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HomeMy WebLinkAbout19064 ORD - 10/17/1985THE STATE OF TEXAS COUNTY OF NUECES CITY OF CORPUS CHRISTI On this the 17th day of October, of the City of Corpus Christi, 1985, the City Council Texas convened in Special Meeting, with the following members of said Council present, to -wit: Luther Jones, Dr. Jack Best, Frank Mendez, David Berlanga, Sr., Leo Guerrero, Linda Strong, Joe McComb, Bill Pruet, Mary Pat Slavik, Edward A. Martin, J. Bruce Aycock, Juan Garza, Armando Chapa, with the following absent: constituting a quorum, at Mayor, Mayor Pro -Tem, Councilmembers, City Manager, City Attorney, Director of Finance, %City/ Secretary, L./Nd1 j2ONG which time the following among other business was transacted: Ale. 111,-Z4 presented for the consideration of the Council an ordinance. The ordinance was read by the City Secretary. The Mayor presented to the Council a communica- tion in writing pertaining to said proposed ordinance, as follows: "Corpus Christi, Texas October 17, 1985 "TO THE CITY COUNCIL Corpus Christi, Texas Gentlemen: "The public importance and pressing need for the issuance of general improvement and refunding bonds for the construction of permanent improvements and refunding of the City's General Improvement Bonds and Certificates of Obligation to facilitate further financing for permanent improvements creates an emergency and an imperative public necessity requiring the suspension of rules and Charter provisions requiring ordinances to be considered and voted upon at three regular meetings. I, therefore, request that the City Council pass the proposed ordinance authorizing the issuance of bonds as an emergency measure. You will please consider this request in connection with the ordinance which is to be introduced for passage by the City Council on the subject. "Yours very truly, /s/ Luther Jones Mayor" 19064 ����. • Councilmember Leo Guerrero moved that the resolu- tion be adopted finally. The motion was seconded by Coun- cilmember oun- cilmember Frank Mendez The motion was carried by the following vote: AYES: All present voted Aye, except Council Member Mary Pat Slavik voted nay. NAYS: Council Member Mary Pat Slavik. The Mayor announced that the resolution had been adopted. The resolution is as follows: • ORDINANCE AUTHORIZING AN ESCROW AGREEMENT BETWEEN THE CITY OF CORPUS CHRISTI, TEXAS AND FIRST CITY BANK OF CORPUS CHRISTI, AS ESCROW AGENT, AND OTHER MATTERS PERTAIN- ING THERETO THE STATE OF TEXAS COUNTY OF NUECES CITY OF CORPUS CHRISTI . WHEREAS, the City has outstanding its general improvement bonds and certificates of obligation payable from ad valorem taxes in the aggregate principal amount of $108,375,000 (hereinafter referred to as the "Refunded Obligations"); and WHEREAS, it is the desire of the City and the City is authorized by Article 717k, V.A.T.C.S., as amended, to sell its bonds for the purpose of refunding the Refunded Obliga- tions and to place the proceeds from the sale of such refunding bonds, together with other funds lawfully avail- able therefor, in escrow to be held and applied to the payment of the Refunded Obligations; and WHEREAS, the City by passage of an ordinance con- currently herewith, authorizing the issuance of the City's General Improvement and Refunding Bonds, Series 1985-A (the "Series 1985-A Bonds"), provides that the City will concur- rently with the delivery of the Series 1985-A Bonds to the purchasers thereof deposit part of the proceeds from the sale of the Bonds into a special escrow fund to be held in accordance with a special escrow agreement; and WHEREAS, the Refunded Obligations, with the exception of a portion of the Corpus Christi, Texas General Improve- ment Bonds, Series 1981 (the "Redeemable Refunded Obliga- tions") shall mature in accordance with their scheduled maturities specified in the respective ordinances author- izing their issuance; and WHEREAS, such special escrow agreement provides for payment from funds in the escrow fund of all of the interest coming due on the Refunded Obligations and the principal thereof as it matures with the exception of the said Series • 1981 Bonds remaining outstanding on July 15, 1991, which will be redeemed and paid on such date; and WHEREAS, it is the desire of the City to provide for the special escrow agreement required by the ordinance authorizing the issuance of the Bonds; and WHEREAS, it is desirable that the special escrow agreement provide for the investment of monies so escrowed in direct obligations (including book -entry form) of the United States of America, which must have interest payable and maturities of principal at times to insure the existence of monies, together with other funds lawfully available therefor, sufficient to pay the principal of, and interest on the Refunded Obligations as the same shall come due and mature in accordance with their terms on their respective maturity dates or redemption dates, as the case may be; and WHEREAS, the City has made arrangements to purchase such direct obligations of the United States of America, which have interest payable thereon coming due and matur- ities at times to insure the existence of monies, together with other funds lawfully available therefor, sufficient to pay the principal of, and interest on the Refunded Obliga- tions as the same shall come due and mature in accordance with their terms on such maturity dates and redemption dates; and' WHEREAS, Article 717k, V.A.T.C.S., as amended, provides that when the initial deposit of securities (and any unin- vested money) is made with First City Bank of Corpus Christi, Corpus Christi, Texas (the "Escrow Agent"), such deposit shall constitute the making of firm banking and financial arrangements for the discharge and final payment or redemption of the obligations being refunded, and al- though such obligations being refunded shall continue to be obligations of the Issuer, automacically they shall become obligations of the Issuer secured solely by and payable solely from such deposit and the proceeds therefrom; and upon the making of such deposit, all previous encumbrances • existing in connection with said obligations being refunded (whether in connection with taxes, revenues, real and personal property, or any other source of security or payment) automatically shall terminate and discharged and released, as a matter of encumbrances shall be of no further force be finally law, and said or effect; and although said obligations being so refunded will remain outstanding, they shall be regarded as being outstanding only for the purpose of receiving the funds provided by the Issuer for their payment or redemption, and they shall not be regarded as being outstanding of the Issuer to issue bonds, or tions in connection therewith, or in ascertaining the power in calculating any limita- for any other purpose; and WHEREAS, it is in order for the City Council to author- ize the execution of a special escrow agreement covering the handling of such special escrow fund; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: 1. That the City Manager of the City is hereby author- ized and directed to execute, the City Secretary is author- ized to attest, and the City Attorney is authorized to approve as to form and correctness, on behalf of the City, the City of Corpus Christi, Texas Ad Valorem Tax Bonds Escrow Agreement covering the use of the monies to be deposited with the Escrow Agent therein named for the benefit of the holders of the Refunded Obligations. 2. That the form of such Escrow Agreement which constitutes a part of this authorizing ordinance shall be substantially as follows, to -wit: 2. That all ordinances, resolutions and orders incon- sistent herewith or in conflict herewith are hereby re- scinded to the extent of such inconsistency or conflict. 3. That the fact that the contemplated issuance of such bonds is necessary for the orderly development and growth of the City of Corpus Christi, Texas creates a public emergency and an imperative public necessity requiring the suspension of the Charter Rule providing that no ordinance or resolution shall be passed finally on the date it is introduced and that such ordinance or resolution shall be read at three several meetings of the City Council and the Mayor having declared that such public emergency and imper- ative necessity exist, and having requested that said Charter Rule be suspended and that this ordinance take effect and be in full force and effect' from and after its passage, it is accordingly so ordained. PASSED this 17th day of October, 1985. ATTEST: May City Secretary, Ci'y of Corpus Christi, Texas (SEAL) of Corpus Christi, Texas The foregoing ordinance was approved prior to passage as to form and correctness this the /7.' -day of October, 1985. ty Attorney, ty of Corpus Christi, T as THE STATE OF TEXAS COUNTY OF NUECES CITY OF CORPUS CHRISTI : I, the undersigned, City Secretary of the City of Corpus Christi, Texas, do hereby certify that the above and foregoing is a true, full and correct copy of an ordinance passed by the City Council of the City of Corpus Christi, Texas (and of the minutes pertaining thereto) on the 17th day of October, 1985, authorizing an Escrow Agreement between the City of Corpus Christi and First City Bank of Corpus Christi, which ordinance is duly of record in the minutes of said City Council, and said meeting was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Vernon's Ann. Civ. Stat., art. 6252-17, as amended. EXECUTED UNDER MY HAND AND SEAL of said City this 17th day of October, 1985. (SEAL) City Secretary, Ciof Corpus Christi, Texas • BOND PURCHASE CONTRACT RELATING TO $108,231,312.30 CITY OF CORPUS C111&ISTI, TEXAS GENERAL IMPROVEMENT AND REFUNDING BONDS SERIES 1985-A The Honorable Mayor and Members of the City Council City of Corpus Christi, Texas P.O. Box 9277 Corpus Christi, Texas 78469 October 17, 1985 Dear Mayor and Members of the City Council: The undersigned appearing on the signature page hereof (collectively hereinafter called the "Underwriters") offer to enter into this Purchase Contract with the City of Corpus Christi, Texas (the "City"), subject to the City's accept- ance of this Purchase Contract on or before 12 o'clock noon, C.D.T., on October 17, 1985. If not so accepted, this offer will be subject to withdrawal by the Underwriters upon notice delivered to the City at any time prior to the acceptance hereof by the City. 1. Upon the terms and conditions and upon the basis of the representations set forth herein, the Underwriters hereby agree to purchase from the City, and the City hereby agrees to sell and deliver to the Underwriters, an aggregate of $108,231,312.30 principal amount of the City's General Improvement and Refunding Bonds, Series 1985-A (the "Bonds"). The Bonds shall be issued as Serial Bonds and Capital Appreciation Bonds, shall be dated, shall mature, and shall bear interest from the dates at the rate or rates per annum, and such interest being payable on the dates, all as more fully set forth in the Official Statement (hereinbelow defined) attached as Exhibit A hereto. As set forth in said Exhibit A, the Serial Bonds shall be dated October 15, 1985, with interest payable on November 1, 1986, and semiannually thereafter on May 1 and November 1 in each year. As set forth in Exhibit A, the Capital Appreciation Bonds shall be dated October 15, 1985, but interest shall commence to accrue on said Capital Appreciation Bonds from the date of Closing (as hereinbelow defined), and shall be payable at maturity. The purchase price for the Bonds shall be $107,033,717.83, as provided in Exhibit B hereto, plus • Page 2 accrued interest on the Serial Bonds from their date to the date of Closing. 2. Subject to the other terms and conditions hereof, at 10 o'clock a.m., C.D.T., on November 14, 1985, at First City National Bank of Austin, Austin, Texas, or at such other time, date and place as may be mutually agreed upon by the City and the Underwriters (the "Closing"), the City will deliver fully registered Bonds in definitive form in the denomination of $5,000 each or any integral multiple thereof within a maturity to the Underwriters, duly executed, authenticated and certified, together with the other documents hereinafter mentioned, and the Underwriters will accept such delivery and pay the purchase price of the Bonds as set forth in Paragraph 1 hereof by check or checks payable in immediately available funds to the order of the City. Initial delivery will be accomplished upon issuance of one Bond for each maturity, registered in the name designated by the Underwriters, approved by the Attorney General and registered and manually signed by the Comptroller of Public Accounts. Upon payment for the Bonds at the time of the initial delivery, the Paying Agent/Registrar shall cancel the Bonds, provided registration instructions have been received by the Paying Agent/Registrar, and shall register and deliver the regis- tered definitive Bonds, in any integral multiple of $5,000 for any one maturity, in accordance with instructions received from the Underwriters. It shall be the duty of the Underwriters to furnish to the Paying Agent/Registrar, at least five business days prior to the initial delivery, written instructions on forms which the Underwriters must request and obtain from, and which are provided by, the Paying Agent/Registrar designating the names in which the Bonds are to be registered, the addresses of the registered owners, the maturities, interest rates and denominations. If such forms are not available, written instructions by letter shall be furnished to the Paying Agent/Registrar. The Paying Agent/Registrar will not be required to accept registration instructions after the fifth business day prior to the initial delivery. If such instructions are not received within the provided period, the cancellation of the Bonds and delivery of the registered definitive Bonds will be delayed until such written instructions are received. If the Underwriters shall so request, the definitive Bonds shall be made available to the Underwriters at least one business day before the Closing for purpose of inspection. Delivered to the City herewith 1s a corporate check of the Underwriters, payable to the City, in the amount of $1,000,000, as security for the performance by the Page 3 Underwriters of their obligations to accept delivery of and pay for the Bonds at the Closing in accordance with the pro- visions of this Purchase Contract. If this offer is accept- ed by the City, this check shall be held by the City un- cashed until the Closing. Concurrently with the delivery of and payment for the Bonds at the Closing, such check shall be returned uncashed to the Underwriters. In the event the City does not accept this offer, or upon the City's failure to deliver Bonds at the Closing, or if the conditions to the obligations of the Underwriters contained in this Purchase Contract shall be unsatisfied (unless waived by the Underwriters), or if such obligations shall be terminated for any reason permitted by this Purchase Contract, the check shall be immediately returned to the Underwriters. In the event that the Underwriters fail (other than for a reason permitted under this Purchase Contract) to accept delivery of and pay for the Bonds at the Closing, the check shall be cashed by the City and the City shall retain the amount of the check as full liquidated damages for such failure and for any and all defaults hereunder on the part of the Underwriters, and shall constitute full release and discharge of all claims and rights hereunder of the City against the Underwriters. The Underwriters hereby agree not to stop or cause payment on said check to be stopped unless the City has breached any of the terms of this Purchase Con- tract. 3. The Bonds shall be described in and shall be issued and secured under the provisions of the ordinance authorizing the issuance of the Bonds adopted by the City prior to or currently with the acceptance hereof (the "Ordinance"). The Bonds shall be subject to redemption and shall be payable as provided in the Ordinance. 4. Exhibit A hereto is the Official Statement, including the cover page and Appendices thereto, of the City with respect to the Bonds. The Official Statement, including the cover page and the Appendices thereto, as further amended only in the manner hereinafter provided, is hereinafter called the "Official Statement." The City hereby authorizes the Ordinance, the Official Statement, the Escrow Agreement (hereinbelow defined) and the information therein contained to be used by the Underwriters in connection with the public offering and sale of the Bonds, and the City ratifies and confirms the use by the Underwriters prior to the date hereof of the Preliminary Official Statement in connection with the public offering of the Bonds. Page 4 As set forth in the Official Statement, a portion of the proceeds of the Bonds, together with other funds of the City, will be used at Closing to advance refund and defease certain outstanding bonds of the City as described in the Official Statement. In order to accomplish such advance refunding and defeasance, it will be necessary for the City to subscribe for certain United States Treasury - State and Local Government Series obligations ("SLG's") to be pur- chased at Closing with proceeds of the Bonds and to purchase at or prior to Closing, with other available funds of the City, certain open market federal securities ("Open Market Federal Securities"), the maturing principal and interest of which will be sufficient to provide for the full and timely payment of the City's bonds to be advance refunded and defeased. By the acceptance of this Purchase Contract, the City (i) hereby ratifies and approves the Underwriters' preparation of a plan for the advance refunding and defeas- ance of the bonds to be refunded and the purchase on behalf of the City by Salomon Brothers Inc and Texas Commerce Bank National Association, of the Open Market Federal Securities, (ii) hereby authorizes the Underwriters to file with the Federal Reserve Board the subscriptions for the SLG's to be purchased by the City at Closing, and (iii) hereby authorizes and approves the City's purchase of the Open Market Federal Securities from Salomon Brothers Inc ("Salomon") and Texas Commerce Bank National Association ("TCB") at Closing, as follows: (1) when sold by Salomon and TCB as agent, for an amount equal to their cost, including ordinary and reasonable brokerage commissions and cost of carry to Closing, and/or (2) when sold by Salomon and TCB as principal, for an amount equal to the market value on October 15, 1985, including ordinary and reasonable dealer spread and cost of carry to Closing. 5. It shall be a condition of the obligation of the City to sell and deliver the Bonds to the Underwriters, and of the obligation of the Underwriters to purchase and accept delivery of the Bonds, that the entire principal amount of the Bonds authorized by the Ordinance shall be sold and delivered by the City and accepted and paid for by the Underwriters at the Closing. The Underwriters agree to make a bona fide public offering of all of the Bonds, at not in excess of the initial public offering prices, as set forth on the cover page of the Official Statement, plus interest accrued thereon from the date of the Bonds. The principal amount per $5,000 amount due at maturity for the Capital Appreciation Bonds computed on the basis of the applicable yield to maturity is set forth in Exhibit C hereto. Page 5 6. On the date hereof, the City represents, warrants and agrees as follows: (a) The City is a municipal corporation and a home rule city duly organized and existing under the Constitution and laws of the State of Texas, and a body politic and corporate, and has full legal right, power and authority to enter into this Purchase Contract, to adopt the Ordinance, to sell the Bonds, and to issue and deliver the Bonds to the Underwriters as provided herein and to carry out and consummate all other transactions contemplated by the Ordinance and this Purchase Contract; (b) By official action of the City prior to or concurrently with the acceptance hereof, the City has duly adopted the Ordinance, has duly authorized and approved the execution and delivery of, and the perfor- mance by the City of the obligations contained in the Bonds, the Escrow Agreement and this Purchase Contract and has duly authorized and approved the performance by the City of its obligations contained in the Ordinance, the Escrow Agreement and in this Purchase Contract; (c) The City is not in breach of or in default under any applicable law or administrative regulation of the State of Texas or the United States or any applicable judgment or decree or any loan agreement, note, resolution, agreement or other instrument, except as may be disclosed in the Official Statement, to which the City is a party or, to the best of our actual knowledge, is otherwise subject, which would have a material and adverse effect upon the business or financial condition of the City and the execution and delivery of this Purchase Contract by the City; (d) All approvals, consents and orders of any governmental authority or agency having jurisdiction of any matter which would constitute a condition precedent to the performance by the City of its obligations to sell and deliver the Bonds hereunder have been obtained or will be obtained prior to the Closing; (e) At the time of the City's acceptance hereof and at the time of the Closing, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the state- ments therein, in the light of the circumstances under which they were made, not misleading; • Page 6 (f) Between the date of this Purchase Contract and the Closing, the City will not, without the prior written consent of the Underwriters, issue any addi- tional bonds, notes or other obligations for borrowed money, and the City will not incur any material liabil- ities, direct or contingent, relating to, nor will there be any adverse change of a material nature in the financial position of, the City; (g) Except as described in the Official State- ment, no litigation is pending or, to the knowledge of the City, threatened in any court affecting the corpo- rate existence of the City, the title of its officers to their respective offices, or seeking to restrain or enjoin the issuance or delivery of the Bonds, or the levy or collection of the taxes pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Ordinance, the Escrow Agreement, or this Purchase Contract, or contesting the powers of the City, or any authority of the Bonds, the Ordinance, the Escrow Agreement, or this Purchase Contract or contest- ing in any way the completeness, accuracy or fairness of the Preliminary Official Statement or the Official Statement; (h) The City will cooperate with the Underwriters in arranging for the qualification of the Bonds for sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Underwriters designate and will use its best efforts to continue such qualifications in effect so long as required for distribution of the Bonds; provided, however, that the City will not be required to execute a special or general consent to service of process or qualify to do business in connection with any such qualification in any jurisdiction; (i) The descriptions contained in the Official Statement of the Bonds, and the Ordinance accurately reflect the provisions of such instruments, and the Bonds, when validly executed, authenticated, certified and delivered in accordance with the Ordinance and sold to the Underwriters as provided herein, will be validly issued and outstanding obligations of the City secured in the manner provided in the Ordinance and described in the Official Statement; and (j) If prior to the Closing an event occurs affecting the City which is materially adverse for the • Page 7 purpose for which the Official Statement is to be used and is not disclosed in the Official Statement, the City shall notify the Underwriters, and if in the opinion of the Underwriters such event requires a supplement or amendment to the Official Statement, the City will supplement or amend the Official Statement in a form and in a manner approved by the Underwriters and Bond Counsel to the City. 7. The Underwriters have entered into this Purchase Contract in reliance upon the representations and warranties of the City contained herein and to be contained in the documents and instruments to be delivered at the Closing, and upon the performance of the City and its obligations hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the Underwriters' obligations under this Purchase Contract to purchase and pay for the Bonds shall be subject to the performance by the City of its obligations to be performed hereunder and under such docu- ments and instruments to be delivered at or prior to the Closing, and shall also be subject to the following conditions: (a) The representations and warranties of the City contained herein shall be true, complete and correct in all material respects at the date hereof and on and as of the date of Closing, as if made on the date of Closing; (b) At the time of the Closing, the Ordinance and the Escrow Agreement shall be in full force and effect, and the Ordinance and the Escrow Agreement shall not have been amended, modified or supplemented, and the Official Statement shall not have been amended, mod- ified or supplemented, except as may have been agreed to by the Underwriters; (c) At the time of the Closing, all official action of the City related to the Ordinance shall be in full force and effect and shall not have been amended, modified or supplemented; (d) The City shall not have failed to pay princi- pal or interest when due on any of its outstanding obligations for borrowed money; (e) At or prior to the Closing, the Underwriters shall have received with respect to the Bonds each of the following documents: Page 8 (i) The Official Statement of the City executed on behalf of the City by the City Manager of the City; (ii) The Ordinance certified by the City Secretary under the City's seal as having been duly adopted by the City and as being in effect, with such changes or amendments as may have been agreed to by the Underwriters, together with any other proceedings of the City required by this Purchase Contract, certified as true, accurate and complete by the City Secretary; (iii) An unqualified bond opinion in substan- tially the form attached hereto as Exhibit D, or, if not attached hereto, in form and substance satisfactory to the Underwriters, dated the date of Closing, of McCall, Parkhurst and Horton, Bond Counsel to the City; (iv) A supplemental opinion, dated the date of Closing, of Bond Counsel addressed to the Underwriters to the effect that: (A) the Purchase Contract has been duly authorized, executed and delivered by the City and (assuming due authori- zation by the Underwriters) constitutes a binding and enforceable agreement of the City in accor- dance with its terms; (B) the Escrow Agreement has been duly authorized, executed and delivered by the City and constitutes the binding and enforceable agreement (assuming due authorization by the Escrow Agent) of the City in accordance with its terms; (C) the Bonds are exempted securities within the meaning of Section 3(a)(2) of the Securities Act of 1933, as amended, and it is not necessary in connection with the sale of the Bonds to the public to register the Bonds under the Securities Act of 1933, as amended, or to qualify the Ordinance under the Trust Indenture Act of 1939, as amended; and (D) such firm has reviewed the information contained under the captions "Plan of Financing," "The Bonds," "Tax Exemption," "Tax Accounting Treatment of Original Issue Discount Bonds," and "Tax Accounting Treat- ment of Capital Appreciation Bonds," contained in the Official Statement and such firm is of the opinion that the information relating to the Bonds and the Ordinance contained under such captions in all material respects accurately and fairly reflects the provisions thereof. • Page 9 (v) An unqualified opinion or certificate, dated on or prior to the date of Closing, of the Attorney General of Texas, approving the Bonds as required by law; (vi) The opinion, dated the date of Closing, of Messrs. Vinson & Elkins, Counsel to the Under- writers, to the effect that the Bonds are exempted securities as described in Section 3(a)(2) of the Securities Act of 1933, as amended, and Section 304(a)(4) of the Trust Indenture Act of 1939, as amended, to the extent provided in such Acts, and it is not necessary in connection with the sale of the Bonds to the public to register the Bonds under the Securities Act of 1933 as amended, or to qualify the Ordinance under the Trust Indenture Act of 1939, as amended. The opinion of such Counsel shall also state that, based upon their participation in the preparation of the Official Statement, such Counsel has no reason to believe that the Official Statement (except for the financial statements and other financial and statistical data contained therein, as to which no view need by expressed), as the date of the Official Statement, contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (vii) A certificate, dated the date of Clos- ing, signed by the Mayor, the City Manager and the Director of Finance of the City, to the effect that to the best of their knowledge, (A) the representations and warranties of the City con- tained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (B) except to the extent disclosed in the Official Statement, no litigation is pending or, to the knowledge of such person, threatened in any court to restrain or enjoin the issuance or delivery of the Bonds, or the levy, collection or application of ad valorem taxes and any other funds of the City pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity of the Bonds, the Ordi- nance, or this Purchase Contract, or contesting the powers of the City or contesting the authori- zation of the Bonds or the Ordinance, or Page 10 contesting in any way the accuracy, completeness or fairness of the Official Statement; (C) the Official Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (D) no event affecting the City has occurred since the date of the Official Statement which is materially adverse for the purpose for which the Official Statement is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any respect; and (E) there has not been any material adverse change in the financial condition of the City from that reflected in the City's audited financial state- ments and other financial information contained in the Official Statement; (viii) A fully executed escrow agreement (the "Escrow Agreement") between the City and First City Bank of Corpus Christi, Corpus Christi, Texas (the "Escrow Agent"), which (together with any other appropriate documentation) evidences that all SLG's, Open Market Federal Securities and cash required to be deposited with the Escrow Agent have been purchased by or delivered to the Escrow Agent, all as described in the Official Statement, together with a certificate, dated as of the date of Closing, executed by an appropriate official of the Escrow Agent, to the effect that the Escrow Agreement has been duly authorized, executed and entered into by the Escrow Agent; (ix) A certificate dated the date of Closing, of an appropriate official of the City to the effect that, on the basis of the facts, estimates and circumstances in effect on the date of delivery of the Bonds, it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be arbitrage bonds within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended. (x) A certificate, dated the date of Closing, signed by the City Manager, the City Attorney, and the Director of Finance of the City, stating that, (A) in their opinion, the outcome of any litigation pending against the City at the • • Page 11 date of Closing will not have a material effect on the City's financial position or operations and (8) the litigation pending against the City challenging or seeking to enjoin or restrain the City's 1984 and 1985 tax levies, and/or proceedings related thereto (such litigation to be identified in such certificate by styles, cause numbers, and courts of jurisdiction) is without merit and will not adversely affect the City's ability to levy and collect taxes in payment of the Bonds. (xi) A certified public accountant's report addressed to the City, Bond Counsel, Underwriters and the Escrow Agent as to escrow adequacy for the bonds to be refunded prepared in the manner described in the Official Statement; (xii) Such additional legal opinions, certifi- cates, instruments and other documents as the Underwriters may reasonably request to evidence the truth, accuracy and completeness, as of the date hereof and as of the date of Closing, of the City's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance and satisfaction by the City at or prior to the date of Closing of all agreements then to be performed and all conditions then to be satisfied by the City. All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are satisfactory to the Underwriters. If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds contained in this Purchase Contract, or if the obligations of the Under- writers to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall termi- nate and neither the Underwriters nor the City shall be under further obligation hereunder, except that the respec- tive obligations of the City and the Underwriters set forth in Paragraphs 9 and 11 hereof shall continue in full force and effect. • Page 12 8. The Underwriters may terminate their obligation to purchase at any time before the Closing if any of the following should occur: (a)(i) Legislation shall have been enacted by the Congress of the United States, or recommended to the Congress for passage by the President of the United States or favorably reported for passage to either House of the Congress by any Committee of such House, or (ii) a decision shall have been rendered by a court established under Article III of the Constitution of the United States or by the United States Tax Court, or (iii) an order, ruling or regulation shall have been issued or proposed by or on behalf of the Treasury Department of the United States or the Internal Revenue Service or any other agency of the United States, or (iv) a release or official statement shall have been issued by the President of the United States or by the Treasury Department of the United States or by the Internal Revenue Service, the effect of which, in any such case described in clause (i), (ii), (iii) or (iv), would be to impose, directly or indirectly, federal income taxation upon interest received on obligations of the general character of the Bonds or upon income of the general character to be derived by the City in such a manner as in the judgment of the Underwriters would materially impair the marketability or materially reduce the market price of obligations of the general character of the Bonds. (b) Legislation shall have been enacted by the Congress of the United States to become effective on or prior to the Closing, or a decision of a court ruling, regulation or proposed regulation by or on behalf of the Securities and Exchange Commission or other agency having jurisdiction over the issuance, sale and deliv- ery of the Bonds, or any other obligations of any similar public body of the general character of the City, is in violation of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or the execution and delivery of the Ordinance or any indenture of similar character is in violation of the Trust Indenture Act of 1939, as amended, or with the purpose or effect of otherwise prohibiting the issuance, sale or delivery of the Bonds as contemplated hereby or by the Official Statement or of obligations of the general character of the Bonds. (c)(i) The Constitution of the State of Texas shall be amended or an amendment shall be proposed, or • Page 13 (ii) legislation shall be enacted, or (iii) a decision shall have been rendered as to matters of Texas law, or (iv) any order, ruling or regulation shall have been rendered as to or on behalf of the State of Texas by an official, agency or department thereof, affecting the tax status of the City, its property or income, its bonds (including the Bonds) or the interest thereon, which in the judgment of the Underwriters would mate- rially affect the market price of the Bonds. (d)(i) A general suspension of trading in secu- rities shall have occurred on the New York Stock Exchange, or (ii) the United States shall have become engaged in hostilities which have resulted in the declaration, on or after the date of this Purchase Contract, of a national emergency or war, the effect of which, in either case described in clause (i) and (ii), is, in the judgment of the Underwriters, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Bonds on the terms and in the manner contemplated in this Purchase Contract and the Official Statement. (e) An event described in Paragraph 6(j) hereof occurs which, in the opinion of the Underwriters, requires a supplement or amendment to the Official Statement. (f) A general banking moratorium shall have been declared by authorities of the United States, the State of New York or the State of Texas. (g) The debt ceiling of the United States is such that the State and Local Government Series securities required to fund any Escrow Agreement referenced in the Ordinance are not available for delivery on the date of the delivery of the Bonds. (h) A lowering of the rating prior to the Closing of the Bonds below "AA" by Standard & Poor's Corporation or below "AA" by Moody's Investors Service. (i) An order, ruling or judgement of a court" 411 shall be made enjoining or restraining the levy or" collection of ad valorem taxes, or proceedings related thereto, by the City; declaring a tax levy of the City, or proceedings relating thereto, to be void, invalid or more than three percent (3%) in excess of an effective tax rate calculated pursuant to the Property Tax Code; requiring the City to recalculate an effective tax rate • • Page 14 pursuant to the Property Tax Code; requiring the City to re -levy ad valorem taxes or to re -mail tax statements or mail corrected or supplemented tax state- ments; or requiring the City to hold public hearings or publish notices in connection with a tax levy. 9. Costs related to the issuance and sale of the Bonds and the refunding and payment of the bonds to be refunded, including, but not limited to, costs of prepara- tion and printing the Bonds, the Preliminary Official Statements and Official Statements, postage, the costs of obtaining credit ratings on the Bonds and bonds being refunded, municipal bond insurance, if any, all fees and disbursements of Bond Counsel, the City's Financial Advisor, the Escrow Agent and each Paying Agent for the bonds being refunded, the initial registration and paying agent accep- tance fees, the cash flow analysis fees, and the fees of the accountant certifying escrow adequacy, the City's counsel and accountant and all other miscellaneous and closing costs shall be obligations of the City. 10. Any notice or other communication to be given to the City under this Purchase Contract may be given by delivering the same in writing at the address for the City set forth above, and any notice or other communication to be given to the Underwriters under this Purchase Contract may be given by delivering the same in writing to Salomon Brothers Inc, One New York Plaza, New York, New York 10004, Attention: Municipal Bond Department. 11. This Purchase Contract is made solely for the benefit of the City and the Underwriters (including the successors or assigns of the Underwriters) and no other person shall acquire or have any right hereunder or by virtue hereof. The City's representations, warranties and agreements contained in this Purchase Contract shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of the Underwriter and (ii) delivery of any payment for the Bonds hereunder; and the City's representations and warranties contained in Paragraph 6 of this Purchase Contract shall remain operative and in full force and effect, regardless of any termination of this Purchase Contract. Page 15 12. This Purchase Contract shall become effective upon the execution of the acceptance hereof by the Mayor or City Manager of the City and shall be valid and enforceable as of the time of such acceptance. Very truly yours, SALOMON BROTHERS INC MBANK CAPITAL MARKETS TEXAS COMMERCE BANK, NATIONAL ASSOCIATION SMITH BARNEY, HARRIS UPHAM & CO. DILLON READ & CO., INC. as representatives of the Underwriters By TEXAS COMMERCE BANK NATIONAL„ASSOCIATION Vice President ACCEPTED: This 1'7/, day of October, 1985 ATTEST: CITY OF CORPUS CHRISTI, TEXAS ,PL� �LJQ[ Q-}rai . City Manager [SEAL] App .ved 7 . 1985 City Attorney The purchase price is computed as follows: Exhibit 8 Aggregate Principal amount $108,231.312.30 Less: Aggregate Underwriters Discount for all Bonds 1,894,047.97 Original Issue Premium for 1996 maturity (840.526.50) Original Issue Discount for 1996 maturity 40,363.50 Original Issue Discount for 1997 maturity 62,437.60 Driginal Issue Discount for 1998 maturity 41.272.00 1,197,594.47 Purchase Price* 1107,033.717.83 *Accrued interest to be added. • Exhibit C Principal Amount Per $5.000 Maturity Amount Principal Maturity Amount 1994 $1,904.55 1997 1.734.10 1998 1,567.60 1999 1,414.45 • • MCCALL, PARKHURST & HORTON BOO DIAMOND SHAMROCK TOWER JON?. D. MCCALL DALLAS. TERAS TREOI-aSBJ MILLARD •PARKHURST UTOPIAS E. SPURGEON CITY OF CORPUS CHRISTI, TEXAS GENERAL IMPROVEMENT AND REFUNDING BONDS, SERIES 1985A, DATED OCTOBER 15, 1985 IN THE PRINCIPAL AMOUNT OF $108,231,312.30 AS BOND COUNSEL for the issuer (the °Issuer°) of the bonds described above (the °Bonds°), we have examined into the legality and validity of the Bonds, which are issuable only as fully registered bonds without interest coupons, with part of such Bonds aggregating $97,585,000.00, termed Current Interest Bonds in the Ordinance hereinafter mentioned, in the denominations of $5,000 or any integral multiple thereof, numbered from R-1 upward, maturing on November 1 in each of the years 1986 through 1998, bearing interest from their date, until maturity or redemption, at the following rates per annum: maturities 1986, 5.258 maturities 1993, 8.009 maturities 1987, 5.909 maturities 1994, 8.209 maturities 1988, 6.409 maturities 1995, 9.409 maturities 1989, 6.90% maturities 1996, 8.409 maturities 1990, 7.259 maturities 1997, 8.509 maturities 1991, 7.50% maturities 1998, 8.709 maturities 1992, 7.759 and being subject to redemption prior to their scheduled maturities in accordance with the terms and conditions stated on the face of the Bonds, with part of such Bonds aggregating $10,646,312.30 termed Capital Appreciation Bonds in the Ordi- nance hereinafter mentioned, numbered from CR -1 upward, maturing November 1 in each of the years 1996 through 1999, bearing interest from November 14, 1985, which is payable only on maturity and compounds on each May 1 and November 1, beginning on May 1, 1986. WE HAVE -ACTED AS BOND COUNSEL for the Issuer for the sole purpose of rendering an opinion with respect to the legality and validity of the Bonds under the Constitution and statutes of the State of Texas and with respect to the exemption of the interest on the Bonds from federal income taxes, and for no other reason or purpose. We have not been requested to investigate or verify, and have not investigated or verified, any records, data or other material relating to the financial condition or capabilities of the Issuer, and have not assumed any responsibility with respect thereto. We have relied solely on representations by officials of the Issuer as to the current outstanding indebtedness of, and assessed valuation of taxable property within, the Issuer. WE HAVE EXAMINED the applicable and pertinent provisions of the Constitution and laws of the State of Texas, the charter of the Issuer, certified copies of the proceedings of the Issuer, including the ordinance authorizing the Bonds, a copy of the Escrow Agreement hereinafter defined, and other proofs authorizing and relating to the issuance of the Bonds, including two of the executed Bonds (Bonds No. R-1 and CR -1). We have relied upon the opinion of Ernst & Whinney with respect to the yield on the Bonds and the yield on the investments held in escrow for the purpose of defeasing the obligations of the Issuer being refunded by the Bonds. • BASED ON SAID EXAMINATION, IT IS OUR OPINION that said Bonds have been authorized, issued and delivered in accord- ance with the Constitution and laws of the State of Texas, and constitute valid and legally binding obligations of the Issuer; and that the ad valorem taxes, upon all taxable property within the Issuer, necessary to pay the interest on and principal of said Bonds, have been pledged irrevocably, except as may be limited by laws applicable to the Issuer relating to bankruptcy, reorganization, and other similar matters affecting creditors' rights, for such purpose, within the limit prescribed by the Constitution and charter of the Issuer. BASED ON SAID EXAMINATION, IT IS FURTHER OUR OPINION that the Escrow Agreement, dated as of November 14, 1985, between the Issuer and First City Bank of Corpus Christi, Corpus Christi, Texas, as Escrow Agent (the "Escrow Agree- ment"), has been duly authorized, executed and delivered by the Issuer, and constitutes a binding and enforceable agree- ment in accordance with its terms and that the Refunded Obligations, as defined in the Escrow Agreement, being refunded by the Bonds, are outstanding under the ordinances authorizing their issuance only for the purpose of receiving the funds provided by, and are secured solely by and payable solely from, the Escrow Agreement and the cash and invest- ments, including the income therefrom, held by the Escrow Agent pursuant to the Escrow Agreement. ALSO, IT IS OUR OPINION that the interest on said Bonds is exempt from federal income taxes under existing statutes, regulations, published rulings, and court decisions. Respectfully, • • GENERAL CERTIFICATE THE STATE OF TEXAS COUNTY OF NUECES CITY OF CORPUS CHRISTI We, the undersigned, hereby officially certify that we are the Mayor, City Secretary and Director of Finance, respectively, of said City, and we further certify as follows: 1. That said City is a duly incorporated Home Rule City, having more than 5,000 inhabitants, operating and existing under the Constitution and laws of the State of Texas and the duly adopted Home Rule Charter of said City, which Charter has not been changed or amended since February 26, 1985, the date the ordinance was passed by the City Council authorizing the City of Corpus Christi, Texas General Improvement Bonds, Series 1985. 2. That no litigation of any nature has ever been filed pertaining to, affecting or contesting: (a) the issu- ance, delivery, payment, security or validity of the pro- posed City of Corpus Christi, Texas General Improvement and Refunding Bonds, Series 1985-A, dated October 15, 1985, in the aggregate principal amount of $108,231,312.30 (the "Bonds"); (b) the authority of the officers of said City to issue, execute and deliver said bonds; or (c) the validity of the corporate existence or the Charter of said City; and that no litigation is pending pertaining to, affecting or contesting the boundaries of said City. 3. That on October 17, 1985, the date an Ordinance was passed by said City Council authorizing the issuance of said $108,231,312.30 of Bonds, and at the present time, the following persons were the duly elected or appointed and qualified officials of said City: Luther Jones, Mayor, Dr. Jack Best, Mayor Pro -Tem, Frank Mendez, David Berlanga, Sr., Leo Guerrero, Linda Strong, Councilmembers, Joe McComb, Bill Pruet, Mary Pat Slavik, Edward A. Martin, City Manager, J. Bruce Aycock, City Attorney, Juan Garza, Director of Finance, Armando Chapa, City Secretary. 4. That none of the outstanding bonds being refunded has ever been held in, or purchased for the account of, the interest and sinking fund created and maintained for the benefit of such bonds being refunded, and nothing in said interest and sinking fund is available and can be used for the retirement of any of such bonds. 5. That the currently effective ad valorem tax rolls of said City are those for the year 1985, being the most recently approved tax rolls of said City; that said City has caused the taxable property in said City to be assessed as required by law; that the Board of Equalization of said City has equalized and approved the valuation of taxable property in said City for said year; that the tax assessor of said City has duly verified the aforesaid tax rolls, and said Board of Equalization has finally approved the same; and upon which the annual ad valorem tax of said City actually has been or will be levied (after deducting the amount of all exemptions, if any, under Section 1-b(b), Section 1-f, Section 1-g, and Section 2(b) of Article 8 of the Texas Constitution, and Chapter 11, Subchapter B, Property Tax Code), according to the aforesaid tax rolls for said year, as delivered to the City Secretary of said City, and finally approved and recorded by the City Council of said City, is $6,588,136,279.00. 6. That upon the issuance and delivery to the pur- chasers of the Bonds and the concurrent refunding of the City's obligations payable from ad valorem taxes the said City will have no outstanding indebtedness payable from ad valorem taxes except the Bonds. SIGNEDANDSEALED this the 17th day o� Ocgber, 1985. City Secretary, Ci y of Mayor, pity of Corpus Christi, Texas Corpus Christi, Texas . / 4, r ofr. a a Corpu- Ch sti, Texas Direc City (SEAL) APPROVED AS TO FORM AND CORRECTNESS this 17th day of October, 1985. f4/44.- 1 ey City of Corpu Christi, Texas • Corpus Christi, Texas 44, // day of � , 198. TO THE MEMBERS OF THE CITY COUNCIL Corpus Christi, Texas For the reasons set forth in the emergency clause of the foregoing ordinance or resolution, an emergency exists requiring suspension of the Charter rule as to consideration and voting upon ordinances or resolutions at three regular meetings; I/we, therefore, request that you suspend said Charter rule and pass this ordinance or resolution finally on the date it is introduced, or at the present meeting of the City Council. Respectfully, Council Members Respectfully, MAYOR THE CITY OF CORPUS CHRISTI, TEXAS The above ordinance was passed by the following vote: Luther Jones Dr. Jack Best David Berlanga, Sr. Leo Guerrero Joe McComb Frank Mendez Bill Pruet Mary Pat Slavik Linda Strong 19064