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Home My WebLink About024398 ORD - 03/20/2001CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS COUNTIES OF NUECES AND SAN PATRICIO CITY OF CORPUS CHRISTI On this the 20th day of March, 2001, the City Council of the City of Corpus Christi, Texas convened in Regular Meeting, at City Hall, with the following members of said Council present, to- wit: Samuel b Neal, Jr. Betty Jean Longoria, Javier D. Colmenero, John Longoria, Mark Scott, Rex A. Kinnison, Melody Cooper, Henry Garrett, Arnold Gonzales, Ph.D. David R. Garcia, James Bray, Jorge Cruz-Aedo, Armando Chapa, with the following absent: ~, constituting other business was transacted~ Mayor Councilmembers City Manager, City Attorney, Director of Financial Services, City Secretary a quorum, at which time the following among The City Manager presented for the consideration of the Council an ordinance authorizing the sale of general improvement and refunding bonds. The ordinance was read by the City Secretary. The motion was carried by the following vote, AYES: NAYS: All members of the C,~y Council shown present above voted "Aye" except (¢O'~f't2¢..4¢,.-- . The Mayor announced that the ordinance had been passed. The ordinance is as follows: 024398 ORDINANCE NO. 02,!398 AN ORDINANCE PROVIDING FOR THE ISSUANCE OF THIRTY NiNE MILLION ONE HUNDRED FIFTYTHOUSAND DOLLARS ($39,'150,000) OF THE GENERAL IMPROVEMENT AND REFUNDING BONDS, SERIES 200'1, OF THE CITY OF CORPUS CHRISTI, TEXAS, BEARING INTEREST AT THE RATES HEREINAFTER SET FORTH, AND PROVIDING FOR THE LEVY, ASSESSMENT AND COLLECTION OF A TAX SUFFICIENT TO PAY THE INTEREST ON SAID BONDS AND TO CREATE A SINKING FUND FOR THE REDEMPTION THEREOF AT MATURITY; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH; AND PROVIDING THATTHIS ORDINANCE SHALL BE IN FORCEAND EFFECT FROM AND AFTER THE DATE OF ITS PASSAGE. WHEREAS, it is deemed advisable and to the best interest of the City of Corpus Christi (the "City" or the "Issuer") that all of the general improvement bonds authorized at election previously held in the City on November 7, 2000, aggregating $39,'150,000 in principal amount, be combined in a single issue and sold at this time, for the following purposes: Street Improvements, in the amount of $20,776,000; Park and Recreation and Museum Improvements, in the amount of $4,694,000; Public Health and Safety Improvements, in the amount of $5,330,000; and WHEREAS, it is deemed advisable and to the best interest of the City that the bonds to be sold pursuant to the aforesaid elections be sold at this time, pursuant to the laws of the State of Texas; and WHEREAS, the City Council has determined to refund the outstanding obligations of the City described in Schedule I attached to this ordinance (the "Refunded Bonds") to achieve a debt service savings with respect to Refunded Bonds; and WHEREAS, the bonds hereinafter authorized are to be issued and delivered pursuant to the laws of the State of Texas, including specifically Chapters '1207, '125'1 and '133'1, Texas Government Code, for the purposes set forth above. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: '1. That the bond or bonds of the City of Corpus Christi, Texas (the "City" or the "Issuer~') to be called "General Improvement and Refunding Bonds, Series 2001" (the "Bonds" or the "Series 2001 Bonds"), be issued under and by virtue of the Constitution and Jaws of the State of Texas and the Charter of the City for the following purposes: (a) Thirty Million Eight Hundred Thousand Dollars ($30,800,000), for permanent improvements to the City (the "New Money Portion"), as shall conform to the propositions approved by the voters at an election held in the City on November 7, 2000, to-wit: Twenty Million Seven Hundred Seventy-Six Thousand Dollars ($20,776,000) for the purpose of improving the streets of the City; Four Million Six Hundred Ninety- Four Thousand Dollars ($4,694,000) for the purpose of constructing new improvements to the City's parks and recreation and museum facilities; and Five Million Three Hundred Thirty Thousand Dollars ($5,330,000) for the purpose of public health and safety improvements (all of such improvements approved at the November 7, 2000 election hereinafter called the "Project"); and (b) Eight Million Three Hundred Fifty Thousand Dollars ($8,350,000) for the purpose of refunding the Refunded Bonds (the "Refunding Portion"); all of which bonds aggregate in principal amount the sum of Thirty Nine Million One Hundred Fifty Thousand Dollars ($39,150,000). 2. That the Series 2001 Bonds shall be dated March 15, 2001, shall be in the denomina- tion of $5,000 each, or any integral multiple thereof, shall be numbered consecutively from R-1 upward, and shall mature on the maturity date, in each of the years, and in the amounts, respec- tively, as set forth in the following schedule: MATURITY DATE: MARCH I YEARS AMOUNTS ($) YEARS AMOUNTS 2005 160,000 2013 2,585,000 2006 170,000 2014 2,710,000 2007 370,000 2015 3,090,000 2008 395,000 2016 2,930,000 2009 405,000 2017 2,720,000 2010 3,210,000 2018 2,865,000 2011 3,690,000 .... **** 2012 3,850,000 2021 10,000,000 -2- For purposes of this Ordinance, the Bonds maturing on March 1,2021 are hereby designated as "Term Bonds." Attached to this Ordinance is Schedule II, which reflects the amortization of the New Money Portion and the Refunding Portion, respectively, for the Bonds. 3. That the City reserves the right to redeem the Series 2001 Bonds maturing on or after March 1, 2012, in whole or in part, on March 1,2011, or on any date thereafter, for the principal amount thereof plus accrued interest thereon to the date fixed for redemption. The years of maturity of the Series 2001 Bonds called for redemption at the option of the City prior to stated maturity shall be selected by the City. The Series 2001 Bonds or portions thereof redeemed within a maturity shall be selected by lot or other method by the Paying Agent/Registrar (hereinafter defined); provided, that during any period in which ownership of the Bonds is determined only by a book entry at a securities depository for the Series 2001 Bonds, if fewer than all of the Series 2001 Bonds of the same maturity and bearing the same interest rate are to be redeemed, the particular Series 2001 Bonds of such maturity and bearing such interest rate shall be selected in accordance with the arrangements between the City and the securities depository. The Bonds that constitute Term Bonds under this Ordinance shall be subject to mandatory sinking fund redemption, on the dates and in the amounts as set forth in the FORM OF BOND set forth in this Ordinance. At least 30 days prior to the date fixed for any such redemption the City shall cause (i) a written notice of such redemption to be deposited in the United States Mail, first-class postage prepaid, addressed to each such registered owner at his address shown on the Registration Books (hereinafter defined) of the Paying Agent/Registrar and (ii) notice of such redemption either to be published one (1) time in or posted electronically on the website of a financial journal or publication of general circulation in the United States of America or the State of Texas carrying as a regular feature notices of municipal bonds called for redemption; provided however, that the -3- failure to send, mail, or receive such notice described in (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 Series 2001 Bond, and it is hereby specifically provided that the provision of notice described in (ii) above shall be the only notice actually required in connection with or as a prerequisite to the redemption of any Series 2001 Bonds. By the date fixed for any such redemption, due provision shall be made with the Paying Agent/Registrar for the payment of the required redemption price for the Series 2001 Bonds or the portions thereof which are 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, the Series 2001 Bonds or the portions thereof which are to be so redeemed, thereby automatically shall be redeemed prior to their scheduled maturities, and shall not bear interest after the date fixed for their 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 of the Series 2001 Bonds or any portion thereof. If a portion of any Series 2001 Bond shall be redeemed a substitute Series 2001 Bond or Series 2001 Bonds having the same maturity date, bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000, at the written request of the registered owner, 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 this Ordinance. In addition to the foregoing, the City shall cause the Paying Agent/Registrar to give notice of any such redemption in the manner set forth in Section 5(h) hereof. The failure to cause such notice to be given, however, or any defect therein, shall not affect the validity or effectiveness of such redemption. -4- 4. That the Series 2001 Bonds scheduled to mature during the years, respectively, set forth below shall bear interest at the following Bonds maturing ~n Bonds maturing in Bonds maturing ~n Bonds maturing ~n Bonds maturing ~n Bonds maturing ~n Bonds maturing ~n Bonds maturing m Bonds maturing ~n Bonds maturing Bonds maturing Bonds maturing Bonds maturing Bonds maturing rates per annum: the year 2005 4.50% the year 2006 4.50% the year 2007 4.50% the year 2008 4.50% the year 2009 4.50% the year 2010 5.00% the year 2011, 5.00% the year 2012 5.00% the year 2013 5.25% in the year2014 5.375% in the year 2015 5.375% in the year2016 5.375% in the year2017 5.375% in the year2018 5.375% Bonds maturing in the year 2021, 5.00% Said interest shall be payable to the registered owner of any such Series 2001 Bond in the manner provided and on the dates stated in the FORM OF BOND set forth in this Ordinance. 5. (a) The City shall keep or cause to be kept at the designated corporate trust office in Dallas, Texas (the "Designated Trust Office") of The Chase Manhattan Bank (the "Paying Agent/Registrar"), or such other bank, trust company, financial institution, or other agency named in accordance with the provisions of (g) below, books or records of the registration and transfer of the Series 2001 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 transfers and registrations under such reasonable regulations as the City and Paying Agent/- Registrar may prescribe; and the Paying Agent/Registrar shall make such transfers and regis- trations as herein provided. It shall be the duty of the Paying Agent/Registrar to obtain from the registered owner and record in the Registration Books the address of such registered owner of each bond to which payments with respect to the Series 2001 Bonds shall be mailed, as herein provided. The City or its designee shall have the right to inspect the Registration Books during -5- 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. Registration of each Series 2001 Bond may be trans- ferred in the Registration Books only upon presentation and surrender of such bond to the Paying Agent/Registrar for transfer of registration and cancellation, together with proper written instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing the assignment of such bond, or any portion thereof in any integral multiple of $5,000, to the assignee or assignees thereof, and the right of such assignee or assignees to have such bond or any such portion thereof registered in the name of such assignee or assignees. Upon the assignment and transfer of any Series 2001 Bond or any portion thereof, a new substitute bond or bonds shall be issued in exchange therefor in the manner herein provided. (b) The entity in whose name any Series 2001 Bond shall be registered in the Registration Books at any time shall be treated as the absolute owner thereof for all purposes of this Ordinance, whether or not such bond shall be overdue, and the City and the Paying Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or on account of, the principal of, premium, if any, and interest on any such bond shall be made only to such registered owner. All such payments shall be valid and effectual to satisfy and discharge the lia- bility upon such bond to the extent of the sum or sums so paid. (c) The City hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on the Series 2001 Bonds, and to act as its agent to exchange or replace Series 2001 Bonds, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by the City and the Paying Agent/Registrar with respect to the Series 2001 Bonds, and of all exchanges thereof, and all replacements thereof, as provided in this Ordinance. (d) Each Series 2001 Bond may be exchanged for fully registered bonds in the manner set forth herein. Each bond issued and delivered pursuant to this Ordinance, to the extent of the unredeemed principal amount thereof, may, upon surrender thereof atthe Designated Trust Office of the Paying Agent/Registrar, together with a written request therefor duly executed by the registered owner or the assignee or assignees thereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, at the option of the registered owner or such assignee or assignees, as appropriate, be exchanged for fully registered bonds, without interest coupons, in the form prescribed in the FORM OF BOND set forth in this Ordinance, in the denomination of $5,000, or any integral multiple thereof (subject to the requirement hereinafter stated that each substitute bond shall have a single stated maturity date), as requested in writing by such registered owner or such assignee or assignees, in an aggregate principal amount equal to the unredeemed principal amount of any Series 2001 Bond or Series 2001 Bonds so surrendered, and payable to the appropriate registered owner, assignee, or assignees, as the case may be. If a portion of any Series 2001 Bond shall be redeemed prior to its scheduled maturity as provided herein, a substitute bond or bonds having the same maturity date, bearing interest at the same rate, in the denomination or denominations of any integral mul- tiple of $5,000 at the request of the registered owner, and in an aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon surrender thereof for cancellation. If any Series 2001 Bond or portion thereof is assigned and transferred, each bond issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the bond for which it is being exchanged. Each substitute bond shall bear a letter and/or number to distinguish it from each other bond. The Paying Agent/Registrar shall exchange or replace Series 2001 Bonds as provided herein, and each fully registered bond or bonds delivered in exchange for or replacement of any Series 2001 Bond or portion thereof as permitted or required by any provision of this Ordinance shall constitute one of the Series 2001 Bonds for all purposes of this Ordinance, and may again be exchanged or replaced. It is specif- -7- ically provided, however, that any Series 2001 Bond delivered in exchange for or replacement of another Series 2001 Bond prior to the first scheduled interest payment date on the Series 2001 Bonds (as stated on the face thereof) shall be dated the same date as such Series 2001 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 de- livered, unless such substitute bond is 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 paid in full. On each substitute bond issued in exchange for or replacement of any Series 2001 Bond or Series 2001 Bonds issued under this Ordinance 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 this Ordinance. 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 such Certificate, and no such substitute bond shall be deemed to be issued or outstanding unless such Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all Series 2001 Bonds surrendered for exchange or replace- ment. No additional ordinances, orders, or resolutions need be passed or adopted by the City Council or any other body or person so as to accomplish the foregoing exchange or replacement of any Series 2001 Bond or portion hereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute bonds in the manner prescribed herein, and said bonds shall be of type composition printed on paper with lithographed or steel engraved borders of customary weight and strength. Pursuant to Chapter 1206, Texas Government Code, the duty of exchange or replacement of any Series 2001 Bond as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Paying Agent/Registrar's Authentication -8- Certificate, the exchanged or replaced bond shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Series 2001 Bonds which originally were delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. Neither the City nor the Paying Agent/Registrar shall be required (1) to issue, transfer, or exchange any bond during a period beginning at the opening of business 30 days before the day of the first mailing of a notice of redemption of bonds and ending at the close of business on the day of such mailing, or (2) to transfer or exchange any bond so selected for redemption in whole when such redemption is scheduled to occur within 30 calendar days. (e) All Series 2001 Bonds issued in exchange or replacement of any other Series 2001 Bond or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Series 2001 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 exchanged for other Series 2001 Bonds, (v) shall have the characteristics, (vi) shall be signed and sealed, and (vii) the principal of and interest on the Series 2001 Bonds shall be payable, all as provided, and in the manner required or indicated, in the FORM OF BOND set forth in this Ordinance. (f) The City shall pay the Paying Agent/Registrar's reasonable and customary fees and charges for making transfers of Series 2001 Bonds, but the registered owner of any Series 2001 Bond requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto. The registered owner of any Series 2001 Bond requesting any exchange shall pay the Paying Agent/Registrar's reasonable and standard or customary fees and charges for exchanging any such bond or portion thereof, together with any taxes or governmental charges required to be paid with respect thereto, all as a condition precedent to the exercise of such privilege of exchange, except, however, that in the case of the exchange of an assigned and transferred bond or bonds or any portion or portions thereof in any integral multiple of $5,000, and in the case of the exchange of the unredeemed portion of a Series 2001 Bond which has been redeemed in part prior to maturity, as provided in this Ordinance, such fees and charges will be paid by the City. In addition, the City hereby covenants with the registered owners of the Series 2001 Bonds that it will (i) pay the reasonable and standard or customary fees and charges of the Paying Agent/Registrar for its services with respect to the payment of the principal of and interest on the Series 2001 Bonds, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with respect to the transfer or registration of Series 2001 Bonds solely to the extent above provided, and with respect to the exchange of Series 2001 Bonds solely to the extent above provided. (g) The City covenants with the registered owners of the Series 2001 Bonds that at all times while the Series 2001 Bonds are outstanding the City will provide a competent and legally qualified bank, trust company, financial institution, or other agency to act as and perform the services of Paying Agent/Registrar for the Series 2001 Bonds under this Ordinance, and that the Paying Agent/Registrar will be one entity. 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. 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 national or state banking institution which shall be a corporation organized and doing business under the laws of the United States of America or of any state, authorized under such laws to exercise trust powers, subject to supervision or examination by federal or state authority, and whose qualifications substantially are similar to the previous Paying Agent/Registrar to act as Paying Agent/ Registrar under this Ordinance. 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 Series 2001 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 Series 2001 Bonds, by United States Mail, 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 Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar. (h) (i) In addition to the manner of providing notice of redemption of Series 2001 Bonds as set forth in this Ordinance, the Paying Agent/Registrar shall give notice of redemption of Series 2001 Bonds by United States Mail, first-class postage prepaid, at least thirty (30) days prior to a redemption date to each NRMSIR (as defined in Section 14 hereof) and the SID (as defined in Section 14 hereof). In addition, in the event of a redemption caused by an advance refunding of the Series 2001 Bonds, the Paying Agent/Registrar shall send a second notice of redemption to the persons specified in the immediately preceding sentence at least thirty (30) days but not more than ninety (90) days prior to the actual redemption date. Any notice sent to the NRMSIRs or the SID shall be sent so that they are received at least two (2) 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 owner of any Series 2001 Bond who has not sent the Series 2001 Bonds in for redemption sixty (60) days after the redemption date. (ii) Each redemption notice, whether required in the FORM OF BOND or otherwise by this Ordinance, shall contain a description of the Series 2001 Bonds to be redeemed, including the complete name of the Series 2001 Bonds, the series, the date of issue, the interest rate, the maturity date, the CUSIP number, if any, the amounts called of each certificate, the publication and mailing date for the notice, the date of redemption, the redemption price, the name of the Paying Agent/Registrar and the address at which the Series 2001 Bond may be redeemed, -11- including a contact person and telephone number. (iii) All redemption payments made by the Paying Agent/Registrar to the registered owners of the Series 2001 Bonds shall include CUSIP numbers relating to each amount paid to such registered owner. 6. The form of all Series 2001 Bonds, including the form of the Comptroller's Registration Certificate to accompany the Series 2001 Bonds on the initial delivery thereof, the form of Paying Agent/Registrar's Authentication Certificate, and the Form of Assignment to be printed on each of the Series 2001 Bonds, shall be, respectively, substantially as follows, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance: -12- NO. FORM OF BOND UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF NUECES AND SAN PATRICIO CITY OF CORPUS CHRISTI, TEXAS GENERAL IMPROVEMENT AND REFUNDING BOND SERIES 2001 MATURITY DATE INTEREST RATE ORIGINAL ISSUE DATE March 15, 2001 CUSIP ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF CORPUS CHRISTI, TEXAS (the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to , otto the registered assignee hereof (either being herein- after called the "registered owner") the principal amount of: DOLLARS and to pay interest thereon, from the Original Issue Date specified above, to the maturity date specified above, or the date of its redemption prior to scheduled maturity, at the rate of interest per annum specified above, with said interest being payable on September 1, 2001, and semi- annually on each March 1 and September 1 thereafter; except that if the Paying Agent/Registrar's Authentication Certificate appearing on the face of this Bond is dated later than September 1, 2001, such interest is payable semiannually on each March 1 and September 1 following such date. THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the United States of America, without exchange or collection charges. The principal of this Bond shall be paid to the registered owner hereof upon presentation and surrender of this Bond at maturity or redemption prior to maturity at the designated corporate trust office in Dallas, Texas (the "Designated Payment Office"), of The Chase Manhattan Bank, which is the "Paying Agent/Registrar~' for this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the registered owner hereof as shown by the Registration Books kept by the Paying Agent/Registrar at the close of business on the 15th day of the month next preceding such interest payment date by check, dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; 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 its address as it appears on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. Any accrued interest due at maturity or upon redemption of this Bond prior to maturity as provided herein shall be paid to the registered owner upon presentation and surrender of this Bond for redemption and payment at the Designated Payment Office of the Paying Agent/Registrar. The Issuer covenants with the registered owner of this Bond that no later than each principal payment and/or interest payment date for this Bond it will make available to the Paying Agent/Registrar from the Interest -13- and Sinking Fund as defined by the ordinance authorizing the Bonds (the "Ordinance") the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Bonds, when due. IN THE EVENT OF A NON-PAYMENT of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer. Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each registered owner of a Bond appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. 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 where the Designated Payment 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 close; and payment on such date shall have the same force and effect as if made on the original date payment was due. Notwithstanding the foregoing, during any period in which ownership of the Bonds is determined only by a book entry at a securities depository for the Bonds, any payment to the securities depository, or its nominee or registered assigns, shall be made in accordance with existing arrangements between the Issuer and the securities depository. THIS BOND is one of a Series of Bonds of like tenor and effect except as to number, principal amount, interest rate, maturity and option of redemption, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $39,150,000, for the following purposes, to-wit: to finance street improvements; parks and recreation and museum improvements; and public health and safety improvements; and to refund those obligations of the City designated in the Ordinance as the "Refunded Bonds". ON MARCH 1,2011, oron any date thereafter, the Bonds of this Series maturing on March 1, 2012 and thereafter may be redeemed prior to their scheduled maturities, at the option of the Issuer, in whole, or in part, at par and accrued interest to the date fixed for redemption. The years of maturity of the Bonds called for redemption at the option of the City prior to stated maturity shall be selected by the City. The Bonds or portions thereof redeemed within a maturity shall be selected by lot or other method by the Paying Agent/Registrar; 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 Issuer and the securities depository. THE BONDS are also subject to mandatory redemption in part by lot pursuant to the terms of the Ordinance, on March 1, 2019 and March 1,2020 with respect to Bonds maturing March 1, 2021, in the following years and in the following amounts, at a price equal to the principal amount thereof and accrued and unpaid interest to the date of redemption, without premium: Year Principal Amount -14- 2019 $3,170,000 2020 $3,330,000 2021 $3,500,000 * · Final Maturity To the extent, however, that Bonds subject to sinking fund redemption have been previously purchased or called for redemption in part and otherwise than from a sinking fund redemption payment, each annual sinking fund payment for such Bond shall be reduced by the amount obtained by multiplying the principal amount of Bonds so purchased or redeemed by the ratio which each remaining annual sinking fund redemption payment for such Bonds bears to the total remaining sinking fund payments, and by rounding each such payment to the nearest $5,000 integral; 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, the particular Bonds to be called for mandatory redemption shall be selected in accordance with the arrangements between the City and the securities depository. AT LEAST 30 days prior to the date fixed for any such redemption (a) a written notice of such redemption shall be given to the registered owner of each Bond or a portion thereof being called for redemption by depositing such notice in the United States mail, first class postage prepaid, addressed to each such registered owner at his address shown on the Registration Books of the Paying Agent/Registrar and (b) notice of such redemption either shall be published one (1) time in or posted electronically on the website of a financial journal or publication of general circulation in the United States of America or the State of Texas carrying as a regular feature notices of municipal bonds called for redemption; provided, however, that the failure to send, mail, or receive such notice described in (a) 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, and the Ordinance provides that the provision of notice as described in (b) above shall be the only notice actually required in connection with or as a prerequisite to the redemption of any Bond. By the date fixed for any such redemption due provision shall be made by the Issuer 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 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 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 denomination or denominations in any integral multiple of $5,000, at the written request of the registered owner, and in 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 Issuer, all as provided in the Ordinance. ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest coupons, in the denomination of any integral multiple of $5,000. As provided in the Ordinance, this Bond, or any unredeemed portion hereof, may, at the request of the registered owner or the assignee or assignees hereof, be assigned, transferred, and exchanged for a like -15- aggregate principal amount of fully registered bonds, without interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the case may be, having the same maturity date, and bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000 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 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 integral multiple of $5,000 to the assignee or assignees in whose name or names this Bond or any such portion or portions hereof is or are to be transferred and 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 exchange shall pay the Paying Agent/Registrar's reasonable standard or customary fees and charges for exchanging any Bond or portion thereof. The foregoing notwithstanding, in the case of the exchange of a portion of a Bond which has been redeemed prior to maturity, as provided herein, and in the case of the 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 Issuer. 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, or exchange as a condition precedent to the exercise of such privilege. In any circumstance, neither the Issuer nor the Paying Agent/Registrar shall be required (1) to make any transfer or exchange during a period beginning at the opening of business 30 days before the day of the first mailing of a notice of redemption of bonds and ending at the close of business on the day of such mailing, or (2) to transfer or exchange any Bonds so selected for redemption when such redemption is scheduled to occur within 30 calendar days. 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 Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the 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. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond, and the series of which it is a part, is duly authorized by law; that the bonds issued for the permanent improvements heretofore described were approved by a vote of the resident, qualified electors of the City of Corpus Christi, Texas, voting at elections held for that purpose within said City on November 7, 2000; that all acts, conditions and things required to be done precedent to and in the issuance of this series of bonds, and of this Bond, have been properly done and performed and have happened in regular and due time, form and manner as required by law; that sufficient and proper provision for the levy and collection of taxes has been made, which, when collected, shall -16- be appropriated exclusively to the payment of this Bond and the series of which it is a part; and that the total indebtedness of said City, including the entire series of bonds of which this is one, does not exceed any constitutional, statutory or charter limitation. BY BECOMING the registered owner of this Bond, the registered owner thereby acknowledges all of the terms and provisions of the Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Ordinance is duly recorded and available for inspection in the official minutes and records of the governing body of the Issuer, and agrees that the terms and provisions of this Bond and the Ordinance constitute a contract between each registered owner hereof and the Issuer. IN WITNESS WHEREOF, this Bond has been signed with the manual or facsimile signature of the Mayor of said City, and attested with the manual or facsimile signature of the City Secretary, and the official seal of the Issuer has been duly affixed to, or impressed, or placed in facsimile, on this Bond. ATTEST: XXXXXXXXXXXXXX City Secretary Mayor (SEAL) FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE It is hereby certified that this Bond has been issued under the provisions of the proceedings adopted by the Issuer as described in the text of this Bond; and that this Bond has been issued in conversion of and exchange for 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. Dated: THE CHASE MANHATTAN BANK, Paying Agent/Registrar By Authorized Representative -17- FOR VALUE RECEIVED, the FORM OF ASSIGNMENT: ASSIGNMENT undersigned hereby sells, assigns and transfers unto Please insert Social Security or Taxpayer Identification Number of Transferee / / (Please print or typewrite name and address, including zip code of Transferee) the within Bond and all rights thereunder1 and hereby irrevocably constitutes and appoints attorney to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. NOTICE: The signature above must correspond with the name of the Registered Owner as it appears upon the front of this Bond in every particular, without alteration or enlargement or any change whatsoever. -18- FORM OF COMPTROLLER'S CERTIFICATE (ATTACHED TO THE BONDS UPON INITIAL DELIVERY THEREOF) OFFICE OF COMPTROLLER : STATE OF TEXAS REGISTER NO. I hereby certify that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this Bond has been examined by him as required by law, and that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding obligation of the City of Corpus Christi, Texas, payable in the manner provided by and in the ordinance authorizing same, and said Bond has this day been registered by me. WITNESS MY HAND and seal of office at Austin, Texas (SEAL) Comptroller of Public Accounts of the State of Texas The printer of the Series 2001 Bonds is hereby authorized to print on the Series 2001 Bonds (i) the form of bond counsel's opinion relating to the Series 2001 Bonds, and (ii) an appropriate statement of insurance furnished by a municipal bond insurance company providing municipal bond insurance, if any, covering all or any part of the Series 2001 Bonds. 7. That a special fund or account, to be designated the "City of Corpus Christi, Texas Series 2001 General Improvement and Refunding Bonds Interest and Sinking Fund" (the "Interest and Sinking Fund") is hereby created and shall be established and maintained by the City at its official depository bank. The Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the City, and shall be used only for paying the interest on and principal of the Series 2001 Bonds. All taxes levied and collected for and on account of the Series 2001 Bonds shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any of the Series 2001 Bonds is outstanding and unpaid, the City Council -19- of the City shall compute and ascertain the rate and amount of ad valorem tax, based on the latest approved tax rolls of the City, with full allowances being made for tax delinquencies and costs of tax collections, which will be sufficient to raise and produce the money required to pay the interest on the Series 2001 Bonds as such interest comes due, and to provide a sinking fund to pay the principal of the Series 2001 Bonds as such principal matures, but never less than 2% of the original principal amount of the Series 2001 Bonds as a sinking fund each year. Said rate and amount of ad valorem tax is hereby ordered to be levied and is hereby levied against all taxable property in the City for each year while any of the Series 2001 Bonds is outstanding and unpaid, and said ad valorem tax shall be assessed and collected each such year and deposited to the credit of the Interest and Sinking Fund. The ad valorem taxes necessary to pay the interest on and principal of the Series 2001 Bonds, as such interest comes due, and such principal matures, are hereby pledged for such purpose, within the limit prescribed by law. There shall be appropriated from the General Fund of the City for deposit into the Interest and Sinking Fund moneys as may be necessary to pay the first scheduled interest payment on the Series 2001 Bonds. The rate of ad valorem tax that may be levied in connection with the payment of the debt service on that portion of the Series 2001 Bonds issued for the Proiect may be set at such a rate such that the aggregate rate of ad valorem tax levied by the City in any fiscal year may exceed the 68 cent per $100 tax rate cap provided in the City Charter, as the Series 2001 Bonds issued for the Project fall within the provisions of the City Charter, as amended by the vote of the citizens on April 4, 1993, that permit said rate cap to be exceeded for bonds approved by the citizens at an election held for such purpose. 8. (a) In the event any outstanding Series 2001 Bond is damaged, mutilated, lost, stolen, or destroyed, the Paying AgentJRegistrar shall cause to be printed, executed, and delivered, a new bond of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Series 2001 Bond, in replacement for such Series 2001 Bond in the manner -20- hereinafter provided. (b) Application for replacement of damaged, mutilated, lost, stolen, or destroyed Series 2001 Bonds shall be made to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Series 2001 Bond, the applicant for a replacement bond shall furnish to the City and to the Paying Agent/Registrar such secudty or indemnity as may be required by them to save each of them harmless from any ~oss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Series 2001 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 Series 2001 Bond, as the case may be. In every case of damage or mutilation of a Series 2001 Bond, the applicant shall surrender to the Paying Agent/Registrar for cancellation the Series 2001 Bond so damaged or mutilated. (c) Notwithstanding the foregoing provisions of this Section, in the event any such Series 2001 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 Series 2001 Bond, the City may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Series 2001 Bond) instead of issuing a replacement Series 2001 Bond, provided security or indemnity is furnished as above provided in this Section. (d) Prior to the issuance of any replacement bond, the Paying Agent/Registrar shall charge the owner of such Series 2001 Bond with all legat, 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 Series 2001 Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the City whether or not the lost, stolen, or destroyed Series 2001 Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Series 2001 Bonds duly issued under this Ordinance. -21- (e) In accordance with Chapter 1206, Texas Government Code, this Section of this Ordinance shall constitute authority for the issuance of any such replacement bond without necessity of further action by the governing body of the City or any other body or person, and the duty of the replacement of such bonds is hereby authorized and imposed upon the Paying Agent/Registrar, subject to the conditions imposed by this Section 8 of this Ordinance, and the Paying Agent/Registrar shall authenticate and deliver such bonds in the form and manner and with the effect, as provided in Section 5(d) of this Ordinance for Series 2001 Bonds issued in exchange for other Series 2001 Bonds. 9. That the City Manager of the City is hereby authorized to have control of the Series 2001 Bonds and all necessary records and proceedings pertaining to the Series 2001 Bonds pending their delivery and their investigation, examination and approval by the Attorney General of the State of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Series 2001 Bonds, the Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate accompanying the Series 2001 Bonds, and the seal of said Comptroller shall be impressed, or placed in facsimile, on each such certificate. 10. That the sale of the Bonds to Banc One Capital Markets, Inc., as representative for the underwriters named in the hereinafter defined Purchase Contract (the "Underwriters"), at the purchase price described in the bond purchase agreement between the City and the Underwriters (the "Purchase Contract"), is hereby authorized, ratified and confirmed. One Bond in the principal amount maturing on each maturity date as set forth in the Purchase Contract shall be delivered to the Underwriters, and the Underwriters shall have the right to exchange such bonds as provided in Section 5 hereof without cost. The Purchase Contract setting forth the terms of the sale of the Bonds to the Underwriters, in substantially the form attached to this Ordinance, is hereby accepted, approved and authorized to be delivered in executed form to the Underwriters. The -22- Mayor or the City Manager is hereby authorized to execute and deliver the Purchase Contract on behalf of the City. The "Official Statement" prepared in connection with the sale of the Bonds, in substantially the form attached to this Ordinance, is hereby accepted, approved and authorized 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. 11. That the Issuer covenants to take any action to assure, or refrain from any action which would adversely affect, the treatment of the Series 2001 Bonds as obligations described in section 103 of the Internal Revenue Code of 1986 (the "Code"), the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the Issuer covenants as follows: (a) to take any action to assure that no more than 10 percent of the proceeds of the Series 2001 Bonds or the projects financed therewith (less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds are so used, that amounts, whether or not received by the Issuer, with respect to such private business use, do not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on the Series 2001 Bonds, in contravention of section 141(b)(2) of the Code; (b) to take any action to assure that in the event that the "private business use" described in subsection (a) hereof exceeds 5 percent of the proceeds of the Series 2001 Bonds or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for a "private business use" which is "related" and not "disproportionate," within the meaning of section 141 (b)(3) of the Code, to the governmental use; (c) to take any action to assure that no amount which is greater than the lesser -23- of $5,000,000, or 5 percent of the proceeds of the Series 2001 Bonds (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to per- sons, other than state or local governmental units, in contravention of section 141 (c) of the Code; (d) to refrain from taking any action which would otherwise result in the Series 2001 Bonds being treated as "private activity bonds" within the meaning of section 141 (b) of the Code; (e) to refrain from taking any action that would result in the Series 2001 Bonds being "federally guaranteed" within the meaning of section 149(b) of the Code; (f) to refrain from using any portion of the proceeds of the Series 2001 Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which produc- es a materially higher yield over the term of the Series 2001 Bonds, other than investment property acquired with -- (1) proceeds of the Series 2001 Bonds invested for a reasonable temporary period of 3 years er less until such proceeds are needed for the purpose for which the bonds are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of section 1.148o1(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 proceeds of the Series 2001 Bonds; (g) to otherwise restrict the use of the proceeds of the Series 2001 Bonds or amounts treated as proceeds of the Series 2001 Bonds, as may be necessary, so that the Series 2001 Bonds do not otherwise contravene the requirements of section 148 of the -24- Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings); and (h) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Series 2001 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 Series 2001 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. For purposes of the foregoing clauses (a) and (b) above, the Issuer understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of a refunding bond, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of the issuance of the Bonds. It is the understanding of the Issuer 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 Issuer 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 exemption 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 Issuer 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 the foregoing, the Mayor, the City Manager, any Assistant City Manager, and the Director of Financial Services may execute any certificates or other reports required by the Code and to make such elections, on behalf of the -25~ City, which may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. In order to facilitate compliance with the above clause (h), a "Rebate Fund" is hereby established by the City for the sole benefit of the United States of America, and such Rebate Fund shall not be subject to the claim of any other person, including without limitation the registered owners of the Bonds. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. 12. That the Issuer covenants to account for the expenditure of proceeds from the sale of the Series 2001 Bonds and any investment earnings thereon to be used for the Project on its books and records by allocating proceeds 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. The foregoing notwithstanding, the Issuer shall not expend such proceeds or investment earnings more than 60 days after the later of (a) the fifth anniversary of the date of delivery of the Series 2001 Bonds or (b) the date the Series 2001 Bonds are retired, unless the Issuer obtains an opinion of nationally- recognized bond counsel substantially to the effect that such expenditure will not adversely affect the tax-exempt status of the Series 2001 Bonds. 13. That the Issuer covenants that the property constituting a Project will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash or other compensation, unless the Issuer obtains an opinion of nationally-recognized bond counsel substantially to the effect that such sale or other disposition will not adversely affect the tax- exempt status of the Series 2001 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 resulting in the receipt of cash or other compensation. For purposes of this Section, the Issuer shall not be obligated to comply with this covenant if it obtains an opinion of nationalIy-recognized bond counsel to the effect that such failure to comply will not -26- adversely affect the excludability for federal income tax purposes from gross income of the interest. 14. (a) Definitions. That as used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID" means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. (b) Annual Reports. (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 10 of this Ordinance, being the information described in Exhibit A hereto. Any financial statements so to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit A hereto, or such other accounting principles as the City may be required to employ from time to time pursuant to state law or regulation, and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within such period, then the City shall provide unaudited financial statements by the required time, and shall provide audited financial statements for the applicable fiscal year to each NRMSIR and any SID, when and if the audit report on such statements becomes 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 -27- would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. (c) Matedal 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 Series 2001 Bonds, if such event is material within the meaning of the federal securities laws: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the Series 2001 Bonds; 7. Modifications to rights of holders of the Series 2001 Bonds; 8. Series 2001 Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Series 2001 Bonds; and 11. Rating changes. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such subsection. (d) 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 Series 2001 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 Ordinance or applicable law that causes any Series 2001 Bonds no longer to be outstanding. (ii) The provisions of this Section are for the sole benefit of the holders and beneficial owners of the Series 2001 Bonds, and nothing in this Section, express or implied, shall give any -28- 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 to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation orwarranty concerning such information or its usefulness to a decision to invest in or sell Series 2001 Bonds at any future date. (iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY SERIES 2001 BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. (iv) No default by the City in observing or performing its obligations under this Section shall comprise a breach of or default under the Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. (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 Series 2001 Bonds in the primary offering of the Series 2001 Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule since such offering as well as such -29- changed circumstances and (2) either (a) the holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the outstanding Series 2001 Bonds 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 holders and beneficial owners of the Series 2001 Bonds. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) 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 Series 2001 Bonds in the primary offering of the Series 2001 Bonds. 15. That interest earnings derived from the investment of proceeds from the sale of the Series 2001 Bonds shall be used along with other available bond proceeds for the construction of the permanent improvements set forth in Section 1 hereof for which a portion of the Series 2001 Bonds are issued; provided that after completion of such permanent improvements, if any of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and Sinking Fund. It is further provided, however, that any interest earnings on bond proceeds which are required to be rebated to the United States of America pursuant to Section 11 hereof in order to prevent the Series 2001 Bonds from being arbitrage bonds shall be so rebated and not considered as interest earnings for the purposes of this Section. 16. That the Series 2001 Bonds initially shall be issued and delivered in such manner that no physical distribution of the Series 2001 Bonds will be made to the public, and The -30- Depository Trust Company ("DTC"), New York, New York, initially will act as depository for the Series 2001 Bonds. DTC has represented that it is a limited purpose trust company incorporated under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered under Section 17A of the Securities Exchange Act of 1934, as amended, and the City accepts, but in no way verifies, such representations. The Series 2001 Bonds initially authorized by this Ordinance shall be delivered to and registered in the name of CEDE & CO., the nominee of DTC. It is expected that DTC will hold the Series 2001 Bonds on behalf of the Purchaser and its participants. So long as each Series 2001 Bonds is registered in the name of CEDE & CO., the Paying Agent/Registrar shall treat and deal with DTC the same in all respects as if it were the actual and beneficial owner thereof. It is expected that DTC will maintain a book- entry system which will identify ownership of the Series 2001 Bonds in integral amounts of $5,000, with transfers of ownership being effected on the records of DTC and its participants pursuant to rules and regulations established by them, and that the Series 2001 Bonds initially deposited with DTC shall be immobilized and not be further exchanged for substitute Series 2001 Bonds except as hereinafter provided. The City is not responsible or liable for any functions of DTC, will not be responsible for paying any fees or charges with respect to its services, will not be responsible or liable for maintaining, supervising, or reviewing the records of DTC or its participants, or protecting any interests or rights of the beneficial owners of the Series 2001 Bonds. It shall be the duty of the DTC Participants, as defined in the Official Statement herein approved, to make all arrangements with DTC to establish this book-entry system, the beneficial ownership of the Series 2001 Bonds, and the method of paying the fees and charges of DTC. The City does not represent, nor does it in any way covenant that the initial book-entry system established with DTC will be maintained in the future. Notwithstanding the initial establishment of the foregoing book- entry system with DTC, if for any reason any of the originally delivered Series 2001 Bonds is duly -31- filed with the Paying Agent/Registrar with proper request for transfer and substitution, as provided for in this Ordinance, substitute Series 2001 Bonds will be duly delivered as provided in this Ordinance, and there will be no assurance or representation that any book-entry system will be maintained for such Series 2001 Bonds. In connection with the initial establishment of the foregoing book-entry system with DTC, the City heretofore has executed a "Blanket Letter of Representations" prepared by DTC in order to implement the book-entry system described above. 17. (a) Deemed Paid. Any Series 2001 Bond and the interest thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased Bond") within the meaning of this Ordinance, except to the extent provided in subsection (e) of this Section, when payment of the principal of such Series 2001 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 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 Series 2001 Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Series 2001 Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes or revenues herein levied and pledged as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Defeasance Securities. Upon entering into the Future Escrow Agreement with respect to any such Certificates of Obligation so defeased, such Certificates of -32- Obligation shall no longer be outstanding for any purpose except for right of payment, and all rights of the City to take any other action amending the terms of such Certificates of Obligation shall be extinguished. (b) Investments. 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 Certificates of Obligation 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 Securities or the substitution of other Defeasance Securities upon the satisfaction of the requirements specified in subsection (a)(i) or (ii) above. 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) Selection of Defeased Bonds. In the event that the City elects to defease less than all of the principal amount of Certificates of Obligations of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of Certificates of Obligations by such random method as it deems fair and appropriate. (d) Defeasance Obligations. The term "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 -33- 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 of a 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. (e)ContinuingDutyofPayingAgent/Registrar. Until all Certificates of Obligation defeased under this Section of this Ordinance shall become due and payable, the Paying Agent/Registrar for such Certificates of Obligation shall perform the services of Paying Agent/Registrar for such Certificates of Obligation the same as if they had not been defeased, and the City shall make proper arrangements to provide and pay for such services. 18. That the City hereby finds that the refunding of the Refunded Bonds will result in a net present value savings of $254,277 and a gross savings of $267,783.68. 19. That concurrently with the delivery of the Bonds the City shall cause to be deposited with the Escrow Agent (as named in the Escrow Agreement), from the proceeds from the sale of the Bonds and other available moneys of the City, all as described in the letter of instructions referred to in Section 21 hereof, an amount sufficient to provide for the refunding of the Refunded Bonds in accordance with Chapter 1206, Texas Government Code. The City Manager and City Secretary are hereby authorized, for and on behalf of the City, to execute the Escrow Agreement to accomplish such purposes, in substantially the form and substance attached to this Ordinance. 20. That the City hereby determines that, subject to the delivery of the Bonds, the Refunded Bonds shall be called for redemption on the respective redemption dates set forth in Schedule I, at the applicable redemption price to the date fixed for redemption as provided in Schedule I, all in accordance with the applicable provisions of the ordinances authorizing their issuance. The City Manager or the designee thereof shall take such actions as are necessary to -34- cause the required notice of redemption to be given in accordance with the terms of the respective ordinances for the Refunded Bonds called for redemption. 21. That the proceeds from the sale of the Bonds shall be used in the manner described in the letter of instructions, as the Mayor, the City Manager, or the Director of Financia~ Services of the City may execute on behalf of the City. The foregoing not~vithstanding, proceeds representing accrued interest and premium on the Bonds shall be deposited to the credit of the Interest and Sinking Fund. 22. That the findings set forth in the preamble to this Ordinance are hereby incorporated into the body of this Ordinance and made a part hereof for all purposes. 23. That all ordinances and resolutions or pads thereof in conflict herewith are hereby repealed. 24. That the Mayor, the City Secretary or Assistant City Secretary, the City Manager, the Director of Financial Services 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 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 Ordinance, the Bonds, the Escrow Agreement, the Purchase Contract, the offering documents prepared in connection with the sale of the Bonds, or the Paying Agent/Registrar Agreement. In case any officer whose signature appears on any Bond shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purposes the same as if he or she had remained in office until such delivery. 25. That 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 above-mentioned Series 2001 Bonds, such finding of an emergency is hereby -35- specifically made and declared, requiring suspension of the Charter rule as to consideration and voting upon ordinances or resolutions at two regular meetings so that this Ordinance be passed and take effect upon first reading. 26. That it is hereby officially found and determined that the meeting at which this Ordinance was passed was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code, as amended. 27. In connection with the sale of the Bonds, the City intends to acquire, for the benefit of the holders of the Bonds, a Municipal Bond Guaranty Insurance Policy (the "Policy") to be issued by Financial Security Assurance ("FSA"). The acquisition of the Policy is hereby approved, and in consideration thereof the City shall use its best efforts to comply with the conditions agreed upon by the City and FSA in connection with the issuance of the Policy. The City Manager and any Assistant City Manager shall have the authority to execute any documents to effect the issuance of said Policy by FSA. [EXECUTION PAGE FOLLOWS] -36- ADOPTED this March 20, 2001. ATTEST: City of Corpus Christi, Texas APPROVED AS TO FORM AND LEGALITY: City~tt~rney, Tex/as City o~.~3orpus Christi, (SEAL) -37- Exhibit A to Ordinance DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 14 of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: The information of the general type included in Appendix A under the headings "DEBT PAYABLE FROM TAXES", "GENERAL REVENUES" and "AD VALOREM TAXES". Appendix C to the Official Statement, "Excerpts from the Annual Financial Report of the City of Corpus Christi, Texas for the Fiscal Year Ended July 31, 2000". Accounting Principles The accounting principles referred to in such Section are the accounting principles described in the notes to the financial statements referred to in paragraph 1 above. -38- SCHEDULE I Table of Refunded Obligations (1) Combination Tax and Municipal HOT Revenue Certificates of Obligation, Series 1994-A: Interest Par Maturity Date Rate (%) Amount(S) Call Date Call Price 12/01/2006 6.200 12/01/2007 6.300 12/01/2008 6.400 12/01/2009 6.500 12/01/2010 6.500 12/01/2011 6.600 12/01/2012 6.600 12/01/2013 6.600 12/01/2014 6.600 150,000 175 000 175 000 175 000 200 000 225 000 225 000 250 000 250 000 12/01/2005 100.00 12/01/2005 100.00 12/01/2005 100.00 12/01/2005 100.00 12/01/2005 100.00 12/01/2005 100.00 12/01/2005 100.00 12/01/2005 I00.00 12/01/2005 100.00 (2) Combination Tax and Municipal HOT Revenue Certificates of Obligation, Series 1994B: 12/01/2006 6.200 50,000 12/01/2005 100.00 12/01/2007 6.300 50,000 I2/01/2005 100.00 12/01/2008 6.400 50,000 12/01/2005 100.00 12/01/2009 6.500 50,000 12/01/2005 100.00 i2/01/2010 6.500 75,000 12/01/2005 100.00 12/01/2011 6.600 75,000 12/01/2005 100.00 12/01/2012 6.600 75,000 12/01/2005 100.00 12/01/2013 6.600 75,000 12/01/2005 100.00 12/01/2014 6.600 75,000 12/01/2005 100.00 (3) Combination Tax and Solid Waste Revenue Certificates of Obligation, Series 1995: 12/01/2010 5.100 650,000 03/01/2005 100.00 12/01/2011 5.100 700,000 03/01/2005 100.00 12/01/2012 5.125 725,000 03/01/2005 100.00 (4) General Improvement Bonds, Series 1995B: 03/01/2010 5.100 600,000 03/01/2005 100.00 03/01/2011 5.100 625,000 03/01/2005 100.00 03/01/2012 5.125 650,000 03/01/2005 100.00 (5) Combination Tax and Texas State Aquarium Certificates of Obligation Revenue, Series 1996: 03/01/2011 5.250 275,000 03/01/2006 100.00 03/01/2012 5.350 275,000 03/01/2006 100.00 03/01/2013 5.355 300,000 03/01/2006 100.00 03/01/2014 5.450 300,000 03/01/2006 100.00 03/01/2015 5.450 325,000 03/01/2006 100.00 03/01/2016 5.450 350,000 03/01/2006 100.00 Schedule II Date New Money Refunding Total 03/01/0 130,000 30,000 160,000 5 03/01/0 135,000 35,000 170,000 6 03/01/0 140,000 230,000 370,000 7 03/01/0 145,000 250,000 395,000 8 03/01/0 155,000 250,000 405,000 9 03/01/1 1,715,000 1,495,000 3,210,000 0 03/01/1 1,800,000 1,890,000 3,690,000 1 03/01/1 1,890,000 1,960,000 3,850,000 2 03/01/1 1,985,000 600,000 2,585,000 3 03/01/1 2,090,000 620,000 2,710,00C 4 03/01/1 2,450,000 640,000 3,090,00(~ 5 03/01/1 2,580,000 350,000 2,930,000 6 03/01/1 2,720,000 2,720,000 7 03/01/1 2,865,000 2,865,000 8 03/01/1 3,170,000 3,170,000 9 03/01/2 3,330,000 3,330,000 0 03/01/2 3,500,000 3,500,000 1 Total 30,800,000 8,350,000 39,160,000 THE STATE OF TEXAS COUNTIES OF NUECES AND SAN PATRIClO CITY OF CORPUS CHRISTI I, the undersigned, City Secretary of the City of Corpus Christi, Texas, do hereby cedify 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 20th day of March, 2001, authorizing the issuance of $39,150,000 General Improvement Bonds, Series 2001, which ordinance is duly of record in the minutes of said City Council, and said meeting was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Texas Government Code, Chapter 551. EXECUTED UNDER MY HAND AND SEAL of said City, this the 20th day of March, 2001. (SEAL) City Sec~re~ Christi, Texas Corpus Christi, Texas ayof ,20 (--5:' / TO THE MEMBERS OF THE CITY 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: 1/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, 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 024398