Loading...
HomeMy WebLinkAboutORD 90-34 Al ORDINANCE AUTHORIZING THE ISSUANCE OF $5,000,000 CITY OF BEAUMONT, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1990; LEVYING TAXES TO PROVIDE FOR PAYMENT THEREOF; AND CONTAINING OTHER PROVISIONS RELATED THERETO THE STATE OF TEXAS § COUNTY OF JEFFERSON § CITY OF BEAUMONT § WHEREAS, the City Council of the CITY OF BEAUMONT, TEXAS (the "City") , authorized the publication of a notice of intention to issue certificates of obligation to the effect that the City Council would meet on June 19, 1990, to adopt an ordinance and take such other action as may be deemed necessary to authorize the issuance of certificates of obligation payable from the City' s ad valorem taxes and a pledge of certain revenues of the City's waterworks and sewer system, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of authorized street improvements within the City and the cost of professional services incurred in connection therewith; and WHEREAS, such notice was published at the times and in the manner required by the Constitution and the laws of the State of Texas and the United States of America, respectively, particularly Sections 271.041 , et seq. , V.T.C.A. Local Government Code, as amended; and WHEREAS, no petition or other request has been filed with or presented to any official of the City requesting that any of the proceedings authorizing such certificates of obligation be submitted to a referendum or other election; THEREFORE, BE IT ORDAINED BY THE CITY OF BEAUMONT: 1 . Effect of Preamble. The matters and facts contained in the preamble to this Ordinance are hereby found to be true and correct. 2 . Definitions. Throughout this Ordinance, the following terms and expressions as used herein shall have the meanings set forth below: The term "Business Day" shall mean any day which is not a Saturday, Sunday, a legal holiday, or a day on which the Registrar is authorized by law or executive order to close. �; --3q 6 - o- 90 The term "Certificates" shall mean the Combined Tax and Revenue Certificates of Obligation, Series 1990, authorized in this Ordinance, unless the context clearly indicates otherwise. The term "City" shall mean the City of Beaumont, Texas. The term "Code" shall mean the Internal Revenue Code of 1986, as amended. The term "Construction Fund" shall mean the construction fund established by the City pursuant to Section 20 of this Ordinance. The term "Interest and Sinking Fund" shall mean the interest and sinking fund established by the City pursuant to Section 18 of this Ordinance. The term "Interest Payment Date" , when used in connection with any Certificate, shall mean March 1, 1991, and each September 1 and March 1 thereafter until maturity of such Certificate. The term "Net Revenues" shall mean the revenues of the System remaining after deduction of the reasonable and necessary expenses of operation and maintenance of the System. The term "Ordinance" as used herein and in the Certificates shall mean this Ordinance authorizing the Certificates. The term "Owner" shall mean any person who shall be the registered owner of any outstanding Certificates. The term "Paying Agent" shall mean the Registrar. The term "Record Date" shall mean, for any Interest Payment Date, the 15th calendar day of the month next preceding such Interest Payment Date. The term "Register" shall mean the books of registration kept by the Registrar in which are maintained the names and addresses of and the principal amounts registered to each Owner. The term "Registrar" shall mean Ameritrust Texas National Association, Houston, Texas, and its successors in that capacity. -2- The term "System" shall mean the City's waterworks and sewer system. 3 . Authorization. The Certificates shall be issued in fully registered form, without coupons, in the total authorized aggregate amount of Five Million Dollars ($5, 000, 000) for the purpose of evidencing the indebtedness of the City for all or any part of the cost of authorized street improvements within the City and the cost of professional services incurred in connection therewith. 4. Designation, Date, and Interest Payment Dates. The Certificates shall be designated as the "CITY OF BEAUMONT, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1990" , and shall be dated July 1 , 1990. The Certificates shall bear interest from the later of July 1, 1990, or the most recent Interest Payment Date to which interest has been paid or duly provided for, calculated on the basis of a 360-day year of twelve 30-day months, interest payable on March 1, 1991, and semiannually thereafter on September 1 and March 1 of each year until maturity. 5 . Initial Certificates, Numbers and Denominations. The Certificates shall be issued bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in the following schedule, and may be transferred and exchanged as set out in this Ordinance. The Certificates shall mature on March 1 in each of the years and in the amounts set out in such schedule. Certificates delivered upon transfer of or in exchange for other Certificates shall be numbered in order of their authentication by the Registrar, shall be in the denomination of $5,000 or integral multiples thereof, and shall mature on the same date and bear interest at the same rate as the Certificate or Certificates in lieu of which they are delivered. Certificate Principal Interest Number Year Amount Rate R-1 1992 $410,000 8.00% R-2 1993 $445,000 8.00% R-3 1994 $475,000 8.00% R-4 1995 $510,000 7.60% R-5 1996 $545,000 6.50% R-6 1997 $585,000 6 .60% R-7 1998 $630,000 6.60% R-8 1999 $675,000 6.60% R-9 2000 $725,000 6 .60% -3- 6 . Execution of Certificates; Seal. The Certificates shall be signed by the Mayor of the City and countersigned by the City Clerk of the City, by their manual, lithographed, or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Certificates shall have the same effect as if each of the Certificates had been signed manually and in person by each of said officers, and such facsimile seal on the Certificates shall have the same effect as if the official seal of the City had been manually impressed upon each of the Certificates. If any officer of the City whose manual or facsimile signature shall appear on the Certificates shall cease to be such officer before the authentication of such Certificates or before the delivery of such Certificates, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in such office. 7. Approval by Attorney General; Registration by Comptroller. The Certificates to be initially issued shall be delivered to the Attorney General of the State of Texas for approval and shall be registered by the Comptroller of ' Public Accounts of the State of Texas. The manually executed registration certificate of the Comptroller of Public Accounts substantially in the form provided in Section 16 of this Ordinance shall be attached or affixed to the Certificates to be initially issued. 8. Authentication. Except for the Certificates to be initially issued, which need not be authenticated by the Registrar, only Certificates which bear thereon a certificate of authentication, substantially in the form provided in Section 16 of this Ordinance, manually executed by an authorized representative of the Registrar, shall be entitled to the benefits of this Ordinance or shall be valid or obligatory for any purpose. Such duly executed certificate of authentication shall be conclusive evidence that the Certificates so authenticated were delivered by the Registrar hereunder. 9. Payment of Principal and Interest. The Registrar is hereby appointed as the paying agent for the Certificates. The principal of the Certificates shall be payable, without exchange or collection charges, in any coin or currency of the United States of America which, on the date of payment, is legal tender for the payment of debts due the United States of America, upon their presentation and surrender as they become due and payable, at the principal corporate -4- trust office of the Registrar. The interest on each Certificate shall be payable by check payable on the Interest Payment Date, mailed by the Registrar on or before each Interest Payment Date to the Owner of record as of the Record Date, to the address of such Owner as shown on the Register or, at the request of an Owner, and at the Owner' s risk and expense, in such other manner as may be acceptable to the Owner and the Registrar. Any accrued interest payable at maturity shall be paid upon presentation and surrender of the Certificate to which such interest appertains. If the date for payment of the principal of or interest on any Certificate is not a Business Day, then the date for such payment shall be the next succeeding Business Day, and payment on such date shall have the same force and effect as if made on the original date payment was due. 10 . Successor Registrars. The City covenants that at all times while any Certificates are outstanding it will provide a bank, trust company, financial institution or other entity duly qualified and . duly authorized to act as Registrar for the Certificates. The City reserves the right to change the Registrar on not less than 60 days' written notice to the Registrar, so long as any such notice is effective not less than 60 days prior to the next succeeding principal or interest payment date on the Certificates. Promptly upon the appointment of any successor Registrar, the previous Registrar shall deliver the Register or copies thereof to the new Registrar, and the new Registrar shall notify each Owner, by United States mail, first class postage prepaid, of such change and of the address of the new Registrar. Each Registrar hereunder, by acting in that capacity, shall be deemed to have agreed to the provisions of this Section. 11. Special Record Date. If interest on any Certificate is not paid on any Interest Payment Date and continues unpaid for 30 days thereafter, the Registrar shall establish a new record date for the payment of such interest, to be known as a Special Record Date. The Registrar shall establish a Special Record Date when funds to make such interest payment are received from or on behalf of the City. Such Special Record Date shall be 15 days prior to the date fixed for payment of such past due interest, and notice of the date of payment and the Special Record Date shall be sent by United States mail, first class, postage prepaid, not later than 5 days prior to the Special Record Date, to each affected Owner of record -5- as of the close of business on the day prior to the mailing of such notice. 12. Ownership; Unclaimed Principal and Interest. The City, the Registrar and any other person may treat the person in whose name any Certificate is registered as the absolute Owner of such Certificate for the purpose of making payment of principal or interest on such Certificate, and for all other purposes, whether or not such Certificate is overdue, and neither the City nor the Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the person deemed to be the Owner of any Certificate in accordance with this Section 12 shall be valid and effectual and shall discharge the liability of the City and the Registrar upon such Certificate to the extent of the sums paid. Amounts held by the Registrar which represent principal of and interest on the Certificates remaining unclaimed by the Owner after the expiration of 3 years from the date such amounts have become due and payable shall be reported and disposed of by the Registrar in accordance with the provisions of Texas law, including to the extent applicable, Title 6 of the Texas Property Code, as amended. 13 . Registration, Transfer, and Exchange. So long as any Certificates remain outstanding, the Registrar shall keep the Register at its principal corporate trust office and, subject to such reasonable regulations as it may prescribe, the Registrar shall provide for the registration and transfer of Certificates in accordance with the terms of this Ordinance. Each Certificate shall be transferable only upon the presentation and surrender thereof at the principal corporate trust office of the Registrar, duly endorsed for transfer, or accompanied by an assignment duly executed by the registered Owner or his authorized representative in form satisfactory to the Registrar. Upon due presentation of any Certificate for transfer, the Registrar shall authenticate the deliver in exchange therefor, within 3 Business Days after such presentation, a new Certificate or Certificates, registered in the name of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Certificate or Certificates so presented. All Certificates shall be exchangeable upon presentation and surrender thereof at the principal -6- corporate trust office of the Registrar for a Certificate or Certificates of the same maturity and interest rate in any authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of the Certificate or Certificates presented for exchange. The Registrar shall be and is hereby authorized to authenticate and deliver exchange Certificates in accordance with the provisions of this Section 13. Each Certificate delivered in accordance with this Section 13 shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which such Certificate is delivered. The City or the Registrar may require the Owner of any Certificate to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange of such Certificate. Any fee or charge of the Registrar for such transfer or exchange shall be paid by the City. 14. Mutilated, Lost, or Stolen Certificates. Upon the presentation and surrender to the Registrar of a mutilated Certificate, the Registrar shall authenticate and deliver in exchange therefor a replacement Certificate of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding. If any Certificate is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Certificate has been acquired by a bona fide purchaser, shall execute and the Registrar shall authenticate and deliver a replacement Certificate of like amount, bearing a number not contemporaneously outstanding. The City or the Registrar may require the Owner of a mutilated Certificate to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith and any other associated expenses, including the fees and expenses of the Registrar. The City or the Registrar may require the Owner of a lost, apparently destroyed or wrongfully taken Certificate, before any replacement Certificate is issued, to: (1) furnish to the City and the Registrar satisfactory evidence of the ownership of and the circumstances of the loss, destruction or theft of such Certificate; -7- (2) furnish such security or indemnity as may be required by the Registrar and the City to save them harmless; (3) pay all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Registrar and any tax or other governmental charge that may be imposed; and (4) meet any other reasonable requirements of the City and the Registrar. If, after the delivery of such replacement Certificate, a bona fide purchaser of the original Certificate in lieu of which such replacement Certificate was issued presents for payment such original Certificate, the City and the Registrar shall be entitled to recover such replacement Certificate from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Registrar in connection therewith. If any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has become or is about to become due and payable, the City in its discretion may, instead of issuing a replacement Certificate, authorize the Registrar to pay such Certificate. Each replacement Certificate delivered in accordance with this Section 14 shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which such replacement Certificate is delivered. 15. Cancellation of Certificates. All Certificates paid in accordance with this Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates are authenticated and delivered in accordance herewith, shall be cancelled and destroyed upon the making of proper records regarding such payment. The Registrar shall furnish the City with appropriate certificates of destruction of such Certificates. 16. Forms. The form of the Certificates, including the form of the Registrar's Authentication Certificate, the form of Assignment, and the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas -8- which shall be attached or affixed to the Certificates initially issued shall be, respectively, substantially as follows, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance: (Face of Certificate) UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF JEFFERSON NUMBER DENOMINATION R- $ REGISTERED REGISTERED CITY OF BEAUMONT, TEXAS Combination Tax and Revenue Certificate of Obligation, Series 1990 INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS THE CITY OF BEAUMONT, TEXAS (the "City") , promises to pay to the Registered Owner identified above, or registered assigns, on the date specified above, upon presentation and surrender of this certificate at the principal corporate trust office of Ameritrust Texas National Association, Houston, Texas, (the "Registrar") , the principal amount identified above, payable in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due the United States of America, and to pay interest thereon at the rate shown above, calculated on the basis of a 360-day year of twelve 30-day months, from the later of July 1 , 1990, or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this Certificate is payable by check on March 1 , 1991, and semiannually thereafter on each September 1 and March 1, mailed to the registered owner as shown on the books of registration kept by the Registrar as of the 15th day of the month next preceding each interest payment date or, at the request and at the risk and expense of the registered owner, in such other manner as may be acceptable to the registered owner and the Registrar. -9- REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS CERTIFICATE SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE. IN WITNESS WHEREOF, this Certificate has been signed with the manual or facsimile signature of the Mayor of the City and countersigned with the manual or facsimile signature of the City Clerk of the City, and the official seal of the City has been duly impressed, or placed in facsimile, on this Certificate. (AUTHENTICATION CERTIFICATE) (SEAL) CITY OF BEAUMONT, TEXAS Mayor City Clerk (Back Panel of Certificate) THIS CERTIFICATE is one of a duly authorized issue of Certificates of Obligation, aggregating $5,000,000 (the "Certificates") , issued in accordance with the Constitution and the laws of the State of Texas, particularly Sections 271.041, et seq. , V.T.C.A. Local Government Code, as amended, for the purpose of evidencing the indebtedness of the City for all or any part of the cost of authorized street improvements within the City and the cost of professional services incurred in connection therewith, pursuant to an ordinance duly adopted by the City Council of the City (the "Ordinance") , which Ordinance is of record in the official minutes of the City Council. THIS CERTIFICATE is transferable only upon presentation and surrender at the principal corporate trust office of the Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his authorized representative, subject to the terms and conditions of the Ordinance. THE CERTIFICATES are exchangeable at the principal corporate trust office of the Registrar for Certificates in the principal amount of $5, 000 or any integral multiple -10- thereof, subject to the terms and conditions of the Ordinance. THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordinance unless this Certificate either (i) is registered by the Comptroller of Public Accounts of the State of Texas by registration certificate attached or affixed hereto or (ii) is authenticated by the Registrar by due execution of the authentication certificate endorsed hereon. THE REGISTERED OWNER of this Certificate, by acceptance hereof, acknowledges and agrees to be bound by all the terms and conditions of the Ordinance. THE CITY has covenanted in the Ordinance that it will at all times provide a legally qualified registrar for the Certificates and will cause notice of any change of registrar to be mailed to each registered owner. IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and validly issued and delivered; that all acts, conditions and things required or ' proper to be performed, to exist and to be done precedent to or in the issuance and delivery of this Certificate have been performed, exist and have been done in accordance with law; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such principal matures, have been levied and ordered to be levied, within the limits prescribed by law, against all taxable property in the City, and have been pledged irrevocably for such payment. IT IS FURTHER certified, recited and represented that the net revenues (the "Net Revenues") to be derived from the operation of the City's waterworks and sewer system (the "System") , in an amount not to exceed Ten Thousand Dollars ($10,000.00) per annum, are also pledged to the payment of the principal of and interest on this Certificate and the series of Certificates of which it is a part to the extent that taxes may ever be insufficient or unavailable for said purpose, all as set forth in the Ordinance to which reference is made for all particulars; provided, however, that such pledge of Net Revenues is and shall be junior and subordinate in all respects to the pledge of such Net Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of such -11- Net Revenues to the payment of this Certificate and the series of Certificates of which it is a part, and the City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind payable in whole or in part from the Net Revenues of the System, secured by a pledge of the Net Revenues of the System that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing this Certificate and the series of Certificates of which it is a part. Form of Registration Certificate of Comptroller of Public Accounts COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this certificate has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this certificate has been registered by the Comptroller of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL this day of 1990. Comptroller of Public Accounts (Seal) of the State of Texas Form of Registrar's Authentication Certificate AUTHENTICATION CERTIFICATE It is hereby certified that this Certificate has been delivered pursuant to the Ordinance described in the text of this Certificate, in exchange for or in replacement of a Certificate, Certificates or a portion of a Certificate or Certificates of a Series which was originally approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. -12- AMERITRUST TEXAS, NATIONAL ASSOCIATION BY= Authorized Signature Date of Authentication Form of Assignment ASSIGNMENT For value received, the undersigned hereby sells, assigns, and transfers unto (Please print or type name, address, and zip code of Transferee) (Please insert Social Security or Taxpayer Identification Number of Transferee) the within certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer said certificate on the books kept or registration thereof, with full power of substitution in the premises. DATED: Signature Guaranteed: Registered Owner NOTICE: The signature above must correspond to the name of the registered NOTICE: Signature must be owner as shown on the face guaranteed by a member firm of this certificate in of the New York Stock Exchange every particular, without or a commercial bank or trust any alteration, enlargement company. or change whatsoever. Statement of Insurance Financial Guaranty Insurance Company ("Financial Guaranty") has issued a policy containing the following provisions with respect to the City of Beaumont Combination Tax and Revenue Certificates of Obligation, Series 1990 (the "Certificates") , such policy being on file at the principal office of the Paying Agent/Registrar, as paying agent (the "Paying Agent") : Ameritrust Texas National Association, 333 Clay Street, Houston, TX 77253. -13- Financial Guaranty hereby unconditionally and irrevocably agrees to pay for disbursement to the Owners that portion of the principal of and interest on the Certificates which is then due for payment and which the issuer of the Certificates (the "Issuer") shall have failed to provide. Due for payment means, with respect to the principal, the stated maturity date thereof, or the date on which the same shall have been duly called for mandatory sinking fund redemption, but not any earlier date on which the payment of principal of the Certificates is due by reason of acceleration, and with respect to interest, the stated date for payment of such interest. Upon receipt of telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail, from an Owner or the Paying Agent to Financial Guaranty that the required payment of principal or interest has not been made by the Issuer to the Paying Agent, Financial Guaranty on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with Citibank, N.A. , or its successor as its agent (the "Fiscal Agent") , sufficient to make the portion of such payment not paid by the Issuer. Upon presentation to the Fiscal Agent of evidence satisfactory to it of the Owner' s right to receive such payment and any appropriate instruments of assignment required to vest all of such Owner' s right to such payment in Financial Guaranty, the Fiscal Agent will disburse such amount to the Owner. As used herein the term "Owner" means the person other than the Issuer who at the time of nonpayment of a Certificate is entitled under the terms of such Certificate to payment thereof. The policy is non-cancellable for any reason. FINANCIAL GUARANTY INSURANCE COMPANY 17. Legal Opinion; Cusip. The approving opinion of Orgain, Bell & Tucker, Beaumont, Texas, and CUSIP Numbers may be printed on the Certificates, but errors or omissions in the printing of such opinion or such numbers shall have no effect on the validity of the Certificates. 18. Interest and Sinking Fund; Tax Levy. The proceeds from all taxes levied, assessed and collected for and on -14- account of the Certificates authorized by this Ordinance are hereby irrevocably pledged and shall be deposited, as collected, in a special fund to be designated "City of Beaumont, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1990, Interest and Sinking Fund" . While the Certificates or any part of the principal thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there shall be annually levied, assessed and collected in due time, form and manner within the limits prescribed by law, and at the same time other City taxes are levied, assessed and collected, in each year, beginning with the current year, a continuing direct annual ad valorem tax upon all taxable property in the City sufficient to pay the current interest on the Certificates as the same becomes due, and to provide and maintain a sinking fund adequate to pay the principal of the Certificates as such principal matures but in each year never less than 2% of the original principal amount of the Certificates, full allowance being made for delinquencies and costs of collection, and said taxes when collected shall be applied to the payment of the interest on and principal of the Certificates and to no other purpose. In addition, interest accrued from the date of the Certificates until their delivery, and premium, if any, is to be deposited in such fund. To pay the interest coming due on the Certificates on March 1 , 1991, there is hereby appropriated from current funds, which are hereby certified to be on hand and available for such purpose, an amount sufficient to pay such interest, and such amount shall be used for no other purpose. 19. Pledge of Revenues. The Net Revenues of the System, in an amount not to exceed $10,000 per annum, are hereby irrevocably pledged to the payment of the principal of and interest on the Certificates as the same come due, to the extent that the taxes described in Section 18 of this Ordinance may ever be insufficient or unavailable for said purpose; provided, however, that such pledge of Net Revenues is and shall be junior and subordinate in all respects to the pledge of the Net Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge the Net Revenues to the payment of the Certificates; and the City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind payable in whole or in part from the Net Revenues of the System that may be prior and superior in -15- right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing this series of Certificates. 20. Construction Fund. There is hereby created and there shall be established on the books of the City a separate account to be entitled the "City of Beaumont, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1990, Construction Fund" . Immediately after the sale and delivery of the Certificates, that portion of the proceeds of the Certificates to be used for paying all or any part of the cost of authorized street improvements within the City, the cost of p-rofessional services incurred in connection therewith, and the issuance cost of the Certificates shall be deposited into the Construction Fund. Upon completion of such street improvements, the monies, if any, remaining in the Construction Fund shall be transferred and deposited by the City into the Interest and Sinking Fund. 21 . Further Proceedings. After the Certificates to be initially issued shall have been executed, it shall be the duty of the Mayor of the City to deliver the Certificates to be initially issued and all pertinent records and proceedings to the Attorney General of the State of Texas for examination and approval. After the Certificates to be initially issued shall have been approved by the Attorney General of the State of Texas, the Certificates shall be delivered to the Comptroller of Public Accounts of the State of Texas for registration. Upon registration of the Certificates to be initially issued, the Comptroller of Public Accounts (or a deputy lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller' s Registration Certificate prescribed herein to be affixed or attached to the Certificates to be initially issued, and the seal of the Comptroller shall be impressed, or placed in facsimile, thereon. 22. Sale. The sale of the Certificates to NCNB Texas National Bank, Texas Commerce Bank National Association, Harris Trust & Savings Bank, Masterson & Co. , Finser Investment Corp. , and Hibernia National Bank (collectively the "Purchaser") , at the price of par plus accrued interest on the Certificates to date of delivery, is hereby authorized, approved, ratified and confirmed, subject to the unqualified approving opinion as to the legality of the Certificates of the Attorney General of the State of Texas and of Orgain, Bell & Tucker, Beaumont, Texas, Bond Counsel. The Certificates initially delivered shall be registered in the name of the Purchaser or its designee. -16- 23. Books and Records. So long as any of the Certificates are outstanding, the City covenants and agrees that it will keep proper books of record and account in which full, true and correct entries will be made of all dealings, activities and transactions relating to the Certificates and the funds created pursuant to this Ordinance, and all books, documents and vouchers relating thereto shall at all reasonable times be made available for inspection upon request of any Owner. 24. Tax Exemption. (a) General Tax Covenant. The City intends that the interest on the Certificates shall be excludable from gross income for purposes of federal income taxation pursuant to Sections 103 and 141 through 150 of the Code, and applicable regulations. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted, respectively, would cause the interest on the Certificates to be includable in gross income, as defined in Section 61 of the Code, of the holders thereof for purposes of federal income taxation. In particular, the City covenants and agrees to comply with each requirement of this Section 24; provided, however, that the City shall not be required to comply with any particular requirement of this Section 24 if the City has received an opinion of nationally recognized bond counsel (a "Counsel's Opinion") that such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Certificates or if the City has received a Counsel 's Opinion to the effect that compliance with some other requirement set forth in this Section 24 will satisfy the applicable requirements of the Code, in which case compliance with such other requirement specified in such Counsel's Opinion shall constitute compliance with the corresponding requirement specified in this Section 24. (b) Use of Proceeds. The City covenants and agrees that its use of the Net Proceeds of the Certificates (as hereinafter defined) will at all times satisfy the following requirements: (i) The City will limit the amount of original or investment proceeds of the Certificates to be used (other than use as a member of the general public) in the trade or business of any person other than a governmental unit to an amount aggregating no more than 10% of the Net Proceeds of the Certificates ( "private-use proceeds") . For purposes of this Section, the term "person" includes any individual, -17- corporation, partnership, unincorporated association, or any other entity capable of carrying on a trade or business; and the term "trade or business" means, with respect to any natural person, any activity regularly carried on for profit and, with respect to persons other than natural persons, any activity other than an activity carried on by a governmental unit. Any use of proceeds of the Certificates in any manner contrary to the guidelines set forth in Revenue Procedures 82-14, 1982-1 C.B. 459, and 82-15, 1982-1 C.B. 460, including any revisions or amendments thereto, shall constitute the use of such proceeds in the trade or business of one who is not a governmental unit; (ii) The City will not permit more than 5% of the Net Proceeds of the Certificates to be used in the trade or business of any person other than a governmental unit if such use is unrelated to the governmental purpose of the Certificates. Further, the amount of private-use proceeds of the Certificates in excess of 5% of the Net Proceeds of the Certificates ( "excess private-use proceeds") will not exceed the proceeds of the Certificates expended for the governmental purpose of the Certificates to which such excess private-use proceeds relate; (iii) The City will not permit an amount of proceeds of the Certificates exceeding the lesser of (a) $5,000, 000 or (b) 5% of the Net Proceeds of the Certificates to be used, directly or indirectly, to finance loans to persons other than governmental unit. When used in this Section 24, the term Net Proceeds of the Certificates shall mean the proceeds from the sale of the Certificates, including investment earnings on such proceeds, less accrued interest. (c) No Federal Guaranty. The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that, if taken or omitted, respectively, would cause the Certificates to be "federally guaranteed" within the meaning of Section 149 (b) of the Code and applicable regulations thereunder, except as permitted by Section 149 (b) (3) of the Code and such regulations. (d) No-Arbitrage Covenant. The City shall certify, through an authorized officer, employee or agent, that based upon all facts and estimates known or reasonably expected to be in existence on the date the Certificates are delivered, -18- . the City will reasonably expect that the proceeds of the Certificates will not be used in a manner that would cause the Certificates to be "arbitrage bonds" within the meaning of Section 148 (a) of the Code and applicable regulations thereunder. Moreover, the City covenants and agrees that it will make such use of the proceeds of the Certificates, including interest or other investment income derived from Certificate proceeds, regulate investments of proceeds of the Certificates, and take such other and further action as may be required so that the Certificates will not be "arbitrage bonds" within the meaning of Section 148 (a) of the Code and applicable regulations thereunder. (e) Arbitrage Rebate. The City will take all necessary steps to comply with the requirement that certain amounts earned by the City on the investment of the "gross proceeds" of the Certificates (within the meaning of Section 148(f) (6) (B) of the Code) , be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Certificates as may be required to calculate the amount earned on the investment of the gross proceeds of the Certificates separately from records of amounts on deposit in the funds and accounts of the City allocable to other bond issues of the City or moneys which do not represent gross proceeds of any bonds of the City, (ii) calculate at such times as are required by applicable regulations, the amount earned from the investment of the gross proceeds of the Certificates which is required to be rebated to the federal government, and (iii) pay, not less often than every 5th anniversary date of the delivery of the Certificates, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Certificates that might result in a "prohibited payment" within the meaning of Temp. Treas. Reg. S 1 .103-15AT. (f) Information Reporting. The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Certificates are issued, an information statement concerning the Certificates, all under and in accordance with Section 149 (e) of the Code and applicable regulations thereunder. -19- 25. Qualified Tax-Exempt Obligations. The City hereby designates the Certificates as "qualified tax-exempt obligations" for purposes of Section 265 (b) of the Code. In connection therewith, the City represents that (a) the aggregate amount of tax-exempt obligations issued by the City during calendar year 1990, including the Certificates , which have been designated as "qualified tax-exempt obligations" under Section 265 (b) (3) of the Code, does not exceed $10,000, 000, and (b) the reasonably anticipated amount of tax-exempt obligations which will be issued by the City during calendar year 1990, including the Certificates, will not exceed $10, 000,000 . For purposes of this Section 25, the term "tax-exempt obligation" does not include "private activity bonds" within the meaning of Section 141 of the Code, other than "qualified 501 (c) (3) bonds" within the meaning of Section 145 of the Code. In addition, for purposes of this Section 25, the City includes all governmental units which are "subordinate entities" of the City, within the meaning of Section 265 (b) of the Code. 26. Official Statement. The City Council of the City ratifies and confirms its prior approval of the form and content of the Official Statement prepared in the initial offering and sale of the Certificates. The use of such Official Statement in the reoffering of the Certificates by the Purchaser is hereby approved and authorized. The appropriate officials of the City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Certificates. 27. Related Matters. To satisfy in a timely manner all of the City' s obligations under this Ordinance, the Mayor, the Mayor Pro Tem, the City Clerk, or Assistant City Clerk, and all other appropriate officers and agents of the City are hereby authorized and directed to take all other actions that are reasonably necessary to provide for issuance of the Certificates, including, without limitation, executing and delivering on behalf of the City all certificates, consents, receipts , requests and other documents as may be reasonably necessary to satisfy the City' s obligations under this Ordinance and to direct the application of funds of the City consistent with the provisions hereof. 28. Use of Proceeds. Proceeds from the sale of the Certificates, except for accrued interest which shall be deposited to the Interest and Sinking Fund for the Certificates, shall be used to pay the cost of authorized -20- street improvements within the City and the cost of professional services incurred in connection therewith, all as more fully provided in Section 3 of this Ordinance. Proceeds from the sale of the Certificates may also be used to pay premiums for any municipal bond insurance policy purchased in order to provide for payment of the principal of and interest on the Certificates. Investment earnings on proceeds of the Certificates shall also be used to pay the costs and premiums described above. Any remaining investment earnings shall be deposited to the Interest and Sinking Fund for the Certificates . 29. Open Meeting. It is hereby officially found and determined that a sufficient written notice of the date, hour, place and subject of the meeting of the City Council at which this Ordinance was adopted was posted at a place convenient and readily accessible at all times to the general public at the City Hall of the City for the time required by law preceding this meeting, as required by Article 6252-17, Vernon's Revised Texas Civil Statutues Annotated, as amended, and that this meeting has been open to the public as required by law at all times during which this Ordinance and the subject matter thereof has been discussed, considered and formally acted upon. The City Council further ratifies, approves and confirms such written notice and the contents and posting thereof. 30. Paying Agent/Registrar. The form of agreement setting forth the duties of the Registrar is hereby approved, and the appropriate officials of the City are hereby authorized to execute such agreement for and on behalf of the City. 31. No Personal Liability. No recourse shall be had for payment of the principal of or interest on any Certificates or for any claim based thereon, or on this Ordinance against any official or employee of the City or any person executing any Certificates. 32 . Severability. If any Section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. 33. Repealer. All orders, resolutions, and ordinances, and parts thereof inconsistent herewith are hereby repealed to the extent of such inconsistency. -21- 34. Effective Date of Ordinance. This Ordinance shall take effect and be in full force and effect upon and after its final passage. PASSED AND APPROVED this 19th day of June, 1990. r Mayor Pro Tempore and Councilman at Large CITY OF BEAUMONT, TEXAS ATTEST: City C rk CITY OF BEAUMONT, TEXAS `'(S ;AT ry -22-