HomeMy WebLinkAboutOrdinance No. 2003-15 ORDINANCE NO. 2003-15
ORDINANCE AUTHORIZING THE ISSUANCE OF $8,700,000 CITY OF
FRIENDSWOOD TEXAS, PERMANENT IMPROVEMENT BONDS, SERIES
2003
THE STATE OF TEXAS §
COUNTIES OF GALVESTON AND HARRIS §
CITY OF FRIENDSWOOD §
WHEREAS, the bonds hereinafter authorized were duly and favorably voted at an election
held in the City of Friendswood, Texas (the "City") on the 1 st day of February, 2003; and
WHEREAS,the City Council of the City does hereby determine that bonds should be issued
in the amount of$8,700,000 as a portion and the first installment of the$20,085,000 tax bonds voted
at the election mentioned above, said bonds having been authorized for the purposes and issued in
the amounts shown below:
Purpose Amount Authorized This Issue Unissued
Public Safety Facilities $ 7,380,000 $3,782,840 $ 3,597,160
Drainage Improvements 5,575,000 3,167,034 2,407,966
Streets and Thoroughfares 4,055,000 438,216 3,586,784
Centennial Park 3,075,000 1,281,910 1,793,090
TOT�L $20,085,000 $8,700,000 $11,385,000
Now, Therefore
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FRIENDSWOOD:
1. Definitions. Throughout this Ordinance the following terms and expressions as used
herein shall have the meanings set forth below:
"Act" means Chapter 1331, Texas Goverrunent Code, as amended.
"Bonds"means the$8,700,000 City of Friendswood,Texas,Permanent Improvement Bonds,
Series 2003, authorized in this Ordinance, unless the context clearly indicates otherwise.
"Business Day" means any day which is not a Saturday, Sunday, or a day on which the
Registrar is authorized by law or executive order to close.
"City" means the City of Friendswood, Texas. �
"Closing Date" means the date of the initial delivery of and payment for the Bonds.
"Code" means the Internal Revenue Code of 1986, as amended.
"Comptroller" means the Comptroller of Public Accounts of the State of Texas.
"Debt Service Fund" means the debt service fund for payment of the Bonds established by
the City in Section 16 of this Ordinance.
"Initial Bond" means the Initial Bond authorized by Section 5(d).
"Interest Payment Date",when used in connection with any Bond,means March l,2004,and
each September 1 and March 1 thereafter until maturity or earlier redemption.
"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.
"Ordinance" as used herein and in the Bonds means this ordinance authorizing the Bonds.
"Owner" means any person who shall be the registered owner of any outstanding Bond.
"Record Date" means, for any Interest Payment Date, the fifteenth day of the month next
preceding each Interest Payinent Date.
"Register"ineans the books oi registration kept by the Registrar,in which are maintained the
names and addresses of, and the principal amounts of the Bonds registered to, each Owner.
"Registrar" means JPMorgan Chase Bank, and its successors in that capacity.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means the Municipal Advisory Council of Texas, which has been designated by the
State of Texas as, and determined by the SEC stafFto be, a state information depository within the
meaning of the Rule.
2. Authorization. The matters and facts recited in the preamble to this Ordinance are
hereby found to be true and correct. The Bonds shall be issued, pursuant to the Act, in fully
registered form in the aggregate principal amount of Eight Million Seven Hundred Thousand Dollars
($8,700,000)with the amount for each purpose being as described in the preamble to this Ordinance:
(i) public safet_y facilities;
(ii) drainage improvements;
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(iii) streets and thoroughfares; and
(iv) Centennial Park,
3. Designation, Date, and Interest Payment Dates. The Bonds shall be designated as
"CITY OF FRIENDSWOOD,TEXAS,PERMANENT IMPROVEMENT BONDS, SERIES 2003"
and shall be dated August 1,2003. The Bonds shall bear interest at the rates set forth in Section 4 of
this Ordinance from the later of August 1, 2003, or the most recent Interest Payment Date to which
such interest has been paid or duly provided for, calculated on the basis of a 360 day year of twelve
30 day months,interest payable on March 1,2004,and semiannually thereafter on September 1 and
March 1 of each year until maturity or earlier redemption.
4. Principal Amounts and Interest Rates;Numbers and Denominations.The Bonds shall
be issued in the principal ainounts and bearing interest at the rates set forth in the following schedule,
and may be transferred and exchanged as set out in this Ordinance. The Bonds shall mature on
March 1 in each of the years and in the amounts set out in such schedule. The Initial Bond shall be
numbered I-1 and all other Bonds shall be numbered in sequence beginning with R-l. Bonds
delivered on transfer of or in exchange for other Bonds shall be numbered in order of their
authentication by the Registrar,shall be in the denomination of$5,000 or integral multiples thereof,
and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of
which they are delivered.
Principal Interest
Year Amount Rate
2006 $100,000 %
2007 100,000 %
2v^v8 150,000 eio
2009 325,000 %
2010 295,000 %
2011 310,004 %
2012 330,000 %
2013 345,000 %
2014 365,000 %
2015 385,000 %
2016 410,000 %
2017 430,000 %
2018 455,000 %
2019 480,000 %
2020 510,000 %
2021 535,000 %
2022 565,000 %
2023 600,000 %
2024 635,000 %
2025 670,000 %
2026 705,000 %
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5. Execution of Bonds; Seal. (a) The Bonds shall be signed by the Mayor and
countersigned by the City Secretary,by their manual,lithographed,or facsimile signatures, and the
official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures
on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in
person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if
the official seal of the City had been manually impressed upon each of the Bonds.
(b) If any officer of the City whose manual or facsimile signature shall appear on the
Bonds shall cease to be such officer before the authentication of such Bonds or before the delivery of
such Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient for all
purposes as if such officer had remained in such office.
(c) Except as provided below,no Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefit af this Ordinance unless and until there appears thereon the
Registrar's Authentication Certificate substanfially in the form provided herein,duly authenticated by
manual execution by an officer or duly authorized signatory of the Registrar. In lieu of the executed
Registrar's Authentication Certificate described above,the Initial Bond delivered at the Closing Date
shall have attached hereto the Comptroller's Registration Certificate substantially in the form
provided herein, manually executed by the Comptroller, or by his duly authorized agent, which
certificate shall be evidence that the Initial Bond has been duly approved by the Attorney General
and that it is a valid and binding obligation of the City, and has been registered by the Comptroller.
(d) On the Closing Date, the Initial Bond, being a single bond representing the entire
principal amount of the Bonds, payable in stated installments to the Underwriter or its designee,
executed by manual or facsimile signature of the Mayor and City Secretary of the City,approved by
the Attorney General, and registered and manually signed by the Compiroller, shall b���iivzred to
the Underwriter or its designee. Upon payment for the Initial Bond, the Registrar shall cancel the
Initial Bond and deliver definitive bonds to DTC.
6. Payment of Principal and Interest. The Registrar is hereby appointed as the paying
agent and registrar for the Bonds. The principal of the Bonds shall be payable,without exchange or
collection charges, in any coin or currency of the United States of America which on the date of
payment is legal tender for the payment of debts due the United States of America, upon their
presentation and surrender as they respectively become due and payable, whether at maturity or
earlier redeinption, at the principal payment office of the Registrar. The interest on each Bond shall
be payable on each Interest Payment Date,by check mailed by the Registrar on or before the Interest
Payment Date to the Owner of record as of the Record Date,to the address of such Owner as shown
on the Register.
If the date for payment of the principal of or interest on any Bond is not a Business Day,then
the date for such payment shall be the next succeeding Business Day with the same force and effect
as if made on the date payment was originally due.
7. Successor Re�istrars. The City covenants that at all times while any Bonds are
outstanding it will provide a commercial bank or trust company, organized under the laws of the
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United States or any state, authorized under such laws to exercise trust powers, and subject to
supervision or examination by federal or state authority, to serve as and perform the duties and
services of Registrar for the Bonds. The City reserves the right to change the Registrar on not less
than 60 days written notice to the Registrar, so long as any such notice is effective not less than 60
days prior to the next succeeding principal or interest payment date on the Bonds. Promptly upon
the appointment of any successor Registrar, the previous Registrar shall deliver the Register or
copies thereof to the new Registrar,and the new Registrar shall notify each Owner,by United States
mail, first class postage prepaid, of such change �nnd of the address of the new Registrar. Each
Registrar hereunder,by acting in that capacity, shall be deemed to have agreed to the provisions of
this Section.
8. Sbecial Record Date. If interest on any Bond is not paid on any Interest Payment
Date and continues unpaid for thirty(30) days thereafter,the Registrar shall establish a new record
date for the payinent of such interest, to be known as a Special Record Date. The Registrar shall
establish a Special Record Date«�hen funds to make such interest payment are received from or on
behalf of the City. Such Special Record Date shall be fifteen (15) days prior to the date fixed for
payment of such past due interest, and notice of the date of payment and the Special Record Date
shall be sent by United States mail, first class,postage prepaid, not later than five (5) days prior to
the Special Record Date, to each affected Owner of record as of the close of business on the day
prior to the mailing of such notice.
9. Ownership;Unclaimed Principal and Interest. The City,the Registrar and any other
person may treat the person in whose name any Bond is registered as the absolute owner of such
Bond for the purpose of making and receiving payment of the principal of or interest on such Bond,
and for all other purposes, whether or not such Bond is overdue, and neither the City nor the
Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the
persan deerr�ed to be thz Owr��r of any Banu in accordance wit� this Section sha11 be va1i� and
effectual and shall discharge the liability of the City and the Registrar upon such Bond to the extent
of the sums paid.
Amounts held by the Registrar which represent principal of and interest on the Bonds
remaining unclaimed by the Owner after the expiration of three years from the date such amounts
have become due and payable shall be reported and disposed of by the Registrar in accordance with
the applicable provisions of Texas law including, to the extent applicable, Title 6 of the Texas
Property Code, as amended.
10. Re�;istration,Transfer, and Exchange. So long as any Bonds remain outstanding,the
Registrar shall keep the Register at its principal payment office in Dallas, Texas. Subject to such
reasonable regulations as it may prescribe,the Registrar shall provide for the registration and transfer
of Bonds in accordance with the terms of this Ordinance.
Each Bond shall be transferable only upon the presentation and surrender thereof at the
principal payment office of the Registrar in Dallas, Texas, duly endorsed for transfer, or
accompanied b,y an assignment duly executed by the registered Owner or his authorized
representative in form satisfactory to the Registrar. Upon due presentation of any Bond for transfer,
the Registrar shall authenticate and deliver in exchange therefor, within three Business Days after
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such presentation, a new Bond or Bonds registered in the name of the transferee or transferees, in
authorized denominations and of the same maturity and aggregate principal amount and bearing
interest at the same rate as the Bond or Bonds so presented.
All Bonds shall be exchangeable upon presentation and surrender thereof at the principal
payment office in Dallas,Texas, of the Registrar, for a Bond or Bonds of like maturity and interest
rate and in any authorized denomination, in an aggregate amount equal to the unpaid principal
amoun± of the Bond or Bonds presented for exch�nge. The Registrar shall be and is hereby
authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this
Section. Each Bond delivered in accordance with this Section shall be entitled to the benefits and
security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such Bond is
delivered.
The City or the Registrar may require the Owner of any Bond to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with the transfer or
exchange of such Bond. Any fee or charge of the Registrar for such transfer or exchange shall be
paid by the City.
11. Mutilated. Lost, or Stolen Bonds. Upon the presentation and surrender to the
Registrar of a mutilated Bond, the Registrar shall authenticate and deliver in exchange therefor a
replacement Bond of like maturity, interest rate, and principal amount, bearing a number not
contemporaneously outstanding. If any Bond is lost,apparently destroyed,or wrongfully taken,the
City,pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge
that such Bond has been acquired by a bona fide purchaser, shall authorize and the Registrar shall
authenticate and deliver a replacement Bond of like maturity, interest rate and principal amount,
bearing a nuinber not contemporaneously outstanding.
The City or the Registrar may require the Owner of a mutilated Bond to pay a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection therewith and any
other expenses connected therewith, including the fees and expenses of the Registrar. The City or
the Registrar may require the Owner of a lost, apparently destroyed or wrongfully taken Bond,
before any replacement Bond is issued, to:
(1) furnish to the City and the Registrar satisfactory evidence of the ownership of
and the circumstances of the loss, destruction or theft of such Bond;
(2) furnish such security or indemnity as may be required by the Registrar and
the City to save them harmless;
(3) pay all expenses and charges in connection therewith, including, but not
limited to,printing costs,legal fees, fees of the Registrar and any tax or other
governmental charge that may be imposed; and
(4) meet any other reasonable req_uirements of the City and the Registrar.
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If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in lieu of
which such replacement Bond was issued presents for payment such original Bond,the City and the
Registrar shall be entitled to recover such replacement Bond from the person to whom it was
delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the City or the Registrar in connection therewith.
If a::y such rnutilated,lost, apparently destroyPd or wrongfully taken Bond has become or is
about to become due and payable, the City in its discretion may, instead of issuing a replacement
Bond, authorize the Registrar to pay such Bond.
Each replacement Bond delivered in accordance with this Section shall be entitled to the
benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such
replacement Bond is delivered.
12. Cancellation of Bonds. All Bonds paid in accordance with this Ordinance, and all
Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in
accordance herewith, shall be cancelled and destroyed upon the making of proper records regarding
such payment. The Registrar shall furnish the City with appropriate certificates of destruction of
such Bonds.
13. Optional Redem�tion. The Bonds are subject to optional redemption as set forth in
the Form of Bonds in this Ordinance.
Principal amounts may be redeemed only in integral multiples of$5,000. If a Bond subject
to redemption is in a denomination larger than$5,000,a portion of such Bond maybe redeemed,but
only in integral multipies of $5,000. Upon sunender af any Bond for reuerr�pti�r� in p��, the
Registrar,in accordance with Section 10 hereof,shall authenticate and deliver in exchange therefor a
Bond or Bonds of like maturity and interest rate in an aggregate principal amount equal to the
unredeemed portion of the Bond so surrendered.
Notice of any redemption identifying the Bonds to be redeemed in whole or in part shall be
given by the Registrar at least thirty days prior to the date fixed for redemption by sending written
notice by first class mail to the Owner of each Bond to be redeemed in whole or in part at the address
shown on the Register. Such notices shall state the redemption date,the redemption price,the place
at which Bonds are to be surrendered for payinent and, if less than all Bonds outstanding of a
particular maturity are to be redeemed,the numbers of the Bonds or portions thereof of such maturity
to be redeemed. Any notice given as provided in this Section shall be conclusively presumed to have
been duly given,whether or not the Owner receives such notice. By the date fixed for redemption,
due provision shall be made with the Registrar for payment of the redemption price of the Bonds or
portions thereof to be redeemed,plus accrued interest to the date fixed for redemption. When Bonds
have been called for redemption in whole or in part and due provision has been made to redeem same
as herein provided, the Bonds or portions thereof so redeemed shall no longer be regarded as
outstanding except for the puraose of receiving payment solely from the funds so provided for
redemption, and the ri�hts of the Owners to collect interest which would otherwise accrue after the
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redemption date on any Bond or portion thereof called for redemption shall terminate on the date
fixed for redemption.
14. Forms. The form of the Bonds,including the form of the Registrar's Authentication
Certificate, the form of Assignment, and the form of Registration Certificate of the Comptroller,
which shall be attached or affixed to the Bonds initially issued,shall be,respectively, substantially as
follows, with such additions, deletions and variations as may be necessary or desirable and not
prohibited by tr.is rJ:�inaace, includir.g any legend regar�i::g bond insurance if such insurar.ce is
obtained by the Underwriter:
(a) Form of Bonds.
REGISTERED REGISTERED
NUMBER DENOMINATION
$
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF GALVESTON AND HARRIS
CITY OF FRIENDSWOOD, TEXAS
PERMANENT IMPROVEMENT BOND
SERIES 2003
INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP:
March 1, 20_ August l, 2003
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The City of Friendswood, Texas (the "City") promises to pay to the registered owner
identified above, or registered assigns, on the maturity date specified above,upon presentation and
surrender of this Bond to JPMorgan Chase Bank(the"Registrar"),at its principal payment office in
Dallas,Texas,the principal amount identified above,payable in any coin or currency of the United
States of America which on the date of payment of such principal is legal tender for the payment of
debts due the United States of America, and to pay interest thereon at the rate shown above,
calculated on the basis of a 360 day year of twelve 30 day months,from the later of August l,2003,
or the most recent interest payment date to which interest has been paid or duly provided for.
Interest on this Bond is payable by check on March l, 2004, and semiannually thereafter on each
September 1 and March 1,mailed to the registered owner as shown on the books ofregistration kept
by the Registrar as of the fifteenth day of the month next preceding such interest payment date.
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THIS BOND is one of a duly authorized issue of Bonds, aggregating $8,700,000 (the
"Bonds"), issued for the purpose of the construction and equipment of public safety facilities,
including a new public safety building,a new fire station and/or renovations of existing fire stations,
and the acquisition of land, construction of drainage improvements to various sites, including
Sunmeadow, Annalea-Whitehall, Clover Acres, Woodlawn, Mission Estates and Glenshannon
Subdivisions, construction of improvements to streets and thoroughfares, including Friendswood
Link Road, Brittany Bay Boulevard extension, various local streets and the acquisition of any
necessary rights-of-way, construction of i�prove�ents tc C�r.tennial Park, �ar.der and in strict
conformity with the Constitution and laws of the State of Texas and by authority of an election held
within the City on May 5, 2001 and pursuant to an ordinance adopted by the City Council (the
"Ordinance"), which Ordinance is of record in the official minutes of the City Council.
THE CITY RESERVES THE RIGHT to redeem Bonds maturing on and after March l,2014,
prior to their scheduled maturities, in whole or from time to time in part, in integral multiples of
$�,000,on March l,2013, or any date thereafter at par plus accrued interest on the principal amounts
called for redemption to the date fixed for redemption. Reference is made to the Ordinance for
complete details concerning the manner of redeeming the Bonds.
NOTICE OF ANY REDEMPTION shall be given at least thirty(30) days prior to the date
fixed for redemption by first class mail, addressed to the registered owners of each Bond to be
redeemed in whole or in part at the address shown on the books of registration kept by the Registrar.
When Bonds or portions thereof have been called for redemption, and due provision has been made
to redeem the same, the amounts so redeemed shall be payable solely from the funds provided for
redemption, and interest which would otherwise accrue on the amounts called for redemption shall
terminate on the date fixed for redemption.
THIS BOND is transferable only upon presentation and surrender at tne principal paymen�
office of the Registrar in Dallas,Texas,duly endorsed for transfer or accompanied by an assignment
duly executed by the registered owner or his authorized representative, subject to the terms and
conditions of the Ordinance.
THE BONDS are exchangeable at the principal payment office of the Registrar in Dallas,
Texas, for Bonds in the principal amount of$5,000 or any integral inultiple thereof, subject to the
terms and conditions of the Ordinance.
THIS BOND shall not be valid or obligatory for any purpose or be entitled to any benefit
under the Ordinance unless this Bond is either(i)registered by the Comptroller of Public Accounts
of the State of Texas by registration certificate attached or affixed hereto or(ii)authenticated by the
Registrar by due execution of the authentication certificate endorsed hereon.
THE REGISTERED OVVI�TER of this Bond,by acceptance hereof,acknowledges and agrees
to be bound by all the terms and conditions of the Ordinance.
THE rITY has covenante�l �n the Ore1?nance that it will at all times provide a legallv
qualified registrar fer the B�nds and will cause noti ce c�f any change of registrar to be mailed to each
registered owner.
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IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
issued and delivered;that all acts,conditions and things required or proper to be performed,to exist
and to be done precedent to or in the issuance and delivery of this Bond have been performed, exist
and have been done in accordance with law; and that annual ad valorem taxes, within the limits
prescribed by law,sufficient to provide for the payment of the interest on and principal of this Bond,
as such interest comes due and such principal matures, ha�e been levied and ordered to be levied
against all taxabie property in the City, and have beer��leu�ged ir:�vo�a�ly fcr s�ach paymen±.
IN WITNES S WHEREOF,this Bond has been signed with the manual or facsimile signature
of the Mayor of the City and countersigned with the manual or facsimile signature of the City
Secretary of the City, and the official seal of the City has been duly impressed, or placed in
facsimile, on this Bond.
PASSED,APPROVED,AND ADOPTED ON FIRST AND FINAL READING THIS 21sT
day of July, 2003.
(AUTHENTICATION (SEAL) CIT OF FRIENDSWOOD, TEXAS
CERTIFICATE) --
Mayor Kiinball W. Brizen ine
. �
Ci y Secretary Delo 's McKenzie
(b) Form of Re�istration Certificate of Comptroller.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTERNO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorriey 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 Public Accounts
(SEAL) of the State of Texas
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(c) Form of Re�istrar's Authentication Certificate.
AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been delivered pursuant to the
Ordinance described in the text of this Bond.
�PMorgan Chase Bank
As Paying Agent/Registrar
By
Authorized Signature
Date of Authentication
(d) Form of Assi�nment.
AS SIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer ldentification Number of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer said
Bond on the books kept for registration thereof, with fu11 power of substitution in the premises.
DATED:
Signature Guaranteed:
Registered Owner
NOTICE: The signature above must
correspond to the name of the registered
owner as shown on the face of this
NOTICE: Signature must be Bond in every particular, without any
guaranteed by a member firm of the alteration, enlargement or change
New York Stock Exchange or a whatsoever.
commercial bank or trust company.
(e) The Initial Bond shall be in the form set forth in paragraphs (a), (b) and (d) of this
Section, except for the following alterations:
(z) immPdia±Ply ur.dPr ±he n�me of the Bond, the headings
"II�,TTEREST IZATE" and "MATURITY L�ATE" shal_l both be
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completed with the words"As Shown Below" and the word"CUSIP"
deleted;
(ii) in the first paragraph of the Bond, the words "on the maturity
date specified above" and "at the rate shown above" shall be deleted
and the following shall be inserted at the end of the first sentence"...,
with such principal to be paid in installments on March 1 in each of
the years and in the principal amoun±s �den_tified in the following
schedule and with such installments bearing interest at the per annum
rates set forth in the following schedule:
[Information to be inserted from schedule in Section 4]
(iii) the Initial Bond shall be numbered I-l.
15. CUSIP Numbers; Bond Insurance. CUSIP Numbers may be printed on the Bonds,
but errors or omissions in the printing of such numbers shall have no effect on the validity of the
Bonds. If bond insurance is obtained by the Underwriter,the Bonds may bear an appropriate legend
as provided by the insurer.
16. Debt Service Fund;Tax Lew. There is hereby established a separate fund ofthe City
to be known as the City of Friendswood,Texas,Permanent Improvement Bonds, Series 2003 Debt
Service Fund(the "Debt Service Fund"),which shall be kept separate and apart from all other funds
of the City. The proceeds from all taxes levied, assessed and collected for and on account of the
Bonds authorized by this Ordinance shall be deposited, as collected, in the Debt Service Fund.
While the Bonds or any part of the principal thereof or interest thereon remain outstanding and
unpaid, there is hereby levied and tilere shall be annually assessed and collected in due time, ionn
and manner, and at the same time as other City taxes are assessed,levied and collected,in each year,
a continuing direct annual ad valorem tax, within the limits prescribed by law, upon all taxable
property in the City,sufficient to pay the current interest on the Bonds as the same becomes due and
to provide and maintain a sinking fund of not less than two percent of the principal amount of the
Bonds or the amount required to pay each installment of principal of the Bonds as the same matures,
whichever is greater, full allowance being made for delinquencies and costs of collection, and said
taxes are hereby irrevocably pledged to the payment of the interest on and principal of the Bonds and
to no other purpose.
17. Application of Chapter 1208,Government Code. Chapter 1208,Government Code,
applies to the issuance of the Bonds and the pledge of the taxes granted by the City under Section 16
of this Ordinance, and such pledge is therefore valid, effective and perfected. If Texas law is
amended at any time while the Bonds are outstanding and unpaid such that the pledge of the taxes
granted by the City under Section 16 of this Ordinance is to be subject to the filing requirements of
Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the
Bonds the perfection of the security interest in said pledge,the City agrees to take such measures as
it determines are reasonable and necessary under Texas law to comply with the applicable provisions
of Chapter 9,Business&Commerce Code and enable a filing to perfect the security interest in said
pledge to occur.
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18. Further Proceedin�s. After the Bonds to be initially issued have been executed, it
shall be the duty of the Mayor or Mayor Pro Tem and other appropriate officials and agents of the
City to deliver the Bonds to be initially issued and all pertinent records and proceedings to the
Attorney General, for examination and approval. After the Bonds to be initially issued have been
approved by the Attorney General,they shall be delivered to the Comptroller for registration. Upon
registration of the Bonds to be initially issued,the Comptroller(or the Comptroller's bond clerk or an
assistant nond clerk lawfully designated in writing to act far the Comptroller)sha11 manually sign the
Comptroller's Registration Certificate prescribed herein and the seal of said Comptroller shall be
impressed, or placed in facsimile, thereon.
19. Sale. The sale and delivery of the Bonds to (the
"Underwriter")at a price of par,plus a cash premium of$-0-,plus accrued interest thereon to date of
delivery,is hereby authorized,approved,ratified and confirmed,subj ect to the approving opinion as
to the legality of the Bonds of the Attorney General of the State of Texas, and of Vinson& Elkins
L.L.P., Houston, Texas,bond counseL It is hereby found and declared that the Bonds were sold at
public sale and that the bid of the Underwriter was the best bid received by the City.
20. Federal Income Tax Inclusion.
(a) General Tax Covenant. The City intends that the interest on the Bonds shall be
excludable from gross income for purposes of federal income taxation pursuant to sections 103 and
141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code), and applicable
Income Tax Regulations(the"Regulations"). The City covenants and agrees not to take any action,
or knowingly omit to take any action within its control that,if taken or omitted,respectively,would
cause the interest on the Bonds to be includable in gross income, as defined in section 61 of the
Code, for federal income tax purposes. In particular,the City covenants and agrees to comply witn
each requirement of this Section; provided, however, that the City shall not be required to comply
with any particular requirement of this Section if the City has received an opinion of nationally
recognized bond counsel ("Counsel's Opinion")that such noncompliance will not adversely affect
the exclusion from gross income for federal income tax purposes of interest on the Bonds or if the
City has received a Counsel's Opinion to the effect that compliance with some other requirement set
forth in this Section will satisfy the applicable requirements of the Code and Regulations, in which
case compliance with such other requirement specified in such Counsel's Opinion shall constitute
compliance with the corresponding requirement specified in this Section.
(b) No Private Use or Pavment and No Private Loan Financin�. The City shall certify,
through an authorized officer, employee or agent that based upon all facts and estimates known or
reasonably expected to be in existence on the date the Bonds are delivered,that the proceeds of the
Bonds will not be used in a manner that would cause the Bonds to be"private activity bonds"within
the meaning of section 141 of the Code and the Regulations promulgated thereunder. Moreover,the
City covenants and agrees that it will make such use of the proceeds of the Bonds including interest
or other investment income derived from Bond proceeds, regulate the use of property financed,
directly or�ndire�tl��,with s�.:�h pr�ceeds; and ta.ke s�ach other and further action as may be required
so that the Bonds will not be"private activit�J bonds" �uithin the meaning of s��ti_�n 141 of the Code
and the Regulations promulgated thereunder.
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(c) No Federal Guarantee. The City covenants and agrees not take any action, or
knowingly omit to take any action within its control, that, if taken or omitted, respectively, would
cause the Bonds to be"federally guaranteed" within the meaning of section 149(b) of the Code and
the applicable Regulations thereunder, except as permitted by section 149(b)(3)of the Code and such
Regulations.
(d) No Hed�e Bonds. Tne City covenants and agrees that it has r�ot an�will not talce any
action, and has not knowingly omitted and will not knowingly omit to take any action, within its
control,that,if taken or omitted,respectively,would cause the Bonds to be"hedge bonds"within the
meaning of section 149(g) of the Code and the applicable Regulations thereunder.
(e) No Arbitra�e. The City shall certify, through an authorized officer, employee or
agent that based upon all facts and estimates known or reasonably expected to be in existence on the
date the Bonds are delivered,the City will reasonably expect that the proceeds of the Bonds will tlot
be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of
section 148(a) of the Code and the applicable Regulations promulgated thereunder. Moreover,the
City covenants and agrees that it will make such use of the proceeds of the Bonds including interest
or other investment income derived from Bond proceeds, regulate investments of proceeds of the
Bonds, and take such other and further action as may be required so that the Bonds will not be
"arbitrage bonds" within the meaning of section 148(a) of the Code and the applicable Regulations
promulgated thereunder.
(fl Arbitrage Rebate. If the City does not qualify for an exception to the requirements of
section 148(� of the Code relating to the required rebate to the United States,the City will take all
necessary steps to comply with the requirement that certain amounts earned by the City on the
investment of the "gross proceeds" of the Bonds (within the meaning of section 148(t)(6)(B) of the
Code), be rebated to the federal government. Specifically, the City will (i) maintain records
regarding the investment of the gross proceeds of the Bonds as may be required to calculate the
ainount earned on the investment of the gross proceeds of the Bonds separately from records of
ainounts on deposit in the funds and accounts of the City allocable to other bond issues of the City or
moneys which do not represent gross proceeds of any bonds of the City, (ii)calculate at such times
as are required by applicable Regulations, the amount earned from the investment of the gross
proceeds of the Bonds which is required to be rebated to the federal government, and(iii)pay, not
less often than every fifth anniversary date of the delivery of the Bonds or on such other dates as may
be permitted under applicable Regulations, all amounts required to be rebated to the federal
government. �urther, the City will not indirectly pay any amount otherwise payable to the federal
government pursuant to the foregoing requirements to any person other than the federal government
by entering into any investment arrangement with respect to the gross proceeds of the Bonds that
might result in a reduction in the amount required to be paid to the federal government because such
arrangement results in a sinaller profit or a larger loss than would have resulted if the arrangement
had been at arm's length and had the yield on the issue not been relevant to either party.
�bC'} iT1iQTI1liitlC};1 P�e�Oi ilii�. T��.�lt�C�V�i.a.T2+3^GIlCl a�'T'��S tQ f'.le CT.�'.3'13P±Q be fll Pr3���?th
the Secretary-af the Treasury�,not later than the 1 Sth day of the second calendar month after the close
of the calendar quarter in which the Bonds are issued, an information statement concerning the
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Bonds, all under and in accordance with section 149(e) of the Code and the applicable Regulations
promulgated thereunder.
(h) Continuin�li a�. Notwithstanding any other provision of this Ordinance,the
City's obligations under the covenants and provisions of this Section shall survive the defeasance and
discharge of the Bonds.
21. Use of Proceeds. Praceeds from tr�e sa�e of t:�e B�nds sha??,p:o�pt?y upon rPceipt by
the City,be applied as follows:
(a) Accrued interest and any premium on the Bonds shall be deposited
into the Debt Service Fund.
(b) The remaining proceeds of the Bonds shall be used for the purposes
described ii� Section 2 of this Ordinance and for paying the costs of
issuance of the Bonds. After accomplishing the purposes described in
Section 2, any remaining bond proceeds, including earnings on
investment of such proceeds, shall be transferred to the Debt Service
Fund.
22. Official Statement. The City ratifies and confirms its prior approval of the form and
content of the Preliminary Official Statement prepared in the initial offering and sale of the Bonds
and hereby authorizes the preparation of a final Official Statement reflecting the terms of the
Underwriter's bid and other relevant information. The use of such Official Statement in the
reoffering of the Bonds by the Underwriter is hereby approved and authorized. The proper officials
of the City are hereby authorized to execute and deliver a certificate pertaining to such Official
Statement as prescribed therein, dated as ot the daie of paymeni for and delivery of the Bonds.
23. Continuing Disclosure Undertakin�. (a) Annual Reports. The City shall provide
annually to each NRMSIR and the SID,within six months after the end of each fiscal year,financial
information and operating data with respect to the City of the general type included in the final
Official Statement authorized by Section 22 of this Ordinance under the headings "CITY TAX
DEBT" (excluding"—Estimated Overlapping Debt"), °TAX DATA—Property Subject to Taxation
by the City," "—Historical Analysis of Tax Collection," "—Analysis of Tax Base," "SELECTED
FINANCIAL DATA," and in Appendix "B". The information to be provided will include audited
financial statements, if the City commissions an audit and it is completed by the required time. If
audited financial statements are not available by the required time,the City will provide unaudited
financial statements at the required time and audited financial stateinents when and if they become
available. Any financial statements so to be provided shall be prepared in accordance with the
accounting principles described in Appendix B to the Official Statement, or such other accounting
principles as the City may be required to employ from time to time pursuant to State law or
regulation.
If tre Ci±y chan�es?ts f scal_year,?t will notify each NRMSIR and the SID of the change(and
of the date of the new fiscal year end) �rior to the next date by which the City otherwise would be
required to provide financial information and operating data pursuant to this Section.
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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 the SID or filed with the SEC.
(b) Material Event Notices. The City shall notify the SID and either each NRMSIR or
the MSRB, in a timely ��.anr�er, of any� cf the follo��i::g ever.ts with respect to the Bonds, if such
event is material within the meaning of the federal securities laws:
A. Principal and interest payment delinquencies;
B. Non-payment related defaults;
C. Unscheduled draws on debt service reserves reflecting financial
difficulties;
D. Unscheduled draws an credit enhancements reflecting financial
difficulties;
E. Substitution of credit or liquidity providers, or their failure to
perform;
F. Adverse tax opinions or events affecting the tax-exempt status of the
Bonds;
G. Modifications to rights of holders of the Bonds;
H. Bond calls;
I. Defeasances;
J. Release, substitution, or sale of property securing repayinent of the
Bonds; and
K. Rating changes.
The City shall notify the SID and either each NRMSIR or the MSRB,in a tiinely manner,of
any failure by the City to provide financial infonnation or operating data in accordance with Section
23(a) of this Ordinance by the time required by such Section.
(c) Limitations Disclaimers, and Amendments. 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 Texas law that causes
Bonds no longer to be outstanding.
The provisions of this Section are for the sole benefit of the holders 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
infonnation that may be relevant or material to a complete presentation of the City's financial results,
condit?on, or prospects or hereby undertake to update any information provided in accordance with
this Section or otherwise, except as expressly provided herein. The City does not make an_y
representation or warranty concerning such information or its usefulness to a decision to invest in or
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sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON,IN CONTRACT OR TORT,
FOR DAMAGES RESULTING 1N WHOLE OR 1N PART FROM ANY BREACH BY THE CITY,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED 1N THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH
PERSON, I?�T �ONTRA_rT OR TORT, FOR OR ON ACCOUNT OF A_NY SUCH BREACH
SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
comprise a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or othen��ise limit the
duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City froin time to time to adopt to
changed circumstances that arise from a change in legal requirements, change in law, or change in
the identity, nature, status or type of operations of the City, but only if (1) the agreement, as
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 to the date of such amendment, as well as such changed circumstances, and (2) either(a) the
holders of a znajority in aggregate principal amount of the outstanding Bonds consent to such
amendment,or(b) a person unaffiliated with the City(such as nationally recognized bond counsel),
determines that the amendment will not materially impair the interests of the holders and beneficial
owners of the Bonds. The City may also amend or repeal the provisions of this car�tinuing disclosure
agreement if the SEC amends or repeals the applicable provisions of the Rule or a court of final
jurisdiction enters judgment hat 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 form lawfully purchasing or
selling Bonds in the primary offering of the Bonds. If any such amendment is made, the City will
include in its next annual update an explanation in narrative form of the reasons for the change and
its impact on the type of operating data or financial information being provided.
24. Re ig strar. The form of agreement setting forth the duties of the Registrar is hereby
approved, and the appropriate officials of the City are hereby authorized to execute such agreement
for and on behalf of the City.
25. Further Proceedin�s. The Mayor, the Mayor Pro Tem, City Secretary and other
appropriate officials of the City are hereby authorized and directed to do any and all things necessary
and/or convenient to carry out the terms and purposes of this Ordinance.
26. Partial Invaliditv. If any Section, paragraph, clause or provision of this Ordinance
shall for any reason be held to be invalid or unenforceable,the invalidity or unenforceability of such
Section, para�raph, clause or provision shall not affect anyo uf the remaining provisions of this
Ordinance.
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27. Open Meeting. The meeting at which this Ordinance was adopted was open to the
public, and public notice of the time,place and purpose of said meeting,was given,all as required by
the Texas Open Meetings Act.
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PASSED AND APPROVED the 21 st day of July, 2003.
.
/s/I�.imball W. Brize ine -
C� �
Mayor
City of Friendswoo�, Texas
ATTEST:
/ / o c ire
e �
ity Secretary
City of Friendswood, Texas
(SEAL)
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