HomeMy WebLinkAbout024164 ORD - 08/22/2000CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS
COUNTIES OF NUECES AND SAN PATRICIO
CITY OF CORPUS CHRISTI
On this the 22nd day of August, 2000, the City Council of the City of Corpus Christi, Texas
convened in Regular Meeting, with the following members of said Council present, to-wit:
Samuel L. Neal, Jr.
Betty Jean Longoria,
Melody Cooper,
Arnold Gonzales, Ph.D.,
Rex Kinnison,
Henry Garrett,
John Longoria,
Javier D. Colmenero,
Mark Scott
David Garcia,
James Bray,
Jorge Cruz-Aedo,
Armando Chapa,
with the following absent: k-0i)0~(
among other business was transacted:
Mayor
Councilmembers
City Manager,
Cit~ Attorney,
Director of Finance,
City Secretary
, constituting a quorum, at which time the following
City Manager David Garcia presented for the consideration of the Council an ordinance
authorizing the issuance of the City's General Airport Revenue Bonds, Series 2000A. The ordinance
was read by the City Secretary. The motion to pass the ordinance was carried by the following vote.
AYES: All members of the City Council shown present above voted "Aye".
NAYS: None.
ABSENT WHEN VOTING: None.
The Mayor announced that the ordinance had been passed. The ordinance is as follows:
024164
iNDEXED
Adopted 8/22/00
FIRST SUPPLEMENTAL ORDINANCE TO THE MASTER ORDINANCE
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF CORPUS
CHRISTI GENERAL AIRPORT REVENUE BONDS, SERIES 2000A (EXEMPT FACILITY
BONDS); AND APPROVING AND AUTHORIZING INSTRUMENTS AND
PROCEDURES RELATING THERETO
024164
FIRST SUPPLEMENTAL ORDINANCE TO THE MASTER ORDINANCE
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF
CORPUS CHRISTI GENERAL AIRPORT REVENUE BONDS, SERIES 2000A
(EXEMPT FACILITY BONDS); AND APPROVING AND AUTHORIZING
INSTRUMENTS AND PROCEDURES RELATING THERETO
TABLE OF CONTENTS
PREAMBLE
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
Section 9.
Section 10.
Section 11.
Section 12.
Section 13.
Section 14.
DEFINITIONS ................................................
AMOUNT, PURPOSE, AND DESIGNATION OF THE BONDS ......
DATE, DENOMINATIONS, NUMBERS, MATURITIES, AND
FORM OF BONDS ............................................
INTEREST ....................................................
REGISTRATION, TRANSFER, AND EXCHANGE;
AUTHENTICATION AND BOOK-ENTRY ONLY SYSTEM ........
ESTABLISHMENT OF REVENUE BOND FINANCING PROGRAM
AND ISSUANCE OF PARITY OBLIGATIONS ....................
SECURITY ....................................................
PAYMENTS; DEBT SERVICE FUND .............................
CONSTRUCTION FUND; REBATE FUND .......................
DAMAGED, MUTILATED, LOST, STOLEN OR
DESTROYED BONDS .........................................
AMENDMENT OF SUPPLEMENT ...............................
COVENANTS REGARDING TAX EXEMPTION ...................
ALLOCATION OF, AND LIMITATION ON, EXPENDITURES
FOR THE PROJECT ...........................................
DISPOSITION OF PROJECT ....................................
Page
1
2
2
2
3
3
7
8
8
9
9
10
12
14
15
Section 15.
Section 16.
Sechon 17.
Section 18.
Section 19,
Section 20.
Section 21.
Section 22.
Section 23.
Section 24.
Section 25.
Section 26.
Section 27.
Section 28.
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
FIRST SUPPLEMENT TO CONSTITUTE A CONTRACT;
EQUAL SECURITY ............................................ 15
SEVERABILITY OF INVALID PROVISIONS ...................... 15
PAYMENT AND PERFORMANCE ON BUSINESS DAYS ........... 15
LIMITATION OF BENEFITS WITH RESPECT TO THE FIRST
SUPPLEMENT ................................................ 16
CUSTODY, APPROVAL, BOND COUNSEL'S OPINION,
CUSIP NUMBERS, PREAMBLE AND INSURANCE ................ 16
COMPLIANCE WITH RULE 15c2-12 ............................. 16
DEFEASANCE OF BONDS ..................................... 18
FURTHER PROCEDURES ...................................... 19
BOND INSURANCE AND DEBT SERVICE RESERVE FUND
INSURANCE POLICIES ........................................ 19
RULES OF CONSTRUCTION ................................... 20
INTERPRETATIONS .......................................... 20
DELEGATION OF AUTHORITY ................................ 20
REPEAL OF CONFLICTING ORDINANCES ...................... 20
IMMEDIATE EFFECT .......................................... 20
DEFINITIONS ............................................... A-1
FORM OF BONDS ............................................. B-1
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION ........ C-1
ORDINANCE REQUIREMENTS OF INSURER .................... D-1
ORDINANCE NO.
FIRST SUPPLEMENTAL ORDINANCE TO THE MASTER ORDINANCE
AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF
CORPUS CHRISTI GENERAL AIRPORT REVENUE BONDS, SERIES 2000A
(EXEMPT FACILITY BONDS); AND APPROVING AND AUTHORIZING
INSTRUMENTS AND PROCEDURES RELATING THERETO
THE STATE OF TEXAS :
COUNTY OF NUECES :
CITY OF CORPUS CHRISTI :
WHEREAS, on August 22, 2000, the City Council of the City of Corpus Christi, Texas
adopted the "Master Ordinance Establ~l~g the GeneralAirporr Revenue BondFinancfiwProgram VPYrh
Respect to the Issuance o£ Obh~anbns by the Cz~/ o£ Corpus Ctmga; Texas Secured by General A~kport
Revenues" (referred to herein as the "Master Ordinance"); and
WHEREAS, unless otherwise defined herein, terms used herein shall have the meaning given
in the Master Ordinance; and
WHEREAS, the Master Ordinance establishes the program under which revenue supported
indebtedness attributable to the Airport can be incurred, and pledges the Pledged Revenues to the
payment of Parity Obligations to be outstanding under the Master Ordinance; and
WHEREAS, the City deems it necessary to issue the first series of Parity Obligations pursuant
to this First Supplement to the Master Ordinance for the purposes hereinafter described; and
WHEREAS, the bonds authorized to be issued by this First Supplement (the "Bonds") are to
be issued and delivered pursuant to laws of the State of Texas, including particularly Chapter 22,
Texas Transportation Code and Chapter 1371, Texas Government Code; and
WHEREAS, this First Supplement is being adopted concurrently with the adoption of the
Master Ordinance; and
WHEREAS, in addition to the first series of Patity Obligations authorized to be issued by this
First Supplement, the City is concurrently adopting a Second Supplement to the Master Ordinance
authorizing the issuance of the Second Series Bonds for the purposes described in the Second
Supplement;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF CORPUS CHRISTI, TEXAS THAT:
Section 1. DEHNITIONS. In addition to the definitions set forth in the preamble of this
First Supplement, the terms usedin this First Supplement (except in the FORM OF BONDS) andnot
otherwise defined shall have the meanings given in the Master Ordinance or in Exhibit "A" to this
First Supplement attached hereto and made a part hereof.
Section 2. AMOUNT, PURPOSE, AND DESIGNATION OF THE BONDS. The "CITY
OF CORPUS CHRISTI, TEXAS GENERAL AIRPORT REWENUE BONDS, SERIES 2000A
(EXEMPT FACILITY BONDS)", are hereby authorized to be issued and delivered in the aggregate
principal amount of $13,010,000 FOR THE PURPOSE OF CONSTRUCTING, IMPROVINg,
RENO VA TING, ENLARGING AND EQUIPPING THE CORPUS CHRISTI INTERNA TIONAL
AIRPORT.
Section 3. DATE, DENOMINATIONS, NUMBERS, MATURITIES AND TERMS OF
BONDS. (a) Terms of Bonds. The Bonds shall be dated the Bond Date, shall be in the denomina-
tion of $5,000, or any integral multiple thereof (an "Authorized Denomination"), shall be numbered
consecutively from R-1 upward, and shall mature and be payable serially on February 15 in each of
the years and in the amounts as set forth in the Purchase Agreement.
(b) Sale of Bonds. The sale of the Bonds to the Underwriters, at the purchase price described
in the Purchase Agreement, is hereby authorized, ratified and confirmed. One Bond in the principal
amount maturing on each maturity date as set forth in the Purchase Agreement shall be delivered to
the Underwriters, and the Underwriters shall have the tight to exchange such bonds as provided in
Section 5 hereof without cost.
(c) Purchase Agreement. The Purchase Agreement setting forth the terms of the sale of the
Bonds to the Underwriters, in substantially the form attached to this First Supplement, is hereby
accepted, approved and authorized to be delivered in executed form to the Underwriters. The
Designated Financial Officer is hereby authorized to execute and deliver the Purchase Agreement on
behalf of the City.
(d) Offering Documents. The "Official Statement" preparedin connection with the sale of the
Bonds, in substantially the form attached to this First Supplement, is hereby accepted, approved and
authotized to be delivered in executed form to the Underwriters. The use of the "Preliminary Official
Statement" prepared in connection with the sale of the Bonds is hereby ratified.
(e) Form of Bonds. The form of the Bonds, including the form of the Authentication
Certificate, the form of Assignment and the form of Registration Certificate of the Comptroller of
Public Accounts of the State of Texas, with respect to the Bonds initially issued and delivered to the
Underwriters pursuant to this First Supplement, shall be, respectively, substantially as set forth in
Exhibit "B", with such appropriate variations, omissions, or insertions as are permitted or required by
this First Supplement.
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(f) Redemption Features. The Bonds shall be subject to redemption in accordance with the
terms and conditions set forth in the Purchase Agreement. The FORM OF BOND set forth in
Exhibit "B" to this First Supplement shall contain the redemption features applicable to the Bonds,
consistent with the Purchase Agreement.
Section 4. INTEREST. The Bonds shall bear interest, calculated on the basis of a 360-day
year composed of twelve 30-day ~nonths, from the Bond Date, until Maturity, at the rates per annum
se t forth in the Purcha se Agreement. Said interest shall be payable to the registered owner of any such
Bond in the manner provided and on the dates stated in the FORM OF BOND set forth in Exhibit
"B" to this First Supplement.
Sec tion 5. REGISTRATION, TRANSFER, AND EXCHANGE; AUTHENTICATION;
BOOK-ENTRY ONLY SYSTEM. (a) Registration, Transfer, Conversion and Exchange;
Authentication. The City shall keep or cause to be kept at the trust office designated in the Paying
Agent Agreement (the "Designated Trust Office") by The Chase Manhattan Bank (the "Paying
Agent/Registrar"), books or records for the registration of the transfer, conversion and exchange of
the Bonds (the "Registration Books"), and the City hereby appoints the Paying Agent/Registrar as its
registrar and transfer agent to keep such books or records and make such registrations of transfers,
conversions and exchanges under such reasonable regulations as the City and the Paying
Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations,
transfers, conversions and exchanges as herein provided. The execution of a Paying Agent
Agreement, in such form as is approved by the City Attorney, is hereby authorized. The Paying
Agent/Registrar shall obtain and record in the Registration Books the address of the registered owner
of each Bond to which pay~nents with respect to the Bonds shall be mailed, as herein provided; but
it shall be the duty of each registered owner to notify the Paying Agent/Registrar in writing of the
address to which payments shall be mailed, and such interest payments shall not be mailed unless such
notice has been given. The City shall have the right to inspect the Registration Books during regular
business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the
Registration Books confidential and, unless otherwise required by law, shall not permit their
inspection by any other entity. The City shall pay the Paying Agent/Registrar's standard or customary
fees and charges for making such registration, transfer, conversion, exchange and delivery of a
substitute Bond or Bonds. Registration of assignments, transfers, conversions and exchanges of Bonds
shall be made in the manner provided and with the effect stated in the FORM OF BOND set forth
in Exhibit "B" to this First Supplement. Each substitute Bond shall bear a letter and/or number to
distinguish it from each other Bond.
On each substitute bond issued in exchange for or replacement of any Bond issued under this
First Supplement there shall be printed thereon a Paying Agent/Registrar's Authentication Certificate,
in the form hereinafter set forth in the FORM OF BOND set forth in Exhibit "B" to this First
Supplement (the "Authentication Certificate"). It is specifically provided, however, that any Bond
deliveredin exchange for or replacement of another Bond prior to the first scheduledinterest payment
date on the Bonds (as stated on the face thereof) shall be dated the same date as such Bond, but each
substitute bond so delivered on or after such first scheduled interest payment date shall be dated as
of the interest payment date preceding the date on which such substitute bond is delivered, unless
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such substitute bondis delivered on an interest payment date, in which case it shall be dated as of such
date of delivery; provided, however, that if at the time of delivery of any substitute bond the interest
on the Bond for which it is being exchanged has not been paid, then such substitute bond shall be
dated as of the date to which such interest has been paidin full. An authorized representative of the
Paying Agent/Registrar shall, before the delivery of any such substitute bond, date such substitute
bond in the manner set forth above, and manually sign and date the Authentication Certificate, and
no such substitute bond shall be deemed to be issued or outstanding unless the Authentication Certifi-
cate is so executed.
The Paying Agent/Registrar promptly shall cancel all paid Bonds and Bonds surrendered for
conversion and exchange. No additional ordinances, orders, or resolutions need be passed or adopted
by the governing body of the City or any other Person so as to accomplish the foregoing conversion
and exchange of any Bond or portion thereof, and the Paying Agent/Registrar shall provide for the
printing, execution, and delivery of the substitute Bonds in the manner prescribed herein. Pursuant
to Chapter 1206, and particularly Subehapter B thereof, the duty of conversion and exchange of
Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of
the Authentication Certificate, the converted and exchanged Bond shall be valid, incontestable, and
enforceable in the same manner and with the same effect as the Bonds which initially were issued and
delivered pursuant to this First Supple~nent, approved by the Attorney General, and registered by the
Comptroller of Public Accounts.
(b) Payment of Bonds and Interest. The City hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of, premium, if any, and interest
on the Bonds, all as providedin this First Supplement. The Paying Agent/Registrar shallkeep proper
records of all payments made by the City and the Paying Agent/Registrar with respect to the Bonds.
(c) In Genera/. The Bonds (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be payable only to the registered owners
thereof, (ii) may be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned,
(iv) may be converted and exchanged for other Bonds, (v) shall have the characteristics, (vi) shall be
signed, sealed, executed and authenticated, (vii) the principal of and interest on which shall be pay-
able, and (viii) shall be administered and the Paying Agent/Registrar and the City shall have certain
duties and responsibilities with respect to the Bonds, all as provided, and in the manner and to the
effect as required or indicated, in the FORM OF BOND set forth in Exhibit "B" to this First
Supplement. The Bonds initially issued and delivered pursuant to this First Supplement are not re-
quired to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute
Bond issued in conversion of and exchange for any Bond or Bonds issued under this First Supplement
the PayingAgent/Registrar shall execute the Authentication Certification, in the manner hereinabove
described.
(d) SubstltutePayingAgentdRegistrar. TheCitycovenantswiththeregisteredownersofthe
Bonds that at all times while the Bonds are outstanding a competent and legally qualified entity shall
act as and perform the services of Paying Agent/Registrar for the Bonds under this First Supplement,
and that the Paying Agent/Registrar will be one entity. Such entity may be the City, to the extent
permitted by law, or a bank, trust company, financial institution, or other agency, as selected by the
City. The City reserves the right to, and may, at its option, change the Paying Agent/Registrar upon
not less than 60 days written notice to the Paying Agent/Registrar, to be effective not later than 30
days prior to the next principal or interest payment date after such notice. In the event that the entity
at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method)
should resign or otherwise cease to act as such, the City covenants that promptly it will appoint a
competent and legally qualified entity to act as Paying Agent/Registrar under this First Supplement.
Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall
transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books
and records relating to the Bonds, to the new Paying Agent/Registrar designated and appointed by the
City. Upon any change in the Paying Agent/Registrar, the City promptly will cause a written notice
thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Bonds, by United
States mail, first-class postage prepaid, which notice also shall give the address of the new Paying
Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Registrar shall
be deemed to have agreed to the provisions of this First Supplement, and a certified copy of this First
Supplement shall be delivered to each Paying Agent/Registrar.
(e) Book Entry Only System. The Bonds issued on the Issuance Date in exchange for the
Bonds initially issued to the Underwriters shall be in the form ora separate single fully registered Bond
for each of the maturities thereof. Upon initial issuance, the ownership of each such Bond shall be
registered in the name of Cede & Co., as nominee of The Depository Trust Company of New York
("DTC"), and except as provided in subsection (f) hereof, all of the outstanding Bonds shall be
registered in the name of Cede & Co., as nominee of DTC. The City heretofore has executed and
delivered to DTC a "Blanket Letter of Representations" with respect to the utilization by the City of
DTC's book-entry only system. Notwithstanding any other provision of this First Supplement to the
contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of and interest on such Bond and all notices with respect to such
Bond shall be made and given, respectively, in the manner provided in the representation letter of the
City to DTC.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City
and the Paying Agent/Registrar shall have no responsibility or obligation to any securities brokers and
dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf
DTC was created ("DTC Participant") to hold securities to facilitate the clearance and settlement of
securities transactions among DTC Participants or to any Person on behalf of whom such a DTC
Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the
City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the
accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership
interest in the Bonds, (ii) the delivery to any DTC Participant or any other Person, other than a
registered owner of Bonds, as shown on the Registration Books, of any notice with respect to the
Bonds, or (iii) the payment to any DTC Participant or any other Person, other than a registeredowner
of Bonds, as shown in the Registration Books of any amount with respect to principal of or interest
on the Bonds. Notwithstanding any other provision of this First Supplement to the contrary, the City
and the Paying Agent/Registrar shall be entitled to treat and consider the Person in whose name each
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Bond is registered in the Registration Books as the absolute owner of such Bond for the purpose of
payment of principal and interest with respect to such Bond, for the purpose of registering transfers
with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall
pay all principal of and interest on the Bonds only to or upon the order of the registered owners, as
shown in the Registration Books as provided in this First Supplement, or their respective attorneys
duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and
discharge the City's obligations with respect to payment of principal of and interest on the Bonds to
the extent of the sum or sums so paid. No Person other than a registered owner, as shown in the
Registration Books, shall receive a Bond evidencing the obligation of the City to make payments of
principal and interest pursuant to this First Supplement. Upon delivery by DTC to the Paying
Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee
in place of Cede & Co., and subject to the provisions in this First Supplement with respect to interest
checks being mailed to the registered owner at the close of business on the Record Date, the words
"Cede & Co." in this First Supplement shall refer to such new nominee of DTC.
(0 Successor Securities Depository. In the event that the City determines that DTC is
incapable ofdischargingits responsibilities describedherein andin the representationletter of the City
to DTC or that it is in the best interest of the beneficial owners of the Bonds that they be able to
obtain certificated Bonds, the City shall (i) appoint a successor securities depository, qualified to act
as such under Section 17 (a) of the Securities and Exchange Act of 1934, as amended, notify DTC and
DTC Participants of the appointment of such successor securities depository and transfer one or more
separate Bonds to such successor securities depository or (ii) notify DTC and DTC Participants of the
availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants
having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted
to being registeredin the Registration Books in the name of Cede & Co., as nominee of DTC, but may
be registered in the name of the successor securities depository, or its nominee, or in whatever name
or names registered owners transferring or exchanging Bonds shall designate, in accordance with the
provisions of this First Supplement.
(g) Notice of Redemption. In addition to the method of providing a notice of redemption set
forth in the FORM OF BONDS, the Paying Agent/Registrar shall give notice of redemption of Bonds
by United States mail, first-class postage prepaid, at least 30 days prior to a redemption date to each
registered securities depository and to any national information service that disseminates redemption
notices. In addition, in the event of a redemption caused by an advance refunding of the Bonds, the
Paying Agent/Registrar shall send a second notice of redemption to the Persons specified in the
immediately preceding sentence at least 30 days but not more than 90 days prior to the actual
redemption date. Any notice sent to the registered securities depositories or such national
information services shall be sent so that they are received at least two days prior to the general
mailing or publication date of such notice. The Paying Agent/Registrar shall also send a notice of
prepayment or redemption to the registered owner of any Bond who has not sent the Bonds in for
redemption 60 days after the redemption date.
Each notice of redemption, whether required in the FORM OF BONDS or in this Section,
shall contain a description of the Bonds to be redeemed including the complete name of the Bonds,
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the Series, the date of issue, the interest rate, the maturity date, the CUSIP number, the amounts
called of each certificate, the date of redemption, the redemption price, the name of the Paying
Agent/Registrar and the address at which the Bonds may be redeemed, including a contact person and
telephone number.
All redemption payments made by the Paying Agent/Registrar to the registered owners of the
Bonds shall include a CUSIP number relating to each amount paid to such registered owner.
Section 6. ESTABLISHMENT OF REVENUE BOND FINANCING PROGRAM AND
ISSUANCE OF PARITY OBLIGATIONS. By adoption of the Master Ordinance the City has
provided a financing structure for revenue supported indebtedness to be issued or incurred for the
Airport. The Master Ordinance is intended to establish a master plan under which revenue supported
debt for the Airport can be delivered. This First Supplement provides for the authorization, issuance,
sale, delivery, form, characteristics, provisions of payment and redemption, and security of the Bonds,
which are the first series of Parity Obligations. This First Supplement and the Master Ordinance were
adopted concurrently, and therefore the City declares that the conditions for the issuance of Parity
Obligations as described in Section 12 of the Master Ordinance do not apply to the issuance of the
Bonds. The Master Ordinance is incorporated herein by reference and as such made a part hereof for
all purposes, except to the extent modified and supplemented hereby. The Bonds are hereby declared
to be Parity Obligations under the Master Ordinance.
Section 7. SECURITY. (a) Pledged Revenues. The Bonds are special obligations of the City
payable from and secured solely by the Pledged Revenues pursuant to the Master Ordinance and this
First Supplement. The Pledged Revenues are hereby pledged to the payment of the principal of,
premium, if any, and interest on the Bonds as the same shall become due and payable.
(b) Debt Service Reserve Fund. The Bonds are to be secured by the Debt Service Reserve
Fund. The City covenants and agrees to fund the Debt Service Reserve Fund by obtaining on the
Issuance Date a municipal bond debt service reserve insurance policy from the Insurer in an amount
equal to the Required Reserve Amount.
Section 8. PAYMENTS; DEBT SERVICE FUND. (a) Moneys Made Available to Paying
Agent. The City agrees to pay the principal of, premium, if any, and the interest on the Bonds when
due, whether by reason of maturity or redemption. The City shall make available to the Paying
Agent/Registrar, on or before such principal, redemption, or interest payment date, money sufficient
to pay such interest on and such pnncipal of the Bonds as will accrue or mature, or be subject to
redemption prior to maturity. The Paying Agent/Registrar shall cancel all paid Bonds and shall
furnish the City with an appropriate certificate of cancellation.
(b) Debt Service Fund. Moneys in the Airport Fund not required for paying Operating
Expenses during each month shall be applied by the City in the order of priority with respect to the
Funds and Accounts that such applications are described in the Master Ordinance. The Master
Ordinance provides that deposits will be made to the credit of the Debt Service Fund in accordance
with the terms of the Supplement authorizing the issuance or incurrence of Parity Obligations. With
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respect to the Bonds, deposits shall be made to the credit of the Debt Service Fund on or before the
15th day of each month, in the following order of priority, to-wit:
(i) such amounts, deposited in approximately equal monthly installments,
commencing during the month in which the Bonds are delivered or the month thereafter if
delivery is made after the 15th day thereof, as will be sufficient, together with other amounts,
if any, in the Debt Service Fund available for such purpose (including specifically moneys on
deposit in the Capitalized Interest Account in which capitalized interest is deposited and
dedicated thereto), to pay the interest scheduled to come due on the Bonds on the next
succeeding interest payment date;
(ii) such amounts, deposits in approximately equal monthly installments, commencing
during the month which shall be the later to occur of (i) the twelfth month before the first
maturity date of the Bonds, or (ii) the month in which the Bonds are delivered or the month
thereafter if delivery is made after the 15th day thereof, as will be sufficient, together with
other amounts, if any, in the Debt Service Fund available for such purpose, to pay the
principal scheduled to mature on the Bonds on the next succeeding principal payment date;
and
(iii) such amounts, deposited in approximately equal monthly installments,
commencing during the twelfth month before the first mandatory sinking fund redemption
date of the Bonds herein designated as "Term Bonds" within such series, to pay scheduled
mandatory sinking redemption amounts of such Term Bonds to be redeemed in accordance
with the terms of this First Supplement.
(c) Capitalized Interest Account. Within the Debt Service Fund there shall be established the
Capitalized Interest Account, into which account shall be credited amounts, if any, to be deposited
thereto to pay interest on the Bonds as the same shall come due, pursuant to the certificate to be
executed by the Designated Financial Officer as provided in Section 22 hereof.
Section 9. CONSTRUCTION FUND; REBATE FUND. (a) Conztruct/on Fund. There
is hereby created and there shall be established and maintained on the books of the City, and
accounted for separate and apart from all other funds of the City, a separate fund designated as the
Construction Fund. Proceeds from the sale of the Bonds, other than accrued interest and moneys, if
any, for deposit to the credit of the Debt Service Reserve Fund, shall be deposited to the credit of the
Construction Fund for use by the City for payment of all lawful costs associated with the construction,
improvement, renovation, enlargement and equipping of the Airport, as hereinbefore provided. Upon
payment of all such costs, any moneys remaining on deposit in the Construction Fund shall be
transferred FIRST to the Rebate Fund, to the extent the City is liable to pay rebate amounts to the
United States of America pursuant to the terms of the Code and NEXT to the Debt Service Fund.
Amounts so deposited to the Debt Service Fund shall be used in the manner described in the Master
Ordinance.
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(b) Rebate Fund. There is hereby created and there shall be established and maintained on
the books of the City, and accounted for separate and apart from all other funds of the City, a separate
fund designated as the Rebate Fund. The Rebate Fund shall be for the sole benefit of the United
States of America and shall not be subject to the lien created by this First Supplement or to the claim
of any other Person, including the Holders of the Bonds. Amounts deposited to the Rebate Fund,
together with any investment earnings thereon, shall be held in trust and applied solely as provided
in section 148 of the Code.
Section 10. DAMAGED, MUTILATED, LOST, STOLEN, ORDESTROYED BONDS.
(a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost, stolen, or
destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond
of the same series, principal amount, maturity, and interest rate, and in the same form, as the
damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such Bond in the manner
hereinafter provided.
(b) Application for Replaceraent Bonds. Application for replacement of damaged, mutilated,
lost, stolen, or destroyed Bonds shall be made to the Paying Agent/Registrar. In every case of loss,
theft, or destruction of a Bond, the applicant for a replacement bond shall furnish to the City and to
the Paying Agent/Registrar such security or indemnity as may be required by them to save each of
them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or
destruction of a Bond, the applicant shall furnish to the City and to the Paying Agent/Registrar
evidence to their satisfaction of the loss, theft, or destruction of such Bond, as the case may be. In
every case of damage or mutilation of a Bond, the applicant shall surrender to the Paying Agent/Regis-
trar for cancellation the Bond so damaged or mutilated.
(c) Payment in Lieu of Replacement. Notwithstanding the foregoing provisions of this
Section, in the event any such Bond shall have matured, and no default has occurred which is then
continuing in the payment of the principal of, redemption premium, if any, or interest on the Bond,
the City may authorize the payment of the same (without surrender thereof except in the case of a
damaged or mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity
is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond,
the Paying Agent/Registrar shall charge the owner of such Bond with all legal, printing, and other
expenses in connection therewith. Every replacement bond issued pursuant to the provisions of this
Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a contractual
obligation of the City whether or not the lost, stolen, or destroyed Bond shall be found at any time,
or be enforceable by anyone, and shall be entitled to all the benefits of this First Supplement equally
and proportionately with any and all other Bonds duly issued under this First Supplement.
(e) Authority for Issuing Replacement Bonds. In accordance with Chapter 1206, this Section
shall constitute authority for the issuance of any such replacement bond without the necessity of
further action by the City or any Person, and the duty of the replacement of such Bonds is hereby
authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall
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authenticate and deliver such Bonds in the form and manner and with the effect, as provided in
Section 5 of this First Supplement for Bonds issued in exchange and replacement for other Bonds.
Section 11. AMENDMENT OF SUPPLEMENT. (a) Amendments Without Consent. This
First Supplement and the rights and obligations of the City and of the owners of the Bonds may be
modified or amended at any time without notice to or the consent of any owner of the Bonds or any
other Parity Obligations, solely for any one or more of the following purposes:
(i) To add to the covenants and agreements of the City contained in this First
Supplement, other covenants and agreements thereafter to be observed, or to surrender any
right or power reserved to or conferred upon the City in this First Supplement;
(ii) To cure any ambiguity or inconsistency, or to cure or correct any defective
provisions contained in this First Supplement, upon receipt by the City of an opinion of Bond
Counsel, that the same is needed for such purpose, and will more clearly express the intent of
this First Supplement;
(iii) To supplement the security for the Bonds, replace or provide additional credit
facilities, or change the form of the Bonds or make such other changes in the provisions hereof
as the City may deem necessary or desirable and which shall not, in the judgment of the City,
materially adversely affect the interests of the owners of the Outstanding Bonds;
(iv) To make any changes or amendments requested by any Credit Rating Agency
then rating or requested by the City to rate Parity Obligations, as a condition to the issuance
or maintenance of a rating, which changes or amendments do not, in the judgment of the City,
materially adversely affect the interests of the owners of the Outstanding Parity Obligations;
(v) To make such changes, modifications or amendments as are permitted by
Section 20(c) (v) of this First Supplement;
(vi) To make such changes, modifications or amendments as may be necessary or
desirable, which shall not adversely affect the interests of the owners of the Outstanding Parity
Obligations, in order, to the extent permitted by law, to facilitate the economic and practical
utilization of Credit Agreements with respect to the Parity Obligations; or
(vii) To make such other changes in the provisions hereof as the City may deem
necessary or desirable and which shall not, in the judgment of the City, materially adversely
affect the interests of the owners of Outstanding Parity Obligations.
Notice of any such amendment may be published by the City in the manner described in subsection
(c) of this Section; provided, however, that the publication of such notice shall not constitute a
condition precedent to the adoption of such amendator, ordinance and the failure to publish such
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notice shall not adversely affect the implementation of such amendment as adopted pursuant to such
amendatory ordinance.
(b) Amendments With Consent. Subject to the other provisions of this First Supplement, the
owners of Outstanding Bonds aggregating a nmjority in Outstanding PrincipalAmount shall have the
right from time to time to approve any amendment, other than amendments described in Subsection
(a) of this Section, to this First Supplement which may be deemed necessary or desirable by the City;
provided, however, that nothing herein contained shall permit or be construed to permit, without the
approval of the owners of all of the Outstanding Bonds, the amendment of the terms and conditions
in this First Supplement or in the Bonds so as to:
(i) Make any change in the maturity of the Outstanding Bonds;
(ii) Reduce the rate of interest borne by Outstanding Bonds;
(iii) Reduce the amount of the principal payable on Outstanding Bonds;
(iv) Modify the terms of payment of principal of or interest on the Outstanding
Bonds, or impose any conditions with respect to such payment;
(v) Affect the rights of the owners of less than all Bonds then Outstanding; or
(vi) Change the minimum percentage of the Outstanding Principal Amount of
Bonds necessary for consent to such amendment.
(c) Notice. If at any time the City shall desire to amend this First Supplement other than
pursuant to subsection (a) of this Section, the City shall cause notice of the proposed amendment to
be publishedin a financial newspaper or journal of general circulation in The City of New York, New
York, and a newspaper of general circulation in the City, once during each calendar week for at least
two successive calendar weeks. Such notice shall briefly set forth the nature of the proposed
amendment and shall state that a copy thereof is on file at the principal office of the Registrar for
inspection by all owners of Bonds. Such publication is not required, however, if the City gives or
causes to be given such notice in writing to each owner of Bonds.
(d) Receipt of Consents. Whenever at any time not less than thirty days, and within one year,
from the date of the first publication of said notice or other service of written notice of the proposed
amendment the City shall receive an instrument or instruments executed by all of the owners or the
owners of at least a majority in Outstanding Principal Amount of Bonds, as appropriate, which
instrument or instruments shall refer to the proposed amendment described in said notice and which
specifically consent to and approve such amendment in substantially the form of the copy thereof on
file as aforesaid, the City may adopt the amendatory ordinance in substantially the same form.
(e) E~ect of Amendments. Upon the adoption by the City of any ordinance to amend this
First Supplement pursuant to the provisions of this Section, this First Supplement shall be deemed to
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be amended in accordance with the amendatory ordinance, and the respective rights, duties, and
obligations of the City and all the owners of then Outstanding Bonds and all future owners of the
Bonds shall thereafter be determined, exercised, and enforced under the Master Ordinance and this
First Supplement, as amended.
(0 Consent Irrevocable. Any consent given by any owner of Bonds pursuant to the provisions
of this Section shall be irrevocable for a period of six months from the date of the first publication or
other service of the notice provided for in this Section, and shall be conclusive and binding upon all
future owners of the same Bonds during such period. Such consent may be revoked at any time after
six months from the date of the first publication of such notice by the owner who gave such consent,
or by a successor in title, by filing notice thereof with the Registrar and the City, but such revocation
shall not be effective if the owners of a majority in Outstanding Principal Amount of Bonds, prior to
the attempted revocation, consented to and approved the amendment.
(g) Ownership. For the purpose of this Section, the ownership and other nmtters relating to
all Bonds registered as to ownership shall be determined from the Registration Books. The Registrar
may conclusively assume that such ownership continues until written notice to the contrary is served
upon the Registrar.
Section 12. COVENANTS REGARDING TAX-EXEMPTION. The City intends to issue
the Bonds as Tax-Exempt Debt, and to that end hereby covenants to refrain from any action which
would adversely affect, or to take such action to assure, the treatment of the Bonds as obligations
described in section 103 of the Code, the interest on which is not includable in the "gross income" of
the holder (other than the income of a "substantial user" of the Project or a "related person," within
the meaning of section 147 (a) of the Code) for purposes of federal income taxation. In particular,
but not by way of limitation thereof, the City covenants as follows:
(a) to take such action which may be reasonably available to the City to assure that
the Bonds are exempt facility bonds, as defined in section 142(a) of the Code, at least 95
percent of the proceeds of which are used to provide "airports" within the meaning of section
142 (a) (1) of the Code;
(b) to ensure that at all times dunng the term of the Bonds that the facilities
provided with the proceeds thereof be treated as governmentally owned within the meaning
of section 142 (b) of the Code;
(c) to refrain from taking any action that would result in the Bonds being"federally
guaranteed" within the meaning of section 149 (b) of the Code;
(d) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as definedin section 148 (b) (2) of the Code) which produces a materially
higher yield over the term of the Bonds, other than investment property acquired with --
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(1) proceeds of the Bonds invested for a reasonable temporary period of 3
years or less until such proceeds are needed for the purpose for which the Bonds are
issued,
(2) proceeds or amounts invested in a bona fide debt service fund, within
the meaning of section 1.148-1 (b) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the stated principal
amount (or, in the case of a discount, the issue price) of the Bonds;
(e) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90
percent of the "Excess Earnings," within the meaning of section 148 (0 of the Code and to pay
to the United States of America, not later than 60 days after the Bonds have been paid in full,
100 percent of the amount then required to be paid as a result of Excess Earnings under
section 148(0 of the Code;
(f) to otherwise restrict the use of the proceeds of the Bonds or amounts treated
as proceeds of the Bonds, as may be necessary, to satisfy the requirements of section 148 of the
Code (relating to arbitrage);
(g) to use proceeds of the Bonds in an aggregate amount of no more than two
percent of the sale proceeds of the Bonds for the payment of costs of issuance;
(h) to use no portion of the proceeds of the Bonds to provide any airplane, sky-box
or other private luxury box, health club facility, facility primarily used for gamNing or store
the principal business of which is the sale of alcoholic beverages for consumption off-premises;
and
(i) to comply with the limitations imposed by section 147 (c) of the Code (relating
to the limitation on the use of proceeds to acquire land) and section 147(d) of the Code
(relating to restrictions on the use of bond proceeds to acquire existing buildings, structures
or other property).
(j) to assure that the average maturity of the Bonds, taking into account the issue
price of the various maturities of the Bonds, will not exceed 120 percent of the reasonably
expected economic life of the property financed with the proceeds of the Bonds, as more
specifically set forth in section 147 (b) of the Code.
The City understands that the term "proceeds" includes (i) "disposition proceeds" as defined in the
Treasury Regulations, (ii) investment proceeds and, (iii) in the case of refunding bonds, transferred
proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the
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Bonds. It is the understanding of the City that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the
Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which
modify or expand provisions of the Code, as applicable to the Bonds, the City will not be required to
comply with any covenant contained herein to the extent that such failure to comply, in the opinion
of nationally-recognized bond counsel, will not adversely affect the exentption from federal income
taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or
rulings are hereafter promulgated which impose additional requirements which are applicable to the
Bonds, the City agrees to comply with the additional requirements to the extent necessary, in the
opinion of nationally-recognized bond counsel, to preserve the exemption from federal income
taxation of interest on the Bonds under section 103 of the Code. In furtherance of such intention,
the City hereby authorizes and directs any Designated Financial Officer to execute any certificates or
other reports required by the Code and to make such elections, on behalf of the City, which may be
permitted by the Code as are consistent with the purpose for the issuance of the Bonds.
The City hereby approves the issuance of the Bonds and the projects to be financed with the
proceeds of the Bonds for the purposes of Section 147 (f) of the Code.
Section 13. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE
PROJECT. The City covenants to account for on its books and records the expenditure of proceeds
from the sale of the Bonds and any investment earnings thereon to be used for the financing of the
improvements to the Airport as described in Section 2 hereof (referred to herein and Section 14
hereof as a "Project") in accordance with the requirements of the Code. The City recognizes that in
order for the proceeds to be considered used for the reimbursement of costs, the proceeds must be
allocated to expenditures within 18 months of the later of the date that (a) the expenditure on a
Project is made or (b) each such Project is completed; but in no event later than three years after the
date on which the original expenditure is paid. The foregoing notwithstanding, the City recognizes
that in order for proceeds to be expended under the Code, the sale proceeds or investment earnings
must be expended no more than 60 days after the earlier of (a) the fifth anniversary of the Issuance
Date or (b) the date the Bonds are retired. The City agrees to obtain the advise of Bond Counsel if
such expenditure fails to comply with the foregoing to assure that such expenditure will not adversely
affect the tax-exempt status of the Bonds. For purposes of this Section, the City shall not be obligated
to comply with this covenant if it obtains an opinion of Bond Counsel to the effect that such failure
to comply will not adversely affect the excludability for federal income tax purposes from gross income
of the interest.
Section 14. DISPOSITION OF PROJECT. The City covenants that the property
constituting a Project will not be sold or otherwise disposed in a transaction resulting in the receipt
by the City of cash or other compensation, unless the City obtains an opinion of Bond Counsel
substantially to the effect that such sale or other disposition will not adversely affect the tax-exempt
status of the Bonds. For purposes of this Section, the portion of the property comprising personal
property and disposed of in the ordinary course of business shall not be treated as a transaction
resultingin the receipt of cash or other compensation. For purposes of this Section, the City shall not
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be obligated to comply with this covenant if it obtains an opinion of Bond Counsel to the effect that
such failure to comply will not adversely affect the excludability for federal income tax purposes from
gross income of the interest.
Section 15. FIRST SUPPLEMENT TO CONSTITUTE A CONTRACT; EQUAL
SECURITY. In consideration of the acceptance of the Bonds, the issuance of which is authorized
hereunder, by those who shall hold the same from time to time, this First Supplement shall be deemed
to be and shall constitute a contract between the City and the Holders from time to time of the Bonds
and the pledge made in this First Supplement by the City and the covenants and agreements set forth
in this First Supplement to be performed by the City shall be for the equal and proportionate benefit,
security, and protection of all Holders, without preference, priority, or distinction as to security or
otherwise of any of the Bonds authorized hereunder over any of the others by reason of time of
issuance, sale, or maturity thereof or otherwise for any cause whatsoever, except as expressly provided
in or permitted by this First Supplement.
Section 16. SEVERABILITY OF INVALID PROVISIONS. If any one or more of the
covenants, agreemen ts, or provisions herein contained shall be held contrary to any express provisions
of law or contrary to the policy of express law, though not expressly prohibited, or against public
policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements, or
provisions shall be null and void and shall be deemed separable from the remaining covenants,
agreements, or provisions and shall in no way affect the validity of any of the other provisions hereof
or of the Bonds issued hereunder.
Section 17. PAYMENT AND PERFORMANCE ON BUSINESS DAYS. Except as
provided to the contrary in the FORM OF BONDS, whenever under the terms of this First
Supplement or the Bonds, the performance date of any provision hereof or thereof, including the
payment of principal of or interest on the Bonds, shall occur on a day other than a Business Day, then
the performance thereof, including the payment of principal of and interest on the Bonds, need not
be made on such day but may be performed or paid, as the case may be, on the next succeeding
Business Day with the same force and effect as if made on the date of performance or payment.
Section 18. LIMITATION OF BENEFITS WITH RESPECT TO THE FIRST
SUPPLEMENT. With the exception of the rights or benefits herein expressly conferred, nothing
expressed or contained herein or implied from the provisions of this First Supplement or the Bonds
is intended or should be construed to confer upon or give to any Person other than the City, the
Holders, and the Paying Agent/Registrar, any legal or equitable right, remedy, or claim under or by
reason of or in respect to this First Supplement or any covenant, condition, stipulation, promise,
agreement, or provision herein contained. This First Supplement and all of the covenants, conditions,
stipulations, promises, agreements, and provisions hereof are intended to be and shall be for andinure
to the sole and exclusive benefit of the City, the Holders, and the Paying Agent/Registrar as herein
and therein provided.
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Section 19. CUSTODY, APPROVAL, BOND COUNSEL'S OPINION, CUSIP
NUMBERS, PREAMBLE AND INSURANCE. The Designated Financial Officer is hereby
authorized to have control of the Bonds issued hereunder and all necessary records and proceedings
pertaining to the Bonds pending their delivery and approval by the Attorney General of the State of
Texas. In accordance with the provisions of Chapter 1202, the Designated Financial Officer is hereby
authorized to request that the Attorney General approve the Bonds, in which case the Designated
Financial Officer also is authorized to request that the Comptroller of Public Accounts register the
Bonds and to cause an appropriate legend reflecting such approval and registration to appear on the
Bonds. The approving legal opinion of Bond Counsel and the assigned CUSIP numbers may, at the
option of the City, be printed on the Bonds and on any Bonds issued and delivered in exchange or
replacement of any Bond, but neither shall have any legal effect, and shall be solely for the
convenience and information of the registered owners of the Bonds. The preamble to this First
Supplement is hereby adopted and made a part of this First Supplement for all purposes. If insurance
is obtained on any of the Bonds, the Bonds shall bear, as appropriate and applicable, a legend
concerning insurance as provided by the municipal bond insurance company issuing any such
insurance.
Section 20. COMPLIANCE WITH RULE 15c2-12. (a) Annua/Reports. (i) The City
shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal
year ending in or after 2001, financial information and operating data with respect to the City of the
general type included in the final Official Statement authorized by Section 3 of this First Supplement,
being the information described in Exhibit "C" hereto. Any financial statements so to be provided
shall be prepared in accordance with the accounting principles described in Exhibit "C" hereto, or
such other accounting principles as the City may be required to employ from time to time pursuant
to state law or regulation. If the City commissions an audit of such statements and the audit is
completed within the period during which they must be provided, a copy of such audit also shall be
provided in accordance with the Rule. If any such audit of such financial statements, if one is
commissioned by the City, is not complete within such period, then the City shall provide unaudited
financial statements and audited financial statements for the applicable fiscal year to each NRMSIR
and any SID, when and if the audit report on such statements become available.
(ii) If the City changes its Fiscal Year, it will notify each NRMSIR and any SID of the change
(and of the date of the new Fiscal Year end) prior to the next date by which the City otherwise would
be required to provide financial information and operating data pursuant to this Section. The
financial information and operating data to be provided pursuant to this Section may be set forth in
full in one or more documents or may be included by specific reference to any document (including
an official statement or other offering document, if it is available from the MSRB) that theretofore
has been provided to each NRMSIR and any SID or filed with the SEC.
(b) Materia/Event Notices. The City shall notify any SID and either each NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is
material within the meaning of the federal securities laws:
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2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Principal and interest payment dehnquencies;
Non-payment related defaults;
Unscheduled draws on debt service reserves reflecting financial difficulties;
Unscheduled draws on credit enhancements reflecting financial difficulties;
Substitution of credit or liquidity providers, or their failure to perform;
Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
Modifications to rights of holders of the Bonds;
Bond calls;
Defeasances;
Release, substitution, or sale of property securing repayment of the Bonds; a
Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any
failure by the City to provide financial information or operating data in accordance with subsection
(a) of this Section by the time required by such subsection.
(c) Limitations, Disclaimers, and Amendments. (i) The City shall be obligated to observe
and perform the covenants specified in this Section for so long as, but only for so long as, the City
remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that
the City in any event will give notice of any deposit made in accordance with this First Supplement
or applicable law that causes the Bonds no longer to be Outstanding.
(ii) The provisions of this Section are for the sole benefit of the registered owners and
beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit
or any legal or equitable right, remedy, or claim hereunder to any other Person. The City undertakes
to provide only the financial information, operating data, financial statements, and notices which it
has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any
other information that may be relevant or material to a complete presentation of the City's financial
results, condition, or prospects or hereby undertake to update anyinformation providedin accordance
with this Section or otherwise, except as expressly provided herein. The City does not make any
representation or warranty concerning such information or its usefulness to a decision to invest in or
sell Bonds at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON,
IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM
ANY BREACH BY THE CITY, WHETHER NEGLIGENT ORWITHOUT FAULT ON ITS PART,
OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
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(iv) No default by the City in observing or performing its obligations under this Section shall
comprise a breach of or default under this First Supplement for purposes of any other provision of this
First Supplement. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise
limit the duties of the City under federal and state securities laws.
(v) The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a change
in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary
offering of the Bonds in compliance with the Rule, taking into account any amendments or
interpretations of the Rule since such offering as well as such changed circumstances and (2) either
(a) the registered owners of a majority in aggregate principal amount (or any greater amount required
by any other provision of this First Supplement that authorizes such an amendment) of the Bonds
then outstanding consent to such amendment or (b) a Person that is unaffiliated with the City (such
as nationally recognized bond counsel) determines that such amendment will not materially impair
the interest of the registered owners and beneficial owners of the Bonds. If the City so amends the
provisions of this Section, it shall include with any amended financial information or operating data
next provided in accordance with subsection (a) of this Section an explanation, in narrative form, of
the reason for the amendment and of the impact of any change in the type of financial information
or operating data so provided. The City may also amend or repeal the provisions of this continuing
disclosure agreement if the SEC amends or repeals the applicable provision of the Rule or a court of
final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the
extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing
or selling Bonds in the primary offering of the Bonds.
Section 21. DEFEASANCE OF BONDS. (a) De/eased Bonds. Any Bond and the interest
thereon shall be deemed to be paid, retired and no longer Outstanding (a "Defeased Bond"), except
to the extent provided in subsection (d) of this Section, when payment of the principal of such Bond,
plus interest thereon to the due date (whether such due date be by reason of maturity or otherwise)
either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii)
shall have been provided for on or before such due date by irrevocably depositing with or making
available to the Paying Agent/Registrar in accordance with an escrow agreement or other similar
instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the United States
of America sufficient to make such payment or (2) Defeasance Securities that mature as to principal
and interest in such amounts and at such times as will insure the availability, without reinvestment,
of sufficient money to provide for such payment, and when proper arrangements have been made by
the City with the Paying Agent/Registrar for the payment of its services until all Defeased Bonds shall
have become due and payable. At such time as a Bond shall be deemed to be a Defeased Bond
hereunder, as aforesaid, such Bond and the interest thereon shall no longer be secured by, payable
from, or entitled to the benefits of, the Pledged Revenues, and such principal and interest shall be
payable solely from such money or Defeasance Securities. Notwithstanding any other provision of this
First Supplement to the contrary, it is hereby provided that any determination not to redeem Defeased
Bonds that is made in conjunction with the payment arrangements specified in subsections (a) (i) or
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(ii) of this Section shall not be irrevocable, provided that: (1) inthe proceedings providing for such
payment arrangements, the City expressly reserves the right to call the Defeased Bonds for
redemption; (2) gives notice of the reservation of that right to the owners of the Defeased Bonds
immediately following the making of the payment arrangements; and (3) directs that notice of the
reservation be included in any redemption notices that it authorizes.
(b) Investment in De[easance Securities. Any moneys so deposited with the Paying
Agent/Registrar may at the written direction of the City be invested in Defeasance Securities,
maturing in the amounts and times as hereinbefore set forth, and all income from such Defeasance
Securities received by the Paying Agent/Registrar that is not required for the payment of the Bonds
and interest thereon, with respect to which such money has been so deposited, shall be turned over
to the City, or deposited as directed in writing by the City. Any Future Escrow Agreement pursuant
to which the money and/or Defeasance Securities are held for the payment of Defeased Bonds may
contain provisions permitting the investment or reinvestment of such moneys in Defeasance Secutities
or the substitution of other Defeasance Securities upon the satisfaction of the requirements specified
in subsections (a) (i) or (ii) of this Section. All income from such Defeasance Securities received by
the Paying Agent/Registrar which is not required for the payment of the Defeased Bonds, with respect
to which such money has been so deposited, shall be remitted to the City or deposited as directed in
writing by the City.
(c) PayingAgentlRegistrar Services. Until all Defeased Bonds shall have become due and
payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for such
Defeased Bonds the same as if they had not been defeased, and the City shall make proper
arrangements to provide and pay for such services as required by this First Supplement.
(d) Selection of Bonds for Defeasance. In the event that the City elects to defease less
than all of the principal amount of Bonds of a maturity, the Paying Agent/Registrar shall select, or
cause to be selected, such amount of Bonds by such random method as it deems fair and appropriate.
Section 22. FURTHER PROCEDURES. The Mayor, any Designated Financial Officer, and
all other officers, employees, and agents of the City, and each of them, shall be and they are hereby
expressly authorized, empowered, and directed from time to time and at any time to do and perform
all such acts and things and to execute, acknowledge, and deliver in the name and under the
corporate seal and on behalf of the City all such instruments, whether or not herein mentioned, as
may be necessary or desirable in order to carry out the terms and provisions of this First Supplement,
the Bonds, the sale and delivery of the Bonds and fixing all details in connection therewith, and to
approve any Official Statement, or supplements thereto, in connection with the Bonds. Specifically,
but not by way of limitation, the Designated Financial Officer shall execute a certificate detailing the
use of the proceeds of the Bonds and the Second Series Bonds, including any deposits of proceeds
representing capitalized interest to the Capitalized Interest Account.
Section 23. BOND INSURANCE AND DEBT SERVICE RESERVE FUND
INSURANCE POLICIES. On the Issuance Date, the City will obtain from the Insurer a municipal
-19-
bond insurance policy and a debt service reserve fund policy in support of the Bonds and the Second
Series Bonds. To that end, for so long as said policies are in effect, the ordinance requirements of the
Insurer, as a condition to the issuance of said policies, attached hereto as Exhibit "D" hereto, are
incorporated by reference into this First Supplement and made a part hereof for all purposes,
notwithstanding any other provision of this First Supplement to the contrary.
Section 24. RULES OF CONSTRUCTION. For all purposes of this First Supplement,
unless the context requires otherwise, all references to designated Sections and other subdivisions are
to the Sections and other subdivisions of this First Supplement. The words "herein", "hereof" and
"hereunder" and other words of similar import refer to this First Supplement as a whole and not to any
particular Section or other subdivision. Except where the context otherwise requires, terms defined
in this First Supplement to impart the singular number shall be considered to include the plural
number and vice versa. References to any named Person means that party and its successors and
assigns. References to any constitutional, statutory or regulatory provision means such provision as
it exists on the date this First Supplement is adopted by the City and any future amendments thereto
or successor provisions thereof. Any reference to the payment of principal in this First Supplement
shall be deemed to include the payment of any mandatory sinking fund redemption payments as
described herein.
Section 25. INTERPRETATIONS. The titles and headings of the Sections and subsections
of this First Supplement have been inserted for convenience of reference only and are not to be
considered a part hereof and shall not in any way modify or restrict any of the terms or provisions
hereof.
Section 26. DELEGATION OF AUTHORITY. In respect to the delegation by the City of
any authority to an officer or employee of the City under Chapter 1371 to perform any duty or
responsibility hereunder, the City hereby finds that a finding or determination made by such officer
or employee has the same force and effect as a finding or determination made by the governing body
of the City.
Section 27. REPEAL OF CONFLICTING ORDINANCES. All ordinances and all parts
of any ordinances (other than the Master Ordinance or Second Supplement) which are in conflict
or inconsistent with this First Supplement are hereby repealed and shall be of no further force or effect
to the extent of such conflict or inconsistency.
Section 28. IMMEDIATE EFFECT. On request of the Mayor to find and declare an
emergency due to the immediate need for the efficient and effective administration of City affairs by
authorizing the issuance of the Bonds to finance needed capital improvements at the Airport, such
finding of an emergency is hereby specifically ma de and declared, requiring suspension of the Charter
rule as to consideration and voting upon ordinances or resolutions at two regular meetings so that this
First Supplement be passed and take effect upon first reading.
-20-
ADOPTED this 22nd day of August, 2000.
ATTEST:
City Secretary
APPROVED AS TO FORM:
Mayor/
(SEAL)
-21-
EXHIBIT A
DEFINITIONS
As used in this First Supplement the following terms and expressions shall have the meanings
set forth below, unless the text hereof specifically indicates otherwise:
"Acts" shall mean, collectively, Chapter 22 and Chapter 1371.
"Authentication Certificate" means the Authentication Certificate as definedin Section 5 (a)
of the First Supplement.
"Authorized Denomination" means an Authorized Denomination as defined in Section 3 (a)
of the First Supplement.
"Bond Date" means, when used with respect to the Bonds, August 15, 2000.
"Bonds" means the First Series Bonds, and all substitute bonds exchanged therefor, and all
other substitute and replacement bonds issued pursuant to the First Supplement; and the term "Bond"
means any of the Bonds.
"Capitalized Interest Account" means the account establishedwithin the Debt Service Fund
as provided in Section 8 (c) of the First Supplement.
"Chapter 1202" means Chapter 1202, Texas Government Code.
"Chapter 1206" means Chapter 1206, Texas Government Code.
"Code" means the Internal Revenue Code of 1986, as amended.
"Construction Fund" means the "City of Corpus Christi, Texas Series 2000 General Airport
Revenue Bonds Construction Fund" established pursuant to Section 9 of the First Supplement.
"Defeasance Securities" means (i) direct, noncallable obligations of the United States of
America, including obligations that are unconditionally guaranteed by the United States of America,
(ii) noncallable obligations of an agency or instrumentality of the United States of America,including
obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that,
on the date of the purchase thereof are rated as to investment quality by a nationally recognized
investment rating firm not less than AAA or its equivalent, and (iii) noncallable obligations ora state
or an agency or a county, municipality, or other political subdivision of a state that have been
refunded and that, on the date the governing body of the City adopts or approves the proceedings
authorizing the financial arrangements are rated as to investment quality by a nationally recognized
investment rating firm not less than AAA or its equivalent.
A-1
'"Designated Trust Office" means the office for payment and transfer of Bonds as designated
by the Paying Agent/Registrar in the Paying Agent Agreement.
"DTC" means The Depository Trust Company, New York, New York, or any successor
securities depository.
"DTC Participant" means securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations on whose behalf DTC was created to hold securities to
facilitate the clearance and settlement of securities transactions among DTC Participants.
"First Series Bonds" means the City of Corpus Christi, Texas GeneralAirport Revenue Bonds,
Series 2000A (Exempt Facility Bonds) authorized by the First Supplement.
"First Supplement" means this ordinance authorizing the Bonds.
"Insurer" means Financial Security Assurance, Inc., and its successors and assigns.
"Issuance Date" means the date of delivery the Bonds to the Underwriters against payment
therefor.
"Master Ordinance" means the Mas~er OrdinanceEstabb'shingthe GeneralAirportRevenueBond
Financ~g Program IVi& R~_sFect to tim Issuance otcObh~a Eons by ~ City o£ Corpus C[z~n; Terns Secured
by GeneralAirportRevenued', adopted by the City on August 22, 2000.
"Maturity" means the date on which the principal of a Bond becomes due and payable as
therein and herein provided, whether at Stated Maturity, by redemption, declaration of acceleration,
or otherwise.
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each Person whom the SEC or its staffhas determined to be a nationally
recognized municipal securities information repository within the meaning of the Rule from time to
time.
~Paymg Agent, Registrar or Paying Agent/Registrar means the agent appolntedpursuant
to Section 5 (a) of the First Supplement, or any successor to such agent.
"Paying Agent Agreement" means the agreement between the City and the Paying
Agent/Registrar pertaining to the duties and responsibilities of the Paying Agent/Registrar for the
Bonds.
A-2
'~Purchase Agreement" means the bond purchase contract between the City and the
Underwriters pertaining to the purchase of the Bonds and the Second Series Bonds by the
Underwriters.
"Rebate Fund" means the "City of Corpus Christi, Texas Series 2000 General Airport Revenue
Bonds Rebate Fund" established pursuant to Section 12 of the First Supplement.
"Record Date" means, with respect to the Bonds, the last Business Day of the month next
preceding an interest payment date.
"Registration Books" means the books or records relating to the registration, payment, and
transfer or exchange of the Bonds maintained by the Paying Agent/Registrar pursuant to Section 5
of the First Supplement.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"Second Series Bonds" means the City of Corpus Christi, Texas General Airport Revenue
Bonds, Series 2000B authorized by the Second Supplement.
"Second Supplement" means the ordinance authorizing the Second Series Bonds, adopted
concurrently with the First Supplement.
"SlD" means any Person designated by the State of Texas or an authorized department, officer,
or agency thereof as, and determined by the SEC or its staff to be, a state infornmtion depository
within the meaning of the Rule from time to time.
"Stated Maturity" means, when used with respect to the Bonds, the scheduled tnaturity or
mandatory sinking fund redemption of the Bonds.
"Underwriters" means the syndicate of investment banking firms identified in the Purchase
Agreement; Merrill Lynch & Co. acts as senior managing underwriter.
All terms not herein defined shall have the meanings given to said terms by the Master
Ordinance or as otherwise defined in this First Supplement.
A-3
EXHIBIT B
FORM OF BONDS
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF NUECES
CITY OF CORPUS CHRISTI, TEXAS
GENERAL AIRPORT REVENUE BOND,
SERIES 2000A
(EXEMPT FACILITY BONDS)
NO. R-
PRINCIPAL
AMOUNT
$
INTEREST MATURITY BOND
RATE DATE DATE CUSIP
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF CORPUS CHRISTI, IN
NUECES COUNTY, TEXAS (the "City"), being a home-rule municipality and political subdivision
of the State of Texas, hereby promises to pay to the Registered Owner specified above, or the
registered assignee hereof (either being hereinafter called the "registered owner"), the principal
amount specified above, and to pay interest thereon, calculated on the basis of a 360-day year
composed of twelve 30-day months, from the Bond Date specified above, to the Maturity Date
specified above, or the date of redemption prior to maturity, at the interest rate per annum specified
above; with interest being payable on February 15, 2001, and semiannually on each August 15 and
February 15 thereafter, except that if the date of authentication of this Bond is later than the first
Record Date (hereinafter defined), such principal amount shall bear interest from the interest
payment date next preceding the date of authentication, unless such date of authentication is after
any Record Date but on or before the next following interest payment date, in which case such
principal amount shall bear interest from such next following interest payment date.
B-1
THE PRINCIPAL OF AND INTEREST ON this Bond are payable m lawful money of the
United States of America, without exchange or collection charges, solely from funds of the City
required by the Ordinance authorizing the issuance of the Bonds to be on deposit with the Paying
Agent/Registrar for such purpose as hereinafter provided. The principal of this Bond shall be paid to
the registered owner hereof upon presentation and surrender of this Bond at maturity or upon the date
fixed for its redemption prior to maturity, of The Chase Manhattan Bank, which is the "Paying
Agent/Registrar" for this Bond, at its designated corporate trust office in Houston, Texas (the
"Designated Trust Office") . The payment of interest on this Bond shall be made by the Paying
Agent/Registrar to the registered owner hereof on each interest payment date by check, dated as of
such interest payment date, and such check shall be sent by the Paying Agent/Registrar by United
States mail, first-class postage prepaid, on each such interest payment date, to the registered owner
hereof, at the address of the registered owner, as it appeared on the last business day of the month
next preceding each such interest payment date (the "Record Date") on the Registration Books kept
by the Paying Agent/Registrar, as hereinafter described; provided, that upon the written request of any
owner of not less than $1,000,000 in principal amount of Bonds provided to the Paying
Agent/Registrar not later than the Record Date immediately preceding an interest payment date,
interest due on such Bonds on such interest payment date shall be made by wire transfer to any
designated account within the United States of America. In addition, interest may be paid by such
other method, acceptable to the Paying Agent/Registrar, as may be requested by, and at the risk and
expense of, the registered owner hereof. Any accrued interest due upon the redemption of this Bond
prior to maturity as provided herein shall be paid to the registered owner upon presentation and sur-
render of this Bond for redemption and payment at the Designated Trust Office of the Paying
Agent/Registrar. The City covenants with the registered owner of this Bond that on or before each
pnncipal payment date and interest payment date for this Bond it will make available to the Paying
Agent/Registrar, the amounts required to provide for the payment, in immediately available funds,
of all principal of and interest on the Bonds, when due. Notwithstanding the foregoing, during any
period in which ownership of the Bonds is determined by a book entry at a securities depository for
the Bonds, payments made to the securities depository, or its nominee, shall be made in accordance
with arrangements between the City and the securities depository. Terms used herein and not
otberwise defined have the meaning given in the Bond Ordinance (hereinafter defined).
IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday, or a day on which banking institutions in The City of New York, New York,
or in the city where the Designated Trust Office of the Paying Agent/Registrar is located are
authorized by law or executive order to close, then the date for such payment shall be the next
succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking
institutions are authorized to ch)se; and payment on such date shall have the same force and effect
as if made on the original date payment was due.
THIS BOND is one of a Series of Bonds, dated as of the Bond Date stated above, authorized
in accordance with the Constitution and laws of the State of Texas including, without limitation,
Chapter 22, Texas Transportation Code, in the aggregate principal amount of $13,010,000, issued
pursuant to a First Supplemental Ordinance to the Master Ordinance adopted August 22, 2000, and
pursuant to the Master Ordinance referred therein (collectively, the "Bond Ordinance"), FOR THE
B-2
PURPOSE OF CONSTRUCTING, IMPROVING, RENOVATING, ENLARGING AND
EQUIPPING THE CORPUS CHRISTI INTERNATIONAL AIRPORT. All Bonds of this series are
issuable solely as fully registered bonds, without interest coupons, in any Authorized Denomination.
ON FEBRUARY 15, 20__, or on any date thereafter, the Bonds of this Series maturing on and
after February 15, 20__ may be redeemed prior to their scheduled maturities, at the option of the City,
with funds derived from any available and lawful source, as a whole, or in part, and, if in part, the
particular Bonds, or portions thereof, to be redeemed shall be selected and designated by the City
(provided that a portion of a Bond may be redeemed only in an integral multiple of $5,000), at par
and accrued interest to the date fixed for redemption; provided, that during any period in which
ownership of the Bonds is determined only by a book entry at a securities depository for the Bonds,
if fewer than all of the Bonds of the same maturity and bearing the same interest rate are to be
redeemed, the particular Bonds of such maturity and bearing such interest rate shall be selected in
accordance with the arrangements between the City and the securities depository.
NOTICE OF any such redemption of Bonds shall be given in the following manner, to-wit,
(i) a written notice of such redemption shall be given to the registered owner of each Bond or a
portion thereof being called fur redemption not more than 60 days nor less than 30 days prior to the
date fixed for such redemption by depositing such notice in the United States Mail, first-class postage
prepaid, addressed to each such registered owner at the address thereof shown on the Registration
Books of the Paying Agent/Registrar and (ii) a notice of such redemption shall be published one time,
at least 30 days prior to the date fixed for such redemption, in a journal or publication of general
circulation in the United States of America which carries as a regular feature notices of redemption
of municipal bonds; provided, however, that the failure to send, mail, or receive such notice described
in clause (i) above, or any defect therein or in the sending or mailing thereof, shall not affect the
validity or effectiveness of the proceedings for the redemption of any Bond, as publication of notice
as described in clause (ii) above shall be the only notice actually required in connection with or as a
prerequisite to the redemption of any Bonds. By the date fixed for any such redemption due provision
shall be made by the City with the Paying Agent/Registrar for the payment of the required redemption
price for this Bond or the portion hereof which is to be so redeemed, plus accrued interest thereon to
the date fixed for redemption. If such notice of redemption is given, and if due provision for such
payment is made, all as provided above, this Bond, or the portion hereof which is to be so redeemed,
thereby automatically shall be redeemed prior to its scheduled maturity, and shall not bear or accrue
interest after the date fixed for its redemption, and shall not be regarded as being outstanding except
for the right of the registered owner to receive the redemption price plus accrued interest to the date
fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment.
The Paying Agent/Registrar shall record in the Registration Books all such redemptions of principal
amount of this Bond or any portion hereof. If a portion of any Bond shall be redeemed a substitute
Bond or Bonds having the same maturity date, bearing interest at the same rate, in any Authorized
Denomination, and in an aggregate principal amount equal to the unredeemed portion thereof, will
be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the
City, all as provided in the Bond Ordinance. The years of maturity of the Bonds called for such
redemption shall be selected by the City. The Bonds or portions thereof redeemed within a maturity
B-3
shall be selected by lot or other customary random method selected by the Paying Agent/Registrar
(provided that a portion of a Bond may be redeemed only in an Authorized Denomination).
THIS BOND ORANY PORTION OR PORTIONS HEREOF may, at the request of the regis-
tered owner or the assignee or assignees hereof, be assigned, transferred, converted into and
exchanged for a like aggregate amount of fully registered Bonds, without interest coupons, payable
to the appropriate registered owner, assignee or assignees, as the case may be, having any Authorized
Denomination as requested in writing by the appropriate registered owner, assignee or assignees, as
the case may be, upon surrender of this Bond to the Paying Agent/Registrar at its Designated Trust
Office for cancellation, all in accordance with the form and procedures set forth in the Bond
Ordinance. Among other requirements for such assignment and transfer, this Bond must be presented
and surrendered to the Paying Agent/Registrar, together with proper instruments of assignment, in
form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing
assignment of this Bond or any portion or portions hereof in any Authorized Denomination to the
assignee or assignees in whose name or names this Bond or any such portion or portions hereof is or
are to be registered. The form of Assignment printed or endorsed on this Bond may be executed by
the registered owner to evidence the assignment hereof, but such method is not exclusive, and other
instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the
assignment of this Bond or any portion or portions hereof from time to time by the registered owner.
The one requesting such conversion and exchange shall pay the Paying Agent/Registrar's reasonable
standard or customary fees and charges for converting and exchanging any Bond or portion thereof.
In any circumstance, any taxes or governmental charges required to be paid with respect thereto shall
be paid by the one requesting such assignment, transfer, conversion or exchange, as a condition
precedent to the exercise of such privilege. The foregoing notwithstanding, in the case of the
conversion and exchange of an assigned and transferred Bond or Bonds or any portion or portions
thereof, such fees and charges of the Paying Agent/Registrar will be paid by the City. The Paying
Agent/Registrar shall not be required (i) to make any such transfer, conversion or exchange during
the period beginning at the opening of business 30 days before the day of the first mailing of a notice
of redemption and ending at the close of business on the day of such mailing, or (ii) to transfer,
convert or exchange any Bonds so selected for redemption when such redemption is scheduled to
occur within 30 calendar days; provided, howeveb such limitation of transfer shall not be applicable
to an exchange by the registered owner of an unredeemed balance of a Bond called for redemption
in part.
WHENEVER the beneficial ownership of this Bond is determined by a book entry at a
securities depository for the Bonds, the foregoing requirements of holding, delivering, or transferring
this Bond shall be modified to require the appropriate person or entity to meet the requirements of
the securities depository as to registering or transferring the book entry to produce the same effect.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the City, resigns, or
otherwise ceases to act as such, the City has covenanted in the Bond Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor, and promptly will cause written notice
thereof to be mailed to the registered owners of the Bonds.
B.-4
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
authorized, issued, and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this Bond
have been performed, existed, and been done in accordance with law; that the Series of Bonds of
which this Bond is one constitute Parity Obligations under the Master Ordinance; and that the
interest on and principal of this Bond, together with the other Bonds of this Series and the other
outstanding Parity Obligations are equally and rataNy secured by and payable solely from a lien on
and pledge of the Pledged Revenues.
THE CITY has reserved the right, subject to the restrictions referred to in the Bond
Ordinance, (i) to issue or incur additional Parity Obligations which also may be secured by and made
payable from a lien on and pledge of the aforesaid Pledged Revenues, in the same manner and to the
same extent as this Bond, and (ii) to amend the provisions of the Bond ordinance under the
conditions provided in the Bond Ordinance.
THE REGISTERED OWNER hereof shall never have the right to demand payment of this
Bond or the interest hereon out of any funds raised or to be raised by taxation or from any source
whatsoever other than specified in the Bond ordinance.
BY BECOMING the registered owner of this Bond, the registered owner thereby acknowledges
all of the terms and provisions of the Bond ordinance, agrees to be bound by such terms and
provisions, acknowledges that the Bond Ordinance is duly recorded and available for inspection in
the official minutes and records of the City, and agrees that the terms and provisions of this Bond and
the Bond Ordinance constitute a contract between each registered owner hereof and the City.
IN WITNESS WHEREOF, the City has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the City and countersigned with the manual or facsimile signature
of the City Secretary of the City, and has caused the official seal of the City to be duly impressed, or
placed in facsimile, on this Bond.
City Secretary, City of Corpus Christi, Texas
Mayor, City of Corpus Christi,Texas
(SEAL)
B-5
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATF.
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in this Bond; and that this Bond has been issued in conversion of and exchange
£or or replacement of a bond, bonds, or a portion of a bond or bonds of an issue which originally was
approved by the Attorney General of the State of Texas and registered by the Comptroller of Public
Accounts of the State of Texas.
The Chase Manhattan Bank,
Paying Agent/Registrar
Dated
Authorized Representative
B-6
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly authorized
representative or attorney thereof, hereby assigns this Bond to
/ /
(Assignee's Social Security or Taxpayer Identification Number)
(print or typewrite Assignee's name and address, including zip code)
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books
with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: This signature must be guaranteed
by a member of the New York Stock Exchange
or a commercial bank or trust company.
NOTICE: This signature must correspond
with the name of the Registered Owner
appearing on the face of this Bond.
B-7
[FORM OF REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS TO ACCOMPANY
THE BONDS UPON INITIAL DELIVERY]
COMPTROLLER'S REGISTRATION CERTIFICATE:
REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of PuNic Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
B-8
Exhibit C
to
Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 20 of this Ordinance.
Annual Financial Statements and Operating Data
The financial informa t/on and operating da ta with respect to the City to be provided annually
in accordance with such Section are as specified (and included in the Appendix or under the
headings of the Official Statement referred to) below:
Tables 1 through 3 contained in the Official Statement;
and
Selected Prows~ons of Certmn Audited F~nancial Statement, as set forth in Appendix B to
the Official Statement.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described
in the notes to the financial statements referred to above.
ORDINANCE REQUIREMENTS
EXHIBIT D
Page 1 of 4
The Ordinance shall incorporate the following requirements either in one section or article entitled "Provisions
Relating to Bond Insurance" (or the like), the crovlaions of which section or article shall be stated in the
Ordinance to qovern, notwlthstandln(3 snvthlncl to the contrar~ set forth In the Ordlns~¢~, or individually in the
appropriate sections:
(a)
"Insurance Policy" shall be defined as follows: "the insurance policy issued by the Bond Insurer
guaranteeing the scheduled payment of principal of and interest on the Bonds when due". "Insurer' shall
be defined as follows: 'Financial Security Assurance inc., a New York stock insurance company, or any
successor thereto or assignee thereof".
(b)
The prior written consent of the Insurer shall be a condition precedent to the deposit of any credit
instrument provided in lieu of a cash deposit into the Debt Service Reserve Fund.
(c)
The Insurer shall be deemed to be the sole holder of the Bonds insured by it for the purpose of exemising
any voting dght or privilege or giving any consent or direction or taking any other action that the holders of
the Bonds insured by it are entitled to take pursuant to the Ordinance. The Paying Agent shall take no
action except with the consent, or at the direction, of Financial Security. The maturity of Bonds insured by
the Insurer shall not be accelerated without the consent of the Insurer.
(d)
In the event the maturity of the Bonds is accelerated, the Insurer may elect, in its sole discretion, to pay
accelerated p~incipal and interest accrued [or accreted, as applicable], on such principal to the date of
acceleration (to the extent unpaid by the Issuer) and the Paying Agent shall be required to accept such
amounts. Upon payment of such accelerated principal and interest accrued [or accreted, as applicable] to
the acceleration date as provided above, the Insurer's obligations under the Insurance Policy with respect
to such Bonds shall be fully discharged.
(e) No grace period for a covenant default shall exceed 30 days,
(f) The Insurer shall be granted the fight to remove the Paying Agent.
(g) The Insurer shall be included as a third party beneficiary to the Ordinance.
(h)
No modification, amendment or supplement to the Ordinance or any other transaction document (each a
"Related Document') may become effective except upon obtaining the prior written consent of the Insurer.
(i)
Copies of any modification or amendment to the Ordinance or any other Related Document shall be sent to
Standard & Poor's Ratings Services and Moody's Investors Service, Inc. at least 10 days pdor to the
effective date thereof.
~)
Rights of the Insurer to direct or consent to issuer, Paying Agent or Bondholder actions under the
Ordinance shall be suspended dudng any period in which the Insurer is in default in its payment obligations
under the Insurance Policy (except to the extent of amounts previously paid by the Insurer and due and
owing to the Insurer) and shall be of no force or effect in the event the Insurance Policy is no longer in
effect or the Insurer asserts that the Insurance Policy is not in effect or the Insurer shall have provided
written notice that it waives such rights.
(k)
The dghts granted to the Insurer under the Ordinance or any other Related Document to request, consent
to or direct any action are rights granted to the Insurer in consideration of its issuance of the Insurance
Policy. Any exemise by the Insurer of such dghts is merely an exercise of the Insurer's contractual rights
and shall not be construed or deemed to be taken for the benefit or on behalf of the Bondholders nor does
such action evidence any position of the Insurer, positive or negative, as to whether Bondholder consent is
required in addition to consent of the Insurer.
0)
Only (1) cash, (2) non-callable direct obligations of the United States of America ("Treasuries'), (3)
evidences of ownership of proportionate interests in futura interest and principal payments on Treasuries
L:~.EGAL~M U NIS~STA3'ES~TX~37620_N .~OC
(m)
(n)
(o)
EXHIBIT D
Page 2 of 4
held by a bank or trust company as custodian, under which the owner of the investment is the real party in
interest and has the dght to proceed directly and individually against the obligor and the underlying
Treasuries are not available to any person claiming through the custodian or to whom the custodian may be
obligated or (4) pre-refunded municipal obligations rated 'AAA' and 'Aaa" by S&P and Moody's,
respectively, or any combination thereof, shall be authorized to be used to effect defeasance of the Bonds
unless the Insurer otherwise approves.
To accomplish defeasance the Issuer shall cause to be delivered (i) a report of an independent firm of
nationally recognized certified public accountants or such other accountant as shall be acceptable to the
Insurer ("Accountant') verifying the sufficiency of the escrow established to pay the Bonds in full on the
maturity or redemption date ("Verification'), (ii) an Escrow Deposit Agreement (which shall be acceptable in
form and substance to the Insurer), and (iii) an opinion of nationally recognized bond counsel to the effect
that the Bonds are no longer 'Outstanding' under the Ordinance; each Verification and defeasance opinion
shall be acceptable in form and substance, and addressed, to the Issuer, the Paying Agent and the Insurer.
In the event a forward purchase agreement will be employed in the refunding, such agreement shall be
subject to the approval of the Insurer and shall be accompanied by such opinions of counsel as may be
required by the Insurer. The Insurer shall be provided with final drafts of the above-referenced
documentation not less than five business days prior to the funding of the escrow.
Bonds shall be doomed 'Outstanding' under the Ordinance unless and until they are in fact paid and retired
or the above cdteria are met.
Amounts paid by the Insurer under the Insurance Policy shall not be deemed paid for puq3oses of the
Ordinance and shall remain Outstanding and continue to be due and owing until paid by the Issuer in
accordance with the Ordinance.
The Ordinance shall not be discharged unless all amounts due or to become due to the Insurer have been
paid in full or duly provided for.
Claims Upon the Insurance Policy and Payments by and to the Insurer.
If, on the third business day prior to the related scheduled interest payment date or principal payment date
('Payment Date") there is not on deposit with the Paying Agent, after making all transfers and deposits
required under the Ordinance, moneys sufficient to pay the principal of and interest on the Bonds due on
such Payment Date, the Paying Agent shall give notice to the Bond Insurer and to its designated agent (if
any) (the 'Insurer's Fiscal Agent') by telephone or talecopy of the amount of such deficiency by 12:00 noon,
New York City time, on such Business Day. If, on the second Business Day prior to the related Payment
Date, there continues to be a deficiency in the amount available to pay the principal of and interest on the
Bonds due on such Payment Date, the Paying Agent shall make a claim under the Insurance Policy and
give notice to the Insurer and the Insurers F'a~-.,aJ Agent (if any) by telephone of the amount of such
deficiency, and the allocation of such deficiency betwoon the amount required to pay interest on the Bonds
and the amount required to pay principal of the Bonds, confirmed in writing to the Insurer and the Insurer's
Fiscal Agent by 12:00 noon, New York City time, on such second Business Day by filling in the form of
Notice of Claim and Certificate delivered with the Insurance Policy.
In the event the claim to be mede is for a mandatory sinking fund redemption installment, upon receipt of
the moneys due, the Paying Agent shall authenticate and deliver to affected Bondholders who surrender
their Bonds a new Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the
Bond surrendered. The Paying Agent shall designate any portion of payment of principal on Bonds paid by
the Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of
maturity, on its books as a reduction in the principal amount of Bonds registered to the then current
Bondholder, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Insurer,
registered in the name of Financial Security Assurance Inc., in a principal amount equal to the amount of
principal so paid (without regard to authorized denominations); provided that the Paying Agent's failure to
so designate any payment or issue any replacement Bond shall have no effect on the amount of principal or
interest payable by the Issuer on any Bond or the subrogation dghts of the insurer.
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(q)
(r)
(s)
(t)
(u)
EXHIBIT D
Page 3 of 4
The Paying Agent shall keep a complete and accurate record of all funds deposited by the Insurer into the
Policy Payments Account and the allocation of such funds to payment of interest on and principal paid in
respect of any Bond. The Insurer shall have the dght to inspect such records at reasonable times upon
reasonable notice to the Paying Agent.
Upon payment of a claim under the Insurance Policy the Paying Agent shall establish a separate special
purpose trust account for the benefit of Bondholders referred to herein as the 'Policy Payments Account'
and over which the Paying Agent shall have exclusive control and sole right of withdrawal. The Paying
Agent shall receive any amount paid under the Insurance Policy in trust on behalf of Bondholders and shall
deposit any such amount in the Policy Payments Account and distribute such amount only for purposas of
making the payments for which a claim was made. Such amounts shall be disbursed by the Paying Agent
to Bondholders in the same manner as principal and interest payments are to be made with respect to the
Bonds under the sections hereof regarding payment of Bonds. it shall not be necessary for such payments
to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service
with other funds available to make such payments.
Funds held in the Policy Payments Account shall not be invested by the Paying Agent and may not be
applied to satisfy any costs, expenses or liabilitiss of the Paying Agent.
Any funds remaining in the Policy Payments Account following a Bond payment date shall promptly be
remitted to the Insurer.
The Insurer shall, to the extent it makes any payment of principal of (or, in the case of Capital Appreciation
Bonds, accreted value) or interest on the Bonds, become subrogated to the dghts of the recipients of such
payments in accordance with the terms of the Insurance Policy.
The Issuer shall pay or reimburse the Insurer any and all charges, fees, costs and expenses which the
Insurer may reasonably pay or incur in connection with (i) the administration, enforcement, defense or
preservation of any dghts or secudty in any Related Document; (ii) the pursuit of any remedies under the
Ordinance or any other Related Document or otherwise afforded by law or equity, (iii) any amendment,
waiver or other action with respect to, or related to, the Ordinance or any olher Related Document whether
or not executed or completed, (iv) the violation by the Issuer of any law, rule or regulation, or any judgment,
order or decree applicable to it or (v) any litigation or other dispute in connection with the Ordinance or any
other Related Document or the transactions contemplated thereby, other than amounts resulting from the
failure of the Insurer to honor its obligations under the Insurance Policy. The Insurer reserves the dght to
charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in
respect of the Ordinance or any other Related Document.
Payments required to be made to the Insurer shall he payable solely from the Trust Estate and shall be paid
(i) pher to an event of dsfauit, to the extent not paid from the Bond Fund, after required deposits to the Debt
Service Reserve Fund and (ii) after an event of default, with re~oe~ to amounts other than principal and
interest on the Bonds, on the same priority as payments to the Paying Agent for expenses. The obligations
to the Insurer shall survive discharge or termination of the Related Documents.
The Insurer shall be entitled to pay principal (or, in the case of Capital ~opreciation Bonds, accreted value)
or interest on the Bonds that shall become Due for Payment but shall he unpaid by reason of Nonpayment
by the Issuer (as such terms are defined in the Insurance Policy) and any amounts due on the Bonds as a
result of acceleration of the maturity thereof in accordance with the Ordinance, whether or not the Insurer
has received a Notice of Nonpayment (as such terms are defined in the Insurance Policy) or a claim upon
the Insurence Policy.
The notice address of the Insurer is: Financial Security Assurance Inc., 350 Park Avenue, New York, New
York 10022-6022, Attention: Managing Director - Surveillance; Re: Policy No. Telephone: (212)
826-0100; Telecopier. (212) 339-3529. In each case in which notice or other communication refers to an
Event of Default, then a copy of such notice or other communication shall also be sent to the attention of
General Counsel and shall be marked to indicate 'URGENT MATERIAL ENCLOSED.'
The Insurer shall he provided with the following information:
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EXHIBIT D
Page 4 of 4
(v)
(w)
(i)
Annual audited financial statements within 120 days after the end of the Issuer's
fiscal year and the Issuer's annual budget within 30 days after the approval thereof;
(ii)
Notice of any drew upon the Debt Service Reserve Fund within two Business Days
after knowledge thereof other than (i) withdrewais of amounts in excess of the Debt
Service Reserve Requirement and (ii) withdrewals in connection with a refunding of
Bonds;
(iii)
Notice of any default known to the Paying Agent within five Business Days after
knowledge thereof;
(iv)
Pdor notice of the advance refunding or redemption of any of the Bonds, including
the principal amount, maturities and CUSIP numbers thereof;
(v)
Notice of the resignation or removal of the Paying Agent and Bond Registrar and the
appointment of, and acceptance of duties by, any successor thereto;
(vi)
Notice of the commencement of any proceeding by or against the Issuer commenced
under the United States Bankruptcy Code or any other applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (an 'Insolvency Proceeding');
(vii)
Notice of the making of any claim in connection with any Insolvency Proceeding
seeking the avoidance as a preferential trensfer of any payment of principal of, or
interest on, the Bonds;
(viii)
A full odginal transcript of all proceedings relating to the execution of any amendment
or supplement to the Related Documents; and
(ix)
All repods, notices and correspondence to be delivered under the terms of the
Related Documents.
Notwithstanding satisfaction of other conditions to the issuance of additional bonds contained in the
Ordinance, no such issuance may occur (1) should any Event of Default (or any event which, once all
notice or grece pedods have passed, would constitute an Event of Default) have occurred and be
continuing unless such default shall be cured upon such issuance and (2) unless the Debt Service Reserve
Fund is fully funded at its requirement (including the new issue) upon the issuance of such Additional
Bonds, in either case unless otherwise permitted by the Insurer.
No contrect shall be entered into nor any action taken by which the rights of the Insurer or security for or
sources of payment of the Bonds may be impaired or prejudiced except upon obtaining the prior written
consent of the Insurer.
THE STATE OF TEXAS
COUNTIES OF NUECES AND SAN PATRICIO
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 22nd day of
August, 2000, authorizing the issuance of the City's General Airport Revenue Bonds, Series 2000A,
which ordinance is duly of record in the minutes of said City Council, and said meeting was open to
:the punic, and punic notice of the time, place and purpose of said meeting was given, all as required
by Chapter 551, Texas Government Code.
EXECUTED UNDER MY HAND AND SEAL of said City, this the 22nd day of August,
2000.
(SEAL)
City Secretary, ~ty of Corpus
Christi, Texas
Corpus Christ~exas
~ f~ay of ~ !~ ~/~-,2000
TO THE MEMBERS OF THE C1TY COUNCIL
Corpus Christi, Texas
For the reasons set forth in the emergency clause of the foregoing ordinance an emergency exists
requiring suspension of the Charter rule as to consideration and voting upon ordinances at two
regular meetings: I/we, therefore, request that you suspend said Charter rule and pass this
ordinance finally on the date it is introduced, or at the present meeting of the City Council.
Respectfully,
Respectfully,
Samuel L. Neal, Jr., Mayor /
City of Corpus Christi
Council Members
The above ordinance was passed by the following vote:
Samuel L. NeaL Jr.
Javier D. Colmenero
Melody Cooper
Henry Garrett
Dr. Arnold Gonzales
Rex A. Kinnison
Betty Jean Longoria
John Longoria
Mark Scott
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