HomeMy WebLinkAboutOrdinance - 2003-O0084 - Tax And Municipal Drainage Utility System Surplus Rev. Cert Obligation Series 03 - 07/24/2003ORDINANCE NO. 2003-00084
First and Final Reading
July 24, 2003
Item No. 36
AN ORDINANCE authorizing the issuance of "CITY OF LUBBOCK, TEXAS,
TAX AND MUNICIPAL DRAINAGE UTILITY SYSTEM SURPLUS
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2003"; 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 Agent/Registrar Agreement 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 $40, 135,000 for the purpose of paying contractual obligations to
be incurred for (i) drainage improvements, including the acquisition, construction and repair of
structures,. equipment and facifitles for. the City's Municipal Drainage Utility System, 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 June 15, 2003 and
June 22, 2003, 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 $40, 135,000 to be designated and bear the title "CITY OF LUBBOCK, TEXAS, TAX
AND MUNICIPAL DRAINAGE UTILITY SYSTEM SURPLUS REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2003" (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 Cod~. Subchapter C of
Chapter 271.
45336859.1
SECTION 2: Fully Registered Obligations -Authorized Denominations-Stated
Maturities-Date. The Certificates are issuable in fully registered form only; shall be dated
July 15, 2003 (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(s)
2005 $705,000 2.000%
2006 720,000 2.000%
2007 735,000 2.375%
2008 755,000 2.625%
2009 775,000 3.000%
2010 800,000 3.375%
2011 830,000 3.500%
2012 860,000 3.750%
2013 895,000 3.950%
2014 930,000 4.000%
2015 970,000 4.000%
2017 2,080,000 5.000%
· 2019 2,295,000 5.000%
2021 2,535,000 5.000%
2022 1,365,000 4.750%
2023 1,430,000 4.750%
2024 1,500,000 4.750%
2034 19,955,000 5.000%
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, 2004.
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 JPMorgan Chase Bank, 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
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"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 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 Dallas, Texas (the uDesignated
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 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
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 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 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 February 15, 2013, 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,
2012 or on any date thereafter at the redemption price of par plus accrued interest to the date of
redemption.
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
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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, 2017, February 15, 2019, February 15, 2021 and February 15, 2034 ("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, 2017
Redemption Date Principal Amount
February 15, 2016 $1,015,000
Term Certificates due February 15, 2021
Redemption Date Principal Amount
February 15, 2020 $1,235,000
Term Certificates due February 15, 2019
Redemption Date Principal Amount
February 15, 2018 $1.120,000
Term Certificates due February 15, 2034
Redemption Date Principal Amount
February 15, 2025
February 15, 2026
February 15, 2027
February 15, 2028
February 15, 2029
February 15, 2030
February 15, 2031
February 15, 2032
February 15, 2033
$1,575,000
$1,660,000
$1,745,000
$1,830,000
$1,925,000
$2,025,000
$2,130,000
$2,240,000
$2,350,000
Approximately forty~five (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 on a mandatory redemption date 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 the
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
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.
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(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 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
Payment/Transfer 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
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
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 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. ·
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 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
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.
45336859.1 5
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 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, · 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.
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 accordance with the operational arrangements referenced in the
Blanket Issuer Letter of Representations by and between the City and DTC (the "Depository
Agreement"). · ·
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 Participants")
and, while the Certificates are held by DTC 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 Certificate (the "Beneficial Owners") being recorded in the records of DTC and
DTC 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 DTC 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
45336859.1 6
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 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, Chapter 1201.
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 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 stated in
Section 1 hereof 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 (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
45336859.1 7
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, all as
determined by the officers executing such Certificates as evidenced by their execution thereof.
B. Form of Certificates.
REGISTERED
NO. ___ _
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF LUBBOCK, TEXAS,
REGISTERED
PRINCIPAL AMOUNT $ ____ _
TAX AND MUNICIPAL DRAINAGE UTILITY SYSTEM SURPLUS REVENUE
CERTIFICATE OF OBLIGATION, SERIES 2003
Certificate Date:
July 15, 2001
Registered Owner:
Principal Amount:
Interest Rate: ___ % Stated Maturity: CUSIP NO: ___ _
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 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, 2004. 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
"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 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
45336859.1 8
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 $40,135,000 (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., 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 dates hereinafter identified (the "Term Certificates") are
subject to mandatory redemption prier 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, 2017
Redemption Date Principal Amount
February 15, 2016 $1,015,000
Term Certificates due February 15, 2021
Redemption Date Principal Amount
February 15, 2020 $1,235,000
Term Certificates due February 15, 2019
Redemption Date Principal Amount
February 15, 2018 $1.120,000
Term Certificates due February 15, 2034
Redemption Date Principal Amount
February 15, 2025
February 15, 2026
February 15, 2027
February 15, 2028
February 15, 2029
February 15, 2030
February 15, 2031
February 15, 2032
February 15, 2033
$1,575,000
$1,660,000
$1,745,000
$1,830,000
$1,925,000
$2,025,000
$2,130,000
$2,240,000
$2,350,000
The particular Term 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 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 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.
45336859.1 9
The Certificates maturing on and after February 15, 2013, 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, 2012, 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. lf 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 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 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, together with the
outstanding Previously Issued Obligations (identified and 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 Municipal Drainage Utility 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 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 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
45336859.1 10
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 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 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.
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 iss,uance 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.
45336859.1 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
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 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
45336859.1 12
D. Form of Certificate of Paying Agent/Registrar to Appear on Definitive Certificates.
REGISTRATION CERTIFICATE OF PA YING 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 Payment/Transfer Office" for this Certificate.
JPMORGAN CHASE BANK, Dallas, Texas,
as Paying Agent/Registrar
Registration Date:
By: -------------Authorized Signature
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 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 this Section.
except that the form of a single fully registered Initial Certificate shall be modified as follows:
45336859.1
(i) immediately under the name of the certificate the
headings ltlnterest Rate" and "Stated Maturity" shall both be
omitted;
(ii) paragraph one shall read as follows:
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 hereinabove stated, on
February 15 in each of the years and in principal installments in accordance with the following
schedule:
PRINCIPAL
INSTALLMENTS
INTEREST
RATE
(Information to be inserted from schedule in Section 2 hereof).
(or so much principal thereof as shafl not have been prepaid prior to maturity) arid 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, 2004. Principal installments of this Certificate are payable in the year of maturity or on a
prepayment date to the registered owner hereof by JPMorgan Chase Bank, Dallas, Texas (the
"Paying Agent/Registrar"), upon presentation and surrender, at its designated offices in Dallas,
Texas (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 "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 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 terms, whenever the same appear herein without qualifying
language, are defined to mean as follows:
{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 Previously Issued Obligations and the
Certificates.
(b) The term "Certificates" shall mean $40,135,000 "CITY OF
LUBBOCK, TEXAS, TAX AND MUNICIPAL DRAINAGE UTILITY SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2003"
authorized by this Ordinance.
45336859.1 14
(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 term "Fiscal Year" shall mean the annual financial accounting
period used with respect to the operations of the System now ending on
September 3oth 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, 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 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 "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 classed under generally accepted accounting
principles as capital expenditures shall not be considered as "Operating and
Maintenance Expenses" for purposes of determining "Net Revenues".
U) The term "Outstanding" when used in this Ordinance with respect
to Certificates means, as of the date of determination, all Certificat~s theretofore
issued and delivered under this Ordinance, except:
45336859.1
(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 "Previously Issued Obligations" shall mean the
outstanding "City of Lubbock, Texas, Tax and Municipal Drainage Utility System
Surplus Revenue Certificates of Obligation, Series 2001", dated June 1, 2001.
(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 of the Net Revenues securing the payment of
the Previously Issued Obligations and the Certificates.
(m) The term "System" or "Municipal Drainage Utility System" shall
mean all land, easements and interest in land, together with all 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 gravity, 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 2003 CITY OF LUBBOCK, TEXAS, TAX
AND 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
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 Act" 0/.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 Certificate Fund shall be credited to, and any losses debited to, the said
45336859.1 16
Certificate Fund. All such investments shall be sold promptly when necessary to prevent any
default in connection with the Certificates.
SECTION 12: Tax Lew. 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, within the limits prescribed by law, 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 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
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 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 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 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. ·
(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.
45336859.1 17
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 Previously Issued Obligations, 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 Previously Issued Obligations and 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 and fully perfected from and after the date of adoption of this Ordinance
without physical delivery or transfer or transfer of control of the Net Revenues, the filing of this
Ordinance or any other act; all as provided in Chapter 1208 of the Texas Government Code.
Section 1208, Government Code, applies to the issuance of the Certificates and the
pledge of the Net Revenues of the System granted by the City under this Section 13, and such
pledge is therefore valid, effective and perfected. If Texas law Js amended at any time while the
Certificates are Outstanding such that the pledge of the NefRevenues of the System granted by
the City under this Section 13 is to be subject to the filing requirements of Chapter 9, Business
& Commerce Code, then in order to preserve to the registered owners of the Certificates the
perfection of the security interest in said pledge, the City agrees to take such measures as it
determines are reasonable and necessary under Texas law to comply with the applicable
provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the security
interest in said pledge to occur .
. SECTION 14: System Fund. The City covenants and 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 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 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 here.in 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: 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 Previously Issued Obligations, 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 used for any other City purpose now or hereafter permitted by law.
45336859.1 18
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 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 contains an amount equal to pay the principal of and interest on
the Certificates to maturity. Ad valorem 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 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 (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 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 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 402 and Subchapter C of
Chapter 271.
(b) Other than for the payment of the Previously Issued 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 their issuance under the terms of this
Ordinance, payable from and secured by a lien on and pledge of the Net Revenues of the
45336859.1 19
System of equal rank and dignity, and on a parity in all respects, with the lien and pledge
securing the payment of the Previously 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
confUct 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 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 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 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 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 and remaining unclaimed for a period of three (3) years after the
maturity, or applicable redemption date, of the Certificates for which such moneys were
45336859.1 20
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 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 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 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 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 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
45336859.1 21
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 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 Section, the following terms have the following meanings:
uc/osing 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 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 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.
"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
45336859.1 22
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.
8. 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 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 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 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 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
45336859.1 23
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 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 Profits. Except to the extent otherwise provided in section 148(f)
of the Code and the Regulations and rulings thereunder:
45336859.1
(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 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 Underwriters 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 from the construction fund,
other appropriate fund or, if permitted by applicable Texas statute, regulation or
opinion of the Attorney General of the State of Texas, the Certificate Fund, 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
24
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), 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 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, Director of Finance, Assistant City Manager, and Cash and Debt 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 certificate,
form or document.
SECTION 25: Sale of Certificates. The Certificates authorized by this Ordinance are
hereby sold by the City to Citigroup Global Markets Inc., Morgan Stanley & Co., Incorporated,
UBS Financial Services, Inc., Edward D. Jones & Co., L.P., Banc of America Securities L.L.C.,
Morgan Keegan & Company, Inc., Coastal Securities and Southwest Securities (herein referred
to as the "Underwriters"} in accordance with the Purchase Contract, dated July 24, 2003,
approved and authorized to be executed pursuant to Ordinance No. ____ is hereby
ratified, confirmed and approved.
SECTION 26: Official Statement. The use of the Preliminary Official Statement, dated
July 14, 2003, in the offering and sale of the Certificates is hereby ratified, confirmed and
approved in all respects, and the City Council 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 reflec;:ts the terms of sale
(together with such changes approved by the Mayor, Mayor Pro Tern, City Manager, Assistant
City Manager, Director of Finance, Cash and Debt Manager, or City Secretary, one or more of
said officials), shall be and is hereby in all respects approved and the Underwriters are hereby
authorized to use and distribute said final Official Statement, dated July 24, 2003, in the offering,
sale and delivery of the Certificates to the public.
45336859.1 25
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 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 Undeiwriters.
Furthermore, the Mayor, City Secretary, City Manager, Assistant City Manager, Director
of Finance, Assistant City Manager, and Cash and Debt 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 advisor, bond counsel and the Paying Agent/Registrar, make
the necessary arrangements for the delivery of the Initial Certificate(s) to the Undeiwriters and
the initial exchange thereof for definitive Certificates.
SECTION 28: Proceeds of Sale. The proceeds of sale of the Certificates, excluding the
accrued interest received from the Undeiwriters, 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 received from the Underwriters 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 29: Legal Opinion. The obligation of the Undeiwriters 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
depositecf 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 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
45336859.1 26
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 United 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 i_nclude 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 37: Continuing Disclosure. Undertaking. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
11 MSRB" means the Municipal Securities Rulemaking Board.
11 NRMSIR" means each person whom the SEC or its staff has determined
to be a nationally recognized · municipal securities information repository within
the meaning of the Rule from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC' means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an
authorized department, officer, or agency thereof as, and determined by the SEC
or its staff to be, a state information depository within the meaning of the Rule
from time to time.
(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, 2003) 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 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
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.
45336859.1 27
If the City changes its fiscal year, it will notify each NRMSIR and any SID of the
change (and of the date of the new fiscal year end) prior to the next date by which the City
otherwise would be required to provide financial information and operating data pursuant to this
Section.
The financial information and operating data to be provided pursuant to this
Section may be set forth in full in one or more documents or may be included by specific
reference to any document (including an official statement or other offering document, if it is
available from the MSRB} that theretofore has been provided to each NRMSIR and any SID or
filed with the SEC.
(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 withiR 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;
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 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, 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 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
45336859.1 28
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 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 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
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 Sectlon 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: MBIA Insurance. The Certificates have been sold with the principal of
and interest thereon being insured by MBIA Insurance Corporation (hereinafter called "MBIA")
pursuant to a Financial Guaranty Insurance Policy. In accordance with the terms and conditions
applicable to insurance provided by MBIA, the City covenants and agrees that, in the event the
principal and interest due on the Certificates shall be paid by MBIA pursuant to the policy
referred to this Section, the assignment and pledge of all funds and all covenants, agreements
and other obligations of the City to the Holders shall continue to exist and MBIA shall be
subrogated to the rights of such Holders; and furthermore, the City covenants and agrees that:
(a) In the event that,. on the second business day, and again on the business day,
prior to the payment date on the Certificates, the Paying Agent/Registrar has not received
sufficient moneys to pay all principal of and interest on the Certificates. due on the second
following or following, as the case may be, business day, the Paying Agent/Registrar shall
immediately notify MBIA or its designee on the same business day by telephone or telegraph,
confirmed in writing by registered or certified mail, of the amount of the deficiency.
45336859.1 29
(b) If the deficiency is made up in whole or in part prior to or on the payment date,
the Paying Agent/Registrar shall so notify MBIA or its designee.
(c) In addition, if the Paying Agent/Registrar has notice that any Holder has been
required to disgorge payments of principal of or interest on the Certificates to a trustee in
bankruptcy or creditors or others pursuant to a final judgment by a court of competent
jurisdiction that such payment constitutes avoidable preference to such Holder within the
meaning of any applicable bankruptcy laws, then the Paying Agent/Registrar shall notify the
MBIA or its designee of such fact by telephone or telegraphic notice, confirming in writing by
registered or certified mail.
(d) The Paying Agent/Registrar is hereby irrevocably designated, appointed, directed
and authorized to act as _attorney-in-fact for Holders of the Certificates as follows:
(1) If and to the extent there is a deficiency in amounts required to
pay interest on the Certificates, the Paying Agent/Registrar shall (a) execute and
deliver to State Street Bank and Trust Company, N.A., or its successors under
the Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance
Paying Agent, an instrument appointing the MBIA as agent for such Holders in
such legal proceeding related to the payment of such interest and an assignment
to the MBIA of the claims for interest to which such deficiency relates and which
are paid by MBIA, (b) receive as designee to the respective Holders (and not as
Paying Agent/Registrar) in accordance with the tenor of the Policy payment from
the Insurance Paying Agent with respect to the claims for interest so assigned,
and (c) disburse the same to such respective Holders; and
(2) If and to the extent of a deficiency in amounts required to pay
principal of the Certificates, the Paying Agent/Registrar shall (a) execute and
deliver to the Insurance Paying Agent in form satisfactory to the Insurance
Paying Agent an instrument appointing MBIA as agent for such Holder in any
legal proceeding relating to the payment of such principal and an assignment to
MBIA of any of the Certificates surrendered to the Insurance Paying Agent or so
much of the principal thereof as has not previously been paid or for which
moneys are not held by the Paying Agent/Registrar and available for such
payment (but such assignment shall be delivered only if payment from the
Insurance Paying Agent is received), (b) receive as designee of the respective
Holders (and not as Paying Agent/Registrar) in accordance with the tenor of the
Policy payment therefor from the Insurance Paying Agent, and (c) disburse the
same to such Holders.
( e) Payments with respect to claims for interest on and principal of Certificates
disbursed by the Paying Agent/Registrar from proceeds of the Policy shall not be considered to
discharge the obligation of the City with respect to such Certificates, and MBIA shall become of
the owner of such unpaid Certificate and claims for the interest in accordance with the tenor of
the assignment made to it under the provisions of this subsection or otherwise.
(f) Irrespective of whether any such assignment is executed and delivered, MBIA
and the Paying Agent/Registrar hereby agree for the benefit of the MBIA that:
(1) They recognize that to the extent MBIA makes payments, directly
or indirectly (as by paying through the Paying Agent/Registrar), on account of
45336859.1 30
principal of and interest on the Certificates, MBIA will be subrogated to the rights
of such Holders to receive the amount of such principal and interest from the City
as provided and solely from the sources stated in this Ordinance and the
Certificates; and
(2) They will accordingly pay to MBIA the amount of such principal and
interest (including principal and interest recovered under subparagraph (ii) of the
first paragraph of the Policy, which principal and interest shall be deemed past
due and not to have been paid) as provided in this Ordinance and the
Certificates, but only from the sources and in the manner provided herein for the
payment of principal of and interest on the Certificates to Holders, and will
otherwise treat the MBIA as the owner of such rights to the amount of such
principal and interest.
(g) In connection with the issuance of additional obligations, the City shall deliver to
the MBIA a copy of the disclosure document, if any, circulated with respect to such additional
obligations.
(h) No amendment or supplement to this Order may become effective without prior
consent of MBIA. Copies of any amendments made to the documents executed in connection
with the issuance of the Certificates which are consented to by the MBIA shall be sent to
Standard & Poor's Corporation.
(i) MBIA shall receive notice of the resignation or removal of the Paying
Agent/Registrar and the appointment of a successor thereto.
(j) MBIA shall receive copies of all notices required to be delivered to Holders and,
on an annual basis, copies of the City's audited financial statements and annual budget.
(k) Any notice that is required to be given to a Holder of the Certificates or to the
Paying Agent/Registrar pursuant to the Ordinance shall also be provided to MBIA. All notices
required to be given to MBIA under the Ordinance shall be in writing and shall be sent by
registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk,
New York 10504, Attention: Surveillance.
(I) MBIA, acting alone, shall have the right to direct all remedies in the event of a
default. MBIA shall be recognized as the registered owner of each Certificate which it insures
for the purposes of exercising all rights and privileges available to' Holders. For Certificates
which it insures, MBIA shall have the right to institute any suit, action, or proceeding at law or in
equity under the same terms as the Holder in accordance with the applicable provisions of this
Ordinance.
(m) The City agrees to reimburse MBIA immediately and unconditionally upon
demand, to the extent permitted by law, for all reasonable expenses, including attorneys' fees
and expenses, incurred by MBIA in connection with (i) the enforcement by MBIA of the City's
obligations, or the preservation or defense of any rights of MBIA, under this Ordinance and any
other document executed in connection with the issuance of the Certificates, and (ii) any
consent, amendment, waiver or other action with respect this Ordinance or any related
document, whether or not granted or approved, together with interest on all such expenses from
and including the date incurred to the date of payment at Citibank's Prime Rate plus 3% or the
maximum interest rate permitted by law, whichever is less. In addition, MBIA reserves the right
45336859.1 31
to charge a fee in connection with its review of such consent, amendment or waiver, whether or
not granted or approved.
SECTION 39: 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 oe considered at such meeting, including this
Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as
amended.
SECTION 40: Effective Date. This Ordinance shall take effect and be in full force
from and_ aftf:3r its adoption on the date shown below in accordance with V.T.C.A., Government
, ~code, SecHon 1201.028.
:--__ ,.--,.~-;;~~~'tfAND ADOPTED, this July 24, 2003.
CITY OF LUBBOCK, TEXAS
ATTEST:
£ ,J,., ,c-< ... ~
City Secretary
(City Seal)
APPROVED AS TO CONTENT:
r,ROVED AS O F
\J.!"' : L i IM s C ,.,
City Attorney 1
45336859.1 32
Ordinance No. 2003-00084
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of July 24, 2003 (this "Agreement"), by and between
the City of Lubbock, Texas (the "Issuer"), and JPMorgan Chase Bank, Dallas, Texas, a New
York banking corporation organized and existing under the laws of the State of New York and
authorized to do business in the State of Texas, or its successors,
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the execution and delivery
of its "City of Lubbock, Texas, Tax and Municipal Drainage Utility System Surplus Revenue
Certificates of Obligation, Series 2003" (the "Securities"), dated July 15, 2003, and such
Securities are scheduled to be delivered to the initial purchasers thereof on or about August 28,
2003;and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in
connection with the payment of the principal of, premium, if any, and interest on said Securities
and with respect to the registration, transfer and exchange thereof by the registered owners
thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the
Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the
Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01 Appointment. The Issuer hereby appoints the Bank to serve as Paying
Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the
Securities as the same become due and payable to the registered owners thereof; all in
accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer
hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Bond Resolution".
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02 Compensation. As compensation for the Bank's services as Paying
Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in
Annex A attached hereto for the first year of this Agreement and thereafter the fees and
amounts set forth in the Bank's current fee schedule then in effect for· services as Paying
Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days
prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the
following Fiscal Year.
45340121.1 EXHIBIT A
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 TWO
DEFINITIONS
Section 2.01 Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date on and after which
the principal or any or all installments of interest, or both, are due and payable on
any Security which has become accelerated pursuant to the terms of the
Security.
"Bank Office" means the designated office of the Bank in Dallas, Texas at
the address shown in Section 3.01 hereof. The Bank will nqtify the Issuer in
writing of any change in location of the Bank Office.
"Bond Resolution" means the resolution, order, or ordinance of the
governing body of the Issuer pursuant to which the Securities are issued,
certified by the Secretary or any other officer of the Issuer and delivered to the
Bank.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30th.
"Holder" and "Security Holder" each means the Person in whose name a
Security is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order
signed in the name of the Issuer by the Mayor, Mayor Pro Tern, City Manager,
Assistant City Manager, Director of Finance, Cash and Debt Manager, or City
Secretary, any one or more of said officials, and delivered to the Bank.
"Legal Holiday" ·means a day on which the Bank is required or authorized
to be closed. ·
"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 Securities" of any· particular Security means every previous
Security evidencing all or a portion of the same obligation as that evidenced by
such particular Security {and, for the purposes of this definition, any mutilated,
lost, destroyed, or stolen Security for which a · replacement Security has been
registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the
Resolution). ·
45340121.1 -2-EXHIBIT A
"Redemption Date" when used with respect to any Security to be
redeemed means the date fixed for such redemption pursuant to the terms of the
Bond Resolution.
"Responsible Officer'' when used with respect to the Bank means the
Chairman or Vice.:Chairman of the Board of Directors, the Chairman or
Vice-Chairman of the Executive Committee of the Board of Directors, the
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any
Trust Officer or Assistant Trust Officer, or any other officer of the Bank
customarily performing functions similar to those performed by any of the ·above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Security Register'' means a register maintained by the Bank on behalf of ·
the Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution the
principal of a Security is scheduled to be due and payable.
Section 2.02 Other Definitions. The terms "Bank," "Issuer," and "Securities (Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar'' refers to the Bank in the performance of the duties
and functions of this Agreement. ·
ARTICLE THREE
PAYING AGENT
Section 3.01 Duties of Paying Agent. As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the
Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity,
Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the
Bank at the following address: P. 0. Box 2320, Dallas, Texas 75221-2320 or 2001 Bryan
Street, 9th Floor, Dallas, Texas 75201, Attention: Operations.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on
each Security when due, by computing the amount of interest to be paid each Holder and
making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the
Record Date. All payments of principal and/or interest on the Securities to the registered
owners shall be accomplished (1) by the issuance of checks, payable to the registered owners,
drawn on the paying agent account provided in Section 5.05 hereof, sent by United States mail,
first class, postage prepaid, to the address appearing on the Security Register or (2) by such
other method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk
and expense. ·
Section 3.02 Payment Dates. The Issuer hereby instructs the Bank to pay the principal
of and interest on the Securities at the dates specified in the Bond Resolution.
45340121.1 -3-EXHIBIT A
ARTICLE FOUR
REGISTRAR
Section 4.01 Security Register -Transfers and Exchanges. The Bank agrees to keep
and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "Security Register") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such
other information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and Bank may prescribe. All transfers, exchanges and replacement of
Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed
by an officer of a federal or state bank or a member of the National Association of Securities
Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly
authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re-registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in
not more than three (3) business days after the receipt of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly
executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the
Paying Agent/Registrar.
Section 4.02 Certificates. The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use and reasonable care will be
exercised by the Bank in maintaining such Securities in safekeepfng, which shall be not less
than the care maintained by the Bank for debt securities of other governments or corporations
for which it serves as registrar, or that is maintained for its own securities. ·
Section 4.03 Form of Security Register. The Bank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer and exchange of the Securities
in accordance with the Bank's general practices and procedures in effect from time to time. The
Bank shall not be obligated to maintain such Security Register in any form other than those
which the Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04 List of Security Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the information contained in the Security
Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Bank to provide an up-to-date listing or to convert the information into written form.
45340121.1 -4-EXHIBIT A
The Bank will not release or disclose the contents of the Security Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and
· prior to the release or disclosure of the contents of the Security Register, the Bank will notify the
Issuer so that the Issuer may contest the court order or such release or disclosure of the
contents of the Security Register.
Section 4.05 Return of Cancelled Certificates. The Bank will, at such reasonable
intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for
which other Securities have been issued, or which have been paid.
Section 4.06 Mutilated, Destroyed. Lost or Stolen Securities. The Issuer hereby
instructs the Bank, subject to the provisions of Section 23 of the Bond Resolution, to deliver and
issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as
long as the same does not result in an overissuance. ·
In case any Security shall be mutilated, or destroyed, lost or stole·n, the Bank may
execute and deliver a replacement Security of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or
stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof
with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such
Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of
indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All
expenses and charges associated with such indemnity and with the preparation, execution and·
delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or
destroyed, lost or stolen.
Section 4.07 Transaction Information to Issuer. The Bank will, within a reasonable
time after receipt of written request from the Issuer, furnish the Issuer information as to the
Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or
exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in
exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to
Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01 Duties of Bank. The Bank undertakes to perform the duties set forth
herein and agrees to use reasonable care in the performance thereof.
Section 5.02 Reliance on Documents, Etc. (a) The Bank may conclusively rely, as
to the truth of the statements and correctness of the opinions expressed therein, on certificates
or opinions furnished to the Bank.
(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
45340121.1 -5-EXHIBIT A
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.
{d) The Bank may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Bank need not examine the ownership of any
Securities, but is protected in acting upon receipt of Securities containing an endorsement or
instruction of transfer or power of transfer which appears on its face to be signed by the Holder
or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts
or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note, security, or other paper or document supplied by
Issuer.
(e) The Bank may consult with counsel, and the written advice of such counsel or
any opinion of counsel shall be full and complete authorization and protection with respect to
any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
{f) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03 Recitals of Issuer. The recitals contained herein with respect to the
Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank
assumes no responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5.04 May Hold Securities. The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05 Moneys Held by Bank -Paying Agent Account/Collateralization. Money
deposited by the Issuer with the Bank of the principal (or Redemption Price, if applicable) of or
interest on any Securities shall be segregated from other funds of the Bank and the Issuer and
shall be held in trust for the benefit of the Holders of such Securities.
AU money deposited with the Bank hereunder shall be secured in the manner and to the
fullest extent required by law for the security of funds of the Issuer.
Amounts held by the Bank which represent principal of and interest on the Securities
remaining unclaimed by the owner after the expiration of three years from the date such
amounts have become due and payable shall be 'reported and disposed of by the Bank in
accordance with the provisions of Texas law including, to the extent applicable, Title 6 of the
Texas Property Code, as amended. The Bank shall have no liability by virtue of actions taken in
compliance with this provision.
The Bank is not obligated to pay interest on any money received by it hereunder.
45340121.1 -6-EXHIBIT A
This Agreement relates solely to money deposited for the purposes described herein,
and the parties agree that the Bank may serve as depository for other funds of the Issuer, act as
trustee under indentures authorizing other bond transactions of the Issuer, or act in any other
capacity not in conflict with its duties hereunder.
Section 5.06 Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred
without negligence or bad faith on its part, arising out of or in connection with its acceptance or
administration of its duties hereunder, including the cost and expense against any claim or
liability in connection with the exercise or performance of any of its powers or duties under this
Agreement.
Section 5.07 lnterpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the State and County where the
administrative offices of the Issuer is located, and agree that service of process by certified or
registered mail, return receipt requested, to the address referred to in Section 6.03 of this
Agreement shall constitute adequate service. The Issuer and the Bank further agree that the
Bank has the right to file a Bill of lnterpleader in any court of competent jurisdiction in the State
of Texas to determine the rights of any Person claiming any interest herein.
Section 5.08 DT Services. It is hereby represented and warranted that, in the event
the Securities are otherwise qualified and accepted for "Depository Trust Company" services or
equivalent depository trust services by other organizations, the Bank has the capability and, to
the extent within its control, will comply with the "Operational Arrangements", which establishes
requirements for securities to be eligible for such type depository trust services, including, but
not limited to, requirements for the timeliness of payments and funds availability, transfer
turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01 Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
Section 6.02 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 on page 9.
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.
45340121.1 -7-EXHIBIT A
Section 6.06 Severability. In case any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 6.07 Benefits of Agreement. Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
Section 6.08 Entire Agreement. This Agreement and the Bond Resolution 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 Resolution, the
Bond Resolution shall govern.
Section 6.09 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and aH of which shall constitute one
and the same Agreement.
Section 6.10 Termination. This Agreement will terminate (i) on the date of final
payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be
earlier terminated by either party upon sixty (60) days written notice; provided, however, an
early termination of this Agreement by either party shall not be effective until (a) a successor
Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and
(b) notice given to the Holders of the Securities of the appointment of a successor Paying
Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an
early termination of this Agreement shall not occur at any time which would disrupt, delay or
otherwise adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by
the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force
and effect following the termination of this Agreement.
Section 6.11 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
45340121.1 -8-EXHIBIT A
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written. ·
[SEAL]
Attest:
Title:
(CITY SEAL)
Attest:
City Secretary
45340121.1
JPMORGAN CHASE BANK, Dallas, Texas, .
BY: ---------------Tit I e:
Address: 2001 Bryan Street, 10th Floor
Dallas, Texas 75201
CITY OF LUBBOCK, TEXAS
BY: --------------Mayor
Address: P. 0. Box 2000
Lubbock, Texas 79457
-9-. EXHIBIT A
Ordinance No. 2003-00084
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 37 of this Ordinance.
Annual Financial Statements and Operating Data
EXHIBITB
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 8A through 25.
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.
45336859.1