (f} The tenn "Government Securities" shall mean direct obligations of the United States of America, induding obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, and the United States Treasury obligations such as its State and Local Government Series in book-entry form. (g) The tenn "Gross Revenues,. shall mean, with respect to any period, all income. revenues and receipts received from the operation and ownership of the System. (h) The term "Net Revenues" shall mean the Gross Revenues of the System, with respect to any period, after deducting the System's Operating and Maintenance Expenses during such period. (i) The t~rm "Operating and Maintenance Expenses" shall mean all reasonable and necessary expenses directly related and attributable to the operation and maintenance of the System, including, but not limited to, the cost of insurance, the. purchase and carrying of stores, materials, and supplies, the payment of salaries and labor, and other expenses .reasonably and property charged. under generally accepted accounting principles, to the operation and maintenance of the System. Depreciation charges on equipment. machinery, plants and other facilities comprising the System and expenditures classed under generally accepted accounting principles as capital expenditures shall not be considered as "Operating and Maintenance Expenses" for purposes of detemiining "Net Revenues". 0) The term "Outstanding" when used jD thjs Ordinance with respect to Certificates means, as of the· date of determination, all Certificates theretofore issued and delivered under this Ordinance, except: . .· (1) those Certificates canceled· by th~ Paying --AgenVRegistrar or delivered to the Paying Agent/Registrar for ca~~llation; (2) -· those Certificates d~med to be duly paid by~ City .. in accordance with the provisions of Section 19 hereof; .. and' .-· · · -• . (3) those Certificates that have been mutilated. destroyed, lost. or stolen and replacement Certificates have been registered and delivered in lieu thereof as provided in Section 23 hereof. -15- ) . (k) The term "Previously Issued Obligations" shall mean the outstanding (i} "City of Lubbock, Texas, Combination Tax and Waterworks System Subordinate Lien Revenue Certificates of Obligation. Series 1991", dated May 15. 1991 ~nd (ii) "City of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Refunding Bonds, Series 1999'', dated April 1, 1999. (I) The term "Prior lien Obligations" shall mean all bonds or other similar obligations hereafter issued that are payable in whole or in part from and secured by a lien on and pledge of the Net Revenues of the System and such lien and pledge securing the payment thereof is prior and superior in claim, rank and dignity to the lien and pledge o.f the Net Revenues securing the payment of the Previously Issued Obligations and the Certificates. (m) The term "Similarly Secured Obligations" shall mean· the City's Waterworks System, being all properties, facilities and plants currently owned, operated and maintained by the City for the supply, treatment, transmission and. distribution of treated potable water. together with all future extensions, improvements, replacements and additions thereto. (n) The term "System'" shall mean the City's Waterworks System, being all properties, facilities and plants currently owned, operated and maintained by the City for the supply, treatment, transmission and distribution of treated potable water, together with all future extensions, improvements, replacements and additions thereto. SECTION 11 : Certificate Fund. For the purpose of paying the interest on and to provide a sinking fund for the payment and retirement of the Certificates, there shall be·and is hereby created a special Fund to be designated .. _SPECIAL 1999 CITY OF LUBBOCK. TEXAS, TAX ANO WATERWORKS SYSTEM SURPLUS REVENUE CERTIFICATE OF OBLIGATION FUND", which Fund.shall be kept and maintained at the City's depository baok, and moneys deposited in said Fund shall be used for no other purpose. Proper officers of the City SRI llereby authorized and directed to cause to be transferred to the Paying Agent for the Certificates. from funds on deposit in the ·certificate Fund, amounts sufficient ~o fully.pay and discharQe promptly each instaUment of. interest and principal of the Certificates as the same accrues or matures or comes due by reason · of redemption prior to maturity; sueh transfers of funds to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent for the Certificates at the dose of business on theJast business day next preceding each interest and/or principal payment date for the Certificates. · · · · · · •• • ~ ·: -_ ••• ,... u • Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate Fund may, at the option of the City. be invested in obligations identified in, and in accordance with the provisions of the "Public Funds Investment Act• (V.T.C.A., Government Code, Chapter 2256) relating to the investment of ,.bond proceeds•; provided that all such investments shall be made in such a manner that the money required to be expended from said Fund will be available at the proper time or times. All interest and income derived from deposits and investments in said '780356.l -16- ) ) ) . ' Certificate Fund shall be credited to, and any losses debited to, the said Certificate Fund. All such investments shall be sold promptly when necessary to prevent any default in connection with the Certificates. SECTION 12: Tax Levy. That to-provide for the payment of the "Debt Service Requirements" on the Certificates being (i) the interest on said Certificates and (ii} a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the greater}, there shall be and there is hereby levied for the current year and each succeeding year thereafter while said Certificates or any interest thereon shall remain Outstanding. a sufficient tax on each one hundred dollars' valuation of taxable property in said City, adequate to pay such Debt Service Requirements, full allowance being made for delinquencies and costs of collection; said tax shall be assessed and collected each year and applied to the payment or the Debt Service Requirements, and the same shall not be diverted to any other purpose. The taxes so levied and collected shall be deposited into the Certificate Fund. This governing body hereby declares its purpose and intent to provide and levy a tax legally an,;I fully sufficient to pay the said Debt Service Requirements, it having been determined that the existing and available taxing authority of the City for su~ purpose is adequate to permit a legally sufficient tax in consideration of all other outstanding indebtedness. The amount of taxes to be provided annually for the payment of the principal of and interest on the Certificates herein authorized to be issued shall be determined and accomplished in the following manner: (a) Prior to the d~te the City Council establishes the annual tax rate and passes an ordinance levying a<;! valorem taxes each year, the City Council shall determine: 780356.l (1) The amount oh deposit in the Certificate Fund after (a) deducting therefrom the total amount of Debt Service Requirements to become due on Certificates prior to the Collection Date for the ad valorem taxes to be levied and (b) adding thereto the amount of Net Revenues of the System ,appropriated and allocated to pay such Debt . Service Requireml!nts .: prtot ·10 the Collection Date for the ad valorem taxes to be levied. . . (2} The amount of Net Revenues if any. appropriated ""-and to · be set aside for the payment of the Debt Service Requirements on the Certificates between the Collection Date for :. the taxes then to be· levied and the Collection Date for the taxes to ·be levied during the next succeeding calendar year. ·· .. . : .. __ . . .. (3) The amount of Debt Service _Requirements t() become due and payable on the Certificates between the Collection Date for the taxes then to be levied and the Coilectfon Date for the taxes to be levied during the next succeeding calendar year. -17- ) . (b) The amount of taxes to be levied annually each year to pay the Debt Service Requirements on the Certificates shall be the amount established in paragraph (3) above less the sum total of the amounts established in paragraphs (1)and (2), after taking into consideration delinquencies and costs of collecting such annual taxes. SECTION 13: Pledge of Revenues. The City hereby covenants and agrees that, subject only to a prior lien on and pledge of the Net Revenues of the System for the payment and security of Prior Lien Obligations, the Net Revenues of the System, with the exception of those in excess of the amounts required to be deposited to the Certificate Fund as hereafter provided, are hereby irrevocably pledged, equally and ratably, to the payment of the principal of and interest on the Similarly Secured Obligations as herein provided, and the pledge of the Net Revenues of the System herein made for the payment of the Certificates shall constitute a lien on the Net Revenues of the System in accordance with the terms and provisions hereof and be valid and binding without further action by the City and without any filing or recording except for the filing of this Ordinance in the records of the City. SECTION 14: System Fund. The City hereby reaffirms its covenant arid agreement made in connection with the issuance of the Previously Issued Obligations that all Gross Revenues (excJuding earnings from the investment of money held in any special funds or accounts created for the payment and security of Prior Lien Obligations) shall be deposited from day to day as collected into a "City of Lubbock, Texas, Waterworks System Operating Fund" (hereinafter called "System Fund'') which Fund shall be kept and maintained at an official depository bank of the City. All moneys deposited in the System Fund shall be pledged and appropriated to the extent required for the following purposes and in the order of priority shown, to wit: First To the payment of all necessary ·and reasonable Operating and Maintenance Expenses of the System cts defined herein or required by statute to be a first charge on and claim against the Gross Revenues. Second: To the payment of the amounts required to be deposited in ·· the special Funds created and ~tabli~hed for the ·13ayment, .~ecurity and benefit of Prior Lien Obligations in accordance with the terms and provisions of the ordinances authorizing the issuance of Prior Lien Obligations; and . . Third: Equally and ratably to the payment of the amounts required to be deposited in the special funds and accounts created and established for the payment of the Slmilarfy Secured Obligations.· Any Net Revenues remaining in the System Fund after satisfying the,fQregoing payments, · · · ·· or making adequate and sufficient provision for the payment thereof, may be appropriated and used for any other City purpose now or hereafter permitted by law. SECTION 15: Deposjts to Certificate Fund The City hereby covenants and agrees to cause. to be deposited in the Certificate Fund prior to each inte~st and principal payment date from the Net Revenues of the System, after deduction of all payments required to be mad~ to 780356.l -18- ) . special Funds or accounts created for the payment and security of the Prior Lien Obligations, an amount equal to one hundred per centum (100%) of the amount required to fully pay the accrued interest and principal of the Certificates then due and payable by reason of maturity or redemption prior to maturity. such deposits to pay accrued interest and principal on the Certificates to be made in substantially equal monthly installments on or before the last business day of each month beginning the month the Certificates are delivered to the initial purchaser. The monthly deposits to the Certificate Fund, as hereinabove provided, shall be made until such time as such Fund c.ontains an amount equal to pay the principal of and interest on the Certificates to maturity. Ad valorem taxes levied, c.ollected and deposited in the Certificate Fund for and on behalf of the Certificates may be taken into consideration and reduce the amount of the monthly deposits otherwise required to be deposited in the Certificate Fund from the Net Rev~nues of the System. In addition, any proceeds of sale of the Certificates in -excess of the amount required to pay the contractual obligations to be incurred (including change orders to a construction contract} shall be deposited in the Certificate Fund, which amount shall reduce the sums otherwise required to be deposited in said Fund from ad valorem taxes and the Net Revenues of the System. SECTION 16: Security of Funds. All moneys on deposit in the Funds for which this Ordinance makes provision (except any portion thereof as may be at any time properly invested) shall be sec~red in the manner and to the fullest extent required by the laws of Texas for the security of public funds, and moneys on deposit in such Funds shall be used. only for the purposes permitted by this Ordinance. SECTION 17: Special Covenants. The City hereby further covenants as follows: (a) It has the lawful power to pledge the Net Revenues of the System supporting this issue of Certificates and has lawfully exercised sald powers under the Constitution and laws of the State of Texas, including said power existing under , V.T.C.A., Government Code, Sections 1502.052, et seq. and V.T.C.A., Local 78Q356.l Government Cod~. Subch~pte( C of Chapter 271. ·-.. (b) Other than for the payment of the outstanding Previously Issued Obligations, the Certificates, the "City of Lubbock, Texas,-Tax and Waterworks Syste~ (Limited Pledg~) Revenue Certificates of Obligation, Series 1992", dated August 15, 1992, "City of Lubbock, Texas. Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 1993", dated October 1, 1993, "City of ["ubbock,..Texas, Tax and Waterworks System {Limited Pledge) Revenue Certificates of Obligation, Series 1995'\ dated December·· 1s, . -1,~5., •~City· of Lubbock, Texas, Tax and Waterworks System (Limited Pledge) Revenue Certificates of Obligation, Series 1998", dated January 1, 1998, and "City of Lubbock, Texas, Tax and Waterworks . System (Limited Pledge) Revenue Certificates of Obligation, Series 1999", dated January 15, 1999, the Net Revenues of the System have not in any manner been pledged to the payment of any debt or-obligation of the City or of the System. ·19- ) SECTION 18: Issuance of Prior Lien Obligations and Additional Obligations: Subordinate to Prior Lien Obligations Covenants and Agreements. (a) The City hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without limitation as to principal amount but subject to any terms, conditions or restrictions applicable thereto under law or otherwise. In addition, the City reserves the right to issue Additional Obligations, without limitation or : any restriction or condition being applicable to their issuance under the terms of this Ordinance, payable from and secured by a lien on and pledge of the Net Revenues of the System of equal rank and dignity, and on a parity in all respects, With the lien thereon and pledge thereof securing the payment of the Previousfy Issued Obligations and the Certificates. (b) It is the intention of this governing body and accordingly hereby recognized and stipulated that the provisions, agreements and covenants contained herein bearing upon the management and operations of the System and the administering and application of revenues derived from the operation thereof. shall to the extent possible be harmonized with like provisions, agreements and covenants contained in ordinances authorizing the· issuance of Prior Lien Obligations. and to the extent of any irreconcilable· conflict between the provisions contained herein and in ordinances authorizing the issuance of Prior Lien Obligations, the provisions, agreements and covenants contained therein shall prevail to the extent of such conflict and be applicable to this Ordina{lce but in all respects subject to the priority of rights and benefits, if any, conferred thereby to the holders or owners of the ·Prior Lien Obligations. Notwithstanding the above, any change or modification affecting the application of revenues derived from the operation of the System shall not impair the obligation of co~tract with respect to the pledge of revenues herein made for the payment and security of the Certificates. SECTION 19: Satisfaction of Obligations of City. If the City shall pay or cause to be ·paid, -or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Certificates, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied and the lien on and pledge of the Net Revenues of the System under this Ordinance and all. covenants, agreements, arid other obligations of the City to tlie Holders shall thereupon cease, terminate, and be discharged and satisfied. ·-· .. : Certificates shall be deemed t.o hav.e been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Certificates or the . principal amou.nt(s) thereof at maturity or (if notice of redemption has been duly given orwaiVed or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof, together with all interest due thereon, shall have been irrevocably deposited with and held iR trust by the Paying AgenVRegistrar, or an authorized escrow agent. or (ii) Government Securities shall have been irrevocably deposited-in-twst-.with the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Certificates, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor 780356.l -20- ) . ) acceptable to the Paying AgenURegistrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Certificates to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/ Registrar and all income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Certificates, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Certificates and remaining unclaimed for a period of four: (4) years after the maturity, or applicable redemption date, of the Certificates for which such moneys were deposited and are held in trust to pay, shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unciaimed property laws of the State of Texas. SECTION 20: Ordinance a Contract • Amendments. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Certificate remains Outstanding except as permitted in this Section. The City, may, without the consent of or notice to any Holders of the Certificates, from time to time and at any time, amend thjs Ordinance in any manner not detrimental to the interests of the Holders of the Certificates, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the written consent of Holders of the Certificates holding a majority in aggregate principal amount of the Certificates then Outstanding affected thereby. amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Certificates. no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if ~ny, a~d interest on the Certificates, red1_:1ce the .P~.t'lcipal amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Certificates, (2) give any preference to any Certificate over any other Certificate, or {3) reduce the aggregate principal amount· of Certificates re.quired to be held by Holders for consent to any such amendment. addition, or rescission. SECTfON 21: Notices to Holders -Waivers. Wherever this Ordinance provides for notice to Holders of any event, such notice shall-be sufficiently given (unless· other.wise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid: ·to the address· of each Holder appearing in the Security Register at the dose of business on the business day next preceding the mailing of such notice. 780356.1 -21- ) In any case where notice to Holders is given by mail. neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Certificates. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder entitled ta receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 22: Cancellation. Certificates surrendered for payment, redemption, transfer, or exchange, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and. if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already canceled. shall be promptly canceled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Certificate,s previously certified or registered and delivered whicn the City may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly canceled by the Paying Agent/Registrar. All canceled Certificates held by the Paying Agent/Registrar shall be returned to the City. SECTION 23: Mutilated, Destroyed. Lost and Stolen Certificates. In case any Certificate shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Certificate of like form and tenor. and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Certificate, or in lieu of and in substitution for such destroyed. lost or stolen Certificate, only upon the approval of the City ~nd after (i) the filing by the Holdedhereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Certificate, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Certificate shall be borne by the Holder of the Certificate mutilated. or destroyed, lost or stolen. Every replacement Certificate issued pursuant to this Section shall be a valid and binding obligation, ·and shalt be entitled to all' the benefits of this Ordinan<:e equally and ratably with all other Outstanding Certificates: n0twithstan1;Hng the· enforceability of payment by anyone of the destroyed, lost or stolen Certificates. The provisions qf this Section are exclusiv~ and shall preclude (to the extent lawful) all other rights and remedies with respect to the· reP.lacement and_ payment ~f mutilated. destroyed, lost, or stolen Certificates. ·· · ·, ··.-·•·· ·• · · SECTION 24: Covenants to Maintain Tax-Exempt Status. A. in this Section, ~e following tenns have the following meanings: 780356.L "Closing Date" means the date on which the Certificates are first authenticated and delivered to lhe initial purchasers against payment therefor. -22- ) . "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Oaten has the meaning set forth in Section 1.148~1(b) of the Regulations. "Gross Proceeds" means any proceeds as defined in Section 1.148-1 (b) of the Regulations, and any replacement proceeds as defined in Section 1.148-1 (c) of the Regulations, of the Certificates. "Investment" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined in · section 148(b) of the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired to carry out the governmental purposes of the Certificates. "Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the ~~~~-. "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and ·141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Certificates. Any reference to any specific Regulation shall also mean. as appropriate, any proposed. temporary orflnal Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. · ''Yield" of (1) any rn·vestment has the meaning set fo-fth m Section 1.148-5 of the Regulations; and. (2) the Certificates has the· meaning set forth in Section '"' 1.148-4 of the Regulations: B. .· Not.to Cause Interest to Become Taxable. The City shall not use, pennit the use of, or omit to 'use Gross Proceeds or any other amounts J or aRy ' pr9perty the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross· Proceeds) · in a manner which if made or omitted, resp~etively, would cause the interest on any Certificate to become includabJe in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generaHty of the foregoing, unles~ and until • the City receives a written opinion of counsel nationaHy recognized in the field of municipal bond law to the effect that failure to comply with sud1 covenant will not adversely affect the exemption 780356.1 -23- ) from federal income tax of the interest on any Certificate. the City shall comply with each of the specific covenants in this Section. C. No Private Use or Private Payments. Except as pennitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated 1 . Maturity of Certificates: ( 1) exclusively own. operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Certificates, and not use or pennit the use of such Gross Proceeds (including an contractual arrangements with terms different than those applicable to the general pub,ic} or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Certificates or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. D. No Private Loan. Except to the extent permitted by section 141 of the Code and . the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Certificates to mij~e or finance loans to any person or entity other than a state or locat government For purposes of the foregoing covenant. such Gross Proceeds are considered to be "loaned'" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes;·(2) capacity in or service fro(!1 such property is committed to such person or entity under a tak~r-pay, output or similar contract or·arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross .Proceeds are otherwise transferred in a transaction which is the economic equivalent of a-loan. E. Not to Invest at Higher Yield. Except to the ·extent penn~y section 148 of the ... •· Code and the Regulations and rulings thereunder, the City shalt not at any time •prior to the final Stated Maturity of the Certificates directly or indirecUy invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money repfaced thereby), whether then held or previously disposed of, exceeds the Yield of the Certificates. 780356.1 -24- ) . F. Not Federally Guaranteed. Except to the extent permitted by sectlon 149{b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Certificates to be federally guaranteed within the meaning of section 149(b} of the Code and the Regulations and rulings thereunder. G. lnfonnation Report The City shall timely tile the information required by section · 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. H. Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations. and rulings thereunder: (1) The City shall account for all Gross Proceeds {including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Certificate is discharged. However, to the extent pennitted by law, the City may commingle Gross Proceeds of the Certificates with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequenUy than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The City shaU maintain such calculations with its official transcript of proceedings relating to the issuance of the Certificates until six years after the final Computation Date. (3) As additional consideration for the purchase of the Certificates by the Purchasers and the loan of the money represented thereby and in order to induce ·· such purchase by measures designed to insure the excludability of the interest th~reon from the gross income of ·the owners thereof for·feder.aJ income tax . purposes, the City shajl pay to the United States out of the Certificate Fund or its . ge11eral fund, as penni_tted by appli~e T ~s statut~. reQl:'lation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value ~f previous rebate payments made for the Certificates equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e )(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any'6ther Computation Date, ninety percent.(90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made ·aUhtHimes, in 'the installments, to the place and in lhe maMer as is or may be required by section 146(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other fonns and infonnation as is or may be required by Section 148(f)ofthe Code and the Regulations and rulings thereunder. , 780356.1 -25- ) (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty ( 180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it. interest thereon, and any penalty ) imposed under Section 1.148-3{h) of the Regulations. I. Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Certificates, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection H of this Section ) because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at ann's length and had the Yield of the Certificates not been relevant to either party. J. Elections. The City hereby directs and authorizes the Mayor, City Secretary, City Manager, Managing Director of Finance, and First Assistant City Manager, individually or jointly, to make elections .pennitted or required pursuant to the provisions of the Code or the Regulations~ as they deem necessary or appropriate in connection with the Certificates, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. SECTION 25: Sale of Certificates 4 Official Statement Approval The Certificates authorized by this Ordinance are hereby sold by the City to Siebert Brandford Shal'.lk & Co., LLC, J.C. Bradford & Company, Inc., Morgan Keegan & Company, Inc., Estrada Hinojosa & Company, Inc. and Southwest Securities {herein collectively referred to as the "Purchasers") in accordance with the Purchase Contract, dated September 23, 1999, attached her~to asE~hiblt Band incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor and City Secre@ry are hereby authorized and directed to execute said Purchase Contr~ct for and on behalf of the City and as the act and deed of this Council, and in.1eg~d tp the approval and execution of the Purchase Contract. the . Council hereby finds, determin·es ·ood declares 'that the represent.ations, warranties and agreements of the City cont.ained therein are true and correct in all material·respects and shal• be honored and perf~nned br the Qity. Furthermore, the use of the Official Statement by the Purchasers in. connection with the public offering and· sale of the Certificates is hereby ratified, confirmed and approved in all respects. The flnal.Offitjal Statement, which ~flee.ts the tenns of sale, attached as Exhibit A to the Purchase Contract (together with such cfianges approved by the· May9r1 City __ Man_ager, First Assistant to City Manager. Managing Director of Finance or City Secretary, 'one-or more of said officials), shall be and is hereby in all respects approved and the Purchasers are hereby authorized to use and distribute .said final Official Statement, dated September 23, 1999, in the reoffering, sale and delivery of the Certificates to the pubHc. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of said Official Statement in final form as may be required by the Purchasers, and such final Official Statement in the form and content manually executed by said officials shall be deemed to 780356.1 -2~ ) . ) ) ) ) ) be approved by the City Council and constitute the Official Statement authorized for distribution and use by the Purchasers. SECTION 26: Escrow Agreement Approval and Execution. The "Escrow Agreement" (the "Agreement") by and between the City and U. s. Trust Company of Texas, N.A., Dallas, Texas (the "Escrow Agent"), attached hereto as Exhibit C and incorporated herein by reference as a part of this Ordinance for all purposes, is hereby approved as to form and content. and such Agreement in substantially the form and substance attached hereto, together with such changes or revisions as may be necessary to accomplish the financing, is hereby authonzed to be executed by the Mayor and City Secretary for and on behaff of the Qty and as the act and deed of the City Council; and such Agreement as executed by said officials shall be deemed approved by the City Council and constitute the Agreement herein approved. SECTION 27: Proceeds of Sale. lmm,ediately following the delivery of the Certificates, the proceeds of sale {less certain costs of issuance and the accrued interest received from the · Purchasers) shall be deposited with the Escrow Agent for application and disbursement in accordance with the provisions of the Agreement. The proceeds of sale of the Certificates not initially deposited with the Escrow Agent. including investment earnings thereon and amounts returned to the City pursuant to the Agreement, shall be disbursed for payment of costs of issuance or deposited in the Certificate Fund for the Certificates to be maintained at the City's depository bank, all in accordance with written instructions. Pending expenditure for authorized projects and purposes, such proceeds of sale may be invested in authorized investments and any investment earnings realized may be expended for such authorized projects and purposes or deposited in the Certificate Fund as shall be determined by the City Council. Accrued interest and premium, if any, received from the Purchasers as well as all surplus proceeds of sale of the Certificates, including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Certificate Fund. SECTION 28: Control and Custody of Certificates. The Mayor of the City shall be and is hereby authorized to take and tiave charge of all necessary orders and records pending investigation by the Attorney General of the State of'Texa,; including the printing of the Certificates, and shall take and have charge and control of the Certificates pending the approval thereof by the Attorney Gene~I, the registration thereof by the Comptroller of Public Accounts and ·_ the delivery thereof to the Purchasers. · · · · > Furthermore, the Mayor, City Secretary, City Manager, First Assistant City Manager, Managing Dir~·of Rnance, and Director of Rnancial Services, any one or more of said officials, are hereby authorized and directed to furnish and·exe~te such d9CUrnents and certifications relating to the City and the issuance of the Certificates, including a certificatIQn as to· facts. estimates, circumstances and reasonable expectations pertaining to the use and expenditure and investment of the proceeds of the Certificates as may be necessary for the approval of the Attorney General, registration by the Comptroller of PubUc Accounts .and delivery of the · Certificates to the purchasers thereof and, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Certificate(s) to the purchasers. '780356.1 ~27- ) ) ) ) ) ) ) ) SECTION 29: Legal Opinion. The obligation of the Purchasers to accept delivery of the Certificates is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys, Dallas, Texas, approving such Certificates as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Certificates. A true and correct reproduction of said opinion is hereby authorized to be printed on the definitive Certificates or an executed counterpart thereof shall accompany the global Certificates deposited with the Depository Trust Company. SECTION 30: CUSIP Numbers. That CUSIP numbers may be printed or typed on the definitive Certificates. It is expressly provided, however, tliat the presence or absence of CUSIP . numbers on the definitive Certificates shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving said Certificates as to legality are to be held responsible for CUSIP numbers' incorrectly printed or typed on the definitive Certificates. SECTION 31: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent/Registrar and the Holders, any right. remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 32: 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 33: Governing Law. This Ordinance shall be construed and enforced in accordance with the Jaws of the State of Texas and the United States of America. ·· SECTION 34: Severabmty. If any provision of this_prdi_~ance or the application thereof to any circumstance shall be held ta be invalid; the remainder of this Ordir:iance and the application thereof to other circumstances shaD nevertheless. be valid, and the City Council hereby declares that this Ordinance would have been·~na~witt,out suchJnvali~ provision. SECl"tON 35: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. · SECTION is: Construction of Terms.· If appropriate in the context of this Ordinance, words of the singular number shall be considered to indude the plural;wor.ds1lf the plural number · shall be considered to include the singular, and words of the mascuUne, feminine or neuter gender shall be considered to include the other genders. SECTION 37: Continuing Disclosure Undertaking. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such .terms below: 780356.l -28-- ) ) ) ) ''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. "Rufe" means SEC Rule 15c2-12, as amended from time lo time. "SEC' means the United States Securities and Exchange Commission. "S/lY' means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be. a state information depository within the meaning of the Rule from time to time. (b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, within six months ~fter the end of each fiscal year {beginning with the fiscal year ending September 30, 1999) financial information and operating data with respect to the City of the general type included in the final Official Statement approved by Section 25 of this Ordinance, being the information described in Exhibit D hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles desaibed in Exhibit D 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 available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial infonnation and operating data and will file the annual audit report, when and if the same becomes 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 n~ fiscal year end) prior to the next date by which the City otherwise would be required to provide financial informatiQ_n ar:i~ operating data pursuant to this Section. · .,· · . The financial infonnation_and opera~ing data tQ be. prQVided pursuant to this Section may be set forth in fuU in one or more documents or may be included by specific reference to any · document (ineJuding an offlCial statement or other offering document, ff it is available from the MSRB) that ther~tqfore has been provided to each·NRMSIR and any SID or fifed with the SEC. -. (c) Mateiial Event Notices. The City shall notify any SID and etther each NRMSIR or the MSRB, in a timely manner, of any of the foliowing events with respecfm· the.' Certificates, if such event is material within the meaning of the federal securities laws:· 1. Principal and interest payment delinquencies; 2. Non.payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 780356.I -29- ) ) ) ) 5. 6. Certificates; Substitution of credit or liquidity providers, or their failure to perform; Adverse tax opinions or events affecting the tax-exempt status of the 7. Modifications to rights of holders of the Certificates; · 8. Certificate calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Certificates; and 11. 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 0perating data in accordance with subsection (b) of this Section by the time required by such Section. ( d) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, the City remains an "obligated person" with respect to the Certificates within the meaning of the Rule, except that the City in any event will give the notice required by subsection (c) hereof of any Certificate calls and defeasance that cause the City to be no longer such an "obligated person." The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Certificates, and nothing in this Section, express or implied. shatl give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. Ttte City undertakes to provide only the linancial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does .not make any representation or warranty concerning such information or its usefulness to a decision to invest in or se.11 C~.rti~_tes at any future date. UND~R NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEEICIAL OWNER Of ANY CERTIFICATE 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 T~IS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, . IN CONTRACT-OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIF.IC PERFORMANCE. •• • •• • a-:-... •~• >4 • No default by the City in observing or perfonning its obligations under this Section shall ·constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. 780356.1 -30- ) . ) The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances resulting from a change in legal requirements, a change tn law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Certificates in the primary offering of the Certificates 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 Certificates 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 Holders and beneficial owners of the Certificates. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeaJs the applicable provisions of the Rule or a court of final jurisdiction detennines that such provisions are invalid, but only if and to the extent that reservation of the City's right to .do so would not prevent underwriters of the initial public offering of the Certificates from lawfully purchasing or selling Certificates in such offering. If the City so amends the provisions of this Section, it shall include with any amended financial infonnaOon or operating data next provided in accordance with subsection (b) an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial infonnation or operating data so provided. SECTION 38: Public Meeting. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, induding this Ordinance, was given. all as required byV.T.C.A.. Government Code, Chapter 551, as amended . .. • •-: -• .A·,. ~-. 7B0356.1 -31- i ' SECTION 39: Effective Date. This Ordinance shall take effect and be in force immediately from and after its passage on second and final reading, and IT IS SO ORDAINED. PASSl;D ANO ADOPTED ON FIRST READING, June 24, 1999. PASSED ANO ADOPTED ON SECOND ANO FINAL READING. this the 23111 day of September, 1999. crrv OF LUBBOCK, TEXAS ATTEST: mJ/, J~) v~ (City Seal) .. . . ·: .. _ ... ,.. 180356.l -32- EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT See Document Number 5 .. . . --: ··_-·,. 802031.l ") ) . EXHIBIT B PURCHASE CONTRACT ) ., See Document Number 4 ) ') ·-. -: ,..,,..,.. 80203Ll . ""\ . EXHIBITC "I SPECIAL ESCROW DEPOSIT AGREEMENT ) See Document Number 6 .. '\ •• • -"! ··.-·,.· ' sooon.1 "' } ) ' ) DESCRIPTION OF ANNUAL FINANCIAL INFORMATION Ex:hlbit D to Ordinance The following information is referred to in Section 37 of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2. The information contained in Tables 1 through 6 and 8A through 18 of the Official Statement. Accounting Principles The accounting principles referred to in such Section are the generally accepted accounting principles as applicable to governmental units as prescribed by The Government Accounting Standards Board. '180356.1 No Text ) ) ) ) ) ) THE STATE OF TEXAS COUNTY OF LUBBOCK CITY OF LUBBOCK CERTIFICATE OF CITY SECRETARY § § § § § I, the undersigned, City Secretary of the City of Lubbock, Texas, DO HEREBY CERTIFY as follows: 1. On the 24th day of February, 2000, the City Council of the City of Lubbock. Texas. con~ened in regular session at its regular meeting place in the City Hall of said City;. the duly constituted members of the Council being as follows: WINDY SITTON MAYOR MAXINCE ) MAYOR PRO TEM VICTOR HERNANDEZ ) T. J. PATTERSON ) COUNCILMEMBERS DAVID NELSON ) ALEX "TY" COOKE ) MARC McDOUGAL ) all of said persons were present at said meeting, except the following: Windy Sitton. Among other business considered at said meeting, the attached ordinance (the "Ordinance") entitled: "AN ORDINANCE authorizing the issuance of 'CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIE:5 2000'; specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; and resolving other matters incident and related to the is_suance, sale, payment and delivery of said bonds, including the approval of a Paying Agent/Registrar Agreement and the approval and distribution of an Official Statement pertaining thereto; and providing an effective date." was introduced and submitted to the Council for .first reading. . After presentation and due consideration of the Ordinance, and upon a motion being made by T.J. Patterson arid seconded by Victor Hernandez , the Ordinance was approved on first reading by the Council by the following vote: -6-voted "For" -0-voted "Against'' -0-abstained all as shown in f.he official Minutes of the Council for the meeting held on the aforesaid date. 829147.1 ) ) ) ) ) ) 2. On the 23"' day of March, 2000, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: WINDY SITTON MAYOR MAXINCE ) MAYOR PRO TEM VICTOR HERNANDEZ ) T. J. PATTERSON ) COUNCILMEMBERS DAVID NELSON ) ALEX ''TY'' COOKE ) MARC McDOUGAL ) all of said persons were present at said meeting, except the following: None . Among other business considered at said meeting, the Ordinance was submitted to the Council for second reading and final passage and adoption. After presentation and due consideration of the Ordinance, and upon a motion being made by Max Ince and seconded by Marc McDougal , the Ordinance was duly passed and adopted on second reading to be effective immediately by the following vote: · -6-voted "For" -0-voted "Against" -0-abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 3. The attached Ordinance is a true and correct copy of the original on file in the official records of the City; the duly qualified and acting members of the City Council of said City on the date of the aforesaid meetings are those persons shown above and, according to the records of my office, advance notice of the time, place and purpose of each meeting was given to each member of the Council; and that said meetings and the deliberation of the aforesaid public business were open to the public and written notice of said meetings, including the subject of the above entitled Ordinance, was posted and given in advance. thereof in compliance with the provisions of V.T.C.A., Government Code, Chapter 551, as amended. 829147.1 -2- ) ) ) ·~ ·. } ) ) ' ) IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal of said City, this the 23rd day of March, 2000. (City Seal) 829147.l -3- mell, City Secretary bock, Texas .., J ) . ) . ) t."•. •• } ., ORDINANCE NO. 2000-00011 AN ORDINANCE authorizing the issuance of "CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 2000"; specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; and resolving other matters iflcident and related to the issuance, sale, payment and delivery of said bonds, including the approval of a Paying AgenURegistrar Agreement and the approval and distribution of ah Official Statement pertaining thereto; and providing an effective date. WHEREAS, the City Council of the City of Lubbock, Texas, hereby finds and determines that $7,000,000 in principal amount of general obligation bonds approved and authorized to be issued at an election held on September 18, 1999, should be issued and sold at this time; a S!Jmmary of the general obligation bonds authorized at such election, as well as previously held elections, the principal amount authorized, amounts heretofore issued and being issued pursuant to this ordinance and amounts remaining to be issued subsequent hereto being as follows: Principal Amounts Date Amount Heretofore Amounts Unissued Purpose Authorized Authorized Issued Being Issued Balance Wateiworks System 10-17--87 2,810,000 200,000 -0-. 2,610,000 Sewer System 5-21-77 3,303,000 2,175,000 -0-1,128,000 Street Improvements 5-1-93 10,170,000 10,166,000 -0-. 4,000 Street Improvements 9-18-99 17,165,000 -0-2,390,000 14,775,000 Drainage 9-18-99 2,160,000 -0-1,025,000 1,135,000 Traffic Signals 9-18-99 3,295,000 -0-340,000 2,955,000 Parks 9-18-99 14,765,000 -o.:. 3,245,000 11,520,000 AND WHEREAS, the City Council hereby reserves ~nd retains the right to issue the balance of unissued bonds approved at said elections in one or more installments when, in the judgment of the Council, funds are needed to accomplish the purposes for which such bonds·are voted; now, · therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1: Authorization -Designation• Principal Amount-Purpose. General obligation bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $7,000,000, to be. designated arid bear the title "CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 2000" (hereinafter referred to as the "Bonds"), for the purpose of making permanent public improvements and public purposes, to wit: $2,390,000 for street improvements, including drainage, curb, gutters, landscaping, sidewalks, curb ramps and utility line relocatior, and the acquisition of. land ·and right-of-way therefor, $1,025,000 for drainage . 829830.1 ) ) ) ) ) .... ) .., improvements, $340,000 for traffic signalization and assorted communications equipment and $3,245,000 to acquire or improve, or both, land for park purposes, all in accordance with authority conferred at the aforesaid election and under and in strict conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Government Code, Chapter 1331 and Article VIII Section 1 of the City Charter of the City of Lubbock, Texas. SECTION 2: Fully Registered Obligations -Bond Date-Authorized Denominations-Stated Maturities-Interest Rates. The Bonds shall be issued as fully registered obligations only, shall be dated March 15, 2.000 (the "Bond Date"), shall be in denominations of $5,000 or any integral multiple (within a Stated Maturity) thereof, and shall become due and payable on February 15 in each of the years and in principal amounts (the "Stated Maturities") in accordance with the following schedule; Year of Principal Interest Stated Maturity Amount Rate 2002 $205,000 5.875% 2003 215,000 . 5.90% 2004 230,0_00 6.00% 2005 245,000 6.00% 2006 260,000 6.00% 2007 275,000 6.00% 2008 290,000 5.60% 2009 310,000 5.10% 2010 330,000 5.20% 2011 ·350,000 5.25% 2012 370,000 5.30% 2013 395,000 5.30% 2014 ·415,000 5.375% 2015 445,000 5.50% 2016 470,000 5.50% 2017 500,000 5.50% 2018 530,000 5.60% 201.9 565,000 5.70% 2020 600,000 5.70% · The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the per annum rates shown above (computed on the basis of a 360-day year of twelve 30-day months); such interest shall be payable on February 15 and August 15 in each year, commencing February 15, 2001. SECTION 3: Terms of Payment-Paying Agent/Registrar. The princ_ipal of, premium, if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders") appearing on the registration and transfer books maintained by the Paying AgenURegistrar and the payment thereof shall be in any coin or currency of the United States of 829830.1 -2- ) ) ) "\ . .., ) America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of U.S. Trust Company of Texas, N.A., Dallas, Texas to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records relating to the registration, payment, transfer and exchange of the Bonds (the "Security Register") shall at all times be kept and maintained on behalf of the City by the Paying AgenVRegistrar, as provided herein and in accordance with the terms and provisions of a "Paying Agent/ Registrar Agreement", substantially in the form attached hereto asExhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City Secretary are authorized to execute and deliver such Agreement in connection with the delivery of the Bonds. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor.Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prep~id, which notice shall also.give the address of the new Paying Agent/Registrar. Principal of and.premium, if any, on the Bonds shall be payable at the Stated Maturities or the redemption thereof, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices in New York, New York (the "Designated Payment/Transfer Office"). Interest on the Bonds shall be paid to the Hold~rs whose name . appears in the Security Register at the.close of·business on the Record Date (the last business day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder rE1corded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, Jh~ t:iolder. If the date for t.he payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the Designated Payment/Transfer Office of the Paying AgenURegistrar is located are authoriz~d 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. In tt:ie 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") ~II 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 (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the dose of business on the last business day next preceding the date of mailing of such notice. 829830.1 -3 - ) ·, ) t ) ) ")· ) ) SECTION 4: Redemption. (a)Optional Redemption. The Bonds having Stated Maturities on and after February 15, 2010, shall be subject to redemption prior to maturity, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2009 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redemption Option. At least forty-five (45) days prior to a redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Bonds, the principal amount-of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the City to exercise the right to redeem Bonds shall be entered in the minutes of the governing body of the City. (c) Selection of Bonds for Redemption. lfless than all Outstanding Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying AgenVRegistrar shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by dividing the principal amount of such Bonds by $5,000 and shall select the Bonds, or principal amount thereof, to be redeemed within such Stated Maturity by lot. (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption ·date for the Bonds, a notice of redemption shall be sent by United States_ Mail, first class postage prepaid, in the name of the Cify and at the City's expense, to each Holder of a Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of . business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount thereof.to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Hold~r. If a Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given as herein above .provided, such Bond ( or the principal amount thereof to Qe redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for the payment of such Bond {or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of sucti payment by the Paying Agent/Registrar. · 829830.1 ) ) ) ) ... ) ) ) ) SECTION 5: Registration-Transfer/Exchange of Bonds-Predecessor Bonds. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Bonds issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Bond may be transferred or exchanged for Bonds of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in fonn satisfactory to the Paying Agent/Registrar. Upon surrender of any Bond for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Bonds of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Bond or Bonds surrendered for transfer. At the option of the Holder, Bonds may be exchanged for other Bonds of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the Designated Payment/Transfer Office of the Paying Agent/Registrar. Whenever any Bonds are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds to the Holder requesting the exchange. All Bonds issued in any transfer or exchange of Bonds shall. be delivered to the Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and delivery thereof, the same shall be the valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange. All transfers or exchanges of Bonds pursuant to this Section shall be made without expense or service charge to the Holder,.except as otheiwise herein provided; and except that the Paying AgenVRegistrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Bonds canceled by reason of an exchange or transfer pursuant to the provisions hereof · are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Bond or Bonds registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor· Bonds" shall includ~ any mutil~ted, lost, destroyed, or stolen Bond for which a replacement Bond has been issued, registered and delivered in lie·u thereof pursuant to the provisions of Section 11 hereof and such new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed. or stolen Bond. · 829830.1 -5- ) ) ) ) ' )' ) . Neither the City nor the Paying AgenURegistrar shall be required to issue or transfer to an assignee of a Holder any Bond ca/fed for redemption, in whole or in part, within 45 days of the date • fixed for the redemption of such Bond; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in part. SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and transfer/exchange of the Bonds, the City . hereby approves and authorizes the use of "Book-Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company (OTC), a limited purpose trust company organized under the laws of the State of New York, in accordance with the operational arrangements referenced in the Blanket Issuer Letter of Representation, by and between the City and OTC (the "Depository Agreement"). Pursuant to the Depository Agreement and the rules of OTC, the Bonds shall be deposited with OTC who shall hold said Bonds for its participants (the "OTC Participants"). While the Bonds are held by OTC under the Depository Agreement, the Holder of the Bonds on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of OTC, notwithstanding the ownership of each actual purchaser or owner of each Bond (the "Beneficial Owners") being recorded in the records of OTC and D~C Participants. In the event OTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases-to provide book-entry clearance and settlement of securities transactions in . general or the City determines that OTC is incapable of proper1y discharging its duties as securities depository for the Bonds. the City covenants and agrees with the Holders of the Bonds to cause Bonds to be printed in definitive form and provide for the Bonds to be issued and delivered to OTC Participants and Beneficial Owners, as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution -Registration. The Bonds shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Bonds may be ·manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Bond Date shall be deemed to be duly executed on behalf of the City, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of d~livery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in subsequent exchanges and transfers, all as authorized and provided in the Bond Procedures Act of 1981, as amended. No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Bond either a certificate of registration substaf)tially in the form provided in Section 9C, manually executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration . substantially in the form provided in Section 9D, manually executed by an authorized officer, 829830.1 -6- ) ) ) ) ' ., ) ' ) ) .. ) ) . employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, registered and delivered. SECTION 8: Initial Bond(s}. The Bonds herein authorized shall be initially issued either (i) as a single fully registered bond in the total principal amount of $7,000,000 with principal installments to.become due and payable as provided in Section 2 hereof and numbered T-1, or (ii} as multiple fully registered bonds, being one bond for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s) shall be the Bonds 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 Te,i:as and delivered to the initial purchaser(s). Any time after the delivery of the Initial Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and exchange therefor definitive Bonds of .authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other infonnation and documentation as the Paying Agent/Registrar may reasonably require. SECTION 9: Forms. A. Forms Generally. The Bonds, the Registration Certificate of th~ _ Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the Bonds, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers_, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends in the event the Bonds, or any maturities thereof, are purchased with insurance and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or detennined by the officers executing suc;;h Bonds as evidenced by their execution. Any portion of the text of any Bonds may be set forth on the· reverse thereof, with an appropriate reference thereto on the face of the Bond. The definitive Bonds ~nd the Initial Bond(s) shall be printed, lithographed, or engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined by the officers executing such Bonds as evidenced by their execution thereof. 829830.l -7- ) I \ ' ) . ) ) ) . ) B. Form of Definitive Bond. REGISTERED NO. ___ _ Bond Date: March 15, 2000 Registered Owner: Principal Amount: UNITED STA TES OF AMERICA STATE OF TEXAS CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 2000 REGISTERED $ __ _ Interest Rate: Stated Maturity: CUSIPNO: DOLLARS The City of Lubbock (hereinafter referred to as the "City"), a body corporate and political subdivision in the County of Lubbock, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specified above-the Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) and to pay interest _ on the unpaid principal amount hereof from the Bond Date at the per annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on February 1_5 and August 15 in each year, commencing February 15, 2001. Principal of this Bond is payable at its Stated Maturity or redemption . to the registered owner hereof, upon presentation and surrender, atthe Designated PaymenVTransferOffice of the Paying · Agent/Registrar executing the registration certificate appearing hereon, or its successor. Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name appears on the •security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first dass postage prepaid, to· the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. Ali payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tenderfor the payment of public . and private debts. This Bond is one of the series specified in its title issued in the aggregate principal amount of $7,000,000 (herein referred t~ as the "Bonds") for the purpose of making pemianent public improvements ancl public purposes, to wit: $2,390,000 for street improvements, including drainage, curb, gutters, landscaping, sidewalks: curb ramps and utility line relocation and the acquisition of land and right-of-way therefor, $1,025,000 for drainage improvements, $340,000 for 829830.1 -8- ) I ) ' ·~·-: -. ) ) )' "\ traffic signalization and assorted communications equipment and $3,245,000 to acquire or improve, or both, land for park purposes, all in accordance with authority conferred at an election and under and in strict conformity with the Constitution and laws of the State of Texas and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Bonds maturing on and after February 15, 2010, may be redeemed prior to their Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2009, or on any date thereafter, atthe redemption price of par, together with accrued interest to the date of redemption. At least thirty days prior to a redemption date, the City shall cause a written notice.of such redemption to be sent by United States Mail, first class postage prepaid, to the registered owners of the Bonds to be redeemed in whole or in part, and subject to the terms and provisions relating thereto contained in the Ordinance. If a Bond {or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon said redemption date such Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor, provided moneys for the payment of the redemption price and the interest on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying AgenVRegistrar. In the event a portion of the· principal amount of a Bond is to be redeemed and the registered owner is someone other than Cede & Co., payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of · such Bond to the Designated Payment/Transfer Office of the Paying Agen,URegistrar, and a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided by the Ordin;mce for the then unredeemed balance of the principal sum thereof will be issued to the registered owner, without charge. If a Bond is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such Bond to an assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance of a Bond redeemed in part. The Bond~ are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City. Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all of the p_rovisions of which the owner or holder of this Bond by· the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the· tax levied for the payment of th~ Bonds; the terms and conditions relating to the ·transferor exchange of this Bond; the conditions upon which the·Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying AgenVRegistrar; the terms and provisions upon which this Bond may be discharged at or prior to its maturity or redemption, and deemed to be no longer Outstanding 829830. l -9- ) ) ) . ) thereunder; and for other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. This Bond, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its pre~entation and surrender at the Designated . Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying AgenVRegistrar duly executed by; the registered owner hereof. or his duly authorized agent. When . a transfer on the Security Register occurs, one or more new fully registered Bonds of the same Stated M~turity, of authorized denominations, bearing the same rate of interest, and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. . The City and the Paying AgenVRegistrar, and any agent of either, shall treat the registered owner whose name appears on the Security Register (i) on the Record Date as the ow~er entitled to payment of intere~t hereon, (ii) on the date of surrender of this Bond as the owner entitf ed to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and {iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of 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 AgenVRegistrar, 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. da~f the past due . interest (which shall be 15 days after the Special Record Date) shall be sent at feast five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Bonds is dufy authorized by law; that all acts, conditions and things requJred to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid obligations of the City have been properly done, have . happened and have been performed in regular and due time, form and manner as required by the · Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by the levy of a tax as aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. 829830.l -10- ) 1 ) IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Bond Date. CITY OF LUBBOCK, TEXAS COUNTERSIGNED: Mayor "'l City Secretary ··· (SEAL) ) ) ) ) ) ·- ) ) . C. *Form of Registration Certificate of Comptroller of Public Accounts to appear on Initial Bond{s) only. REGISTRATION CERTIFICATE OF -COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS ( ( ( ( THE STATE OF TEXAS REGISTER NO. ____ _ I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of P1:1blic Accounts of the State of Texas. WITNESS my signature and seal of office this ___ -.:... ____ _ (SEAL) *NOTE TO PRINTER: 829830.1 Comptroller of Public Accounts of the State of Texas Do Not Print on Definitive Bonds -11-· ) D. Form of Certificate of Paying Agent/Registrar to appear on Bonds (other than a single fuUv registered Initial Bond). ) REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR ) This Bond has been duly issued and registered under the provisions of the within-mentioned Ordinance; the bond or bonds of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying AgenURegistrar. The designated offices of the Paying Agent/Registrar in New York, New York is the "Designated Payment/Transfer Office" for this Bond. · Registration date: E. Form of Assignment. U. S. TRUST COMPANY OF TEXAS, N.A., Dallas, Texas, as Paying Agent/Registrar By ___________ _,_ ___ _ Authorized Signature ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee:) __________ _ (Social Security or other identifying number:_· _______________ _ _____________ ) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints __ · _________________ _ attorney to transfer the within Bond on the books kept for registration thereof. with full power of substitution in the premises. DATED:----~----- Signature guaranteed: 829830.1 NOTICE: The signature pn this assignment must co(respond with the name of the registered owner as it appears on the face of the within Bond in every particular. -12- ) 1 ) ) ,: . :· ... ·· . F. The Initial Bond(s) shall be in the form set forth in paragraph 8 of this Section, except that the fonn of the single fully registered Initial Bond shall be modified as follows: (i) immediately under the name of the bond the headings "Interest Rate __ .. and "Stated Maturity __ " shall both be omitted. (ii) Paragraph one shall read as follows: Registered Owner: Principal Amount: Dollars The City of Lubbock (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Lubbock, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, the Principal Amount hereinabove stated on February 15 in eacJ:l of the years and in principal installments in accordance with the following schedule: YEAR OF MATURITY PRJNCIPAL INSTALLMENTS INTEREST RATE (Information to be inserted from schedule in Section 2 hereof). (or so much principal thereof-as shall not have been prepaid prior to maturity) and to pay interest on the unpaid Principal Amount hereof from the Bond Date at the per annum rates of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest · being payable on February 15 and August 15 in each year, commencing February 15, 2001. Principal installments of this Bond are payable in the year of maturity or on a prepayment date to the registereq owner hereof by U.S. Trust Company of Texas, N.A., Dallas, Texas (the "Paying Agent/Registrar"), upon presentation and surrender, at its designated offices in New York, New .York (the "Designated Payment/Transfer Office"). Interest is payable to the registered owner of this Bond whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close· bf business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered own~r recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the_ United States of America wh.ich at the time of payment is legal tender for the payment of public a11d private debts. SECTION 10: Leyy of Taxes. To provide for the payment of the "Debt Service Requirements" of the Bonds, being (i) the interest on the Bonds and {ii) a sinking fund for their . . redemption ~t maturity or a sinking fund of 2% (whichever amount is the greater), there is hereby 829830.l -13- ' l ) . ...... levied, and there shall be annually assessed and collected in due time, form, and manner, a tax on all taxable property in the City, within the limitations prescribed by law, and such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be ample and sufficient to provide funds each year to pay the principal of and interest on said Bonds while Outstanding; full allowance being made for delinquencies and costs of collection; separate books and records relating to the receipt and disbursement of taxes levied, assessed and collected· for and on atoount of the Bonds shall be kept and maintained by the City at all times while the Bonds are Outstanding, and the taxes collected for the payment of the Debt Service Requirements on the Bonds shall be deposited to the credit of a "Special 2000 Bond Account" (the "Interest and Sinking Fund") maintained on the records of the City and deposited in a special fund maintained at an official depository of the City's funds; and such tax hereby levied, and to be assessed and collected annually. is hereby pledged to the payment of the Bonds. Proper officers of the City are hereby authorized and directed to·-cause to be transferred to the Paying Agent/ Registrar for the Bonds, from funds on deposit in the Interest and Sinking Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Bonds as the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause collected funds to be deposited with the Paying Agent/Registrar on or before each principal and interest payment date for the Bonds. SECTION 11: Mutilated-Destroyed-Lost and Stolen Bonds. In case any Bond shall be _ mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar, subject to City approval and in its discretion, may execute and deliver a replacement Bond of like form and ten.or, and in the same denomination and !)earing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Bond, and. of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. AJl expenses and charges associated with such indemnity and with the preparation, execution ~nd delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated, or destroyed, lost or stolen . Every replacement Bond issued pursuant to this Section shall be a v.alid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds; notwithstanding the enforceability of payment by anyone of the destroyed, lost. or stolen Bonds. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Bonds. 829830.l -14- ) } l .-. SECTION 12: Satisfaction of Obligation of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied under this Ordinance and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Bonds or any principal amount(s} thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i} money sufficient to pay in full such Bonds or the principal amount(s) thereof at maturity or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/ Registrar have been made) the redemption date thereof, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying AgenURegistrar, or an authorized escrow agent. or (ii) Government Securities shall have been irrevocably deposited in trust V'v'ith the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal amount{s} thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptabte to the. Paying Agent/ Registrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal . Revenue Code of 1986, or regulations adopted pursuant thereto. Any moneys so de~osited with the Paying Agent/Registrar, or an authorized escrow agent, and all income from Government Securities held in trust by the Paying AgenURegistrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying AgenVRegistrar for the payment of the principal of and interest on the Bonds and remaining unclaimed _for a period of three (3) years after the Stated Maturity, or applicable redemption date, of the Bonds for which such moneys were deposited and are held in trust to pay, shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying AgenVRegistrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. The term "Government Securities", as used herein, means (i)directnoncallable obligations of the United States of America, including obligations the principal of and interest on which are. unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the City 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 on the date of 829830. l -15- , . .~~·· .· their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than MA or its equivalent. SECTION 13: Ordinance a Contract -Amendments -Outstat1dinq Bonds. This Ordinance shall constitute a contract with the Holders 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 Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of Holders holding a majority in aggregate principal amount of the Bonds then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Bonds, no such amendment, addition, or rescission shall (1) extend the time or times of p.ayment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Bonds~ (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of Bonds required to be held by Holders for consent to any such amendment, addition, or rescission. The term "Outstanding" when used in this Ordinance with respect to Bonds means, as of the date of determination, all Bonds theretofore issued and delivered under this Ordinance, except: (1) those Bonds canceled by the Paying Agent/Registrar or delivered to the Paying Agent/Registrar for cancellation; (2) those Bonds deemed to be duly paid by the City in accordance with the provisions of Section 12 hereof; and (3) those mutilated, destroyed, lost, or stolen Bonds which have been replaced with Bonds registered and delivered in lieu thereof as provided in Section 11 hereof. SECTION 14: Covenants to Maintain Tax-Exempt Status. A.Definitions. When used in •· ·· this·Sectlon, the following terms have the following meanings: 829830.1 "Closing Date" means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. "Caden means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning setforth in Section 1.148-1(b) of the Regulations. -16- "Gross Proceeds" means any proceeds as defined in Section 1.148-1{b) of the Regulations. and any replacement proceeds as defined in Section 1. 148-1 ( c) of the Regulations, of the Bonds. "Investment" has the meaning set forth in Section 1. 148-1 (b) of the Regulations. "Nonpurpose lnvestmentn means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purposes of the Bonds. "Rebate AmountH has the meaning set forth in Section 1. 148-1 (b) of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax · Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. "Yield"of (1) any Investment has the meaning set forth in Section 1. 148-5 of the Regulations; and (2) the Bonds has the meaning set forth in Section 1.148-4 of the Regulations. · B. Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the· acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a m~nner which if made or omitted, respectively, would cause the interest on any Bond to become indudab/e in the gross income, as defined in section 61 of the Code, of the owner thereof fo_r fede(al income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognfzed in•the field of municipal bond law to the ·effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the City shall comply with each of the specific covenants in this Section. C. No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity-of Bonds: (1) exclusiyely own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or 829B30.I -17- ) I ' I indirectly with Gross Proceeds of the Bonds, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and Instrumentality thereof) other than a state or local government, unJess such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Bonds. or any property the acquisition, construction or improvement of which is to be financed or refinanced direct!;' or indirectty with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments. acquired with such Gross Proceeds pending applrcation for their intended purposes. D. No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall not use 'Gross Proceeds of the Bonds ta make or finance _loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a . tal<e-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. E. Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. F. Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. G. Information Report. The City shall timely f~e the information required by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. H. Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder: 8298J0. l -18- (1) The City shall account for all Gross Proceeds {including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Bond is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Bonds with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the. Bonds until six years after the final Computation Date. (3) As additional consideration for the purchase of the Bonds by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the· gross income of the owners thereof for federal income tax purposes, the City shall pay to the United States out of the Interest and Sinking Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and {ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such' date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f} of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section 148(f) of the Code and the Regulations and rulings_ thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs·(2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter ( and in all events Within one hundred eighty ( 180) days after discovery of the error), ihciuding payment to. the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-J(h) of the Regulations. I. Not to Divert Arbitrage Profits. Except to the extent pennitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection H of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the 829830. \ -19- '· .. transaction had been at arm's length and had the Yield of the Bonds not been relevant to either party. J. Elections. The City hereby directs and authorizes the Mayor, City Secretary, City Manager, Managing Director of Finance and Assistant City Manager, individually or jointly, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Bonds, in the Certificate as to Tax- Exemption or similar or other appropriate certificate, form or document. SECTION 15: Sale of the Bonds. Pursuant to a public sale for the Bonds, the bid subn)itted by J.C. Bradford & Co. (herein referred to as the "Purchasers") is declared to be the best bid received producing the lowest true interest cost to the City; such bid is hereby accepted and incorporate herein by reference as a part of this Ordinance for all purposes and.the. sale of the Bonds to said Purchasers at the price of par and accrued interest to the date of delivery, plus a premium of$ -0-, is hereby approved and confirmed. Delivery of the Bonds to the Purchasers shall occur as soon as possible upon payment being made therefor in accordance with the te·rms of sale. · SECTION 16: Control and Custody of Bonds. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texas, incfuding the printing and supply of definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Publi~ . Accounts and the delivery thereof to the Purchasers. Furthermore, the Mayor, City Secretary, City Manager, Managing Director of Finance and Assistant City Manager, any one or more of said officials, are hereby authorized and directed to furnish and execute such documents relating to the City and its financial affairs as may be necessary for the issuance of the Bonds, the approval of the Attorney General and the registration by the Comptroller of Public Accounts and, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, make the necessaiy arrangements for the delivery of the Initial Bond(s) to the Purchasers and the initial exchange thereof for definitive Bonds. ~ECTI ON 17: Official Statement. The use of the Preliminary Official Statement, dated February 24, 2000, in the offering and sale of the Bonds is hereby ratified, confinned and approved in all resp~cts, and the City ~ouncil hereby finds that the information and data contained in said Preliminary Official Statement pertaining to the City and its financial affairs is true and correct in all material respects and no material facts have been omitted therefrom which are necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The final Official-Statement, which reflects the tenns of sale (together with such changes approved by the Mayor, City Secretary, City Manager or Managing Director of Rnance, one or more of said officials), shall be and is hereby in all respects approved and the Purchasers are hereby authorized to use and distribute said final Official Statement, dated March 23, 2000, 'in the reoffering, sale and delivery of the Bonds to the public. 829830. t ) I I : SECTION 18: Proceeds of Sale. The proceeds of sale of the Bonds, excluding the accrued interest and premium, if any, received from the purchasers, shall be deposited in a construction fund maintained at the City's depository bank. Pending expenditure for authorized projects and purposes, such proceeds of sale may be invested in authorized investments in accordance with the provi$i0ns of V.T.C.A., Government Code, Chapter 2256, including guaranteed investment contracts permitted by V.T.C.A., Section 2256.015 et seq., and the City's investment policies and guidelines, and any investment earnings realized shalf be expended for such authorized projects and purposes or deposited in the Interest and Sinking Fund as shall be determined by the City Council. Accrued interest and premium, if any, received from the Purchasers as well as all surplus proceeds of sale of the Bonds, Including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Interest and Sinking Fund. SECTION 19: Notices to Holders-Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given {unless otheiwise herein expressly provided) if in writing and sent by United States Mail. first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the busi~ess day next preceding the mailing of such notice. In any case wher:e notice to Holders is given by mail, neither the. failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before . or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 20: Cancellation. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if surrendered to the City, shall be delivered to the Paying Agent(Registrar and, if not already canceled, shall be promptly canceled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previous·ly certified or registered and deliVered which the City may have acquire_d in any manner whatsoever, and all Bonds so d~livered shall be promptly canceled by the Paying Agent/Registrar. All canceled Bonds held by the Paying Agent/Registrar shall be returned to the City. SECTION 21: Legal Opinion. The obligation of the Purchasers to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright& Jaworski L.L.P., Attorneys, Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Bonds. A true and correct reproduction of said opinion is hereby authorized to be printed on the defiriitiv~ Bonds or an executed counterpart thereof shall a~mpany the global Bonds deposited with the Depository Trust Company. SECTION 22: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive · Bonds. It is expressly provided, hoY_.tever, that the presence or absence of CUSIP numbers on.the 829830, l -21- definitive Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving the Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds. SECTION 23: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying AgenVRegistrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 24: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in ·conflict 9r inconsistent with any provision of this Ordinance are.hereby repea·led to the extent of such conflict, and the provisions of this Ordi.nance shall be and remain controlling as to the matters contained herein . . SECTION 25: Governing law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 26: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 27: Construction of Terms. If appropriate in the context of this Ordinance, _ words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 28: 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 the City Council hereby· declares that this Ordinance would have been enacted without such invalid provision. SECTION 29: Continuing Disclosure Undertaking. {a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Se.curities 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. 829830.l "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC' means the United States Securities and Exchange Commission. -22- ) I "SID" means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. (b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, witllin six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 2000) financial information and operating data with respect to the City of the general type included in the final Official Statement approved by Section 17 of this Ordinance, being the information de~cribed in Exhibit B hereto. Financial statements to be provided shall be ( 1) prepared in accordance with the accounting principles described in Exhibit B 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 avaflable at the time the financial infonnation and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial information and operating data and will file the annuar audit report when and if the same becomes 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 infonnation 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 (inciuding an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC: (c) Material Event Notices. The City shall notify any _SID and either each NRMSIR or . the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: Bonds; arid 829830.1 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. . 11. Principal and interest payment delinquencies; Non-payment related defaults; Unscheduled draws on debt service reserves reflecting financial difficulties: Unscheduled ~raws on credit enhancements reflecting financial difficulties; Substitution of credit or liquidity providers, or their failure to perform; Adverse tax opinions or events affecting the tax-exempt status of the Modifications to rights of holders of the Bonds; Bond calls; Defeasances; Release, substitution, or sale of property securing repayment of the Bonds; Rating changes . -23- ) I l l .. ,· The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such Section. (d) Umitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, 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 subsection (c) hereof of any Bond calls and defeasance that cause the City to be no longer such an "obligated person." The provisions of this Section are for t.t:1e sole benefit of the Holders and beneficial-owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or ciaim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition. or prospects or hereby undertake to update any infonnation provided · in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell 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 WIT~OUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT. FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. . No default by the City in observing or performing its obligations under this Section shall constitute a ~reach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this S~ctioli is intended or shall act to disclaim, waive, or otherwise limit the "duties of the City under federal and state securities laws. The pro.visions of this Section. may be amended by the City from time to time to adapt to changed circum~tances resulting from a change in legal requirements, a change in law, or a chang·e in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell 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 courn~el) determines that such 829830.1 -24- I l l ;._ .:.·· amendment will not materially impair the interests of the Holders and beneficial owners of the Bonds. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) 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. SECTION 30: Public Meeting. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be oonsid~red at such meeting, including this Ordinance, was 'given, all as required by Chapter 551, Texas Government Code, as amended. SECTION 31: Effective Date. This Ordinance shall be in force and effect from and after its passage on second and final reading and IT IS SO ORDAINED. PASSED AND ADOPTED ON FIRST READING, this February 24, 2090. 2000. PASSED AND ADOPTED ON SECOND AND FINAL READING, this the 23n1 day of March, ATTEST: (City Seal) APPROVED AS TO CONTENT: Bets':'t::r ~ Finance Director 829830.l -25- l J EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT See Document Number 7 .:·. ·,•:.·l J I l . DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 29 of this Ordinance. Annual Financial Statements and Operating Data Exhibit B to Ordinance The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The.financial statements of the City appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2. The information under Tables 1 through 6 and BA through 18. Accounting Principles The accounting principles referred to in such Section are the generally accepted accounting principles as applicable to governmental units as prescribed by The Government Accounting Standards Board. 829830. l No Text . ·: ,, CERTIFICATE OF CITY SECRETARY THE STA TE OF TEXAS COUNlY OF LUBBOCK CllY OF LUBBOCK § § § § § I, the undersigned, City Secretary of the City of Lubbock, Texas, DO HEREBY CERTIFY as follows: 1. On the 1111i day of January. 2001, the City Council of the City of Lubbock. Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members· of the Council being as follows: WINDY SITTON ALEX•TY"COOKE VICTOR HERNANDEZ T. J . PATTERSON DAVID NELSON FRANK MORRISON MARC McDOUGAL ) ) ) . ) ) ) MAYOR MAYOR PRO TEM COUNCILMEMBERS all of said persons were present at said meeting, ex~pt the following: Alex "Ty" Cooke and · Victor Hernandez. Among other business considered at said meeting, the attached ordinance {the "Ordinance•) entitled: ~ AN ORDINANCE authorizing the issuance of 'CITY OF LUBBOCK, TEXAS, TAX ANP SOLID WASTE SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001 '; specifying the terms and features of · said certificates; providing for the payment of said certificates of ob{igatiQn by the levy of an-ad valo~m tax upon all taxable property within the City and a lien on and pledge of the ·net revenues from the operation of the Solid Waste Disposal System; and. resolving other _ -matters incident and.related to the. issuance, sale. seeurity, p~yment and • <e delivery .of said certificates, including the approval· of a Paying -Agent/Registrar Agreement and Purchase Contract and the approval and distribution of an Offlcial Statement; and providing an effective date.• was introduced· .ind submitted to the Coancil for first reading. · Aftf!r presentation and due . consideration of the Ordinance, and upon a mc:;,tion being made by·•lii'larc McDougar and seconded by David Nelson, the Ordinance was approved on first reading by the Council by the following vote: 5 . voted "For" 0 voted • Against'" O abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 889012.1 2. On the 8th day of February, 2001, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: WINDY SITTON ALEX "TY" COOKE VICTOR HERNANDEZ T. J. PATTERSON DAVID NELSON FRANK MORRISON MARC McDOUGAL ) ) ) ) ) ) MAYOR MAYOR PRO TEM COUNCILMEMBERS all of said ·persons were present at said meeting, except the following: ALEX ·TY" COOK Among other business considered at said meeting, the Ordinance was submitted to the Council for second reading and finaf passage and adoption. After presentation and due consideration of the Ordinance, and upon a motion being made by T.J. PATTERSON and seconded by FRANK MORRISON, the Ordinance was duly passed and adopted on second reading to be effective immediately by the following vote: 6 voted "For" 0 voted • Against" 0 abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 3. The attached Ordina~oe is a true and correct copy of the original on file in the official records of the City; the duly qualified and acting members of the City Council of said City on the date of the aforesaid meetings are those persons shown above and, according to the records of my office, advance notice of the time, place and purpose of each meeting was given to each member of the Council; and that said meetings and the deliberation of the aforesaid public business were ·open to the public and written notice of said meetings, lnduding the subject of the above ent.itled Ordinance, was posted and given in advance thereof in compliance with the provisions of V.T.C.A., Government Code, Chapter 551, as amended . . , . q .... : ._.,.. , .. 889012.1 -2- IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal of said City. ttus the -st' day of February, 2001. CitySe~ City of Lubbock, Texas (City Seal) 889012.1 -3- : ,. , .. i-: .. ORDINANCE NO. 2001-00002 AN ORDINANCE authorizing the issuance of "CITY OF LUBBOCK, TEXAS, TAX AND SOLID WASTE SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001•; specifying the terms and features of said certificates; providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon all taxable property within the City and a lien on and pledge of the net revenues from the operation of the Solid Waste Disposal System; and resolving other matters incident and related to the issuance, sale, security, payment and delivery of said certificates, including the approval of a Paying Agent/Registrar Agreement and Purchase Contract and the approval and distribution of an Official Statement; and providing an effective date. WHEREAS, notice of the City Council's intention to issue certificates of obligation in the maximum principal amount of $2. 770,000 for the purpose of paying all or part of the City's obfsgations incurred for (i) the construction of public works, to wit the dosure of a municipal landfill, and (ii) professional services rendered in connection with such project and the financing . thereof, has been duly published .in the l.lJbbock Avalanche~Joumal, a newspaper hereby found and determined to be of general circulation in the City of Lubbock, Texas. on December 24, 2000 and December 31, 2000, the date of the first publication of such notice being not less than fifteen (15) days prior to the tentative date stated therein for the second reading and final passage of this Ordinance; and · WHEREAS, no petition, protesting the issuance of such certificates and bearing valid petition signatures of at least 5% o_f the qualified voters of the City, has been filed with the City Secretary, any member of the Council or any other official of the City on or prior to the date of the passage of this Ordinance; ·and WHEREAS, the Council hereby finds and determines the certificates of obligation described in such notice should be issued and sold at this time in the amount and manner hereinafter provided; now, therefore; BE IT ORDAINED BY TH~ CITY COUNCIL OF THE CLTY OF .LUBBOCK: . SECTJON 1: Authorization-Designation-Principal Amount-Purpose. Certificates of obligation of the City shall J>.e and are ·hereby authorized to be issuecfih the ·aggregate principal amount of $2670,000 to be designated arid bear the title "CITY OF LUBBOCK, TEXAS. TAX AND SOLID WASTE SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION; SERIES 2001" (the ·certificates•), for the purpose of paying all or part of the City's obligations incurred for (i) ~-constructiora of public WO(ks, to wit the closure of a municipal landfill, and {ii) professional services render~d in connection with such· project and-_the. financing thereof,.· · pursuant to authority conferred by ai:-id in conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Local Government Code, Subchapter C of Chapter 271. SECTION 2: Fully Registered Obligations -Authorized Denominations-Stated Maturities-Date. The. Certificates are Issuable in fully registered form only; shall be dated February 1, 2001 (the "Certificate Date") and, other than the Initial Certificates referenced in Section 8 hereof) shall be in denominations of $5,000 or any integral multiple thereof (within a Stated Maturity) and the Certificates shall become due and payable on February 15 _ in each of 31882l'U the years and in principal amounts {the •stated Maturities") and bear interest at the per annum rate(s) in accordance with the following schedule: Year of Principal Interest Stated Maturity Amount Rate 2002 140,000 5.00% 2003 140,000 5.00% 2004 140,000 5.00% 2005 140,000 5.00% 2006 140,000 4.375% 2007 140,000 4.00% 2008 140,000 4.00% 2009 140,000 4.15% 2010 140,000 4.25% 2011 140,000 4.35% 2012 140,000 4.40% 2013 140,000 4.625% 2014 140,000 4.70% 2015 140,000 4.80% 2016 135,000 4.875% 2017 135,000 5.00% 2018 135,000 5.00% 2019 135,000 5.00% 2020 135,000 5.00% 2021 135,000 5.00% The Certificates shall bear interest on the unpaid principal amounts from the Certificate Date at the per annum rate(s) shown above in this Section (calculated on the basis of a 360--day year of twelve 30-day months). Interest on the Certificates shall be payable on February 15 and August 15 in each year, commencing February 15, 2002. SECTION 3: Terms of Payment-Paying AgenVReglsb:ar. ·'The-principaf of, premium, if any, and the interest on the Certificates, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Certificates (hereinafter cailed the "Holdersj appearing on the registration and transfer books maintained by. the Paying A§ent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the _time of payment is legal tender for the payment of public and private de~ts. and shall be without exchange or coUection charges to the Holders. The set~ction and appointment of u: S.-Trust"Company of Texas. N,A., .. Dallas, Texas to· · serve as Paying Agent/Registrar for the Certificates is hereby approved and confirmed. · Books ·and records relating to the registration, payment, exchange and transfer of the Certificates (the •security Register") shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, all as provided herein, in accordance with the terms and provisions of a "Paying Agent/Registrar Agreemenr, substantially in the form attached hereto asExhibit A and such reasonable ·rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City .Secretary of the City are hereby authorized to execute and deliver such Agreement in connection with the delivery of the Certificates. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Certificates are paid and U1217.l -2- I ,_. I•. discharged, and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying AgenURegistrar. Upon any change in the Paying Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of-th_e new Paying Agent/Registrar. Principal of and premium. if any, on the Certificates shall be payable at the Stated Maturities or the redemption thereof only upon presentation and surrender of the Certificates to the Paying AgenURegistrar at its designated offices in New York, New York (the aoesignated PaymenVTransfer Office"). Interest on the Certificates shall be paid by the Paying Agent/Registrar to the Holders whose name appears in the Security Register at the close of business on the Record Date (the last business day of the month next _preceding each interest payment date} and p~yment of such interest shall be (i) by check sent United States Mail, first dass postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Certificates shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located. are authorized by law or executive order to cios"e, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to dose; and payment on such date shall have the same force and effect as if made on the original date payment was due. 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 ASpecial 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 (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business.on the last business next preceding the date of mailing of such notice . . SECTION 4: Redemption. (a) Optional Redemption. The Certificates having Stated Maturities.on and after Feb"!ary 15, 2011, shall be subject to redemption prior to maturity, at the option of the-City, in whole or in part iri principal amounts of .$5.000 or any integral multiple thereof {and:Jf within a Stated Maturity by lot by the. Paying Agent/Registrar), on February 15. 2010 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. . · · (b) · Exercise of Redemption Option. At ·Ieast forty-five· ,(45) days prior to -a· · redemption date for the Certificates (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying AgenVRegistrar of the decision to redeem Certificates, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the City to exercise the right to redeem Certificates shall be entered in the minutes of the governing body of the City. (c) Selection of Certificates for Redemption. If less than all Outstanding Certificates of the same Stated Maturity are to be redeemed on a redemption date: the Paying 888217.1 Agent/Registrar shall treat such Certificates as representing the number of Certificates Outstanding which is obtained by dividing the principal amount of such Certificates by $5,000 and shall select the Certificates, or principal amount thereof, to be redeemed within such Stated Maturity by lot. (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Certificates, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the City's expense, to each Holder of a Certificate to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to - have been duly given irrespective of whether received by the Holder. All notices of redemption shall (i) specify the date of redemp1ion for the Certificates, (ii) identify the Certificates to b~ redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed. (iii) state the redemption price, (iv) state that the Certificates, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and {v) specify that payment of the redemption price for the Certificates, or the principal amount thereof to be redeemed, shall be made at the Designated Paymenvrransfer Office of the Paying AgenURegistrar only upon presentation and surrender thereof by the Holder. If a Certificate is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given as hereina·bove provided, such Ce~flcate (or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for the payment of such Certificate (or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying AgenVRegistrar. SECTION 5: Registration -Transfer -Exchange of Certificates-Predecessor Certificates. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each _and every o~~r of the Certificates issued under and pursuant to the provisions of this Ordinance, or if appropriate;'" the-r:iominee thereof. Any Certificate may be transferred or exchanged for Certificates of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to the Paying Agent/Registrar for cancellation, accompanied'by a writte-n instrument of transfer or ~quest for e&change duly executed by the Holder or by his duly authorized agent. in foon satisfactory to the Paying Agent/Registrar. Upon-· s:Urrender. of a_ny Ce.rtificate . (other than the Initial Certificates authorized in Section 8 hereof) for transfer at the Designated· Payment!Transfer, Office· of the Paying· · Agent/Registrar. the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Certificates of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Certificate or Certificates surrendered for transfer. At the option of the Holder, Certificates (other than the Initial Certificates authorized in Section 8 hereof) may be exchanged for other Certificates of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate ~8217.1 -4- principal amount as the Certificates surrendered for exchange, upon surrender of the Certificates to be exchanged at the Designated PaymenVTransfer Office of the Paying Agent/ Registrar. Whenever any Certificates are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Certificates to the Holder requesting the exchange. All Certificates issued in any transfer or exchange of Certificates shall be delivered to the Holders at the Designated .Paymentrrransfer Office of the Paying AgenVRegistrar or sent by United States Mail, first dass, postage prepaid to the Holders, and, upon the registration and delivery thereof, the same shall be the valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Certificates surrendered in such transfer or exchange. All transfers or exchanges of Certificates pursuant to this Section shall be made wlthou.t expense or service charge to the Hofder, except as otherwise herein provided,· and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Certificates canceled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be '"Predecessor Certificates,• evidencing an or a portion, as the case may tie, of the same obligation to pay evidenced by the new Certificate or Certificates registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor Certificates• shall indude any mutilated, lost, destroyed, or stolen Certificate for which a replacement Certificate has been issued, registered and delivered in lieu thereof pursuant to the provisions of Section 23 hereof and such new replacement ·certificate shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Certificate. Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of sueh Certificate; provided, however, such limitation on transferability shall not be applica_ble to an exchange by the Holder of the unredeemed balance of a Certificate called for redemption in part. SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the provisions contained in Sections . 3, 4 and 5 hereof relaling to the payment and transfer/exchange of the .Certificates: tne City· hereby appro~s and authorizes the use of •soak-Entry :@nly· securities clearan~. settlement and transfer system provided by The Depository Trust Company (OTC), a limited purpose trust company organized under the laws of the Slate of New Y~ in accordance with the operational arrangements referenced in the Blanket Issuer :Letter of Repr:esentations by and between the City and OTC (the ·oepository Agreement•). . . . . ·" ·.-,.·. Pursuant to the Depository Agreement and the rules of OTC, the Certificates shall· be · deposited with OTC who shall hold said Certificates for its participants (the ·ore Participants·) and, while the Certificates are held by OTC under the Depository Agreement, the Holder of the Certificates on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of OTC, notwithstanding the ownership of each actual purchaser or owner of each Certificate {the "Beneficial Owners") being recorded in the records of OTC and OTC Participants. · 888217.1 I ,. ) .. I , In. the event OTC determines to discontinue serving as securities depository for the Certificates or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the City determines that OTC is incapable of properly discharging its duties as securities depository for the Certificates, the City covenants and agrees with the Holders of the Certificates to cause Certificates to be printed in definitive form and provide for the Certificate certificates to be issued and delivered to DTC Participants and Beneficial Owners, as the case may be. Th~reafter, the Certificates in definitive form shall be assigned, transferred and exdlanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Certificates shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution -Registration. The Certificates shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secreta,y. The signature of said officers on the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Certificate Date shall be deemed to be duly executed on behalf of the City, notwithstanding that one or· more of the individuals exeruting the same shall cease to be such officer at the time of delivery of the Certificates to the initial purchaser(s) and with respect to Certificates delivered in subsequent exchanges and transfers, all as authorized and provided in V.T.C.A., Government Code, Section 1201.026. No Certificate shall be entitled to any right or benefit under this Orcfi.nance, or be valid or obligatory for any purpose, unless there appears on such Certificate either a certificate of registration substantially in the form provided in Section 9C, manually . executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in the fonn provided in Section 9D, manually executed by an authorized officer, employee-or repre.sentative of the Paying Agent/Registrar, and either such certifi~te duly signed upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly certified, registered and delivered. · SECTION 8: Initial Certificate{s). The Certificates herein authorized shall be initially issued either (i) as a single fully registered certificate in the total principal amount of $2,770,000 with principal instaUments to become due and payable.. as. provided in Section 2 hereof and numbered T-1, or (ii) as multiple· fully registered certificates, being·one-eertificate for each year of maturity in the applicable principal amount and denomination and to ·be numbered consecutively from T-1 and JJpward -Qlereinafter: called ~ •1niti~I C~ficate(st) and, in either case, the Initial Certificate(s} ·shall be registered in the name of the Initial purchaser(s) or. the designee theriof. The lnitia,I Certificate(s) shall be the Certificates submitted to the Office of the .Attorney General of the State of Texas for approval, certified and registered by the, Office o~ the Comptroller of-Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any time a~r-ffie•delivery of the Initial Certificate(s), tJ:1e Paying_Agent/Registrar, pursuant to written instru~on·s from the initial purchaser(s)~-or the desighee thereof. ·shaln:ancel the Initial· · Certiticate(s) delivered hereunder and exchange therefor definitive Certificates of authorized denominations, Stated Maturities, principal amounts and bearing ·applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such ~tten instructions from the initial purchaser(s}, or the designee thereof, and such other infonnation and documentation as the Paying Agent/Regi$ar may reasonably require. · · 888217:1 -6- I , SECTION 9: Forms. A. Forms Generally. The Certificates, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying AgenVRegistrar, and the form of Assignment to be printed on each of the Certificates, shall be substantially in the forms set forth in this Section wit~ such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have su~h letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends in the event the Certificates, or any maturities thereof, are purchased with insurance and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by the officers executing such Certificates as evidenced by their execution. Any portion of-the text of any Certificates may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Certificate. The definitive Certificates and the Initial Certificate(s) shall be printed, lithographed, or engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, ·au as determined by the officers executing such Certificates as evidenced by their execution thereof. B. Form of Certificates. REGISTERED NO. --- Certificate Date: February 1, 2001 Registered Owner: Principal Amount UNITED STATES OF AMERICA STATE OF TEXAS CITY OF LUBBOCK, TEXAS, TAX AND SOLID WASTE SYSTEM SURPLUS REVENUE CERTIFICATE OF OBLIGATION, SERIES 2001 REGISlERED $ ____ _ Interest Rate: ___ % Stated Maturity: · CUSIPNO: DOLLARS . The ·city of Lubbock (hereinafter referred to as the ·city"), a body corporate and municipaJ · corporation in. the County of Lubbock, State of Texas, for· value received, acknowledge.t itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered ~igns thereof, on the Stated Maturity date specified above the Principal Amoµnt · stated above ( or so· much thereof as shall not have been paid upon prior redemption) arjd to pay inte~est (comp4t~ on the basis of a 360-day year of twelve 30-day months) on the· unpaid Principal Amount hereof from·the Certificate Oa~-althe per annur:n rate· · of interest ~pecified above; such interest being payable on February 15 and August 15 of each year, coinmencilig February 15, 2002. Principal of this Certificate is payable at its Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the Designated Payment/Transfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor; provided, however, while this Certificate is registered .to Cede & Co., the payment of principal upon a partial redemption of the principal amount hereof may be accomplished without presentation and surrender of this Certificate. Interest is payable to the registered owner of this Certificate (or one or more Predecessor Certificates, as defined in the Ordinance hereinafter referenced) whose name appears on the 888217.1 -7- I . "Security Register" maintained by the Paying Agent/Registrar at the dose of business on the "Record Date·, which is the fast business day of the month next preceding each interest payment date and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register on the Record Date or by such other method, acceptable to the Paying AgenVRegistrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Certificate is one of the series specified in its title issued in the aggregate principal amount of $2,770,000 (herein referred to as the ·certificatesn) for the purpose of paying all or part of the City's obligations incurred for (i) the construction of public works, to wit: the closure of a municipal landfill, and (ii) professional services rendered in connection with such project and the financing thereof, under and in strict conformity with the Constitution a.nd laws of the State of Texas, particularly V.T.C.A., Local G_ovemment Code, Subchapter C of Chapter 271, and pursuant to an Ordinance adopted by the governing body of the City (herein referred to as the ·ordinance·). The Certificates maturing on and after February 15, 2011, may be redeemed prior to their Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if w!thin a Stated Maturity by Jot by the Paying Agent/Registrar); on February 15, 2010, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. At least thirty days prior to a redemption date, the City shall cause a written notice of such redemption to be sent by United States Mail, first ciass postage prepaid, to the registered owners of each Certificate to be redeemed at the address shown on the Security Register and subject to. the tenns and provisions relating thereto contained in the Ordinance. If a Certificate (or any portion of its principal sum) shall have been duly called for redemption. and notice of such redemption duly given, then.upon the redemption date sue~ Certificate (or the portion of its principal sum to be redeemed) shall become due and pfil'a~le, and, if moneys for the payment of the redemption price and the interest accrued on the principal amotmt to be redeemed to the date of redemption are held for the purpose of such payment by ·the Paying Agent/Registrar, interest sl)all cease to accrue and. be payable from and after the redemption date on the prir)cipal amoant redeeJt]ed.· . . . · ' .· -.. In the event a portion of the principal amount of a Certifica~e is to be redeemed and the registered owner is someone other than C~e & Co., payment of the redemption price of such principal amount'shall be made to the registered owner only upon presentation and surrender of such Certificate to the Designated Payment/Transfer Office of the Paying,Agenl/Registrar, and-a· · new Certificate or Certificates of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to the registered owner, without ·charge. If a Certificate is selected for redemption; in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such Certificate to an assignee of the registered. owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance 9f a Certificate redeemed in part. 888217.l I ' I .• The Certificates are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City and are additionally payable from and secured by a lien on and. pledge of the Net Revenues (as defined in the Ordinanc~) of the City's Solid Waste System (the "System"), such lien and pledge, however, being junior and subordinate to the lien on and pledge of the Net Revenues of the System securing the payment of "Prior Lien Obligations" (as defined in the Ordinance). In the. Ordinance, the City reserves and retains the right to issue Prior Lien Obligation.s while the Certificates are outstanding without limitation as to principal amount but subject to any terms, conditions or restrictions as may be applicable thereto under law or otherwise, as well as the right to issue Additional Obligations {as defined in the Ordinance). Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all the provisions of which the Holder hereof by the ~cceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Certificates; the nature and extent of the limited pledge of the Net Revenues securing the payment of the Certificates; the terms and conditions relating to the transfer or exchange of this Certificate; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon . which the tax levy and the pledge of the Net Revenues and covenants made in the Ordinance may be discharged at or prior to the maturity of this Certificate, and this Certificate deemed to be no longer Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. This Certificate, subject to certain limitations contained in the Ordinance, may be · transferred on the Security Register only upon its presentation and surrender at the Designated PaymenVTransfer Office of the Paying Agent/Registrar, with the Assignment hereon duly . endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs. one or more fully registered Certificates of authorized denominations and of the same aggregate princip13I amount will be issuea by the Paying Agent/Registrar to the designated transferee or transferees. . . ' : .,,.::. The City and the Paying Agent/Registrar, and any agent of either, may treat the registered. own.er hereof whqse name_ appears 9n the Sequrity ~egi~~r (i) on the Record Date as the owner entiUed to. payment of interest hereon, {ii) on· the date of surrender of this Certificate as1 the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the_City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to th~· contrary. · · In the event of nonpaymen~ o~ interest Qn a scheduled payment date and for thirty (30) days thereafter, a new record date for such interest--payo,ent (a aspec1ar ·· 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 (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last busi~ess day next preceding the· da~ of mailing of such notice. 888217.1 -9- I • ) . It is hereby certified, recited, represented and covenanted that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Certificates is duly authorized by law; that all acts. conditions and thjngs required lo exist and be done precedent to and in the issuance of the Certificates to render the same lawful and valid obligations of the City have been properly done, have happened and have been perfom,ed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Certificates do not exceed any constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Certificates as aforestated. In case any provision in this Certificate or any application thereof shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions and applications shall not in any way be affected or impaired thereby. The terms and provisions of this Certificate and the Ordinance shall be construed in accordance with and shall · be governed by the laws of the State of Texas. IN WlTNESS WHEREOF, the City Council of the City has caused this Certificate to be duly executed under tl)e official seal of the City as of the Certificate Date. CflY OF LUBBOCK, TEXAS Mayor COUNTERSIGNED: City Secr~tary (SEAL) . --: -,....,_., ,. 888217.t -10- I • ) . C. *Form of Registration Certificate of Comptroller of Public Accounts to Appear on Initial Certificate{s) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS § § § § REGISTER NO. -----THE STATE OF TEXAS I HEREBY CERTIFY that this Certificate has been examined, certified as to validity and approved by the Attorney General of the State ~f Texas, and duly registered by the Comptroller of Public Accounts of th~ State of Texas. WITNESS my signature and seal of office this Comptroller of Public Accounts of the State of Texas · (SEAL) *NOTE TO PRINTER: Do not print on definitive Certificates D. Form of Certificate of Paying Agent/Registrar to Appear on Definitive Certificates. REGlSTRA TION CERTIFICATE OF PAYING AGENT/REGISTRAR · This Certificate has been duly issued and ~gis~red under the provisions of the within-mentioned Ordinance; the certificate or certificates of tbe above. entitled and designated" series originally delivered having been appro'1ed by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts. as shown by the records of the Paying Agent/Registrar. . . · . . : · ' .· ·- • 1t -The designated offices of the Paying Agent/Registrar located in New York, New York, is the 0Designatep ·Paymenf/Transfer Office• for this Certificate. Registratio!l Date: 888217.1 ·· U. s: TRUST COMP.ANY-.OF. TEXAS, N A, Dallas. Texas, as Paying Agerif/Registrar · By: -~...,.__,...,,,....._ _______ _ Authorized Signature -11- '. E. Form of Assignment ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or ty~ewrite name, address, and zip code of transferee:) __________ _ (Social Security or other identifying number. ---------------------,.-,....---,--=------,,.......,.,~.,.----.------,,----:-:--,,...-,------,-,---...,.,...------,--> the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Certificate on the books kept for registration thereof, with fuil power of substitution in the premises. DATED: ---------- Signature guaranteed: NOTICE: The signature on this assignment must correspond with the name of the registered owner as it appears on the face of the within Certificate in every particular. F. The Initial Certificate(s) shall be in the fonn set forth in paragraph B of this Section, except that the form of a single fully registered Initial Certificate shall be modified as follows: (i) immediately under the name of the certificate the headings "Interest Rate• and "Stated Maturity" shall both be omitted; (ii) paragraph one shall read as follows: Registered Owner: Principal Amount DOLLARS · The Gity of Lubbock, (hereinafter refe.~ to ~ the .!'City-'}. a body corporate and municipal CQfPOration in· the ~unty of Lubbock, Stat~ of Texas; for value received, acknowledge"! itself Indebted to and hereby promises to pay to the Registered Owner named above, or the . registered assigns th~eof, the Principal Amount hereinabove stated, on February 15 in--~_tjl of the years and in prin~ipal ,installments in accordance with the following schedule: . •. · · · · • . . · • . .• YEAR .. : -.,....,,,_._ .. . . PRINCIPAL INSTAUMENTS INTEREST RATE (Information to be inserted from ~chedufe in Section 2 hereof). (or so much principal thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid Principal Amount hereof from the Certificate Date at the per annum rates of interest specified above computed on the basis of a 36<Hiayyear of twelve 30-day months; 881217.1 -12- I •• such interest being payable on February 15 and August 15 of each year, commencing February 15, 2002. Principal installments of this Certificate are payable in the year of maturity or on a prepayment date to the registered owner hereof by U. S. Trust Company of Texas, N.A., Dallas, Texas (the "Paying-AgenURegistrar"), upon presentation and surrender, at its designated offices in New York, New York {the "Designated Payment/Transfer Office"). Interest is payable to the registered owner of this Certfficate whose name appears on the "Security Register" maintained by the Paying Agent/Regislrar at the close of business on the "Record Date•, which is the last business day of the month next preceding each interest payment date hereof and interest shall be" paid by the Paying AgenVRegistrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying AgenU Registrar. requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 1 O: Definitions. For purposes of this Ordinance and for clarity with respect to the issuance of the Certificates, and the levy _of taxes and appropriation of Net Revenues therefor, the following words or terms, whenever the same appear herein without qualifying language, are defined to mean as fotlows: (a) The term "Additional Obligations" shall mean tax and revenue obligations hereafter issued which by their terms are payable from ad valorem taxes and additionally payable from and secured by a parity lien on and pledge of the Net Revenues of the System of equal rank and dignity with the lien and pledge securing the payment of the Certificates. (b) The tenn ·Certificates" shalf mean · $2,770,000 "CITY OF LUBBOCK, TEXAS, TAX AND SOLID WASTE SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001• authorized by this Ordinance. (c) The tenn •~rtificate Fund" shall mean the special Fund created and established under the provisions of Section 1J of _this Ordinance. (d) The term "Collection Date" shall mean, when reference is being . made to the levy and collection of annual ad valorem taxes, the date annual ad valorem taxes levie.d each year by the City become'.delinquenC · 888217.1 ·'I -(e) The term •Fiscal Year" shall mean the annual financial accounting period . used· with respect to the operations of the System now ending on Septemoer--30th.of each year; provi~ed, however, the City Council may change, by ortJinance duly passed, such annual financial accounting PE!riod.. to end on another date if such change is found and determined to be necessary for budgetary or other fiscal purposes. (f) The tenn "Government Securities• shall mean (i) direct noncaflable obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by -13- l • •.,•· 888217.l the City 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 on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. (g) The term uGross Revenues" shall mean, with respect to any period, all income, revenues and receipts received from the operation and ownership of the System. (h) The term "Net Revenues• shall mean the Gross Revenues of the System, with respect to any period, after deducting the System's Operating and Maintenance ~penses during such period. (i) The term ·operating and Maintenance Expenses" shall mean all reasonable and necessary expenses directly related and attributable to the operation and maintenance of the System, including, but not limited to. the cost of insurance, the purchase and canying of stores, materials, and supplies, the payment of salaries and labor, and other expenses reasonably and properly charged, under generally accepted accounting principles, to the operation and maintenance of the System. Depreciation charges on equipment, machinery, plants and other facilities comprising the System and expenditures dassed under generally accepted accounting principles as capital expenditures shal• not be considered as ·operating and Maintenance Expenses" for purposes of detennining •Net Revenues•. 0) The term uoutstanding" when used in this Ordinance with respect to Certificates means, as of the date of determination, all Certificates theretofore issued and delivered under this Ordinance, except: ( 1) th~ Certificates canceled by the Paying Agent/Registrar or delivered to the Payjng . Agent/Registrar for cancellation; . (2) those Certificates deemed to be du!y paid by the · City in accordance with.the provistOAS of Section 1·9 hereof; and ... -(3) those Certificates that have been mutilated, _destroyed, lost, or stolen and replacement Certificates have been ·· ~istered and_ delivered in li~u-thereof as provided in Section 23 · hereof. · · · · . . .. , -.-~-- (k) The term ·Pnor Lien Obligations· shall mean ~) the outstanding •city of Lubbock, Texas , Tax and Solid Waste Disposal System Revenue Certificates of Obligation, Series 1991•, dated May 15, 1991, issued in the original principal amount of $1,145,000 and (ii) all bonds or other similar obligations hereafter issued that are payable in whole or in part from and secured by a lien on and pledge of the Net Revenues of the System and such lien and pledge sea.rring the payment thereof is prior and superior in claim. rank and -14-- dignity to the lien and pledge of the Net Revenues securing the payment of the Certificates. I , (I) The term "System· or •solid Waste System" shall mean the City's I . > : Solid Waste Disposal Syst~m. being all plants, collection vehides, incinerators. sanitary landfills, or other works, facilities and equipment of the City acquired, installed and operated for the purpose of collecting, handling, storing. treating, neutralizing. stabilizing, or disposing of solid wastes, garbage and rubbish, including sites therefor; provided, however, the City, by ordinance adopted by the City Council, may identify and designate one or more incinerators hereafter acquired or constructed, together with all property incident and necessary to its operation, to be removed and not a part of the System as defined herein, and such facilities so identified and designated, together with the revenues received and expenses incurred in ~nnection with the operation and maintenance thereof, shall not constitute a part of the System or be encumbered in any respect by the provisions of this Ordinance. SECTION 11: Certificate Fund For the purpose of paying the interest on and to provide a sinking fund for the payment and retirement of the Certificates, there shall be and is hereby created a special Fund to be designated •SPECIAL 2001 CITY OF LUBBOCK, TEXAS, TAX AND SOLID WASTE SYSTEM SURPLUS REVENUE CERTIFICATE OF OBLIGATION FUND", which Fund shall be kept and maintained at the City's depository bank, and mone~ deposited in said Fund shall be used for no other purpose. Proper officers of the City are hereby authorized and directed to cause to be transferred to the Paying Agent for the Certificates, from funds on deposit in. the Certificate Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Certificates as the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent for the Certificates at the close of business on the last business day next preceding each interest and/or principal payment date for the Certificates. Pending the transfer of fµnds to the Paying Agent/Registrar, money in the Certificate Fund· may, at the option of the City, be invested in obligatiqns identified in, and in accordance with the provisions of the ·Public Funds Investment Act" C,.,. T.C.A:; Government Code, Chapter ·· · 2256) relating to the inv~tment of •bond proceeds"; provided that all such investments shall be made• in ~uch. a manner U-,at the ~oney req~ired to b~ ~ndeg_ from said Fund will be .available at the proper. time··or times. · All interest and income derived from deposits and investments :iii said Certificate Fund shall be credited to, and any losses debited to, the said Certificate Fund. All such investments shall be sold promptly when necessary to prevent any default in conn~ctfon with the Certificates. SECTION 12: Tax L~vy. That t~ provide· for the payment~of ... th~ ·oebt Seivice· ·· Requirements• on the Certificates being 0) the interest on said Certificates and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the greater), there shall be and there is hereby levied a sufficient tax on each ooe hundred doflars' valuation of taxable property in said City to pay such Debt Service Requirements while· the Certificates are Outstanding, full allowance being made for delinquencies and costs of collection, and said tax shall be assessed and collected each year and applied to the payment of the Debt Service Requirements, and the same shall not be diverted· to any other purpose. The taxes so levied and collected sha!I be deposited into the Certificate Fund. This governing 888217.J -15- body hereby declares its purpose and intent to provide and levy a tax legally and fully sufficient to pay the said Debt Service Requirements, it having been detennined that the existing and available taxing authority of the City for such purpose is adequate to permit a legally sufficient tax in consideration of all other outstanding indebtedness. The amount of taxes to be provided annually for the payment of the principal of and interest on · the Certificates herein authorized to be issued shall be determined and accomplished in the following manner: (a) Prior to the date the City Council establishes the annual tax rate and passes an ordinance levying ad valorem taxes each year, the City Council shall determine: (1) The amount on deposit in the Certificate Fund after (a) deducting therefrom the total amount of Debt Service Requirements to become due on Certificates prior to the Collection Date for the ad valorem taxes to be levied and (b) adding thereto the amount of Net Revenues of the System appropriated ahd allocated to pay such Debt Service Requirements prior to the Collection Date for the ad valorem taxes to be levied. (2) The amount of Net Revenues if any, appropriated and .to be set aside for the payment of the Debt Service Requirements on the Certificates between the COilection Date for the taxes then to be levied and the Collection Date for the taxes to· be levied during the next succeeding calendar year. (3) The amount of Debt Service Requirements to become · due and payable on the Certificates between the Collection Date for the taxes then to be levied and the Collection Date for lhe taxes to be levied during the next succeeding calendar year. {b) The amount of taxes to be levied annually each yeac. .to pay the Debt Service · Requirements on the Certificates shall be the amount established ·in paragraph (3) above less the -sum total of the amounts established in paragraphs (1)and (2), after· taking into consideration -delinquencies and costs of collecting such annual taxes~- •<i . - SECTION 13: Pledge of Revenues. The City hereby covenants and agrees that. subject only tQ a prior lien on and pledge of the Net Revenues of the System for the payment and security ·of Prior Lien O~ligations, the Net Revenues of the System, with the exception of those in" excess of the amounts required to be· deposited to the ·eertifk:ate-.Fund.·as hereafter"·· provided, are hereby irrevocably pledged, equally and ratably, to the payment of the principal of and interest on the Certificates and Aqditional Certificates. if issued,· as herein provided·, and the pledge .of the Net Revenues of the System herein made for the payment of the Certificates shall constitute a lien on the Net Revenues of the System in accordance with the terms and provisions hereof and be valid and binding without further action by the City and without any filing or recording except for the filing of this Ordinance in the records of the City. SECTION 14: System Fund The City hereby reaffirms its covenant and agreement made in connection with the issuance of the outstanding Prior Lien Obligations that all Gross 8S8217.I I : ) . Revenues (excluding earnings from the investment of money held in any special funds or accounts created for the payment and security of Prior Lien Obligations) shall be deposited from day to day as collected into a "City of Lubbock, Texas, Solid Waste Disposal System Operating Fund" (hereinafter called "System Fundn) which Fund shall be kept and maintained at an official depository bank of the City. All moneys deposited in the System Fund shall be pledged and appropriated .to the extent required for the following purposes and in the order of priority shown. to wit: First: To the payment of all necessary and reasonable Operating and Maintenance Expenses of the System as defined herein or required by statute to be a first charge on and claim against the Gross Revenues. Second: To the payment of the amounts required to be _deposited in the special Funds created a_nd established for the payment. security and benefit of Prior Lien Obligations in accordance with the terms and provisions of the ordinances authorizing the issuance of Prior Lien 'Obligations; and Third: Equally and ratably to the payment of the amounts required to be deposited in the special funds and accounts created and established for the payment of the Certificates and Additional Certificates, if issued. Any Net Revenues remaining in the System Fund-after satisfying the foregoing payments, or making adequate and sufficient provision· for the payment thereof, may be appropriated and used for any other City purpose now or hereafter permitted by law. SECTION 15: Deposits to Certificate Fund. The City hereby covenants and agrees to cause to be deposited in the Certificate Fund prior to each interest and principal payment date from the Net Revenues .of the System, after deduction of all payments required to be made to special Funds or accounts created for the payment arid security of the Prior Lien Obligations, an amount equal to one hundred per cenh.Jm (100%) of the amount required to ·rully .pay the accrued interest and principal of the Certificates then due and payable by reason of maturity or redemption prior to maturity, sµch deposits to pay accrued interest and principal on the Certificates· to be made in substantially equal monthJy ii:istallments on or before the last business day of. each month beginning the month the Certificates are delivered to the initial purchase~ · The monthly deposits ·to the. Certificate ·Fund. as hereinabove-provided, shall be made until such tir'Qi as such Fund contains an amount equal to pay the principal of and interest on the Certificates to maturity. Ad valorei:n taxes levied, collected and deposited in the Certificate Fund for and .on· behalf of the Certificates may be taken into consideration and reduce the amount of the i;lonthfy-depo~its otherwise required to be deposited in the Certificate Fund from the Net Revenues of the System. In addition, any proceeds of sale of the--Gertificates iri excess· ·· of the amount required to pay the contractual obligations to be incurred (including change orders to a construction contract) shall be deposited in the Certificate·Fund~ which amount shall reduce the sums otherwise required to be deposited in said Fund from ad valorem taxes and the Net Revenues of the System. SECTION 16: Security of Funds. AU moneys on deposit in the Funds for which this Ordinance makes provision (except any portion thereof as may be at any time properly lnvested) shall be secured in the manner and to the fullest extent required by the laws.of Texas 888217.l -17- l ;' l , ) . for the security of public funds, and moneys on deposit in such Funds shall be used only for the purposes permitted by this Ordinance. SECTION 17: Special Covenants. The City hereby further covenants as follows: (a) It has the lawful power to pledge the Net Revenues of the System supporting this issue of Certificates and has lawfully exercised said powers under the Constitution and laws of the State of Texas, including said power existing under V.T.C.A., Government Code, Sections 1502.052, et seq. and V.T.C.A., Local Government Code, Subchapter C of Chapter 271. (b) Other than for the payment of the outstanding Prior Lien Obligations and the Certificates, the Net Revenues of the System have not in any manner been pledged to the payment of any debt or obligation of the City or of the System. SECTION 18: Issuance of Prior Lien Obligations and Additional Obligations; Subordinate to Prior Lien Obligations Covenants and Agreements. (a) The City hereby expressly reserves the right to hereafter issue· Prior Lien Obligations, without limitation as to principal amount but subject to any terms, conditions or restrictions applicable thereto under law or otherwise. In addition, the City reserves the right to issue Additional Obligations, without limitation or any restriction or condition being applicable to i;heir issuance under the terms of this Ordinance, payable from and secured by a lien· on and pledge of the Net Revenues of the System of equal rank and dignity, and on a parity in all respects, with the lieh thereon and pledge thereof securing the payment of the Certificates. · (b) It is the intention of this governing body and accordingly hereby recognized and stipulated fhat the provisions, agreements and covenants contained herein bearing upon the management and operations of the System and the administering and application of revenues derived from the operation thereof, shall to the extent possible be harmonized with like provisions, agreements and covenants contained in ordil!._an~ authorizing the issuance of Prior Lien Obligations, and .to the extent of any irreconcilable .conflict . .between the provisions contained herein and in ordinances authorizing the issuance of· Prior Lien Obligations, the provisions, agreements and covenants contained· therein shall prevail to the extent of such conflict and be ·applicable to this Ordinance but in all respects subject To the priority of rights and benefits, if aay, conferred thereby to the holders or owners of the Prior Lien Obligations. Notwithstanding the above, any change or modification affecting the application of revenues derived from the operation of the System shall not impair the obligation of contract with respect to the pledg~·:o( revenues he~in made for the payme~t ~nd security of the Certificates. H • ~• • -":" -.,,w-•.•-••• -•• SECTION 19: Satisfaction of Obligations of City. If the City shall pay· or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Certificates, at the times and in the manner stipulated in this Ordinance, then the pledge of ~es levied and the lien on and pledge of the Net Revenues of the System under this Ordinance and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Certificates shall be deemed to have been paid within Jhe meaning and with the effect e,cpressed above in this Section when (i) money sufficient to pay in full such Certificates or the 888217.1 -18- ) . I . ) . , ' .. principal amount(s) thereof at maturity or (if notice of redemption has been duly given or waived or if irrevqcable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar. or an authorized escrow agent, or (ii) Government Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar. or an authorized escrow agent, which Government Securities have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of. sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Certificates, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable . to· the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Certificates to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent! Registrar and all income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Certificates, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Ce,:tificates and remaining undaimed for a period of three (3) years after the maturity, or applicable redemption date, of the Certificates foc which such moneys were deposited and are held in trust to pay, shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing,· any remittance of funds from lhe Paying Agent/Registrar to the City shall be subject to any ."applicable unclaimed property laws of the State of Texas. SECTION 20: Ordinance a Contract ~ Amendments. This Ordinance shall constitute a contract with the Holders from tin:te to time, be binding on the City, and shall not be amended or repealed by the City so long as any Certificate remains _f)u~tanding except as permitted in this Section .. The City, may~ without-the consent of or notice to any Ho1ders-Of the Certificates. from · time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders of the Certificates, including the curing of any ambiguity, inconsistency. or formal ·defe·ct or omission herein: In addition, the City m~y. W11h the written consent of Holders of the Certificates holding a majority in aggregate principal amount of the Certificates then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that. without the consent of all Holders of Outstanding Certificates, no such amendment. ·acfdition, or res~ssion shall (1). extend the time or times of payment of the principal of, premium~ if any, and interest on the Certificates, reduce the ·pnncipaJ...amount·thereof, the. ·· ret;temption price, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Certificates, (2) give any preference to any Certificate over any other Certificate, or (3) reduce the aggregate principal amount of Certificates required to be held by Holders for consent to any such amendment, addition, or rescission. . . · .SECTION 21: Notices.to Holders -Waivers. Wherever this Ordinan~ provides for notice to Holders of any even~ such notice shall be sufficiently given (unless otherwise herein 888217.1 -19- I ., expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Certificates. Where this Ordinance provides for notice in any mam:1er, such notice may be waived in writing by the Holder entitled to re.ceive such notice, either before or after the event with respect to which such notice i$ given, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agenl/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 22: Cancellation. Certificates surrendere~ for payment, redemption, transfer. or exchange, if surrendered .to the Paying Agent/Registrar, shall be promptly canceled by it and, jf surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already canceled, shall be promptly canceled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Certificates previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly canceled by" the Paying Agent/Registrar. All canceled Certificates held by the Paying Agent/Registrar shall be returned to the City. SECTION 23: Mutilated, Destroyed, Lost and Stolen Certificates. In case any Certificate shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliv.er a replacement Certificate of like form and tenor, and in the . same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Certificate, or in lieu of and in substitution for such destroyed, lost or stolen Certificate, only upon the approval of the City and after (i} the filing by the Holder thereof with the Paying AgenURegistrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Certificate, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City an.d the Paying AgenURegistrar hannless. AH expenses and charges associated with such indemnity and with the pr.epa_ration, execution and delivery of a replacement Certificate-shall be·bome by the Holder of the Certificate-mutilated; or destroyed, lost or stolen. · Every· replacement Certificate issued pursuant to this.· Section shall be a valid and 1 . binding obligaion, and shall be entitled to all the benefits of-this Ordinance equally and ratably with all other Outstanding Certificates; notwithstanding the enforceability of payment by anyone · of the destfo¥.efl, lost or stolen Certificates. The pr~~isions of this. SectiQn are ~cfasive and· shall preciude {to-the·-extent lawful) an··· other rights and remedies with respect to the replacement and payment of mutliated, destroyed, 1 · lost, or. stolen Certificates. SECTION 24: Covenants to Maintain Tax-Exempt Status. A. Definitions. When used in this Section, the following terms have the following meanings: 888217.l "Closing Oaten means the date on which the Certificates are first authenticated and delivered to the initial purchasers against payment therefor. -2()... I .. ) ; :•.'•, . ) ·. I. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Gross Proceedspmeans any proceeds as defined in Section 1.148-1(b) of the Regulations, and any replacement proceeds as defined in Section 1~ 148-1(c) of the Regulations, of the Certificates. "Investment" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Nonpurpose Investment" means any investment property. as defined in section 148{b) of the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired to carry out the governmental purposes of the Certificates. "Rebate Amount" has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax Regulationsjssued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954. which are applicable to the Certificates. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation.designed to supplement, amend or replace the specific Regulation referenced. "Yield" of (1) any Investment has the meaning set forth in Section 1.148~ of.the Regulations; and (2) the Certificates has the meaningsetforth.fR Section 1.148-4 of the Regulations. B. -Not to Cause ·interest to Become·Taxable. The City sfiall not use. permit the use of, or omit ta use Gross Proceeds or any-other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Certfficate to·~~me iAclUdc!,ble in the gr0$s-income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. · Without iimiting -..the ·gen·erality of the--· · foregoing, unless and until the City receives a written opinion of counsel nationS:lly recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption fr:om federal income tax of the interest on any Certificate, the City shall comply with each of the specific covenants in this Section. · C. No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings .thereunder, the City shall at all times prior. to the last Stated Maturity of Certiftcates: 8S82l7.I -21- , ., •• (1) exclusively own. operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Certificates, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof} other than a state or local government. unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Certificates or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general ap~ication within the aty or interest eamed on investments acquired with such Gross Proceeds pending application for their intended purposes. · D. No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Certificates to make or finance loans to any person or entity other than a state or local government For purposes of the foregoing covenant. such Gross Proceeds are considered to be "loanecr to a person or entity if: {1) property acquired, oonstructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take-or-pay, output or similar ~ntract or arrangement; or (3) indirect benefits. or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic eqt,1jvalent of a loan. E. Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Certificates directly or indirectly invest Gross Proceeds in any Investment (or use Gross Pr~eds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds·(or with money replaced thereby), whether thenneld or previousty..cfisposed-of, exceeds ttie Yield of the Certificates. · · F; · Not federally° Guaranteect E~cept-to the extent"° permitted by section 149(b) of the Code an~e Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Certific;ates to be federally guaranteed within the m~aning of section 149(~_) .Qf the Code and the Regurations and rulings thereunder. G. information Report The City shall timely.file the infonnation--required by section-··· 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such. place as the Secretaiy may presaibe. H. Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148(0 of the Code and the Regulations and rulings thereunder: 888217.1 . ( 1) The City shall account for all Gross Proceeds (induding all receipts. expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all -22- I •. I ·. I .: records of accounting for at least six years after the day on which the last Outstanding Certificate is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Certificates with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. · (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f} of the Code and the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Certificates until six years after the final Computation Date. . (3) As additional consideration for the purchase of the Certificates by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the exdudability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall pay to the United States out of the Certificate Fund or its general fund, as pennitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Certificates equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the Regula_tions, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (900/4) of the Rebate Amount on sucli date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section 148(f) of the Code and the Regulations and rulings·thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and {3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all _events within one hundred eighty (180) days after discovery of the error), including payment to the United State~_ of ~ny additional Rebate Amount owed to it, interest thereon, and ·any penalty imposed under Section 1.148-3(h) of the Regulations. I.· ·Notto Divert A-rbitrage·Profits. Except to the extent pennitted by section 148 of the Code arn:;the Regulations and rulings thereunder, the City shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Certificates, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection Hof this Section becau~ such -trans~ction results in a smaller profit or a larger Joss than would have resulted if ttie transaction had been at arm's ·length and had the Yield of..the· Certificates not" ·· been relevant to either party. · · · J. Elections. The City hereby directs and authorizes the Mayor, City Secretary, City Manager, Managing Director of Finance, and First Assistant City Manager, individually or jointJy, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Certificates, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document 838217.1 -23- SECTION 25: Sale of Certificates -Official Statement Approval. The Certificates authorized by this Ordinance are hereby sold by the City to Morgan Keegan & Company, Inc. and Samec Capital Markets (herein collectively referred to as the "Purchasers") in accordance with the Purchase Contract, dated February 8, 2001, attached hereto as Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and directed to execute said Purchase Contract for and on behalf of the City and as the act and deed of this Council, and in regard to the approval and execution of the Purchase Contract, the Council hereby finds, determines and declares that. the representations, warranties and agreements of the City ~ntained therein are true and correct in all material respects and shall be honored and performed by the City. Furthermore, the use of the Official Statement by the Purchasers in connection with the public offering and sale of the Certificates is hereby ratified, confirmed and approved in all respects. The final Official Statement, which reflects the terms of sale, attached as Exhibit A to the Purchase Contract (together with such changes approved by the Mayor, City Manager, First Assistant to City Manager, Managing Director of Finance or City Secretary, one or more of said officials), shall be and is hereby in all respects approved and the Purchasers are hereby authorized to use and distribute said final Official Statement, dated February 8, 2001, in the offering, sale and delivery of the Certificates to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of said Official Statement in final form as may be required by the Purchasers, and such final Official Statement in the form and content manually executed by said officials shall be deemed to be approved by the City Council and constitute the Official Statement authorized for ~istribution and use by the 'Purchasers. SECTION 26: Control and Custody of Certificates. The Mayor of the City shall be and is hereby authorized to take and have · charge of all necessary orders and records pending investigation by the Attorney General of the Slate of Texas, induding the printing and supply of definitive Certificates, and shall take and have charge and control of the Initial Certificate(s) pending the. approval thereof by the Attorney General, the registration. thereof by the Comptroller of Public Accounts and the. delivery thereof to the Purchasers . . Furthermore. the Mayor; City Seaetary, City Manager, ~anaging_ Director of Finance and Assistant City Manager, .any one or more of said officials.· are hereby authorized and directed to fuf!liSh and exe~ such_ documen!s relating ,to the_ City __ and its financial affairs as may be necessary .for the -issoance of the Certificates, the· approval of the Attorney General and the registrati6n by the Comptroller of Public Accounts and, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the deJivery of_'U:"ie Initial Certificate{s) to the Purchasers and the initial exchange thereof for definitive Certificates. ·-- .. . . -: -.,..-..,.-. : ... ~ SECTION 27: Proceeds of Sale. The proceeds of sale of the Certificates, excluding the accrued interest and premium, jf any, received from the purchasers, shall be deposited in a construction fund maintained at the City's depository bank. Pending expenditure for authorized pro~ and purposes, such proceeds of sale may be invested in authorized inve~tments in accordance with· the provisions of V.T.C.A., Government Code, Chapter 2256, including guaranteed investment contracts pennitted by V.T.C.A., Section 2256:015 et seq., and the City's investment policies and guidelines, and any investment earnings realized shall be expended for such authorized projects and purposes or deposited in the Interest and Sinking 888217.l -24- ) . I . ....... Fund as shall be determined by the City Council. Accrued interest and premium, if any, received from the Purchasers as well as all surplus proceeds of sate of the Certificates, including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Interest and Sinking Fund. SECTION 28: Legal Opinion. The obligation of the Purchasers to accept delivery of the Certificates is subject to being furnished a final'opinion of Fulbright & Jaworski l.l.P., Attorneys, Dallas, Texas, approving such Certificates as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Certificates. A true and correct reproduction of said opinion is hereby authorized to be printed on lhe definitive Certificates or an . executed counterpart thereof shall accompany the global Certificates deposited with the Depository Trust Company. . SECTION 29: CUSIP Numbers. That CUSIP numbers may be printed or typed on the definitive Certificates. It is e~ressly provided, however, that the presence or absence of CUSIP numbers on the definitive Certificates shall be of no significance 9r effect as regards the legality thereof and neither the City nor attorneys approving said Certificates as to legality are to be held responsible for CUSIP numbers incorrectJy printed or typed on the definitive Certificates. SECTION 30: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City. the Paying Agent/Registrar and the Holders, any ~ght, remedy, or claim, legal or equitable, under or by reason of this Or.dinance or any provision her!:3of, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar amt the Holders. SECTION 31: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in conflict or inconsistent wilh 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 32: Governing Law. This Ordinance shall be construed and enforced In accordance with the laws of the State of Texas and the U_n~ States of America . . --. _ .. SECTION 33; 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 tie valid, and the City Council hereby decla~ that this Ordinance would have been enacted without such invalid provision~ ,. SECTION 34: Effect of Headings. The Section headings herein are for convenience only and shall· rjot affect .the cc;,nstruction he~of. -- •• • a-: -,..;.i,,,.-~ •f'" • SECTION 35: Construction of Terms. If appropriate in the context of.this Ordinance, words of the singular number shall be considered to include the plural, words of the plural . number shall be considered to include the singular, and words of the masculine. feminine or neuter gender shall be consid~red to include the other genders. SECTION 36: Continuing Disclosure Undertaking. (a} Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: 888217.1 ·MsRS' means the Municipal Securities Rulernaking Board. -25- •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. uRule"' means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. 1 .: "S10' means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. (b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, i -within six months after the end of each fiscal year (begiMing with the fiscal year ending September 30, 2001) financial infonnation and operating data with respect to the City of the general type included in the final Official Statement approved by Section 25 of this Ordinance, · :, being the information described in Exhibit C hereto. Financial statements to be proVided shall be (1) prepared in accordance with the accounting principles described in Exhibit C hereto and (2) audited, if the City commission~ 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 available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial information and operating data and will file the annual audit report, when and if the same becomes 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 encl) 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 slatement. or other..offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSI R and any SID or filed with the SEC. ' . ' (c) . ~ Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner. of any of the following events with respect to the Certificates, if such event is fl!aterial within the meaning of the federal securities laws: 888217.1 1. 2. 3. difficulties; 4. difficulties; 5. 6. Certificates; 7. Principal and interest payment c:lelinquencies; . -, ---~-·-,,. · · · · Non-payment related defaults; · · Unscheduled draws on debt service reserves reflecting financial Unscheduled draws on credit enhancements reflecting finantjal Substitution of a-edit or liquidity providers. or their failure to perform; Adverse tax opinions or events affecting the tax-exempt status of the Modifications to rights of holders of the Certificates; -26- I . I . . ,•; 8. Certificate calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Certificates; and 11. 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 infonnation or operating data in accordance with subsection {b} of this Section by the time required by such Section. (d} • Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, the City remains an Kobligated person" with respect to the Certificates within the meaning of the Rule, except that the City in any event will give the notice required by subsection (c) hereof of any Certificate calls and defeasance that cause the City to be·no longer such an "obligated person." The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial infonnation, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete ·presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Certificates at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE . HOLDER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY.SUCH PERSON, IN CONTRACT OR TORT, FQ8 OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC . PERFORMANCE. · ·No default -by· the City in observing or performing .its obligations under this Section shalJ.konstitute a breach of or default under this Ordinance for purposes of any other provision of this O_rdinance. · Nothing ·in this Section is intended' or shall act to ~isclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. ·· · ~-= ·_,,..., .• ~-.· ·. ·. ·•· The provisions of this Section may be amended by the City from time 1o time to adapt to changed circumstances resulting from a change in legal requirements, a change in law, · _or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have pennitted an underwriter to purchase or sell Certificates in the primary offering of the Certificates 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 888217.1 -27- I . I . , I . ) . authorizes such an amendment) of the Outstanding Certificates 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 Holders and beneficial owners of the Certificates. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent' that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Certificates from lawfully purchasing or·selling Certificates in such offering. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) 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. SECTION 37; Public Meeting. It is officially found. detennined. and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time. •place.and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. SECTION 38: · Effective Date. This Ordinance shall take effect and be in force immediately from and after its passage on second and fin~I reading. and IT IS SO ORDAINED. PASSED ANO ADOPTED ON FIRST READING, January 11, 2001. PASSED AND ADOPTED ON SECOND ANO FINAL READING, this the 8th day of February, 2001. ATTEST: City Secreta~ · · . cs5' - (City Seal) APPROVED-AS TO CONTENT: . City Attorney_ -28- \ ' , ) . ) . : . 'i - 450094BS.1110026532 EXHIBITA . PAYING AGENT/REGISTRAR AGREEMENT See Document Number 4 ... •-:-.. ~---- ) • q - EXHIBIT B PURCHASE CONTRACT See Document Number 5 . ·-:·"6"~-·-.... .. ) .. ) .. I .... DESCRIPTION OF ANNUAL FINANCIAL-INFORMATION Exhibit C to Ordinance The following information is referred to in Section 36 of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provi.ded annually in accordance with such Section are as specified {and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official Statement as Appendix B. but for the most recently concluded fiscaJ year. 2. The information contained in Tables 1 through 6 and 8A through 17 of the Official Statement. Accounting Principles i:: . The accounting principles referred to in such Section are the generally accepte~ · accounting principles as applicable to ·governmental units as prescribed by The Government Accounting Standards Board. 888217.1 ,-q - No Text ) ) CERTIFICATE OF CITY SECRETARY THE STATE OF TEXAS COUNTY OF LUBBOCK CITY OF LUBBOCK § § § § § I, the undersigned, City Secretary of the City of Lubbock. Texas, DO HEREBY CERTIFY as follows: 1. On the 11th day of January, 2001, the City Council of the City of Lubbock, Texas, convened in regular session at its. regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: WINDY SITTON MAYOR ALEX "TY" COOKE ) MAYOR PRO TEM VICTOR HERNANDEZ ) T. J. PATTERSON ) COUNCILMEMBERS DAVID NELSON ) FRANK MORRISON ) MARC McDOUGAL ) all of ~aid persons were present at said meeting, except the· following: Alex "Ty" Cooke and Victor Hernandez. Among other business considered at said meeting, the attached ordinance (the "Ordinance") entitled: · "AN ORDINANCE authorizing the issuance of 'CITY OF .LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 2001'; specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; and resolving other matters incident and related to the issuance, sale, payment and delivery of said bonds, including the approval of a Paying Agent/Registrar Agreement and Purchase Contract and the approval and distribution of an Official Statement pertaining thereto; and providing ari effective date." · was introduced and submitted · to the Council for first reading. After presentation and due consideration of the Ordinance, . and upon a · motion being made by Marc McDougal and . seconded by David Nelson, the Ordinance was approved on .first reading by the Council by the following vote: 5 voted "For" 0 voted "Against" O abstained . all as shown in the official Minutes of the_ Council for the meeting held on the aforesaid date. 2. On the a1t1 day of February, 2001, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: 888221.1 ) ) ) ) ) WINDY SITTON MAYOR ALEX "TY" COOKE ) MAYOR PRO TEM VICTOR HERNANDEZ ) T. J. PATTERSON ) COUNCILMEMBERS DAVID NELSON ) FRANK MORRISON ) MARC McDOUGAL ) all of said persons were present at said meeting, except the following: ALEX "TY" COOKE. _Among other business considered at said meeting, the Ordinance was submitted to the Council for second reading and final' passage and adoption. After presentation and due consideration of the Ordinance, and upon a motion being made by T.J. PATTERSON and seconded by MARC MCDOUGAL the Ordinance was duly passed and adopted on second reading to be effective immediately by the following vote: 6 voted "-For" _o_ voted "Againsr 0 abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 3. The attached Ordinance is a true and correct copy of the original on file in the official records of the City; the duly qualified and acting members of the City Council of said City on the date of the aforesaid meetings are those persons shown above and, according to the records of my office, advance notice of the time, place and purpose of each meeting was giveh to each member of the Council; and that said meetings and the deliberation of the aforesaid public business w~re open to the pub.lie and written notice of said meetings, including the subject of the above entitled Ordinance, was posted and given in advance thereof in compliance with the provisions of V. T.C.A., Government Code, Chapter 551, as amended. 688221.1 -2- ) ) ) ) . ) ' : ) ) IN WlTNESS WHEREOF, I have hereunto signed my name officially and affixed the seal of said City, this the ff' day of February, 2001. (City Seal) 888221.1 City of Lubbock, Texas -3- i:: .. "\ ..... ) ) ) ) ORDINANCE NO. 2001-00001 AN ORDINANCE authorizing the issuance of ~CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 2001"; specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; and resolving other matters incident and related to the issuance, sale, payment and delivery of said bonds, including the approval of a Paying Agent/Registrar Agreement and Purchase Contract and the approval and distribution of an Official Statement pertaining thereto; and providing an effective date. WHEREAS, the City Council of the City of Lubbock, Texas, hereby finds and determines that $9,100,000 in principal amount of general obligation bonds approved and authorized to be issued at an election held on September 18, 1999, should be issued and sold at this time; a summary of the general obligation bonds authorized at such election, as well as previously held elections, the principal amount authorized, amounts heretofore issued and .being issued pursuant to this ordinance and amounts remaining to be issued subsequent hereto being as follows: Principal Amounts Date Amount Heretofore Amounts Unissued Purpose Authorized Authorized Issued . Being Issued Balance Wat~rworks System 10-17-87 2,810,000 200,000 -0-2,610,000 Sewer System 5-21-77 3,303,000 2,175,000 -0-1,128,000 Street Improvements 5~1-93 10,170,000 10,166,000 -0-4,000 Street Improvements 9-18-99 17,165,000 2,390,000 5,335,000 9,440,000 Drainage 9-18-99 2,160,000 1,025,000 -0-1,135,000 Traffic Signals 9-18-99 3,295,000 340,000 740,000 2,215,000 Parks 9-18-99 14,765,000 3,245,000 3,025,000 8,495,000 ANO WHEREAS, the City Council hereby reserves and retains the right to issue the balance of unissued bonds approved at said elections in one or more installments when, in the judgment of the Council, funds are needed to accomplish the purposes for which such bonds are voted; now, therefore, BE IT ORDAINED BY TH~. CITY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1: Authorization-Designation-Principal Amount-Purpose. General obligation bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $9,100,000, to -be··.designated and bear the title "CITY OF LUBBOCK, TEXAS·, GENERAL OBLIGATION BONDS, SERIES 2001" {hereinafter referred to as the "Bonds"}, for the purpose of making pennanent public improvements and public purposes, to wit: $5,335,000 for street improvements, including drainage, curb, gutters, ·landscaping, · sidewalks, curb ramps and utility line relocation and the acquisition of land and right-of-way therefor, $740,000 for· traffic signalization and assorted communications equipment and $3,025,000 to acquire or improve, or both, land for park purposes, all in accordance with authority conferred at the aforesaid election and under and in strict confonnity with the Constitution and laws of the State of Texas, including V.T.C.A., Government Code, Chapter 1331 and Article VIII Section 1 of the City Charter of the City· of Lubbock, Texas. 3188181.2 ) ) ) "I j ) ) SECTION 2: Fully Registered Obligations -Bond Date -Authorized Denominations-Stated Maturities-Interest Rates. The Bonds ·shall be issued as fully registered obligations only, shall be dated February 1, 2001 (the "Bond Date"), and. other than the single fully registered Initial Bond referenced in Section 8 hereof, shall be in denominations of $5,000 or any integral multiple (within a Stated Maturity) thereof, and shall become due and payable on February _15 in each of the years and in principal amounts (the "Stated Maturities") in accordance with the followjng schedule: Year of Principal Interest Stated Maturity Amount Rate 2002 $65,000 5.00% 2003 305,000 4.70% 2004 320,000 4.40% 2005 335,000 4.35% 2006 350,000 4.35% 2007 365,000 4.40% 2008 380,000 4.45% 2009 400,000 4.50% 2010 415,000 4.50% 2011 435,000 4.60% 2012 · 455,000 4.60% L 2013 480,000 4.625% ~. 2014 500,000 4.70% 2015 525,000 4.85% 2016 555,000 4.95% 2017 580,000 5.00% 2018 610,000' 5.05% 2019 640,000 s:00% 2020 675,000 5.00% 2021 710,000 5.00% The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the per annum rates shown above ( computed on the basis · of a 360-<fay year of twelve 30-day ·months): such interest shall be payable on February 15 and August 15 in each year, commencing February 15, 2002. · · SECTION 3: Tenns of Payment-Paying Agent/Registrar. The principal of, premium, 'if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or otheiwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter . call~ the •Holders•) appe_aring on the registration and transfer bOQks maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of .America, which at the time of pay,nent is legal tender for the payment of public and private . debts, and shall be without excha_nge ·or collection ch8:rges to the Holders. The selection and appointment of U.S. Trust Company of Texas, N.A, Dallas, Texas to -~erve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records relating to the registration, payment, transfer and exchange of the Bonds (the "Security . Register") shall at . all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and provisions of a 888181.1 -2- ) i .., ... "Paying Agent/ Registrar Agreement", substantially in the form attached hereto as Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City Secretary are authorized to execute and deliver such Agreement in connection with the delivery of the Bonds. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor Paying AgenVRegistrar shall be a bank, trust company, financial institution or other entity qualified and authorized to seive in such capacity and perform the duties an~ seivices of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for ·the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities or the redemption thereof, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices in New York, New York {the "Designated Payment/Transfer Office~). Interest on the Bonds shall be paid to the Holders whose name .appears in the Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest payment date) ~nd shall be paid by the Paying Agent/Registrar (i} by check sent United States Mail, first dass postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying AgenVRegistrar, requested by, and at the risk and expense of, the Holder. If the date fqr the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday; a legai;: holiday, or a day on which banking institutions in the City where the Designated Payment/Transfer Office. of the Paying Agent/Registrar is located are authorized by law ·br 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 dose; and payment on such date shall have the same force and effect as if made on the original date payment was due. 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 Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days aft~r the Special Record Date} 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 Holder appearing on the ·security Register at the dose of business on ·the last business day next preceding the· date of mailing of such notice. SECTION 4: Redemption. {a) Optional Redemption. The Bonds having Stated Maturities on and after February 15, 2011, shall be subject to redemption prior to maturity, at the option of the City, in whole or in-part in principal ~mounts of $5,000 or any integral. multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar:), on February 15, 2010 or on any date thereafter at the red~mption price of par plus accrued in~rest to the date of redemption. (b) Exercise of Redemption Option.. At least forty-five (45) days prior to a redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the . Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Bonds, the principal amount of each Stated Maturity .to be redeen,ed, and the date of 888181.1 -3- ) ) ) . ., ) ) redemption therefor. The decision of the City to exercise the right to redeem Bonds shall be entered in the minutes of the governing body of the City. (c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall-treat such Bonds as representing the number of Bonds Outstanding which is obtained by dividing the principal amount of such Bonds by $5,000 and shall select the Bonds, or principal amount thereof, to be redeemed within such Stated Maturity by lot. {d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the · Bonds, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the City's ·expense. to each Holder of a Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. AJI notices of redemption shall (i) specify the date of redemption for the Bonds, (ii} identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal· amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall .become due and payable on the redemption date specified, and the interest thereon, or on th~.' portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or .tl'le principal amount thereof to be redeemed, shall be made at the Designated PaymenVT ransfer Office of the Paying Agetit/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly _given as hereinabove provided, such Bond (or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for the payment of such Bond (or of the principal amount thereof to be redeemed} at the then applicable redemption price are held for the purpose of such payment by the Paying AgenURegistrar. SECTION 5: Registration -Transfer/Exchange of Bonds-Predecessor Bonds. The Paying AgenVRegistrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Bonds issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Bond may .be transferred or exchanged for Bonds of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Paying Agent/Registrar for cancellation, accompanied by a written ir:tstrument of transfer or request for exchange duly exe~ted by the -Holder or ~y his duly authorized agent, in form satisfactory to the _Paying Agent/Registrar. Upon surrender of any Bond ( other than. the Initial Bonds authorized· in Section 8 hereo·f) for transfer at the Designated Payment/Transfer Office of the .Paying-Agent/Registrar, the Paying AgentfRegistrar shall register and deDver, in· the name of the designated transferee or transferees, one or more new Bonds of authorized denominations and having the same Stated Maturity. and of a like aggregate principal amount as the Bond or Bonds surrendered for transfer. 886181.1 -4- l '.) "), ), At the option of the Holder. Bonds (other than the Initial Bonds authorized in Section 8 hereof} may be exchanged for other Bonds of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the Designated PaymenVTransfer Office of the Paying AgenURegistrar. Whenever any Bonds are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds to the Holder requesting the exchange: All Bonds issued in any transfer or exchange of Bonds shall be delivered to the Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and delivery thereof, the same shall be the valid obligations of the City. evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as thet Bonds surrendered in such transfer or exchange. All transfers or exchanges of Bonds pursuant to this Section shall be made without · expense qr service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Bonds canceled by reason of an exchange or transfer pursuant to the provisions hereci:· are hereby defined to be aPredecessor Bonds," evidencing all or a portion. as·the case may be. of the same obligation to pay evidenced by the new Bond or Bonds registered.and delivered In the exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any · mutilated, lost. destroyed, or stolen Bond for which a replacement Bond has been issued, registered and delivered in lieu thereof pursuant to the provisions of Section 11 hereof and such new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond. Neither the City nor the Paying AgenURegistrar shall be required to issue or transfer to an assignee of a Holder any Bond called for redemption. in whole or in part, within 45 days of the date fixed for the redemption of such Bond; provided, however, such limitation on transferability shall not be applicable to an exchange· by the Holder of the unredeemed· balance of a Bond called for redemption in part. SECTION 6: Book-Entry Onty Transfers and Transactions. Notwithstanding the provis.ions contained in Sections · 3, 4 and 5 hereof. relating to the payment, and · transfer/exchange of the Bonds, the City hereby approves and authorizes the use of "Book-Entry Only" securities ciearance, settlement and transfer system provided. by The pepository Trust Company (OTC), a limited purpose trust company organized under the laws of the $tate ofNew York, in accordance with the operational arrangements referenced in the . Blanket Issuer Lett!;!r of Representation, by and between the City and OTC (the "Depository · Agreemenr). · Pursuant to the Depository Agreement and the rules of OTC, the Bonds shall be deposited with OTC who shatl hold said Bonds for its participants (the •oTC Participantsn). . While the Bonds are held by OTC under the Depository Agreement, the Holder of the Bonds on · the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond {the "Beneficial Owners") being recorded in the records of OTC and OTC Participants. 888181.1 i . ..., In the event OTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the City determines that OTC is incapable of properly discharging its duties as securities depository for the Bonds. the City covenants and agrees with the Holders of the Bonds to cause Bonds to be printed in definitive form and provide for the Bonds to be issued and delivered to OTC Participants and Beneficial Owners, as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying AgenURegistrar and payment of such Bonds shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution -Registration. The Bonds shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Bond Date shall be deemed to be duly ·executed on behalf of the City, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in subsequent exchange.s and transfers, all as authorized and provided in V.T.C.A., Government Code, Chapter 1201. No Bond shalt be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on s·uch Bond either a certificate of registratio~.' substantially in the. fonn provided in Section 9C, manually executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registrati~n substantially in the form provided in Section 90, manually executed by an. authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Bond.shall be concfusive evidence, and the only evidence, that such Bond has been duly certified, registered and delivered. · , SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued either (i) as a single fully registered bond in the total principal amount of $9,100,000 with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or (ii) as multiple fully registered bonds, being one bond for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s) shaU be registered in the ".'lame qf the initial purchaser(s) or the designee thereof. The Initial Bond( s) shall be the Bonds 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 initial purchaser{s). Any time after the delivery of the. Initial Bond(s), the Paying Agent/Registrar-; pursuant to · written instructions from the· initial purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and exchange therefor definitive Bonds of authorized denominations, Stated Maturities,. principaf amounts and bearing applicable interest rates for transfer and delivery to tt)e HoMers named at . the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or· the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. · SECTION 9: Forms. A Fonns Generally. The Bonds, the Registration Certificate of the Comptroller of Public Accounts of the State of T~xas, the Registration Certifie:ate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the Bonds. shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, 888181.1 -6- substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends in the event the Bonds, or any maturities thereof, are purchased with insurance and any reproduction of an qpinion of counsel) thereon as may. consistently herewith, be established by the City or determined by the officers. executing such Bonds as evidenced by their execution. Any portion of the text of any Bonds may be set forth on the reverse thereof. with an appropriate reference thereto on the face of the Bond. The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, or engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined by the officers executing such Bonds as evidenced by their execution thereof. :, B. Form of Definitive Bond. REGISTERED NO Bond Date: February 1, 2001 Registered Owner. UNITED STATES OF AMERICA STATE OF TEXAS CITY OF LUBBOCK, TEXAS, GENERAL OBLIGATION BONDS, SERIES 2001 Interest Rate: Stated Maturity: REGISTERED $ ___ _ CUSIPNO: ' Principal Amount DOLLARS i.·. - i • The City of Lubbock (hereinafter referred to as the "City"), a body corporate and political subdivision in the County of Lubbock. State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered owner named above, or the . registered assigns ~ereof, on the Stat~ Maturity date specified above the Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) and · to pay interest on the unpaid principal amount hereof from the Bond Date at the per annum rate . of interest specified above computed on the-.basis of a 360-day year of twelve 30-day months; · such interest being payable on February 15 and August 15 in each year, commencing February 1 ~. ioo2. Principal of this Bond is ~yable at its Stated Maturity or redemption to the registered owner hereof. upon presentation and surrender, at the Designated Payment/Transfer Office of the Paying Agent/Registrar exea.iting the registration certificate appear.ing hereon, or its successor. Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds. as defined in the Ordinance hereinafter referenced) whose name appears on the ·security Register" maintained by the Paying Agent/Registrar at the dose of business on the · •Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United ) States Mail, first dass postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, accepta~e to the Paying Agent/Registrar, requested 888181.f -7- ) ... .. J ) '···. by, and at the risk and expense of, the registered owner. All payments of principal of, premium. if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Bond is one of the series specified in its title issued in the aggregate principal amount of $9,100,000 (herein referred to as ~he ·eonds~) for the purpose of making permanent public improvements and public purposes, to wit: $5,335,000 for street improvements, including drainage, curb, gutters, landscaping, sidewalks, curb ramps and utility line relocation and the acquisition of land and right-of-way therefor, $740,000 for traffic signalization and assorted communications equipment and $3,025,000 to acquire or improve, or both, land for park purposes, all in accordance with authority conferred at an election and under and in strict conformity with the Constitution and laws of the State of Texas and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Bonds maturing on and after February 15, 2011, may be redeemed prior to their Stated Maturities, at the option of the City, .in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2010, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. At least thirty days prior to a redemption date, the City shall cause a written notice q(: · such redemption to be sent by United States Mail, first dass postage prepaid, to the registered owners of the Bonds to be redeemed in whole or in part, and subject to the tenns and provisions relating thereto contained in the Ordinance. If a Bond (or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon said redemption date such Bond (or ttie portion-of its principal sum to be redeemed) shali become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor, provided moneys for the payment of the redemption price and the interest on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar. In the event a portion of the principal amount of a Bond is to be redeemed and the registered owner is someone other than Cede & Co., payment of the redemption price o.f such . principal amount shall be made to the registered owner only upon presentation and .surrender of such Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar. and a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance. of the principal sum thereof will be issued to the registered owner, without charge. If a Bond is selected for redemption, in whole or in part. the City and the Paying Agent/Regi~trar shall not be required to transfer such Bond to an assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the urvedeemed balance of a Bond redeemed in part. · The Bonds are payable from the proceeds of an ad valorem tax levied, within the · _limitations prescribed by law, upon afl taxable property in the City. Reference is· hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the owner or holder of this Bond by the acceptance hereof hereby assents, for definitions of tenns; the description of and the nature and extent" of the tax levied for the payment of the Bonds; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may be 888181.1 -8- ) ) ) ) amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying AgenURegistrar; the terms and provisions upon which this Bond may be discharged at or prior to its maturity or redemption. and deemed to be no longer Outstanding thereunder; and for other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. This Bond, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated PaymenVTransfer Office of the Paying AgenURegistrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more new fully registered Bonds of the same Stated Maturity, of authorized denominations, bearing the same rate of interest. and of the same .aggregate principal amount will be issued by the Paying AgenVRegistrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of either, shall treat the registered owner whose name appears on the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nof the Paying AgenVRegistrar, or a_ny agent of e.ither, shall be affected by notice to the. contrary. f.i.: - the event of 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 6e 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 (5) business days prior to the Special Record Date by United States Mail, first dass postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and poliUcal subdivisiqn duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas: that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the ~ame lawful and valid obligations of the City hav~ been property done, have happened and have be.en performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the· Bonds by the l~vy of a tax as aforestated. In case any provision in this Bond shall be Invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The tenns and provisions of this Bond .and the Ordinance shall· be construed in accordance with and shall be governed by the laws of the State of Texas. 886181.1 -9- ) ) ) I . IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Bond Date. COUNTERSIGNED: City Secretary (SEAL) CllY OF LUBBOCK, TEXAS Mayor C. *Form of Registration Certificate of Comptroller of Public Accounts to appear on Initial Bond(s) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS THE STATE OF TEXAS ( { ( ,( REGISTER NO. £· ·. V. 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 duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this ------- (SEAL) •NOTE TO PRINTER: 888181.1 Comptroller of Public Accounts of the State of Texas Do Not Print on Definitive Bonds -10- ) ) ) ) 0.Form of Certificate of Paying Agent/Registrar to appear on Bonds (other than a single fully registered Initial Bond). REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and registered under the provisions of the within-mentioned Ordinance; the bond or bonds of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the ·records of the Paying Agent/Registrar. · The designated offices of the Paying, Agent/Registrar in New York, New York is the "Designated PaymenVTransfer Officen for this Bond. Registration date: E. Fann of Assignment. U. S. TRUST COMPANY OF TEXAS, N.A., Dallas, Texas, as Paying Agent/Registrar By----:--,:-----,-.......,..-=---------Authorize~ Signature ASSIGNMENT . FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto i.:: V. (Print or typewrite name, address, and zip code of transferee:) ________ (Social Security or other identifying number:) ________ the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints --------=--__,._,.....,.attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises . .DATED: __________ ....;. Signature guaranteed: 888181.1 NOTICE: The signature on this assignment must correspond with the name of the registered . owner as it appears on the face of the within Bond in every particul~r. · -11- ) ) ) F. The Initial Bond(s} shall be in the form set forth in paragraph B of this Section. except that the form of the single fully registered Initial Bond shall be modified as follows: (i) immediately under the name of the bond the headings "Interest Rate _" and '"Stated Maturity __ " shall both be omitted. (ii) Par~graph one shall read as follows: Registered Owner: Principal Amount: DOLLARS ) . The City of Lubbock (hereinafter referred to as the "City"), a body corporate and municipal corporation in the· County of Lubbock, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, the Principal Amount hereinabove stated on February 15 in each of the years and in principal ins_tallments in accordance with the following schedule: YEAR OF MATURITY PRINCIPAL INSTALLMENTS INTEREST RATE (Information to be inserted from schedule in Section 2 hereof). I (or so much principal thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid Principal Amount hereof from the Bond Date at the per annum rates of interest specified above oomputed on the basis of a -360-day year of twelve 30-day months; such interest being payable on February 15 and August 15 in each year, commencing February15, 2002. Principal installments of this Bond are payabre in the year of maturity or on a prepayment date to the registered owner hereof by U.S. Trust Company of Texas, N.A., Dallas, Texas (the "Paying Agent/Registrar'), upon presentation and surrender, at its designated offices in New York, New York (the .. Designated Payment/Transfer Office•). Interest is payable to the registered owner of this Bond whose name appears on the ·security Register' maintained by the Paying AgenVRegistrar at the close of business on the "Record DateN, which is the last ··. · business day of the month next preceding each interest payment date, and interest shall be paid QY the Paying AgenVRegistrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, · . .-. a~ptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or· collection charges to the owner hereof and in any coin or currency of ~ United States of America which at the lime of payment is legal tender for the payment of public and private debts. SECTION 10: Levy of Taxes. To provide for the payment of the uoebt Service Requirements" of the Bonds, being (i) the interest on the Bonds and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount is the greater). there is hereby. levied, and there shall be annually assessed and collected in due time, form, and manner, a tax on all taxable property in the City, within the limitations prescribed by law, ·and such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be ample and sufficient to pro_vide funds each year to pay the principal of and interest on said 888181.1 ) ) Bonds while Outstanding; full allowance being made for delinquencies and costs of collection; separate books and records relating to the receipt and disbursement of taxes levied, assessed and collected for and on account of the Bonds shall be kept and maintained by the City at all times while the Bonds are Outstanding, and the taxes collected for the payment of the Debt Service Requirements on the Bonds shall be deposited to the credit of a "Special 2001 Bond Account" (the "Interest and Sinking Fundft) maintained on the records of the City and deposited in a special fund maintained at an official depository of the City's funds; and such tax hereby levied, and to be assessed and collected annually, is hereby pledged to the payment of the Bonds. Proper officers of the City are hereby authorized and directed to cause to be transferred to the Paying Agent/ Registrar for the Bonds, from funds on deposit in the Interest and Sinking Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Bonds as the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause collected funds to be deposited with the Paying Agent/Registrar on or before each principal and interest payment date for the Bonds. SECTION 11 : Mutilated-Destroyed-Lost and Stolen Bonds. In case any Bond shall be · mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar, subject to City approval and in its discretion, may execute and deliver a replacement Bond of like form and tenor, and in the same d~nomination and bearing a number not contemporaneously outstanding, in exchangf· and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory. to hold the City and the Paying Agent/Registrar hannless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated. or destroyed, lost or stolen. · Every replacement Bond issued pursuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or-stolen Bonds. · The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Bonds. SECTION 12: Satisfaction of Obligation of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds. at the times and in the manner stipulated in this Ordinance. then· the pledge of taxes levied under this Ordinance and all cov~nants, agreements. and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Bonds or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in · full such Bonds or the principal amount(s) thereof at maturity or {if notice of redemption has been duly given or wai~ed or if irrevocable arrangements therefor acceptable to the Paying Agent/ Registrar have been made) the redemption date thereof, together with all interest due 866181.1 -13- ) ) ) I. thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the ~vailability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/ Registrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as Marbitrage bonds" within .the meaning of Section 148 of the Internal Revenue Code of 1986, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/Registrar, or an authorized es~row agent, and all income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Bonds, or any principal amount(s) thereof, or interest thereon with respect to. which such moneys have been so deposited shall be remitted to .the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Bonds and remaining undaimed for a period of three {3) yeaf1i after the Stated Maturity, or applicable redemption date, of the Bonds for which such mane~:. , · were deposited and are held in trust to pay, shall upo~ the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds frpm the Paying Agent/Registrar to the City shall be subject to any applicable . unclaimed property laws of the State of Texas. The tenn "Government Securities", as used herein, means (i) direct noncallable obligations of the United States of America, including obligations the principal of and_interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the City are rated as to investment quality by a nationally recognized investment rating finn 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 on the date of th~ir acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA. or its equivalent SECTION 13: Ordinance a Contract -Amendments -Outstanding Bonds. ' This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, ·and shall not be amended or repealed by the City while any Bond remains Outstanding except as pennitted in this Section. The City may, without the consent of or nqtice to any Holder:s, from time· to time and at any time, amend this Ordinance in any manner not detrimental .to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent· of Holders holding a majority in aggregate principal amount of the Bonds then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Bonds, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of interest 888181.1 -14- ) ) ) thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of Bonds required to be held by Holders for consent to any such amendment, addition, or rescission. The term "Outstanding" when used in this Ordinance with respect to Bonds means, as of the date of determination, au Bonds theretofore issued and delivered under this Ordinance, except: (1) those Bonds canceled by the Paying AgenU~egistrar or delivered to the Paying AgenURegistrar for cancellation; (2) those Bonds deemed to be duly paid by the City in accordance ~th the provisions of Section 12 hereof; and (3) those mutilated, destroyed, lost, or stolen Bonds which have been replaced with Bonds registered and delivered in lieu thereof as provided in Section 11 hereof. SECTION 14:Covenants to Maintain Tax-Exempt Status. A. Definitions. used in this Section, the following terms have the followif"!g meanings: "Closing Date" means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. "Code· means the Internal Revenue Code of 1986, as amended by· all legislation, if any, effective on ~r before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Gross Proceeds· means any proceeds as defined ·in Section 1.148-1(b) of the Regulations. and any replacement proceeds as defined in Section 1.148-1(c) of the Regulations, of the Bonds. "Investment" has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined in ·· section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested . and whidl is not acquired to cari'y out the governmental purposes of the Bonds. 888181.1 "Rebate Amount" has the meaning set forth in Section 1.148-1 (b) of the Regulations. •Regulations" means any proposed, temporary, or final Income Tax Regulations issued pur.suant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shall also mean. as appropriate, any proposed, temporary or final Income Tax Regulation ·designed to supplement, amend or replace the specific Regulation referenced. · -15- When ) ) } . (1) any Investment has the meaning set forth in Section 1.148-5 of the Regulations; and (2) the Bonds has the meaning set forth in Section 1.148-4 of the Regulations. B Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts {or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Bond to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from fed~ral income tax of the interest on any Bond, the City shall comply with each of the specific covenants in this Section. C No Private Use or Private Payments. Except as pennitted by section 141 of the Code and the Regulations and rulings thereqnder, the City shall at all times prior to the last Stated Maturity of Bonds: f::· · (1) exdusively own. operate and possess all property the acquisition, construction or improvement of which is to be financed or· refinanced directly or indire~ly with Gross Proceeds . of the Bonds, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person-or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced ·directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. D No Private Loan. Except to the extent permitted by section 141 ot'the Code and .the Regufa~ions ~nd rulings thereunder, the City shall not use Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned• to a . person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income • tax purposes; (2) capacity in or service from such property is committed to such person·or entity . under a take-or-pay, output or similar contract or anangement; or (3) indirect benefits, ot burdens and benefits of ownership, of such Gross Proceeds or any property acquired, 888181.1 -16- ) constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. E Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds tp replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. F Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. G Information Report. The City shall timely file the information required by section 149(e) of the Cod~ with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. H Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder: 888161.1 {1) The City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds {and receipts, expenditures and investments therepf) and shall retain all records of accounting for ·at least six years after the day on which the last Outstanding Bond is discharged. However,· to the extent permitted by law, the City may commingle Gross Proceeds of the Bonds with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The City shaH maintain such calculations with its official ~nscript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date. · (3) As a~di~onal consideration for the purchase of the Bonds by the Purchasers and. the loan of the money repr_esented thereby and in order to • induce such purchase by measures designed to insure the exdudability of the interest thereon from the gross income of (he r;,wners thereof for federal income tax purposes, the City shall pay to the United States out of the · lnte"rest and Sinking Fund· or its. general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments .made for the Bonds equals (i) in thi;t case of a Final Computation Date as defined in Section 1.148-3(e}(2} of the Reguiations, one hundred percent (100%) of the Rebate Amou.nt on such date; and ~i) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In ail cases, the rebate payments shall be made at the times, in the installments, to the place and in the -17- i:: i . ) ) manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section 148{f) of the Code and the Regulations and rulings thereunder. {4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), induding payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-3(h) of the ~egulations. I Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection H of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Bonds not been relevant to either party. J Elections. The City hereby directs and authorizes the Mayor, City Secretary, Ci!f.: Manager, ·Managing Director of Finance and Assistant City Manager, individually or jointly, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Bonds, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. SECTION 15: Sale of Bonds • Official Statement Approval. The Bonds authorized by this Ordinance are hereby sold .to Estrada Hinojosa & Company, Inc., Siebert Brandford Shank & Co., LLC, and Banc of America Securities LLC (herein collectively referred to as the "Purcha.sers") in accordance with the Purchase Contract, dated February 8, 2001, attached hereto as Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and directed to execute said Purchase Contract for and on behalf of the City and as the act and deed of this Council, and in regard to the approval and execution of the Purchase Contract, the Council hereby finds, detennines .and dedares that the representations, warranties and agreements of the City contained therein are true and. correct in all material respects and shall be honored and performed by the City. Furthennore, the use of the ·Official Statement by the Purchasers in connection with the public offering and sale of the Bonds is hereby ratified, confirmed and approved in all respects. The final Official · Statement, which reflects the tenns of sale, attached as exhibit A to the Purchase Contract (together with such changes approved by the Mayor, City Manager, First Assistant to City Manager, Managing Director of Finance or City Secretary, one or more of said officials), shall be and is hereby in all r~pects approved and the Purchasers are hereby authorized to use and distribute said final 'Official Statement, dated February 8, 2001, in the offering, sale and delivery of the Bonds to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of -said Official Statement in final form as may be required by the Purchasers, and such final Official Statement in the form and content manually executed by said officials shall be deemed . to be approved by the City Council and constitute the Official Statement authorized· for distribution and use by the Purchasers. 888181.1 ) ) ) ) / ', ... SECTION 16: Control and Custody of Bonds. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texas, including the printing and supply of definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers. Furthermore, the Mayor. City Secretary, City Manager. Managing Director of Finance and Assistant City Manager, any one or more of said officials, are hereby authorized and directed to furnish and execute such documents relating to ttie City and its financial affairs as may be necessary for the issuance of the Bonds, the approval of the Attorney General and the registration by the Comptroller of Public Accounts and, together with the City's financial advisor. bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond(s) to the Purchasers and the initial exchange thereof for definitive Bonds. · SECTION 17: Proceeds of Sale. The proceeds of sale of the Bonds, exduding the accrued inte·rest and premium, if any, received from the purchasers, shall be deposited in a construction fund maintained at the City's depository bank. Pending expenditure for authorized projects and purposes, such proceeds of sale may be invested in authorized investments in accordance with the provisions of V.T.C.A., Government Code, Chapter 2256, including guaranteed investment contracts permitted by V.T.C.A., Section 2256.015 et seq., and thfr · City's investment policies and guidelines, and any investment earnings realized shall be expended for such authorized projects and purposes or deposited in the Interest and Sinking Fund as shall be determined by the City Council. Accrued interest and premium, if any, received from the Purchasers as well as all surplus proceeds of sale of the Bonds, including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Interest and Sinking Fund. SECTION 18: Notices to Holders-Waiver. Wherever this Ordinance provides for notice . to Holders . of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first dass postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of s1:1ch notice. · In any case where notice to Holders is given by mail. neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for ·notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any a<?tiori taken in reliance upon such waiver. SECTION 19: Cancellation. AJI Bonds surrendered for payment, redemption, transfer, exchange. or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if surrendered to the City, shall be delivered to the Paying AgenVRegistrar and, if not alrea<;fy canceled, shall be promptly canceled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds ·previously certified or registe~ed and delivered which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptty canceled by the Paying 888181.1 -19- ) ) ) ) ) . AgenVRegistrar. All canceled Bonds held by the Paying AgenURegistrar shall be returned to the City. SECTION 20: Legal Opinion. The obligation of the Purchasers to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys, Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Bonds. A true and correct reproduction of said opinion is hereby authorized to be printed on the definitiv~ Bonds O( an executed counterpart · thereof shall accompany the global Bonds deposited with the Depnsitory Trust Company. SECTION 21: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving the Bonds as to legality are to be held responsibie for CUSIP numbers incorrectly printed or typed on the definitive Bonds. SECTION 22: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be· and being for the sole and exclusive benefit of the City, the Payin~ Agent/Registrar and the Holders. r".'. - SECTION 23: 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 ma.tters contained herein. SECTION 24: Governing Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 25: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 26: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular nurriber shall be considered to .include the plural, words of the plural number sliall be considered to include the singular, and words of the masculine. feminine or ·neuter gender shall be considered to inciude the other genders. SECTION 27: Severability. If any provision of this Ordinance or the application ':f1ereof 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 the City Council hereby dedare~ that this Ordinance would have been enacted without such invalid provision. SECTION 28: Continuing Disclosure Undertaking. (a) Definitions. As used in this Section, the following tenns have the meanings ascribed to such terms below: •MSRB" means the Municipal Securities Rulemaking Board. 888181.1 -20- ) ) ) . ) ) . MNRMSJF?' 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 frt?m 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. (b) Annual Reports. The City shal1 provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 2001) firiandaf information and operating data with respect to the City of the general type included in the final Official Statement approved by Section 15 of this Ordinance, being the information described in Exhibit C hereto. Financial statements 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 available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable. fiscal year to each NRMSIR an;_-. any SlD with the financial information and operating data and will fde the annual audit report when and if the same becomes available. If the City changes its fiscal year, it will notify each NRMSIR and any S10 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 lnfonnation and operating data pursuant to tfiis Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. {c) Material Event Notices. The City shall notify any SID and either each NRMSIR or th~ 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: ---:'•• .. .,,_. 888181.1 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial · difficulties; . 5. Substitution of credit or liquidity providers, or their failur~ to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; 7. Modifications to rights of holders of the Bonds; 8. Bond calls; 9. Oefeasance~: -21- ) ) the Bonds. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) 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. SECTION 29: Public Meeting. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business tQ be considered at such meeting, including this Ordinance, was given, all as required by Ch.apter 551, Texas Government Code, as amended. • SECTION 30: Effective Date. This Ordinance shall be in force and effect from and after its passage on second and final reading and IT IS SO ORDAINED. PASSED ANO ADOPTED ON FIRST READING, this January 11, 2001. PASSED ANO ADOPTED ON SECOND ANO FINAL READING, this the 8th day of February, 2001. CITY OF LUBBOCK, TEXAS £:· Ii. ATTEST: ~~e ~--City Secretary ~~ (City Seal) APPROVED AS TO CONTENT: 888181.1 -23- ) . > ) ·. -:'·~ ... ! .• : : ' ), • < .• . 1;·. EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT See Document Number 4 45009501.01/10026532 ) EXHIBIT B PURCHASE CONTRACT J See Document Number 5 ) ,. . 45009501.01110026532 ) ) ) ) . . . :J ) DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following infonnation is referred to in Section 28 of this Ordinance. Annual Financial Statements and Operating Data EXHfBITC to Ordinance The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specjfied (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements .of the City appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2. The infonnation under Tables 1 through 6 and BA through 17. Accounting Principles The accounting principles referred to in such Section are the generally accepted accounting principles as applicable to governmental units as prescribed by The Government Accounting Standards Board. r 888181.1 'I ) THE STATE OF TEXAS . COUNTY OF LUBBOCK CITY OF LUBBOCK CERTIFICATE OF CITY SECRET ARY § § § § § I, the undersigned, City Secretary of the City of Lubbock, Texas, 00 HEREBY CERTIFY as follows: 1. On the 2411 day of May, 2001, the City Council of the City of Lubbock, Texas, · e9nvened in regular session at its regular meeting place in the City Hall of said City; the duly > . .. constituted members of the Council being as follows: I . WINDY SITTON ALEX UTY" COOKE VICTOR HERNANDEZ T. J. PATTERSON DAVID NELSON FRANK MORRISON MARC McDOUGAL ) ) ) } ) ) MAYOR MAYOR PRO TEM COUNCILMEMBERS all of said persons were . present at said meeting, except the following: none Among other business considered at said meeting, the attached ordinance (the "Ordinance•} entitled: "AN ORDINANCE authorizing the issuance of 'CITY OF LUBBOCK, TEXAS, TAX AND MUNICIPAL DRAINAGE UTILITY SYSTEM SURPLUS REVENUE 9ERTIFICATES OF OBLIGATION, SERIES 2001'; specifying the terms and features of said certificates; providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon all taxable property within the City and a lien qn and pledge of the net revenues from the operation of the Municipal Drainage Utility System; and resolving other matters incident and related to the issuance, sale, security, paymenr and delivery of said certificates, incJudlng the approval of a Paying AgenVRegistrar Agreement and Purchase Contract and the approval and distribution of an Official Statement; and providing an effective date." was introduced and submitted to the Council for first reading. After presentation and due consideration of the Ordinance, and upon a motion beirig made by T. J . Patterson and seconded by Frank Morrison, the Ordinance was approved on first reading by the Council by the following vote: · 7 voted "For" _Q_ voted • Against" 0 abstained all as shown in Jhe official Minutes of the Council for the meeting held on the aforesaid date. 45047144.1 I . 2. On the 141t1 day of June, 2001, the City Council of the City of Lubbock, Texas, convened in regular session at its regular meeting place in the City Hall of said City; the duly constituted members of the Council being as follows: WINDY SITTON ALEX "lY" COOKE VICTOR HERNANDEZ T. J. PATTERSON DAVID NELSON FRANK MORRISON MARC McDOUGAL ) ) } ) ) ) MAYOR MAYOR PRO TEM COUNCILMEMBERS all of said persons were present at said meeting, except the following: Marc McDougal. Among other business considered at said meeting, the Ordinance was submitted to the Council for second reading and final passage and adoption. After presentation and due consideration of the Ordinance, and upon a motion being made by Alex "Ty" Cooke and seconded by Frank Morrison, the Ordinance was duly passed and adopted on second reading to be effective immediately by the following vote: 6 voted "For" 0 voted "Against" 0 abstained all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 3. The attached Ordinance is a true and correct copy of the original on file in the official records of the City; the duly qualified and acting members of the City Council of said City on the date of the aforesaid meetings are those persons shown above and, according to the records of my office, advance notice of the time, place and purpose of each meeting was given to each member of the Council; and that said meetings and the deliberation of the aforesaid public business were open to the public and written notice of said meeting·s, including the subject of the above entitled Ordinance, was posted and given in advance thereof in compliance with the provisions of V.T.C.A., Government Code, Chapter 551 , as amended. 45047144.1 -2 - IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal of said City, this the 14111 day of June, 2001. City Secretary & City of Lubbock, Texas (City Seal} 45047144.1 ~3- ) i .. ) . . ORDINANCE NO. 2001-00041 AN ORDINANCE authorizing the issuance of "CITY OF LUBBOCK. TEXAS, TAX AND MUNICIPAL DRAINAGE UTILITY SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001"; specifying the terms and features of said certificates;· providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon all taxable property within the City and a lien on and pledge of the net revenues from the operation of the City's Municipal Drainage Utility System; and resolving other matters incident and related to the issuance, sale, security, payment and delivery of said certificates, including the approval of a Paying AgenURegistrar Agreement and Purchase Contract and the approval and distribution of an Official Statement; and providing an effective date. WHEREAS, notice of the City Council's intention to issue certificates of obligation in the maximum principal amount of $35,000,000 for the purpose of paying contractual oblfgations to be incurred for (i} drainage· improvements, incJuding the acquisition, construction and repair of structures, equipment and facilities for the City's Municipal Drainage Utility System, and (ii) professional services rendered in connection with su.ch project and the financing thereof, has been duly published in· the Lubbock Avalanche-Journal, a newspaper hereby found and determined to be of general circulation in the City of Lubbock, Texas, on May 13, 2001 and May 20, 2001, the date of the first publication of such notice being not less than fifteen (15) days prior to the tentative date stated therein for the second reading and final passage of this Ordinance; and WHEREAS, no petition, protesting the issuance of such certificates and bearing valid petition signatures· of at least 5% of the qualified voters of the City, has been filed with the City Secretary, any member of the Council or any other official of the City on or prior to the date of the passage of this Ordinance; and · WHEREAS, the Council hereby finds and determines the certificates of obligation described in such notice should be issued and sold at this time in the amount and manner hereinafter provided; now, therefore, · BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: . SECTION 1 : Authorization-Designation-Principal Amount-Purpose. · Certificates of ·obligation of the City shall be and are hereby authorized to be issued in the aggregate principal . amount of $35,000,000 to be designated ar:id bear the title •c1TY OF LUBBOCK, TEXAS, TAX 'AND MUNICIPAL DRAINAGE UTILITY SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001• {the "Certificates"), for · the purpose of paying contractual ·obligations to be incurred for (i) drainage improvements, including the acquisition, construction and repair of structures, equipment and facilities · for the ·City's Municipal Drainage Utility System, and (ii) professional services rendered in connection with · such . project and the ·financing thereof, pursuant to authority conferred by and in conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Local Government Code, Subchapter C of Chapter 271. · SECTION 2: Fully Registered Obligations -Authorized Denominations-Stated Maturities-Date. The Certificates are issuable in fully registered form only; shall be dated 45035694.2 ) ... June 1, 2001 (the .. Certificate Date·} and, other than the Initial Certificates referenced in Section 8 hereof) shall be in denominations of $5,000 or any integral multiple thereof {within a Stated Maturity) and the Certificates shall become due and payable on February 15 in each of the years and in principal amounts (the "Stated Maturities") and bear interest at the per annum rate(s) in accordance with the following schedule: Year of Principal Interest Stated Maturity Amount Rate 2002 160,000 5.000% 2003 550,000 5.000% 2004 575,000 5.000% 2005 605,000 5.000% 2006 635,000 5.000% 2007 670,000 5.000% 2008 705,000 5.000% 2009 740,000 5.000% 2010 780,000 5.000% 2011 815,000 -4.400% 201.2 855,000 4.625% 2013 895,000 4.700% 2014 940,000 4.800% 2015 985,000 4.900% 2016 1,035,000 5.000% · 2017 1,085,000 5.000% 1 2018 1,145,000 5.125% 2019 1,205,000 5.125% 2020 1,270,000 5.200% 2021 1,335,000 5.200% 2023 2,885,000 5.200% 2026 4,940,000 5.250% 2031 10,190,000 5.300% . The Certificates shall bear interest on the unpaid principal amounts from th~ Certificate Date at the per annum rate(s) shown above in this Section (calculated on the basis of a 360-day year of twelve 30-day,_months). Interest on the Certificates shall be payable on-February 15 and August 15 in each year, commencing February 15, 2002. SECTION 3: Terms of Payment-Paying Agent/Registrar. The principal of, premium, if any; and the interest on the Certificates, due and payable by reason of maturity, redemption or otherwise, shall be payable only to· the registered owners or t)olders of the Certificates (hereinafter called the •Holders") appearing on the registratioA and transfer books maintained by the Paying Agent/Registrar and the payment ·thereof shall be in any coin or currency of the · United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. 45035694.2 -2- The selection and appointment of U.S. Trust Company of Texas, N.A., Dallas, Texas to serve as Paying Agent/Registrar for the Certificates is hereby approved and confirmed. Books and records relating to the registration, payment, exchange and transfer of the Certificates (the "Security Register") shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, all as provided herein, in accordance with the terms and provisions of a "Paying Agent/R~gistrar Agreemenr; substantially in the form attached hereto asExhibit A and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. . The Mayor and City Secretary of the City are hereby authorized to execute and l · deliver such Agreement in connection with the delivery of the Certificates. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the .Certificates are paid and discharged, and any successor Paying AgenURegistrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perfonn the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each . ·Holder by United States Mail, first ,class postage prepaid, which notice shall also give the · address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Certificates shall be· payable at the Stated . Maturities or the redemption thereof only upon presentation and surrender of the Certificates to the Paying Agent/Registrar at its designated offices in New York, New York (the "Designated Payment/Transfer Office"). Interest on the Certificates shall be paid by the Paying Agent/Registrar to the Holders whose name appears in the Security Register at the close of · business on the Record Date (the last business day of the month next preceding each interest payment date) and payment of such interest st,all be (i) by check sent United States Mail, firs~ class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to· the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the da_te for the payment of the principal of or interest on the . Certificates shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the Designated Payment/Transfer Office of the Pay.ing 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 when banking institutions are authorized. to dose; and payment on such date shall have the same force and effect as if made on the original date payment was due. · . 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 lhe· 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 (5) business days prior to the Special Record Date by United States · _Mail, first dass postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business next preceding the date of mailing of such notice. SECTION 4: Redemption.. {a) Optional Redemption. · The Certificates having Stated Maturities on and after'february 15, 2012, shall be subject to redemption prior to maturity, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by· the Paying Agent/Registrar), on February 15, 2011 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. 4503S694.2 -3- At least forty-five (45) days prior to a redemption date for the Certificates (unless a shorter notification period shall be satisfactory to the Paying AgenURegistrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Certificates, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the City to exercise the right to redeem Certificates shall be entered in the minutes of the governing body of the City. (b) Mandatory Redemption. The Certificates having Stated Maturities of February 15, 2023, February 15, 2026 and February 15, 2031 (."Term Certificates") shall be subject to mandatory redemption in part prior to maturity at the redemption price of par and accrued interest to the date of redemption on the respective dates and in principal amounts as follows: Term Certificates due February 15, 2023 Term Certificates due February 15, 2026 Redemption Date Principal Amount Redemption D~te Principal Amount February 15, 2022 $1,405,000 February 15, 2024 $1,560,000 . February 15, 2025 $1,645,000 Tem1 Certificates Due February 15, 2031 . Redemption Date Principal Amount February 15, 2027 $1,830,000 February 15, 2028 $1,925,000 February 15, 2029 $2,030,000 February 15, 2030 $2,145,000 Approximately forty-frve (45) days prior to each redemption date specified above the Term Certificates are to be mandatorily redeemed, the Paying Agent/Registrar shall select by lot the numbers of the Term Certificates within the applicable Stated Maturity to be redeemed on the next following February 15 from moneys set aside for that purpose in the Certificate Fund (as hereinafter defined). Any Term Certificate not selected for prior redemption shall be paid on the date of their Stated Maturity. The. principal amount of the Term Certificates for a Stated ·Maturity required to be redeemed pursuant to the operation of such mandatory redemption provisions may be reduced, · at. the option of the City, by· the principal amount of Tenn Certificates of like Stated Maturity which, at least 50 days prior to a mandatory redemption date, (1) shall have been acquired by the C'ity at a price not. exceeding the principal amqunt of such Teon Certificates plus accrued interest to the date of purchase thereof, and delivered to .the Paying Agent/Registrar for cancellation or (2) shall have been redeemed pursuant to the optional redemption provisions set forth in paragraph (a) of this Section and not theretofore ·credited against a mandatory . redemption requirement. (c) Selection of Certificates for Redemption. If less than all Outstanding Certificates of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such Certificates as representing the number of Certificates Outstanding which is· obtained by dividing the principal amount of such Certificates by ·$5,000 and shall select the Certificates, or principal amount thereof, to be redeemed within such Stated Maturity by lot. (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Certificates, a notice of redemption shall be sent-by United States Mail, first class 45035694.2 -4- postage prepaid, in the name of the City and at the City's expense, to each Holder of a Certificate to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective or whether received by the Holder. All notices of redemption shall (i) specify the date of redemption for the Certificates, (ii) identify the Certificates to be redeemed and, in the case of a portion of the principal ·amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv} state that the Certificates, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Certificates, or the principal amount thereof to be redeemed, shall be made at the Designated PaymenVf ransfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Certificate is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given as hereinabove provid~. such Certificate (or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for the payment of such Certificate· (or of the principal amount thereof to be redeemed} at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. SECTION 5: Registration -Transfer -Exchange of Certificates-Predecessor Certificates. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Certificates issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Certificate may be transferred or exchanged for Certificates· of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to the Paying AgenVRegistrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender of any Certificate (other than ·the Initial Certificates authorized in Section 8 hereof) for .transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the · designated. transferee or transferees, one or more new Certificates of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Certificate or Certificates surrendered for transfer. At the option of the Holder, Certificates . (other than the Initial Certificates authorized in Section 8 her:eof) may be exchanged for other Certificates of authorized denominations and having the same Stated Maturity, bearing the. same rate of interest and of like aggregate · · principal amount as the Certificates surrendered for exchange, upon surrender of the Cei:tificates to be exchanged at the Designated Payment/Transfer Office of the Paying AgenV Registrar. . Wheriever any Certificates are surr:endered for exchange, the Paying Agent/Registrar shall register and deliver new Certificates to the Holder requesting the exchange. All Certificates issued in any transfer or exchange of Certificates shall be delivered to the Holders at the Designated Payment/Transfer <;)ffice of the Paying Agent/Registrar or sent by 45035694.2 ) .. •,-, ) . :···. -.~ .... I , United States Mail, ·first class, postage prepaid to the Holders, and. upon the registration and delivery thereof, the same shall be the valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Certificates surrendered in such transfer or exchange. All transfers or exchanges of Certificates pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying AgenVRegistrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. · Certificates canceled by reason of an exchange or transfer pursuant to the provisions . hereof.are hereby defined to be "Predecessor Certificates," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Certificate or Certificates registered and delivered in . the exchange or transfer therefor. Additionally, th~ term "Predecessor Certificates• ;;hall include any mutilated, lost, destroyed, or stolen Certificate for which a repla~ment Certificate has been issued, registered and delivered in lieu thereof pursuant to the provisions of Section 23 hereof and such new replacement Certificate shall be . deemed to evidence the same obligation a~ the mutilated, lost; destroyed, or stolen Certificate. Neither the City nor the Paying AgenURegistrar shall be required to issue or transfer to an assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Certificate; provided, however; such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Certificate called f~r redemption in part. SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and . 5 hereof · relating to the payment and transfer/exchange of the Certificates, the City hereby approves and authorizes the use of '"Book-Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company {OTC), a limited purpose trust company organized under the Jaws of the State of New York, in a~rdance with the operational arrangements referenced in the · Blanket Issuer Letter of Representations by and between the City and OTC (the "Depository Agreement'). Pursuant to the Depository Agreement and the rules of OTC, the Certificate~ shall be deposited with OTC who shall hold said Certificates for its participants (the "OTC Participantsn) and, while the-Certificates are held by OTC under the Depository Agreement, the Holder of the Certificates on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee .of OTC, notwithstanding the ownership of each actual purchaser or owner·of each Certificate (the "Beneficial Owners•) being recorded in the records of OTC and ·oTc Participants. · · lr:i the event OTC determines to discontinu~ serving as securities depository for the Certificates or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the City determines that OTC' is incapable c;>f properly discharging its duties as securities depository. for the Certificates, the City covenants and agrees with _the Holders of tile Certificates to caus·e Certificates to be printed in definitive form and provide for · the Certificate certificates to be issued and delivered. to OTC Participants and Beneficial Owners, as the case may be. Thereafter, . the Certificates in definitive fonn shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar 45035694.2 -6- ) .. and paym_ent of such Certificates shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution -Registration. The Certificates shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Certiflca.tes may be manual or facsimile. Certificates bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Certificate Date shall be deemed to be duly executed on behalf of the City, notwithstanding that one or more of the individuals executing the same shall cease to be • such officer at the time of delivery of the Certificates to the Initial purchaser(s) and with respect to Certificates delivered in subsequent exchanges and transfers, all as authorized and provided in V.T.C.A, Government Code. Section 1201.026. No Certificate shall be entitled to any right or benefit under this Ordinance; or be valid or obligatory for any purpose, unless there appears on sud, Certificate either a certificate of registration substantially in the form provided in Section 9C, manually executed by the Comptroller of Public Accounts of the State of Texas. or his duly authorized agent, or a certificate of .registration substantially in the form provided in Section 9D, manually executed by · an authorized officer, employee or r~presentative of the Paying Agent/Registrar, and either such certificate duly signed upon any Certificate shall be conclusive evidence, and the only evidence. that such Certificate has been duly. certified. registered and delivered. SECTION 8: Initial Certificate(s). The Certificates • herein authorized shall be initially issued · either (i) as a single fully registered certificate in. the total principal amount of $35,000,000 with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or (ii) as multiple fully registered certificates, being one certificate for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward {hereinafter called the "Initial Certificate(s)") and. in either case. the Initial Certificate(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Certificate{s) shall be the Certificates 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 initial purchaser(s). Any time after the delivery of the Initial Certificate{s), the Paying Agent/Regis~r. pursuant to . written instructions from ·the initial purchaser(s). or the designee th~reof, s})a/1 cancel the Initial Certificate(s) delivered hereunder and exchange therefor definitive Certificates of authorized 'denominations, Stated Maturities. principal amounts and bearing applicable interest rates for transfer ·and delivery to the Holders named ·at the addresses identified therefor, all pursuant to and i_n acc::ordance with such written instructions from the initial purchaser(s), or the designee thereof. and such other information "'nd documentation as the Paying AgenVRegistrar may reasonably require. ·:· SECTION 9: Fonns. A Forms Generally. The Certificates, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on eadl of the Certificates, shall be substantially in the forms set forth in this Section with such appropriate insertions. omissions, substitutions, and other v~rtations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (induding insurance legends in the event the Certificates. or any maturities thereof, are purchased with insurance and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by 45035694.2 ) . the City or determined by the officers executing such Certificates as evidenced by their execution. Any portion of the text of any Certificates may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Certificate. The definitive Certificates and the Initial Certificate(s) shall be printed. lithographed, or engraved, typewritten, photocopied or otherwise reproduced in any other similar manner. all as determined by the officers executing such Certificates as evidenced by their execution thereof. REGISTERED NO. ---- B. Form of Certificates. UNITED-STATES OF AMERICA STATE OF TEXAS CllY OF LUBBOCK, TEXAS, REGISTERED PRINCIPAL AMOUNT $ . TAX AND MUNICIPAL DRAINAGE UTILITY SYSTEM SURPLUS REVENUE Certificate Date: June 1,2001 Registered ONner: Principal Amount: . CERTIFICATE OF OBUGATION, SERIES 2001 Interest Rate: % --- Stated Maturity: CUSIPNO: ---- OOUARS The• City of Lubbock (hereinafter referred to as the ·city"}. a body corporate and municipal corporation in the County of Lubbock, State of Texas, for value received, ·· acknowledges itself indebted to and hereby promis~s to pay to the Registered Owner narr:ied above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount stated above (or so much thereof as shall not have been paid upon prior redemption) and to pay interest (computed on the basis of a 360-day year of twelve 30-day · ·months) on the unpaid Principc;1I Amount hereof from the Certificate Date at the per annum rate of interest specified above; such interest being payable on February 15 and August 15 of each year, commencing February 15,-2002. Principal of this Certificate is payable· at its Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the Designated PaymenVTransfer Office of the Paying Agent/Registrar executing the registration. ~ . certificate appearing her~n. or its successor; provided, however, while · this Certificate is registered to· Cede & Co., the payment of principal upon a partial redemp~on of the principal amount hereof may be accomplished without presentation and surrender of this Certificate. Interest is payable to the registered owner qf this Certificate (or one or more Predecessor · · Certificates, as defined in the Ordinance hereinafter referenced) whose name appears on the '"Security Register" maintained by the Paying Agent/Registrar at the close of business on the ·. •Record . Date", which is the last business day of the month next preceding each interest · payment date and interest shall be paid· by the Paying AgenVRegistrar by check sent United . States Mail, first class postage prepaid, to the address of the registered owner recorded in the · _Security Register on the Record· Date or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of. premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United 45015694.2 --8- States of America which at the time of payment is legal tender for the payment of public and private debts. This Certificate is one of the series specified in its title issued in the aggregate principal amount of $35,000,000 (herein referred to as the "Certificates") for the purpose of paying contractual obligations to be incurred for (i) drainage improvements, including the acquisition, construction and repair of structures, equipment and facilities for the City's Municipal Drainage Utility System, and (ii) professional services rendered in connection with such project and the financing thereof, under and in strict conformity with the Constitution and laws of the State of Texas, particularly V.T.C.A., Locar Government Code, Subchapter C of Chapter 271, and pursuant to an Ordinance adopted by the governing body of the City {herein referred to as the "Ordinance"). The Certificates maturing on dates hereinafter identified (the "Term ·Certificates") are subject to mandatory redemption prior to maturity with funds on deposit in the Certificate Fund established and maintained for the payment thereof in the Ordinance, and shall be redeemed in ·part prior to maturity at the price of par and accrued interest to the mandatory redemption date on the respective dates and in principal amounts as follows: Term Certificates due February 15, 2023 Redemption Date Principal Amount Term Certificates due February 15, 2026 Redemption Date Principal Amount February 15, ·2022 ·$1,405,000 February 15, 2024 $1,560,000 February 15, 2025 $1 ,645,000 Term Certificates Due February 15, 2031 Redemption Date Principal Amount February 15, 2027 $1,830,000 February 15, 2028 $1,925,000 February 15, 2029 $2,030,000 February 15, 2030 $2, 145,_000 The particular Tenn Certificates of a stated maturity to be redeemed on each redemption date shall be chosen by lot by the Paying Agent/Registrar; provided, however, that the principal .amount of Term Certificates for a stated maturity required to b~ redeemed pursuant to the operation of such mandatory redemption provisions may_ be reduced, at the option of the City, by the principal amount of Term Certificates of like 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 Certificates plus accrued _interest to the date of purchase, and delivered to the Paying Agent/Registrar for cancellation or (2) shall have been redeemed pursuant to the optional redemption provisions appearing below and not theretofore credited against a mandatory redemption requirement. The Certificates maturing on and after February 15, 2012, may be redeemed prior to . their Stated Maturities, at the option of the City, in whole or in part in principal amounts of ·$5,000 or any integral multiple thereof-(and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2011, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. At least thirty days prior to a redemption date, the City shall cause a written notice of such redemption to be sent by United States Mail, first cf ass postage prepaid, to the registered 45035694.2 -9- ) ;,: ,;,, .. ..... owners of each Certificate to be redeemed at the ·address shown on the Security Register and subject to the terms and provisions relating thereto contained in the Ordinance. If a Certificate {or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon the redemption date such Certificate (or the portion of its principal sum to be redeemed} shall become due and payable, and; if moneys for the payment of the redemption price and the interest accrued on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar, interest shall cease to accrue and be payable from and after the redemption date on the principal amount redeemed. In the event a portion of the principal amount of a Certificate is to be red~med and the registered owner is someone other than Cede & Co., payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of such Certificate to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new Certificate or Certificates of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum ttlereof will be issued to the registered owner. ~ithout charge. If a Certificate is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be .required to transfer such Certificate to an assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance of a Certificate redeemed in part. The Certificates are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by· law, upon all taxable property in the City and are additionally payable from and secured by a lien on and pledge of the Net Revenues (as defined in the Ordinance) of the City's Municipal Drainage ·Utility System (the ~system"), such lien and pledge, _however, being junior and subordinate to the lien qn and pledge of the Net Revenues of the System. securing the payment of •Prior Lien Obligations• (as defined in the Ordinance). In the· Ordinance, the City reserves and retains the right to issue Prior Lien Obligations while the Certificates are outstanding without limitation as to principal amount but subject to any tenns, conditions or restrictions as may be applicable thereto under law or otherwise, as well as the ri~ht to issue Additional Obligations (a~ defined in the Ordinance). Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all the provisions of which the Holder hereof by the acceptance hereof hereby assents, for definition~ of ~erms; the description of and the nature and extent of the tax levied for the payment of the Certificates; the nature and extent of the limited pledge of the· Net Revenues securing the payment of the Certificates; the· ·1enns and conditions relating to the transfer or exchange of this Certificate; the conditions upon · which . the Ordinance may be amended or supplemented with. or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which the tax levy and the pledge of the Net Revenues and covenants made in the ·ordinance may be discharged at or prior to the maturity of this Certificate, and this Certificate deemed to be no longer Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. · This Certificate, . subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation ·and s·urrender at the Designated Paymen.t/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the . 45035694.2 -10- ) . Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent When a transfer on the Security Register occurs, one or more fully registered Certificates of authorized denominations and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of either, may treat the registered owner hereof whose name appears on the Security Register (i} on the Record Date as the owner entitled to payment of interest hereon, {ii) on the· date of surrender of this Certificate as the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/Registrar, or any agent of either, shall be affected by ·notice to the contrary. In the event of 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 Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 dc;tys after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United ~tates Mail, first cJass postage prepaid, to the address of each Holder appearing on the Security Register at the dose of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and covenanted that the City• is a body corporate and political subdivision duty organized and legally existing under and by virtue of the Constitution and laws of the State of -Texas; that the issuance of the Certificates is duly -authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Certificates to render the same lawful and .valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Certificates do not exceed ·any CQnstitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Certificates as aforestated. In case any provision in this Certificate or any application thereof shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions and applications shall not in any way be affected ·or impaired thereby. The terms and provisions of this Certificate and the Ordinance shall be construed in accordance. with and shall be governed by the laws of the State of Texas. · 4S03S694.2 -11- ) IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be duly executed under the official seal of the City as of the Certificate Date. COUNTERSIGNED: City Secretary (SEAL) CITY OF LUBBOCK, TEXAS Mayor · C. *Form of Registration Certificate of Comptroller of Public Accounts to Appear on Initial Certificate(s) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS THE STATE OF TEXAS § § § § REGISTER NO. ----- I HEREBY CERTIFY _that this Certificate has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this ________ _ (SEAL) Comptroller of Public Accounts of the State of Texas "'NOTE T.O PRINTER: Do not print on definitive Certificates •' 4SO)S694.2 -12- D. Form of Certificate of Paying Agent/Registrar to Appear on Definitive Certificates. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Certificate has been duly issued and registered under the provisions of the within-mentioned Ordinance; the certificate or certificates of the above entitled and designated series originally delivered haviryg been approved by the Attorney General of the State of Texas ) · . and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. ) ' The designated offices of the Paying Agent/Registrar located in New York, New York, is the aDesignated Payment/Transf~r Office· for this Certificate. _Registration Date:· . U. S. TRUST COMPANY OF TEXAS, N .A., Dallas, texas, as Paying Agent/Registrar E. Fann of Assignment By: --:---:-:-----:---:--=-:--~-------Authorized Signature ASSIGNMENT FOR VALUE "RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, ~nd zip code of t~nsferee:} ____________ _ (Social Security or other identifying number: __________________ ...,.. the within Certificate and all rights th_ereunder, and hereby irrev~bly constitutes and appoints_ attorney to transfer the within Certificate on the books kept for registration thereof, with full power of substitution in the premises. · DATED:----,.------- Signature guaranteed: NOTICE: The signature on this assignment must correspond with the name ofthe registered owner as it appears on the face of the within · Certificate in every particular. F. The Initial Certificate(s) shall be in the form set forth in paragraph B of thi~ Section, except that the fonn of a single fully registered Initial Certificate shall be modified as follows: (i) immediately under the name of the certificate the headings Mlnterest Rate· and ·stated Maturity" shall both be omitted; · · (ii) paragraph one shall read as follows: 45035694.2 -13- Registered Owner: Principal Amount: DOLLARS The City of Lubbock .(hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Lubbock, State of Texas, for value received,· acknowledges itself indebted to and hereby promises to pay to the Registered owner named above, or the registered assigns thereof, the Principal Amount herelnabove stated, on · February 15 in each of the years and in principal installments in accordance with the following schedule: YEAR PRINCIPAL INSTALLMENTS INTEREST RATE (lnfonnation to be inserted from schedule in Section 2 hereof). {or so much principal thereof as shall not. have been prepaid prior to maturity} and ·10 pay interest on the unpaid Principal Amount hereof from the Certificate Date at the per annum rates of interest specified above computed on the basis of a 360-day year of twelve 30-day mon~hs; such interest being payabie on February 15 and_ August 15 of each year. commencing February 15, 2002. Principal installments of this Certificate are payable in the year of maturity or on a prepayment date to the registered owner hereof by U.S. Trust Company of Texas, N.A., Dallas, . Texas (the "Paying Agent/Registrar"), upon presentation and surrender, at its designated offices in New York. New YQrk (the "Designated Payment/Transfer Office") .. Interest is payable to the · registered owner of this Certificate whose ·name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close df business on the "Reco~ Date·, which is the last business day of the -month next preceding each interest payment date hereof and interest shall be paid by the Paying Agent/Registrar by check sent United States .Mail, first dass postage prepaid, to the address of the registered owner recorded in the Security· Register or by such other method, acceptable to the Paying Agent/ Registrar, requested by, and at the risk and exp~nse of, the registered owner. All payments of principal of, premium, if any, and interest on this Certificate shall be. without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the. payment of public and private debts. · SECTION 1 O: Definitions. For purposes of this Ordinance and for clarity with respect to the issuance of the Certificates, and the levy of taxes and appropriation of Net Revenues therefor, the following words or terms, whenever the same appear herein without qualifying language, are defined to mean as follows: (a) The temi •Additional Obligations" shall mean tax and revenue obligations hereafter Issued which by their tenns are payable from ad valorem taxes and additionally payable from and secured by· a parity lien on and pledge of the Net Revenues of the System of equal rank and dignity with the lien and pledge securing the payment of the Certificates. (b) The term "Certificates" shall mean $35,000,000 "CITY OF LUBBOCK, TEXAS, TAX ANO MUNICIPAL DRAINAGE UTILITY SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001" authorized by this Ordinance. 45035694.2 l . (c) The term "Certificate Fund" shall mean the special Fund created and established under the provisions of Section 11 of this Ordinance. (d) The term "Collection Date" shall mean, when reference is being made to the levy and collection of annual ad valorem taxes. the date annual ad valorem taxes levied each year by the City become delinquent. (e) The tenn "Fiscal Year" shall mean the annual financial accounting period used with respect to the operations of the System now ending on September 30th of each year; provided, however, the City Council may change, by ordinance duly passed, such annual financial accounting period to end on another date if such change is found and determined to be necessary for budgetary or other fiscal purposes. (f) The term "Government Securities" shall mean (i} direct noncallable obligations of the United States of America, induding obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionaUy guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the City are rated as to investment quality by a nationally recognized invesbnent 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 on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than MA or its equivalent (g) The term "Gross Revenues" shall mean, with respect to any period, all income, revenues and receipts received from the operation and ownership of the System. {h) The term "Net Revenues" shall mean the Gross Revenues of the System, with respect to any period, after deducting the System's Operating and Maintenance Expenses during such period. (i} The term ·operating and Maintenance Expenses" shall mean all reasonable and necessary expenses directly related and attributable to the operation and maintenance of the System as defined in V.T.C.A., Government Code, Section 1502.056 as a first lien against the Gross Revenues. Depreciation charges on equipment, machinery, plants and other facilities -comprising the System and expenditures ciassed under generally accepted accounting · principles as capital expenditures shall not be considered as "Operating and Maintenance Expenses" for purposes of determining "Net Revenues'". 0) The term "Outstanding" when used in this Ordinance with respect to Certificates means, as of the date of determination, all. Certificates theretofore issued and delivered under this Ordinance, except 45035694.2 (1) those Certificates canceled by the Paying Agent/Registrar or delivered to the Paying Agent/Registrar for cancellation; -15- ) (2) those Certificates deemed to be duly paid by the City in accordance with the provisions of Section 19 hereof; and (3) those Certificates that have been · mutilated, destroyed, lost, or stolen and replacement Certificates have been registered and delivered in lieu thereof as provided in Section 23 hereof. (k) The term "Prior Lien Obligations· shall mean all bonds or other similar obligations hereafter issueq that are payable in whole or in part from and secured by a. lien on and pledge of the Net Revenues of the System and such lien and pledge securing the payment thereof is prior and superior in claim, rank and dignity to the lien and pledge of t~e Net -Revenues securing the payment of the Certificates. (I) The term "System" or "Municipal Drainage Utility System" shall. mean all land, eas~ments and interest in land, together with afl structures, .equipment and facilities used in draining benefited property (within· the meaning of Subchapter C of Chapter 402 of the Local Government Code, as amended), . including, but not limited to, bridges, catch basins, channels, conduits, creeks, culverts, detention ponds, ditches, draws, flumes, pipes, pumps, sloughs, treatment works, and appurtenances to those items,-whether natural or artificial, or using force or gra,vity, that are used to draw off surface water from land, carry the water away, collect, store, or treat the water, or divert the water into natural or artificial watercourses. . SECTION 11: Certificate Fund For the purpose of paying the interest on and to provide a sinking fund for the payment and retirement of the Certificates, there shall be and is hereby. created a special Fund to be designated "SPECIAL 2001 CITY OF LUBBOCK, TEXAS, TAx ANO MUNICIPAL DRAINAGE UTILITY SYSTEM SURPLUS REVENUE CERTIFICATE OF OBLIGATION FUND", which Fund shall be kept and maintained at the City's depository bank, and moneys deposited in said Fund shall be used for no other purpose. · Proper officers of the City are hereby authorized and directed to cause to be transferred to the Paying Agent for the Certificates, from funds on deposit in the Certificate Fund, amounts ·sufficient to fully pay and disci)arge promptly each installment of interest and principal of the Certificates as the same. accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause immediately available funds to be deposited with · the Paying Agent for the Certificates at the close of business on the last business day next preceding each interest and/or principal payment date for the Certificates. · Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate Fund may, at the option of the City, be invested in obligations identified in, and in accordance with the provisions of the "Public Funds Investment Act" r,.1:T.C.A, Government Code, Chapter 2256) relating to the inyestment of ·bond proceeds"; provided that all such investments shall be made in such a manner that the money required to be expended from said Fund will be available at the proper time or times. All interest and income derived from deposits and investments in said Certificate Fund shall be credited to, and any losses d~bited to, the said Certificate Fund. All such investments shall be sold promptly when necessary to prevent any default in connection with the Certificates. -16- l .. , .. ) ... SECTION 12: Tax Levy: That to provide for the payment .of the "Debt Service Requirements" on the Certificates being (i} the Interest on said Certificates and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the greater), there shall be and there is hereby levied a sufficient tax on each one hundred dollars· valuation of taxable property in said City to pay such Debt Service Requirements while the Certificates are Outstanding, full allowance being made for delinquencies and costs of collection, and said_ tax shall be assessed and collected each year and applied to the payment of the Debt Service Requirements, and the same shall not be diverted to any other pl:Jrpose. The taxes so levied and collected shall be ·deposited into the Certificate Fund. This governing . body hereby declares its purpose and intent to provide and levy a tax· legally and fully sufficient to pay the said Debt Service Requirements, 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 in consideration of all other outstanding indebtedness. The amount of taxes to be provided annually for the payment of the principal of and . interest on the Certificates herein authorized to be issued shall be determined and accomplished in the following.manner: · · (a) Prior to the date the City Council establishes the annual tax rate and passes an ord~ance levying ad valorem taxes each year, the City Council shall determine: . . . . (1) The amount on deposit in the Certificate Fund after (a) deducting therefrom the total amount of Debt Service· Requirements to become due on Certificates prior to the Collection Date for the ad valorem taxes to be levied and (b) adding thereto the ·amount ·of Net Revenues of the System appropriated and allocated to pay such Debt Service Requirements prior to the Collection Date for the ad valorem taxes to be levied. (2) The amount of Net Revenues if any, appropriated and to be set aside for the payment of the Debt Service · Requirements on the Certi~cates between the Collection Qate for the taxes then ·to be levied and the Collection Date for the taxes to be levied during the next succeeding calendar year . (3) The amount of Debt Service Requirements to become due and .payable on the Certificates between the Collection Date for the taxes ·then to be levied and the Collection Date for the . taxes to · 6e levied during th~ next succeeding calendar year. . . . (b) The amount of taxes to be levied annually each year to pay the Debt Service .Requirements on the Certificates shail be the amount established in paragraph (3) above less the ~um total of the amounts established in paragraphs (1)and (2), after taking into co11sideration delinquencies and cos~s of collecting such annual taxes. SECTION 13: Pledge of Revenues. The City hereby covenants and agrees that, subject only to a prior lien on and pledge of the Net Revenues of the System for the payment and security or Prior lien Obligations, the Net Revenues of the System, with the exception of those in excess of the amounts required to be deposited to the Certificate Fund as hereafter 4503S694.2 -17- ) provided, are hereby irrevocably pledged, equally and ratably, to the payment of the principal of and interest on the Certificates and Additional Obligations, if issued, as herein provided, and the pledge of the Net Revenues of the System herein made for the payment of the Certificates shall constitute a lien on the Net Revenues of the System in accordance with the terms and provisions hereof and be valid and binding without further action by the City and without any filing or recording except for the fifing of this Ordinance in the records of the City. . SECTION 14: System Fund The City covenants and agrees that all Gross Revenues · (exduding earnings from the investment of money held in any special funds or accounts created for the payment and security of the Prior Lien Obligations) shall be deposited as collected into a fund maintained at an official depository of the City and known on the books of the City as the "City of Lubbock, Texas. Municipal Drainage Utility System Operation System Fund" (hereinafter called the •system Fund•). All moneys deposited to· the credit of the System Fund shall be allocated, dedicated and disbursed to the extent required for the following purposes arid in the order of priority shown, to wit: First: To the payment of all necessary and reasonable Operating and Maintenance Expenses of the System as defined herein or required by statute to be a first charge on and claim against the Gross Revenues. Second: To the payment of the amounts required to be deposited in the special Funds created and established for the payment, security and benefit of Prior Lien Obligations in accordance with ihe terms and provisions of the ordinances authorizing. the issuance of Prior Lien Obligations; and Third: Equally and ratably to the payment of th~ amounts required to be deposited in the special funds and accounts created and established for the payment of the Certificates and Additional Obligations, if issued. Any Net Revenues· remaining in the System Fund after satisfying the foregoing payments, or making adequate and sufficient provision for the payment thereof, may be appropriated and us~d for any other City purpose n~w or hereafter permitted by law. SECTION 15: Deposits to Certificate Fund. The City hereby.covenants and agrees to cause to be deposited in the Certificate Fund prior to each interest and principal payment date from the Net Revenues of the System, after deduction of all payments required to be made to special Funds or accounts created for the payment and security of the Prior Lien Obligations, an amount equaf to one hundred per centum (100%) of the amount required to fully pay the accrued interest and principal of the Certificates then due and payable by reason of maturity or redemption prior to maturity, such deposits to pay accrued interest and principal on the Certificates to be made in substantially equal monthly installments on or before the last ·. business day of each month beginning the month the. Certificates are delivered to the Initial purchaser. . . The monthly deposits to the Certificate Fund, as hereinabove provided, shall be made until such t'ime as such Fund contains an amount equal to pay the principal of and interest on the Certificates to maturity. Ad valorem taxes levied, coUected and deposited in the Certificate Fund for and on behalf of ·the Certifi<;ates may be taken into consideration and reduce the amount of the monthly deposits otherwise required to be deposited in the Certificate Fund from the Net Revenues of the System. In additi9n; any proceeds of sale of the Certificates in excess of the amount required to pay the contractual obligations to be incurred (including change 45035694.2 ·: ,·, I·' orders to a construction contract) shall be deposited in the Certificate Fund, which amount shall reduce the sums otherwise required to be deposited in said Fund from ad valorem taxes and the Net Revenues of the System. SECTION 16: Security of Funds. All moneys on deposit in the Funds for which this Or~inance makes provision ( except any portion thereof as may be at any time properly invested) shall be secured in the manner and to the fullest extent required by the laws of Texas for the security of public funds, and moneys on deposit in such Funds shall be used only for the purposes permitted by this Ordinance. SECTION 17: Special Covenants. The City hereby further covenants·as follows: (a} It has the lawful power to pledge ttie Net Revenues of the System supporting this issue of Certificates and has lawfully exercised said powers under the Constitution and. laws of the State of Texas, including sai.d power existing under V.T.C.A., Government Code, Sections 1502.052, et seq. and V.T.C.A., Local Government Code, Subchapter C of Chapter 402 and Subchapter G of Chapter 271 . (b) Other than for the payment of the Certificates, the Net Revenues of the System have not in any manner been pledged to the payment of any debt or obligation of the· City or of the System. . . SECTION 18: Issuance of Prior Lien Obligations and Additional Obligations; Subordinate to Prior Lien Obligations Covenants and Agreements. (a) The City hereby expressly reserves the right to hereafter issue Prior lien Obligations, without limitation as to · principal amount but subject to any terms, conditions or restrictions applicable thereto under law or otherwise. . In addition, the City reserves the right to issue Additional Obligations, without limitation . or .any restriction or condition being applicable to their issuance under the tenns of this Ordinance, payable from and secured by a lien on an<f pledge of the Net Revenues of the System of equal rank and dignity, and on a parity in all respects, with the lien· and pledge securing the payment of the Certificates. (b) Jt is the intention of this governing body and accordingly hereby ~cognized and stipulated that the provisions, agreemenfs and covenants contained herein bearing upon the management and operations of the System and the administering and application of revenues derived from the operation thereof, shall to the extent possible be hannonized with like· . provisions, agreements and covenants contained in ordinances authorizing the issuance of Prior Lien Obligations, and to the extent of any irreconcilable conflict· between. the provisions contained herein and in ordinances authorizing the issuance of Prior Lien Obligations, the . provisions, agreements and covenants contained therein shall prevail to the extent of such . conflict and be applicable to this Ordinance but in all respects subject to the priority of rights and benefits, if any, conferred thereby to the holders or owners of the Prior Lien Obligations. Notwithstanding the above, any change or mo<flfication affecting the application of revenues ~erived from the operation of the System shall not impair the obligation of contract with respect : · to the pledge of revenues herein made for the payment and security of the Certificates. SECTION-19: Satisfaction of Obligations of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the ·principal of, premium, if any, and 45035694.2 -19- ) .. interest on the Certificates, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied and the lien on and pledge of the Net Revenues of the System under this Ordinance and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease. terminate, and be discharged and satisfied. Certificates shall be deemed to haye been paid within the meaning and with the effect expressed above in this Section when (I) money sufficient to pay in full such Certificates or the principal amount(s} ther~of at matwity or {if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof, together wlth all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have been certified by an independent accounting firm to mature as to principal and interest in such· amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Certificates. or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable · arrangements therefor acceptable to the Paying Agent/Registrar have been made} the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Certificates to be treated as •arbitrage bonds" within the meaning of Section 148 of · the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/ Registrar and all . income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Certificates, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall.be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Certificates ~nd remaining undaimed for a period of three (3) years after the maturity, or applicable redemption date. of the Certificates for which such moneys were deposited and are held in trust to pay, shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 20: Ordinance a Contract -Amendments. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Certificate remains Outstanding except as permitted in this Section. The City, may, without the consent of or notice to any Holders .of the Certificates, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of th_e Holders of the Certificates, including the curing of any ambiguity, inconsistency, · or formal defect or omission herein. In addition, the City may, with the written consent of Holders of the Certificates holding a majority in aggregate principal amount of the Certificates then Outstanding· affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that. without the consent of all HoldeFs of Outstanding Certificates, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Certificates, reduce the principal amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify the terms of ·payment of the principal of, premium, if any, or interest on the Certificates. (2) give any 45035694.2 -20· I . , . : } preference to any Certificate over any other Certificate, or (3) reduce the aggregate principal amount of Certificates required to be held by Holders ror consent to any such amendment, addition, or rescission. SECTION 21: Notices to Holders -Waivers. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given {unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Certificates. Where this Ordinance provides for notice in any manner, such. notice may be waived in writing by the Holder entitled to . receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to lhe va.lidity of any action taken in reliance upon such waiver. SECTION 22: Cancellation. Certificates surrendered for payment, redemption, transfer, or exchange, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already canceled, shall be promptly canceled by the Paying Agent/Registrar. The City may at any time· deliver to the Paying AgenVRegistrar for cancellation any Certificates previously certified or . registered and delivered which the City may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly canceled by the Paying Agent/Registrar. All canceled Certificates held by the Paying Agent/Registrar shall be returned to the City. SECTION 23: Mutilated, Destroyed, Lost and Stolen Certificates. In case any Certificate shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Certificate of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, · in exchange and substitution for such mutilated Certificate, or in lieu of and in substitution for such destroyed, lost or stolen Certificate, only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to -the Paying Agent/Registrar of the destruction, loss or theft of such certificate, and of _the authenticity of the ownership thereof and {ii) the furnishing to the Paying Agent/Registrar of· indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All. expenses and ·charges associated with such indemnity and with the prepai:ation, execution and delivery of a replacement Gertificate shall be borne by the Holder of the Certificate mutilated, or destroyed, . lost or stolen. Every replacement Certificate issued pursuant to this Section ·shall be a valid and ,binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Certificates; notwithstanding the enforceability of payment by anyone of the destroyed, lost or stolen Certificates. The provisions of this Section are exclusive and shall preclude (to the extent lawful} all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost, or stolen Certificates. 4503$694.2 -21- ) ·. I . federal income tax of the interest on any Certificate, the City shall comply with each of the specific covenants in this Section. C. No Private Use or Privat~ Payments. Except as permitted by section 141 of· the Code and the Regulations an,d rulings thereunder, the City shall at all times prior to the last Stated Maturity of Certificates: . (1) excJusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Certificates, and not use or permit the use of such . Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general· public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or 19081 government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Certificates or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. D. No Private loan. Except to the extent permitted by section 141 .of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Certificates to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing co.venant, such Gross Proceeds are considered to be Mloaned• to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under 'a take-or-pay, output or .similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic eq1:1ivalent of a loan. E. Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Certificates directly or indirectly invest Gross Proceeds in any Investment {or use Gross Proceeds to replace money so invested), if as a result of such investment the '(ield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held of previously disposed of, exceeds the Yield of the Certificates. F. Not Federally Guaranteed.-Except to the extent permitted by section 149(b). of the Code and the RegulaUoris and rulings the~eunder, the City shall not'take or omit to take any action which would cause the Certificates to be federally guaranteed within the meaning .of section 149(b) of .the Code and the Regulations and rulings thereunder. -23- ) . G. lnfonnation Report. The City shall timely file the information required by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. H. Rebate of Arbitrage Profits. Except to the extent otherwise· provided in section 148(f) of the Code and the Regulations and rulings thereunder: (1) The City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof} and shall retain all records of accounting for at least six years after the day on which the last Outstanding Certificate is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Certificates with other money of the City, provided that the City .separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code an_d the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Certificates until six years after the final Computation Date. (3) As additional consideration for the purchase of the Certificates by. the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income. tax purposes, the City shall pay to the United States out at the Certificate Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added ·to the future value of previous rebate payments made for the Certificates equals (i) in the case of a Final Computation Date· as defined in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount ori such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f) of ·the Code and the Regulations and rulings ·. · thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section 148(f} of the Code and· the Regulations and rulings thereunder . . (4) . The-City shall exercise reasonable diligence to assure that no errors are made iQ the calculations and payments required by paragraphs (2) and (3), and if an error Js made, to discover and promptly correct such error within a reasonable amount of time thereafter {and in all events within one hundred eighty (180) days after discovery of the error), including payment to th~ United. States of any additional Rebate Amount owed to · it, interest thereon, and any penalty · imposed under .Section 1.148-3(h) of the Regulations. ,, I. Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Regul_ations and rulings thereunder, the City shall not, at any time 4S03S6942 -24- prior to the earlier of the Stated Maturity or final payment of the Certificates, enter into· any transaction that reduces the amount required to be paid to the United States pursuant to Subsection H of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Certificates not been relevant to either party. J. Elections. The City hereby directs and authorizes the Mayor, City Secretary, City Manager,_ Managing Director of Finance, and First Assistant City Manager, individually or jointly, to make el.actions permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary· or appropriate in connection with the Certificates, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document S!;:CTION 25: Sale of Certificates -Official Statement Approval. The Certificates authorized by this Ordinance are hereby sold by the City to Salomon Smith Barney, Dain Rauscher Incorporated, Estrada Hinojosa & Company, Inc., Edward 0. Jones and Southwest Securities (herein collectively referred to as the ·Purchasers") in accordance with the Purchase Contract, dated June 14, 2001, attached hereto as Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and directed to execute said Purchase Contract for and on behalf of the City and as· the act and . deed of this Council, and in regard to the approval and execution of the Purchase Contract, the Council · hereby finds, determines and declares that the representations, warranties and agreements of the City contained therein are true and correct in all material respects and shall be honored and performed by the City. . . Furthermore, the use of the Official Statement by the Purchasers in connection with the public offering and sale of the Certificates is hereby ratified, confirmed and approved in all respects. The final Official Statement, which reflects the terms of sale, attached as Exhibit A to the Purchase Contract (together with such changes approved by the Mayor, City Manager, First Assistant to City Manager, Managing Director of Finance or City Secretary, one or more of said · officials), shall be and is hereby in all respects approved and the Purchasers are hereby authorized to use and distribute said final Official Statement, dated June 14, 2001, in the offering, sale and delivery of the Certificates to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City · . copies of said Official Statement in final fonn as may be required by the Purchasers, and such final Official Statement in the form and content manually executed by said officials shall be deemed to be approved by the City Council and constjtute th~ Official Statement authorized for distribution and use by the Purchasers. SECTION 26: Control and Custody of Certificates. The Mayor of the City-shall be and is hereby authorized to take and have charge · of all necessary orders and records pending investigation by the Attorney General of the State of Texas, including the printing and supply pf definitive Certificates, and shall 'take and have charge and control of the Initial Certificate(s) pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and. the ~elivery thereof to the Purchasers. Furthermore, the Mayor, City Secretary, City Manager,-Managing Director of Finance and Assistant City Manager,. any one or more of said officials, are hereby authorized and . •directed to furnish and execute such documents relating to the City and its financial affairs as may be necessary for the issuance of the Certificates, the approval of the Attorney General and the registration by the Comptroller of Public Accounts and; together with the City's financial 4.503.5694.2 -25- ) ) ) ) ) ) .. advisor, ·bond couns~I and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Certificate(s) to the Purchasers and the initial exchange thereof for definitive Certificates. .. SECTION 27: Proceeds of Sale. The proceeds of ~ale of the Certificates, excluding the accrued ,nterest and premium, if any, received from the purchasers, shall be ·deposited in a construction fund maintained at_ the City's depository bank. Pending expenditure for authorized . projects ·and purposes, such proceeds of sale may be invested in authorized investments .in accordance with the provisions of V.T.C.A., Government Code, Chapter 2256, including guaranteed investment contracts permitted by V.T.C.A., Section 2256.015 et seq., and the City's investment policies · and guidelines, and any investment earnings realized shall be expended for such authorized projects and purposes or deposited in the Interest and Sinking Fund as shall be determined by the City Council. Accrued interest and premium, if any, -received from the Purchasers as-well as all surplus proceeds of sale of the Certificates, including investment earnings, remaining after completion of all authorized projects or purpq~es shall be deposited to the credit of the Interest and Sinking Fund. · SECTION 28: Legal Opinion. The obligation of the Purchasers to accept delivery of the Certificates is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys, Dallas, Texas, approving such Certificates as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Certificates. A true and correct r:eproducti(?n of said opinion is hereby authorized to be printed on the definitive. Certificates or an . executed counterpart thereof shall accompany the global Certificates deposited with the Depo~itory Trust Company. SECTION 29: CUSIP Numbers. That CUSiP numb"ers may be printed or typed on the definitive Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Certificates shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving said Certificates as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Certificates. SECTION 30: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or. shall be construed to confer upon any person other than the City, the Paying · Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this O[dinance or any provision hereof, this Ordinance and all its provisions· being intended to be and being for the · sole and exdusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 31: 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 32: Governing law. This Ordinance shall be construed and enforced in · accordance with the laws of the State of Texas and the United States of America. . SECTION 33: 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 the City Council hereby dedares that this Ordinance would have been enacted without such invalid provision • . 45035694.2 -26- ) ) ) ' ) SECTION 34: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 35: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural _ number shall be considered to include the singular, and words of the masculifle, femi11ine or neuter gender $haU be considered to include the other genders. SECTION 36: Continuing Disdosure Undertaking. (a) Definitions. As used. in ·this Section, the following terms have the meanings ascribed to such terms below: "MSRB" m~ans 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 ~ommission. "SID" means any person designated by the. State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. {b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fjscaf year (beginning with the fiscal year ending September 30, 2001) financial information and operating data with respect to the City of -the general type included in the final Official Statement approved by Section 25 of this Ordinance, being the information described in Exhibit C hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit C here(o 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 available at the tinie the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial infonnation and operating data and will file the· annual audi~ report. · ·· when and if the same becomes available. If the City chang~s its fiscal year, it wiH notify each NRMSIR and any SID of the change (and of the date of the new fiscal year end) prior to the ·next d·a_te 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. 45035694.2 -27- ) ) ) ) ) ,. \ . ) (c) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Certificates, if such event is material within the meaning of the federal securities laws: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Principal and interest payment delinquencies; Non-payment related defaults; Unscheduled draws on debt service reserves reflecting financial difficulties; Unscheduled draws on credit enhancements reflecting.financial difficulties; Substitution of credit or liquidity providers, or their failure to perform; Adverse tax opinions or events affecting the tax-exempt status of the Certificates; Modifications to rights of holders of the Certificates; Certificate calls; Defeasances; . . Release, substitution, or sale of property securing repayment of the Certificates; and Rating changes. The City shall notify any .SID and either each NRMSIR or the MSRB,. jn a timely manner, of any fai!ure by the City· to provide financial information or. operating data in accordance with subsection (b) of this Section by the time required by such Section. · (d) Umitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform ·the covenants specified in this Section. while, but only while, the City remains an Mobligated person" with respect to the Certificates within the meaning of the Rule, except that the City in any event will give the notice required by subsection (c) hereof of any Certificate calls and defeasance that cause·the City to be no longer such .an "obligated person." The provisions of this Section are for the sole benefit of the Holders and · · beneficial owners of the Certificates, ·and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to a·ny other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any. other information that may be relevant or material to a complete presentation of the. City's financial results, condition, or prospects or hereby undertake to update · any information provided in accordance with this Section or otherwise; except as expressly provided herein. The City does not make any representation or warranty concerning such information or ifs usefulness to a decision to inves.t in o~ s~II Certificates at any fu~ure date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY CERTIFICATE 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 PA~T. OF . ANY COVENANT SPECIFIED IN THIS SECTION,. BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE . LIMITED TO AN ACTION 'FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the City in · observing or performing its obligations under this .Section shall constitute a breach of or default under this Ordinance for purposes of any o_ther provision of this Ordinance. 45-035694.2 -28- ) ' ) ~ ,• ... ' Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances resulting from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sen Certificates in the primary offering of the Certificates 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.Certificates 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 Holders and beneficial owners of the Certificates. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Certificates from lawfully purchasing or selling Certificates in such offering. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial infonnation or operating data so provided. SECTION 37: Public Meeting. It is officially found, detennined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, induding this · Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. 45035694.2 -29- ' · . ..,. ') ,• , ) ) ) ) . , ) ) SECTION 38: Effective Date. This Ordinance shall · take effect and be in force immediately from and after its passage on second and final reading,· and IT IS SO ORDAINED. PASSED AND ADOPTED ON FIRST READING, May 24, 2001. PASSED AND ADOPTED ON SECOND AND FINAL READING, this the 14th day of June, 2001. ATTEST: '£~ ~C>~ C1tY Secretary z {City Seal) APPROVED AS TO CONTENT: APPROVED AS TO FORM: Cl, & Mb,.,. City Attorney ' 4S035694.2 -30- ) EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT ) . See Document Number 4 ) ) ) _. ) " ) ) ) '.) ) .· .... . . -•: EXHIBIT B PURCHASEGONTRACT See Document Number 5 ) ) "I ) DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 36 of this Ordinance. Annual Financial Statements and Operating Data Exhibit C to Ordinance The financial information and operating data with respect to the City to be provided annualiy in accordance with such Section are as specified (and included in the·· Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official Statement as App~ndix B, but for the most recently concluded fiscal year. 2. The information contained in Tables 1 through 6 and 8A through 17 of the Official Statement. Accounting Principles The accounting principles referred to in such Section are the generally accepted accounting principles as applicable to governmental units as prescribed by The Government · Accounting Standards Board. · · 45035694.1 C-1 ) ) ) ) ) ) ) LUB200nIOOI Dallas 987110_1.00C PAYING AGENT/REGISTRAR AGREEMENT between CITY OF LUBBOC~ TEXAS and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Pertaining to City of Lubbock, Texas General Obligation Refunding Bonds Series 2005 Dated as of June 15, 2005 ) ) ) ' TABLE OF CONTENTS Page Recitals ........................................................................................................................................ 1 ARTICLE I APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointrrient. ................................................................................................... 1 Section 1. 02. Compensation .................................................................................................. 1 ARTICLE II DEFINITIONS Section 2.01. Definitions ....................................................................................................... 2 ARTICLE III PAYING AGENT Section 3.01. Duties of Paying Agent. .................................................................................. 3 Section 3.02. Payment Dates ................................................................................................. 3 Section 4.01. Section 4.02. Section 4.03. Section 4.04. Section 4.05. Section 4.06. Section 4.07. Section 5.01. Section 5.02. Section 5.03. Section 5.04. Section 5.05. Section 5.06. Section 5.07. Section 6.01. Section 6.02. WB200nIOOl Dallas 987110_1.DOC ARTICLE IV REGISTRAR Transfer and Exchange .................................................................................... 4 The Bonds ....................................................................................................... 4 Form of Register .............................................................................................. 4 List of Owners ................................................................................................. 5 Cancellation of Bonds ..................................................................................... 5 Mutilated, Destroyed, Lost, or Stolen Bonds .................................................. 5 Transaction Information to Issuer ................................................................... 6 ARTICLEV THE BANK Duties of Bank ................................................................................................. 6 Reliance on Docwnents, Etc ........................................................................... 6 Recitals of Issuer ............................................................................................. 7 May Hold Bonds ............................................................................................. 7 Money Held by Bank ...................................................................................... 7 Indemnification ............................................................................................... 8 Interpleader ...................................................................................................... 8 ARTICLE VI MISCELLANEOUS PROVISIONS Amendnient ..................................................................................................... 8 Assignment ...................................................................................................... 8 (i) ) Section 6.03. Notices ............................................................................................................. 8 Section 6.04. Effect of Headings ........................................................................................... 9 ) Section 6.05. Successors and Assigns ................................................................................... 9 Section 6.06. Separability ...................................................................................................... 9 Section 6.07. Benefits of Agreement .................................................................................... 9 Section 6.08. Entire Agreen1ent ............................................................................................ 9 Section 6.09. Counterparts .................................................................................................... 9 Section 6.10. Termination ..................................................................................................... 9 ) Section 6.11. Governing Law .............................................................................................. 10 EXEClffION .............................................................................................................................. 1 Annex A -Schedule of Fees for Service as Paying Agent/Registrar ) ' "\ ) ) WB20MIOOI Dallas 987110_1.DOC (ii) ) 'I ) '\ ' ) PA YING AGENT/REGISTRAR AGREEMENT THIS PAYING AGENT/REGISTRAR AGREEMENT (the or this "Agreement"), dated as of June 15, 2005, is by and between CITY OF LUBBOC~ TEXAS (the "Issuer"), and JPMorgan Chase Bank, National Association (the "Bank"), a New York state banking corporation duly organized and existing under the laws of the United States of America WHEREAS, the Issuer has duly authorized and provided for the issuance of its General Obligation Refunding Bonds, Series 2005 (the "Bonds"), dated June 15, 2005, to be issued as registered securities without coupons; and WHEREAS, all things necessary to make the Bonds the valid obligations of the Issuer, in accordance with their tenns, will be taken upon the issuance and delivery thereof; and WHEREAS, the Issuer is desirous that the Bank act as the Paying Agent of the Issuer in paying the principal, redemption premium, if any, and interest on the Bonds, in accordance with the terms thereof, and that the Bank act as Registrar for the Bonds; and WHEREAS, the Issuer has duly authorized the execution and delivery of this Agreement, and all things necessary to make this Agreement the valid agreement of the Issuer, in accordance with its terms, have been done; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE I APPOINTMENT OF BANK AS PA YING AGENT AND REGISTRAR Section 1.01. Appointment. (a) The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Bonds in paying to the Owners of the Bonds the principal, redemption premium, if any, and interest on all or any of the Bonds. (b) The Issuer hereby appoints the Bank as Registrar with respect to the Bonds. (c) The Bank hereby accepts its appointment, and agrees to act as, the Paying Agent and Registrar. Section 1.02. Compensation. (a) As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in Annex A hereto for the first year of this Agreement, or such part thereof as this Agreement shall be in effect, and thereafter while this Agreement is in effect, the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. LUB200nJOO I Dallas 987110_1.DOC ) ) ) ) ) ) ) ) (b) In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof, including the reasonable compensation and the expenses and disbursements of its agents and counsel. ARTICLE II DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following tenns have the following meanings when used in this Agreement: "Bank" means JPMorgan Chase Banlc, National Association. "Bank Office" means the Bank's office in Dallas, Texas. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Bond" or "Bonds" means any or all of the Issuer's General Obligation Refunding Bonds, Series 2005, dated June 15, 2005. "Bond Ordinance" means the ordinance of the City Council of the Issuer authorizing the issuance and delivery of the Bonds. "Fiscal Year" means the 12 month period ending September 30th of each year. "Issuer" means the City of Lubbock, Texas. "Issuer Request" and "Issuer Order'' means a written request or order signed in the name of the Issuer by the Mayor of the Issuer, or any other authorized representative of the Issuer and delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized by applicable law to be closed. "Owner" means the Person in whose name a Bond is registered in the Register. ''Paying Agent" means the Bank when it is performing the functions associated with the terms in this Agreement. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or any agency or political subdivision of a government. "Predecessor Bonds" of any particular Bond means every previous Bond evidencing all or a portion of the same obligation as that evidenced by such particular Bond (and, for the purposes of this definition, any Bond registered and delivered under Section 4.06 in lieu of a mutilated, lost, destroyed or stolen Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed or stolen Bond). LUB200n100 I Dallas 987110_1.DOC 2 ) ) ) '\ ) ) ) ) ) "Record Date" means the last Business Day of the month next preceding an interest payment date established by the Bond Ordinance. "Register'' means a register in which the Issuer shall provide for the registration and transfer of Bonds. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice Chairman of the Board of Directors, the Chairman or Vice Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Stated Maturity'' means the date or dates specified in the Bond Ordinance as the fixed date on which the principal of the Bonds is due and payable or the date fixed in accordance with the terms of the Bond Ordinance for redemption of the Bonds, or any portion thereof, prior to the fixed maturity date. ARTICLE III PA YING AGENT Section 3.01. Duties of Paying Agent. (a) The Banlc, as Paying Agent and on behalf of the Issuer, shall pay to the Owner, at the Stated Maturity and upon the surrender of the Bond or Bonds so maturing at the Bank Office, the principal amount of the Bond or Bonds then maturing, and redemption premium, if any, provided that the Bank shall have been provided by or on behalf of the Issuer adequate funds to make such payment. (b) The Bank, as Paying Agent and on behalf of the Issuer, shall pay interest when due on the Bonds to each Owner of the Bonds ( or their Predecessor Bonds) as shown in the Register at the close of business on the Record Date, provided that the Bank shall have been provided by or on behalf of the Issuer adequate funds to make such payments; such payments shall be made by computing the amount of interest to he paid each Owner, preparing the checks, and mailing the checks on each interest payment date addressed to each Owner's address as it appears in the Register on the Record Date. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal o~ redemption premium, if any, and interest on the Bonds at the dates specified in the Bond Ordinance. LUB20MIOOI Dallas 987110_1.DOC 3 ) ) ) ) ) ) ARTICLE IV REGISTRAR Section 4.01. Transfer and Exchange. (a) The Issuer shall keep the Register at the Bank Office, and subject to such reasonable written regulations as the Issuer may prescribe, which regulations shall be furnished to the Bank herewith or subsequent hereto by Issuer Order, the Issuer shall provide for the registration and transfer of the Bonds. The Bank is hereby appointed "Registrar" for the purpose of registering and transferring the Bonds as herein provided. The Bank agrees to maintain the Register while it is Registrar. The Bank agrees to at all times maintain a copy of the Register at its office located in the State of Texas. (b) The Bank as Registrar hereby agrees that at any time while any Bond is outstanding, the Owner may deliver such Bond to the Registrar for transfer or exchange, accompanied by instructions from the Owner, or the duly authorized designee of the Owner, designating the persons, the maturities, and the principal amounts to and in which such Bond is to be transferred and the addresses of such persons; the Registrar shall thereupon, within not more than three (3) business days, register and deliver such Bond or Bonds as provided in such instructions. The provisions of the Bond Ordinance shall control the procedures for transfer or exchange set forth herein to the extent such procedures are in conflict with the provisions of the Bond Ordinance. (c) Every Bond surrendered for transfer or ex.change shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed in a manner satisfactory to the Banlc, duly executed by the Owner thereof or his attorney duly authorized in writing. ( d) The Bank may request any supporting documentation it feels necessary to effect a re-registration. Section 4.02. The Bonds. The Issuer shall provide an adequate inventory of unregistered Bonds to facilitate transfers. The Bank covenants that it will maintain the unregistered Bonds in safekeeping and will use reasonable care in maintaining such unregistered Bonds in safekeeping, which shall be not less than the care it maintains for debt securities of other governments or corporations for which it serves as registrar, or which it maintains for its own securities. Section 4.03. Form of Register. (a) The Bank as Registrar will maintain the records of the Register in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Register in any form other than a form which the Bank has currently available and currently utilizes at the time. (b) The Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. LUB200/7l001 Dallas 987110_1.IX)C 4 ) ) ) ' ., ) Section 4.04. List of Owners. (a) The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the cost, if any, of reproduction, a copy of the infonnation contained in the Register. The Issuer may also inspect the information in the Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written fonn. (b) The Bank will not release or disclose the content of the Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a subpoena or court order or as otherwise required by law. Upon receipt of a subpoena or court order the Bank will notify the Issuer so that the Issuer may contest the subpoena or court order. Section 4.05. Cancellation of Bonds. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if SU1Tendered to the Bank, shall be promptly cancelled by it and, if surrendered to the Issuer, shall be delivered to the Bank and, if not already cancelled, shall be promptly cancelled by the Bank. The Issuer may at any time deliver to the Bank for cancellation any Bonds previously certified or registered and delivered which the Issuer may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Bank. All cancelled Bonds held by the Bank shall be disposed of pursuant to the Securities Exchange Act of 1934. Section 4.06. Mutilated, Destroyed, Lost or Stolen Bonds. (a) Subject to the provisions of this Section 4.06, the Issuer hereby instructs the Bank to deliver fully registered Bonds in exchange for or in lieu of mutilated, destroyed, lost, or stolen Bonds as long as the same does not result in an overissuance. (b) If (i) any mutilated Bond is surrendered to the Bank, or the Issuer and the Bank receives evidence to their satisfaction of the destruction, loss, or theft of any Bond, and (ii) there is delivered to the Issuer and the Bank such security or indemnity as may be required by the Bank to save and hold each of them hannless, then in the absence of notice to the Issuer or the Bank that such Bond has been acquired by a bona fide pmchaser, the Issuer shall execute, and upon its request the Bank shall register and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost, or stolen Bond, a new Bond of the same stated maturity and of like tenor and principal amount bearing a number not contemporaneously outstanding. (c) Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or stolen Bond shall constitute a replacement of the prior obligation of the Issue1\ whether or not the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits of the Bond Ordinance equally and ratably with all other outstanding Bonds. ( d) Upon the satisfaction of the Bank and the Issuer that a Bond has been mutilated, destroyed, lost, or stolen, and upon receipt by the Bank and the Issuer of such indemnity or security as they may require, the Bank shall cancel the Bond number on the Bond registered with a notation in the Register that said Bond has been mutilated, destroyed, lost, or stolen; and a new LUB20MIOOI Dallas 987110_1.DOC 5 ) ) ) ) ) Bond shall be issued of the same series and of like tenor and principal amount bearing a number, according to the Register, not contemporaneously outstanding. (e) The Bank may charge the Owner the Bank's fees and expenses in connection with issuing a new Bond in lieu of or exchange for a mutilated, destroyed, lost, or stolen Bond. (f) The Issuer hereby accepts the Bank's current blanket bond for lost, stolen, or destroyed Bonds and any future substitute blanket bond for lost, stolen, or destroyed Bonds that the Bank may arrange, and agrees that the coverage under any such blanket bond is acceptable to it and meets the Issuer's requirements as to security or indemnity. The Bank need not notify the Issuer of any changes in the security or other company giving such bond or the terms of any such bond, provided that the amount of such bond is not reduced below the amount of the bond on the date of execution of this Agreement. The blanket bond then utilized by the Bank for lost, stolen, or destroyed Bonds by the Ban.le is available for inspection by the Issuer on request. Section 4.07. Transaction Information to Issuer. The Ban.le will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Bonds it has paid pursuant to Section 3.01; Bonds it has delivered upon the transfer or exchange of any Bonds pursuant to Section 4.01; and Bonds it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Bonds pursuant to Section 4.06 of this Agreement ARTICLEV THEBANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and in accordance with the Bond Ordinance and agrees to use reasonable care in the perfonnance thereof. The Bank hereby agrees to use the funds deposited with it ~or payment of the principal of, redemption premiwn, if any, and interest on the Bonds to pay the Bonds as the same shall become due and further agrees to establish and maintain all accounts and funds as may be required for the Bank to :function as Paying Agent. Section 5.02. Reliance on Documents. Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank. (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. LUB20onl001 Dallas 987110_1.00C 6 ) ) (d) The Bank may rely and shall be protected in acting or refraining from acting upon any ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, certificate, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Bonds, but is protected in acting upon receipt of Bonds containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Owner or an attorney-in-fact of the Owner. The Bank shall not be bound to make any investigation into the facts or matters stated in an ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, certificate, note, security, or other paper or document supplied by Issuer. (e) The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (t) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. Section 5.03. Recitals oflssuer. (a) The recitals contained herein and in the Bonds shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. (b) The Bank shall in no event be liable to the Issuer, any Owner or Owners, or any other Person for any amount due on any Bond except as otheiwise expressly provided herein with respect to the liability of the Bank for its duties under this Agreement. Section 5.04. May Hold Bonds. The Banlc, in its individual or any other capacity, may become the Owner or pledgee of Bonds and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. Section 5.05. Money Held by Bank (a) Money held by the Bank hereunder need not be segregated from any other funds provided appropriate accounts are maintained. (b) The Bank shall be under no liability for interest on any money received by it hereunder. (c) Subject to the provisions of Title 6, Texas Property Code, any money deposited with the Bank for the payment of the principal, redemption premium, if any, or in~t on any Bond and remaining unclaimed for three years after final maturity of the Bond has become due and payable will be paid by the Bank to the Issuer, and the Owner of such Bond shall thereafter look only to the Issuer for payment thereof: and all liability of the Bank with respect to such monies shall thereupon cease. LUB200nt001 Dallas 987110_1.00C 7 ) ) ) ) ) ) ) (d) The Bank will comply with the reporting requirements of Chapter 74 of the Texas Property Code. (e) The Bank shall deposit any moneys received from the Issuer into a trust accowit to be held in a paying agent capacity for the payment of the Bonds, with such moneys in the account that exceed the deposit insurance, available to the Issuer, provided by the Federal Deposit Insurance Corporation to be fully collateralized with securities or obligations that are eligible under the laws of the State of Texas and to the extent practicable under the laws of the United States of America to secure and be pledged as collateral for trust accounts until the principal and interest on the Bonds have been presented for payment and paid to the owner thereof. Payments made from such trust account shall be made by check drawn on such trust account unless the owner of such Bonds shall, at its own expense and risk, request such other medium of payment. Section 5.06. Indemnification. To the extent pennitted by law, the Issuer agrees to indemnify the Bank, its officers, directors, employees, and agents for, and hold them hamtless against, any loss, liability, or expense incurred without negligence or bad faith on their part arising out of or in connection with its acceptance or administration of the Bank's duties hereunder, and under Article V of the Bond Ordinance, including the cost and expense (including its counsel fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demands or controversy over its persons as well as funds on deposit in a court of competent jurisdiction within the State of Texas; waive personal service of any process; and agree that service of process by certified or registered mail, return receipt requested, to the address set forth in this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction within the State of Texas to determine the rights of any person claiming any interest herein. ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereof. Section 6.02. Assignment This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown below: LUBZOMIOOI Dallas 987110_1.DOC 8 ) ) ) ) ) i ' , (a) (b) (c) if to the Issuer: if to the Banlc: City of Lubbock, Texas 1625 13th Street Lubbock, Texas 79457 Attention: Cash and Debt Manager JPMorgan Chase Bank, National Association 2001 Bryan Street, 8th Floor Dallas, Texas 75201 Attention: Corporate Trust Deparbnent Section 6.04. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 6.05. Successors and Assigns. All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not. Section 6.06. Separability. If any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 6.07. Benefits of Agreement. Nothing herei~ express or implied, shall give to any Perso~ other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder. Section 6.08. Entire Agreement. This Agreement and the Bond Ordinance constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar, and if any conflict exists between this Agreement and the Bond Ordinance, the Bond Ordinance shall govern. Section 6.09. Counteroarts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10. Termination. (a) This Agreement will terminate on the date of final payment by the Bank issuing its checks for the final payment of principal, redemption premium, if any, and interest of the Bonds. (b) This Agreement may be earlier terminated upon sixty (60) days written notice by either party; provided, that, no termination shall be effective until a successor has been appointed by the Issuer and has accepted the duties imposed by this Agreement. A resigning Paying Agent/Registrar may petition any court of competent jurisdiction for the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a successor Paying Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within sixty (60) days after the giving of notice of resignation. WB200/7100I Dallas 987ll0J.OOC 9 ) ') ) (c) The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the tennination of this Agreement. Section 6.11. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. WB200/71001 Dallas 987110_1.DOC 10 ) ) ) ") ") '.) ') ) IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. ATTEST: Becky Garza, City Secretary LUB20on100I ) Dallas 987110_1.DOC ) ) ) ) ) ) JPMORGAN CHASE BANK, ASSOCIATION By:_ Title: ANNEX"A" SCHEDULE OF FEES FOR SERVICE AS PA YING AGENT/REGISTRAR ) ) ) J ") ') J ) ') ) ~--... ,JPMorgan Proposal and Schedule of Fees for Services as Paying Agent and Registrar and Escrow Agent in connection with City of Lubbock General Obligation Refunding Bonds, Series 1005 Based upon our current understanding of your proposed transaction, our fee proposal is as follows: Notes: Pricing for Paying Agent and Registrar The Paying Agent and Registrar Fee covers the maintenance of records as registrar, processing of transfers, and payment of interest/principal funds for Debt Service. Option No. I Acceptance Fee Annual Fee (payable annually in advance) Option No. 2 One Time Fee (payable at closing) Pricing for Escrow Agent (for account terminating in 2011) $0.00 $300.00 $2,500.00 The Escrow Agent Fee covers the consideration of documents and the normal administrative duties of the escrow agent according to the governing documents. Pricing includes distribution of the call notice to holders of record, redemption processing, and notification to NRMSIR.s. Any publication expenses (i.e. Bond Buyer, regional periodical, financial periodicals, etc.) for the call notice will be billed to the Issuer at cost. One Time Fee (payable at closing) $4,250.00 Please note that our willingness to act in the capacities specified above and the fees designated in this proposal are indicative and based upon our understanding of the transaction. We reserve the right to revise this proposal should any material aspect of the transaction differ from our understanding. Also, our acceptance of the above contracts and duties is subject to our usual internal review, document review and the receipt of appropriate immunities and indemnities. JPMorgan's Trust Accounting Reporting (TAR) website gives corporate and municipal issuers 24/7 Internet access to information on their cash and asset transactions/positions free of charge. TAR also electronically posts and archives trust and escrow account statements so you can access them online, easily at your convenience. With functionality allowing the user to customize reporting, choose format, drill down for detail, and download for convenience, Trust Accounting Reporting on the Web is a J.P. Morgan Trust Company, N. A. • 201 Main Street-3rd Floor, Fort Worth, TX 76102 Telephone: (817) 878-7505 • Facsimile: (817) 878-7540 jeffrey.c.salavarria@jpmorgan.com ') ) ~ ... ,., JPMorgan JPMorgan Fee Proposal July 21, 2005 powerful decision-making and account management tool. To further facilitate your TAR online experience, intra-day updates are provided for more timely and accurate reporting. This capability gives you the option of viewing asset details as of intra-day, close-of-business or to review prior month-end reports. Please visit us at www.jpmorgan.com/tar for more details or contact your JPMorgan Relationship Manager or Sales Representative. Annual fees include one standard audit confirmation per year without charge. Standard audit confirmations include the final maturity date, principle paid, principal outstanding, interest cycle, interest rate, interest paid, cash and asset information, interest rate, and asset statement information. Non- standard audit confinnation requests may be assessed an additional fee. Performance of any extraordinary service or incurring extraordinary expenses, such as those in connection with any default, account resignation, or outside legal counsel charges, will be billed in addition to the stated per annum fees. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, we will ask for information that will allow us to identify you. Vinson&Elkins JENNIFER TAFFE jtaffe@velaw.com Tel 214.220.7941 Fax .214.999.7941 Mr. Andy Burcham City of Lubbock 1625 13th Street Lubbock, Texas 79457 April 4, 2006 Re: $49,615,000 City of Lubbock, Texas General Obligation Refunding Bonds, Series 2005 Dear Andy: Enclosed herewith please find an original and a copy of the Transcript of Proceedings for the above-referenced series of bonds. It was a pleasure to work with you. Vinson & Elkins LLP Attorneys at Law Austin Beijing Dallas D\Jbai Houston London Moscow New York Tokyo Washington Very truly yours, Trammel! Crow Center, 2001 Ross Avenue, Suite 3700 Dallas, TX 75201·2975 Tel 214.220.7700 Fax 214.220.7716 www.velaw.com