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HomeMy WebLinkAboutOrdinance No. 2005-23 ORDINANCE NO. '2005-23 ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF FRIENDSWOOD, TEXAS,PERMANENT IMPROVEMENT AND REFUNDING BONDS, SERIES 2005; AUTHORIZING THE REDEMPTION PRIOR TO MATURITY OF CERTAIN OUTSTANDING OBLIGATIONS; AND CONTAINING OTHER MATTERS RELATING THERETO THE STATE OF TEXAS § COUNTY OF GALVESTON§ CITY OF FRIENDSWOOD § WHEREAS, the City of Friendswood, Texas (the "City") has heretofore issued its Combination Tax and Revenue Certificates of Obligation, Series 1995; and WHEREAS, the City desires to refund the outstanding obligations of said series (the "Refunded Obligations") in advance of their maturities; and WHEREAS, Chapter 1207, Texas Government Code, as amended, authorizes the City to issue refunding bonds payable from taxes, without an election, for the purpose of refunding the Refunded Obligations in advance of their maturities,and to accomplish such refunding by depositing directly with a•paying agent for the Refunded Obligations (or other qualified escrow agent), the proceeds of such refunding bonds, together with other available funds, in an amount sufficient to provide for the payment or redemption of the Refunded Obligations, and provides that such deposit shall constitute the making of firm banking and financial arrangements for the discharge and final payment or redemption of the Refunded Obligations; and WHEREAS,upon the issuance of the refunding bonds herein authorized and the deposit of funds referred to above,the Refunded Obligations shall no longer be regarded as being outstanding, except for the purpose of being paid pursuant to such deposit, and the pledges, liens, trusts and all other covenants,provisions,terms and conditions of the ordinances authorizing the issuance of the Refunded Obligations shall be,with respect to the Refunded Obligations,discharged,terminated and defeased; WHEREAS, the new money portion of the bonds hereinafter authorized were duly and favorably voted at an election held in the City on the lst day of February, 2003; and WHEREAS,the City Council of the City does hereby determine that bonds should be issued in the amount of$7,865,000, and to charge against voted authorization an additional $35,000 in premium received in the sale of the bonds, (being the second installrnent of the $20,085,000 tax bonds voted at the election mentioned above), said bonds to be issued for the purposes and in the amounts shown below: Amount Prior Purpose Authorized Issue This Issue Unissued Public Safety Facilities $ 7,380,000 $3,782,840 $3,597,160 $ -0- Drainage Improvements 5,575,000 3,167,034 $2,407,966 -0- Streets and Thoroughfares 4,055,000 468,216 $ 101,784 3,485,000 Centennial Park Improvements 3.075,000 1.281,910 $1,793,090 -0- TOTAL $20,085,000 $8,700,000 $7,900,000 $3,485,000 Now, Therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FRIENDSWOOD: 1. Recitals;Consideration. It is hereby found and determined that the matters and facts set out in the preamble to this Ordinance are true and correct. It is hereby found and determined that the refunding contemplated in this Ordinance will benefit the City by providing a total debt service savings of$51,947.75 and a present value savings of$46,188.96 in debt service payable by the City,that such benefit is sufficient consideration for the refunding of the Refunded Obligations, and that the issuance of the refunding bonds is in the best interests of the City. 2. Definitions. T'hroughout this Ordinance the following terms and expressions as used herein shall have the meanings set forth below: "Acts"mean Chapter 1207,Texas Government Code,as amended,and Chapter 1331,Texas Government Code, as amended. "Blanket Issuer Letter of Representations"means the Blanket Issuer Letter of Representations between the City, the Registrar and DTC. "Bond Purchase AgreemenY' means the agreement between the City and the Underwriter described in Section 23 of this Ordinance. "Bonds" mean the City of Friendswood, Texas, Permanent Improvement and Refunding Bonds, Series 2005 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. -2- . 1 "Comptroller"means the Comptroller of Public Accounts of the State of Texas. "DTC"means The Depository Trust Company of New York, New York, or any successor securities depository. "DTC Participant"means brokers and dealers,banks,trust companies,clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "Initial Bond"means the Initial Bond authorized by Section 6(d). "Interest and Sinking Fund"means the interest and sinking fund for payment of the Bonds established by the City in Section 20 of this Ordinance. "Interest Payment Date",when used in connection with any Bond,means March 1,2006,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 close ofbusiness on the 15th day of the month next preceding each Interest Payment Date. "Refunded Obligations" mean the City of Friendswood, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1995, dated April 1, 1995, in the aggregate principal amount of$1,910,000,maturing on March 1 amounts as set forth below: Year Amount 2008 $225,000 2009 815,000 2010 870,000 "Register"means the books of 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. -3- "Registrar"means JPMorgan Chase Bank,National Association, 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 staff to be, a state information depository within the meaning of the Rule. "Underwriter" means First Southwest Company, Southwest Securities, Inc. and A.G. Edwards & Sons, Inc. 3. Authorization. The Bonds shall be issued in fully registered form in the aggregate principal amount of$1,935,000 for the purpose of refunding the Refunded Obligations, and in the aggregate principal amount of$7,865,000 for the following purposes, with the amount for each purpose being as described in the preamble to this Ordinance: (i) 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; (ii) for the purpose of the construction of drainage improvements to various sites, including Sunmeadow, Annalea-Whitehall, Clover Acres, Woodlawn, Mission Estates and Glenshannon subdivisions; (iii) for the purpose of the 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; and (iv) for the purpose of the construction of improvements to Centennial Park, under and in strict conformity with the Constitution and laws of the State of Texas, particularly Chapter 1207,Texas Government Code, as amended,and Chapter 1331,Texas Government Code,as amended. 4. Designation and Date. The Bonds shall be designated as "CITY OF FRIENDSWOOD, TEXAS, PERMANENT IMPROVEMENT AND REFUNDING BONDS, SERIES 2005"and shall be dated September 1,2005. The Bonds shall bear interest at the rates set forth in Section 5 of this Order from the later of September 1, 2005, 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. 5. Initial Bonds; Numbers and Denominations. The Bonds shall be initially issued bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in the following schedule,and may be transferred and exchanged as set out in this Ordinance. The Bonds -4- . � shall mature in accordance with this Ordinance on March 1 in each of the years and in the amounts set out in such schedule. 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 $ 10,000 2.850% 2007 60,000 3.000% 2008 335,000 4.375% 2009 1,110,000 4.375% 2010 1,215,000 4.375% 2011 365,000 4.375% 2012 375,000 4.375% 2013 385,000 4.375% 2014 390,000 4.375% 2015 400,000 4.375% 2016 445,000 4.375% 2017 420,000 4.375% 2018 430,000 4.375% 2020 890,000 4.000% 2021 465,000 4.100% 2022 480,000 4.125% 2023 500,000 4.200% . 2024 505,000 4.250% 2025 525,000 4.250% 2026 535,000 4.300% 6. Execution of Bonds;Seal. (a) The Bonds shall be signed on behalf of the City 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 of this Ordinance unless and until there appears thereon the -5- Registrar's Authentication Certificate substantially 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 of the State of Texas 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 Comptroller, shall be delivered to the Underwriter or its designee. Upon payrnent for the Initial Bond,the Registrar shall cancel the Initial Bond and deliver definitive Bonds to DTC. 7. 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 at the principal payment office of the Registrar in Dallas,Texas. 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. If the date for payrnent 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. 8. Successor Re 'sgi t�. 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 United States or any state, and duly qualified and legally authorized to serve as 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 and of the address of the new Registrar. Each Registrar hereunder,by acting in that capacity, shall be deemed to have agreed to the provisions of this Section. 9. Special Record Date. If interest on any Bond is not paid on any Interest Payrnent Date and continues unpaid for thirty(30)days thereafter,the Registrar shall establish a new record date for the payment of such interest,to be known as a Special Record Date. The Registrar shall establish a Special Record Date when funds to make such interest payment are received from or on behalf of the City. Such Special Record Date shall be fifteen(15)days prior to the date fixed for payment of -6- such past due interest,and notice of the date of payrnent 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. 10. 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 person deemed to be the Owner of any Bond in accordance with this Section shall be valid 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. 11. Registration,Transfer,and Exchan�e. So long as any Bonds remain outstanding,the Registrar shall keep the Register at its principal payment office in Dallas,Texas,and,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 by an assignment duly executed by the registered Owner or his authorized representative in form satisfactory to the Registrar. Upon due presentation of any Bond in proper form for transfer, the Registrar sha11 authenticate and deliver in exchange therefor, within three Business Days after 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 at the principal payment office of the Registrar in Dallas,Texas,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 amount of the Bond or Bonds presented for exchange. 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 -7- exchange of such Bond. Any fee or charge of the Registrar for such transfer or exchange shall be paid by the City. 12. 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 contemparaneously 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 number 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 requirements of the City and the Registrar. 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 any such mutilated,lost,apparently destroyed 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 sha11 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. -8- 13. 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. 14. Book-Entry Onlv Svstem. (a) The Initial Bond shall be registered in the name of First Southwest Company. Except as provided in Section 15 hereof, all other Bonds shall be registered in the name of Cede & Co., as nominee of DTC. (b) With respect to Bonds registered in the name of Cede&Co.,as nominee of DTC,the City and the Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such DTC Participant holds an interest in the Bonds,except as provided in this Ordinance. Without limiting the immediately preceding sentence, the City and the Registrar shall have no responsibility or obligation with respect to(i)the accuracy of the records of DTC,Cede &Co.or any DTC Participant with respect to any ownership interest in the Bonds,(ii)the delivery to any DTC Participant or any other person, other than an Owner, as shown on the Register, of any notice with respect to the Bonds,including any notice of redemption,or(iii)the payment to any DTC Participant or any other person, other than an Owner,as shown on the Register,of any amount with respect to principal of, premium, if any, or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute Owner of such Bond for the purpose of payment of principal of and interest on the Bonds, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfer with respect to such Bond,and for all other purposes whatsoever. The Registrar shall pay all principal of,premium,if any,and interest on the Bonds only to or upon the order of the respective Owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payrnents shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payrnents of principal,premium,if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Register, shall receive a Bond certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede &Co.,and subj ect to the provisions of this Ordinance with respect to interest checks being mailed to the Owner of record as of the Record Date,the phrase"Cede&Co."in this Ordinance shall refer to such new nominee of DTC. 15. Successor Securities Depositorv;Transfer Outside Book-Entrv Only Svstem. In the event that the City in its sole discretion,determines that the beneficial owners of the Bonds be able to obtain certificated Bonds, or in the event DTC discontinues the services described herein, the City shall(i)appoint a successor securities depository,qualified to act as such under Section 17(a)of the Securities and Exchange Act of 1934, as amended,notify DTC and DTC Participants, as identified by DTC,of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or(ii)notify DTC and DTC Participants,as identified by DTC,of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC -9- Participants having Bonds credited to their DTC accounts,as identified by DTC. In such event,the Bonds shall no longer be restricted to being registered in the Register in the name of Cede&Co.,as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee,or in whatever name or names Owners transferring or exchanging Bonds shall designate,in accordance with the provisions of this Ordinance. 16. Pavments to Cede&Co. Notwithstanding any other provision of this Ordinance to the contrary,so long as any Bonds are registered in the name of Cede&Co.,as nominee of DTC,all payments with respect to principal of,premium, if any, and interest on such Bonds, and all notices with respect to such Bonds, shall be made and given, respectively, in the manner provided in the Blanket Letter of Representations. 17. Oational and MandatorvRedemption. The Bonds are subject to optional and mandatory 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 may be redeemed,but only in integral multiples of $5,000. Upon surrender of any Bond for redemption in part, the Registrar,in accordance with Section 11 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 payment 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 conclusivelypresumed 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 purpose of receiving payment solely from the funds so provided for redemption, and the rights of the Owners to collect interest which would otherwise accrue after the redemption date on any Bond or portion thereof called for redemption shall terminate on the date fixed for redemption. 18. Forms. The form of the Bonds,including the form of the Registrar's Authentication Certificate,the form of Assignment,the form of Statement of Insurance and the form of Registration Certificate of the Comptroller, which shall be attached or affixed to the Initial Bond, shall be, respectively, substantially as follows, with such additions, deletions and variations as may be necessary or desirable and not prohibited by this Ordinance: -10- (a) Form of Bonds. UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF GALVESTON REGISTERED REGISTERED NUMBER DENOMINATION $ CITY OF FRIENDSWOOD, TEXAS PERMANENT IMPROVEMENT AND REFUNDING BOND SERIES 2005 1NTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: March 1, 20_ September 1; 2005 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, National Association (the "Registrar"), at its principal payrnent 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 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 the Issue Date,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 1 and September 1,beginning on March 1,2006, mailed to the registered owner of record as of the close of business on the 15th day of the month preceding each interest payment date. THIS BOND is one of a duly authorized issue of Bonds, aggregating $9,800,000 (the "Bonds"),issued(a)for the purpose of refunding a portion of the City's outstanding obligations and (b) 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- -11- of-way, and the construction of improvements to Centennial Park, under and in strict conformity with the Constitution and laws of the State of Texas and by authority of an election held in the City on February 1, 2003, and pursuant to an ordinance adopted by the City Council(the"Ordinance"), which Ordinance is of record in the official minutes of the City. THE CITY RESERVES THE RIGHT to redeem the Bonds maturing on or after March 1, 2016,in whole or from time to time in part,in integral multiples of$5,000,on March 1,2015,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. THE BONDS maturing in the year 2020 (the "Term Bonds") are subject to mandatory redemption prior to maturity in the amounts and on the dates set out below, at a price equal to the principal amount to be redeemed plus accrued interest to the redemption date: TERM BONDS MATURING 1N THE YEAR 2020 Mandatorv Redemption Princi�al Amount March 1, 2019 $440,000 March 1, 2020 (maturity) 450,000 The particular Term Bonds to be redeemed shall be selected by the Registrar by lot or other customary random selection method,on or before January 15 of each year in which Term Bonds are to be mandatorily redeemed. The principal amount of Term Bonds to be mandatorily redeemed in each year shall be reduced by the principal amount of such Term Bonds that have been purchased and canceled by the City or have been optionally redeemed and which have not been made the basis for a previous reduction. 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 the principal payment 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 multiple thereof, subject to the terms and conditions of the Ordinance. -12- 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 OWNER of this Bond,by acceptancehereof,acknowledges and agrees to be bound by all the terms and conditions of the Ordinance. THE CITY has covenanted in the Ordinance that it will at all times provide a legally qualified registrar for the Bonds and will cause notice of any change of registrar to be mailed to each registered owner. IT IS HEREBY certified, recited and covenanted that this 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, have been levied and ordered to be levied against all taxable property in the City, and have been pledged irrevocably for such payment. IN WITNES S WHEREOF,this Bond has been signed with the manual or facsimile signature of the Mayor and countersigned with the manual or facsimile signature of the City Secretary,and the official seal of the City has been duly impressed, or placed in facsimile, on this Bond. (AUTHENTICATION (SEAL) CITY OF FRIENDSWOOD, TEXAS CERTIFICATE) Mayor City Secretary (b) Form of Registration Certificate of Comptroller of Public Accounts. COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Bond has been examined, certified as to validity, and approved by the Attorney General of the State of Texas,and that this Bond has been registered by the Comptroller of Public Accounts of the State of Texas. -13- WITNESS MY SIGNATURE AND SEAL this (SEAL) Comptroller of Public Accounts of the State of Texas (c) Form of Re�istrar's Authentication Certificate. AUTHENTICATION CERTIFICATE It is hereby certified that this Bond has been delivered pursuant to the Bond Ordinance described in the text of this Bond. JPMorgan Chase Bank, National Association As Paying Agent/Registrar By Authorized Signature Date of Authentication (d) Form of Assi�nment. ASSIGNMENT For value received, the undersigned hereby sells, assigns, and transfers unto (Please print or type name, address, and zip code of Transferee) (Please insert Social Security or Taxpayer 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 full 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 Bond in NOTICE: Signature must be guaranteed every particular, without any alteration, by a member firm of the New York Stock enlargement or change whatsoever. Exchange or a commercial bank of trust company. -14- (e) Form of Statement of Insurance. STATEMENT OF INSURANCE Financial Security Assurance Inc. ("Financial Security"), New York, New York, has delivered its municipal bond insurance policy with respect to the scheduled payments due of principal of and interest on this Bond to JPMorgan Chase Ba.nk, National Association, or its successor, as paying agent for the Bonds(the"Paying Agent"). Said Policy is on file and available for inspection at the principal office of the Paying Agent and a copy thereof may be obtained from Financial Security or the Paying Agent. (fl The Initial Bond shall be in the form set forth in paragraphs(a),(b),(d)and(e)of this Section, except for the following alterations: (i) immediately under the name of the Bond, the headings "INTEREST RATE" and "MATURITY DATE" shall both be 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 amounts identified 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 5] (iii) the Initial Bond shall be numbered I-1. 19. CUSIP Numbers;Bond Insurance. CUSIP Numbers maybe printed on the Bonds,but errors or omissions in the printing of such numbers shall have no effect on the validity of the Bonds. The purchase of and payment of the premium for municipal bond insurance by the City, in accordance with the terms of a commitment for such insurance from Financial Security Assurance Inc. presented to and hereby approved by the City Council of the City, is hereby authorized. All officials and representatives of the City are authorized and directed to execute such documents and to do any and all things necessary or desirable to obtain such insurance. 20. Interest and Sinking Fund;Tax Levy. There is hereby established a separate fund of the City to be known as the City of Friendswood, Texas, Permanent Improvement and Refunding Bonds,Series 2005 Interest and Sinking Fund(the"Interest and Sinking 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 -15- collected, in the Interest and Sinking Fund. While the Bonds or any part of the principal thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there shall be annually assessed and collected in due time, form 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. 21. 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 20 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 20 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. 22. Further Proceedin�s. After the Initial Bond has been executed,it shall be the duty of the Mayor and other appropriate officials and agents of the City to deliver the Initial Bond and all pertinent records and proceedings to the Attorney General of the State of Texas,for examination and approval. After the Initial Bond has been approved by the Attorney General,it shall be delivered to the Comptroller for registration. Upon registration of the Initial Bond, the Comptroller (or the Comptroller's bond clerk or an assistant bond elerk lawfully designated in writing to act for the Comptroller)shall manually sign the Comptroller's Registration Certificate prescribed herein and the seal of said Comptroller shall be impressed, or placed in facsimile, thereon. 23. Sale;Bond Purchase Agreement. The Bonds are hereby sold and shall be delivered to the Underwriter at a price of $9,896,015.74, plus accrued interest to the date of delivery, in accordance with the terms of the Bond Purchase Agreement of even date herewith,presented to and hereby approved by the City Council,which price and terms are hereby found and determined to be the most advantageous reasonably obtainable by the City. The Mayor and other appropriate officials of the City are hereby authorized and directed to execute the Bond Purchase Agreement on behalf of the City, and the Mayor and all other officers, agents and representatives of the City axe hereby authorized to do any and a11 things necessary or desirable to satisfy the conditions set out therein and to provide for the issuance and delivery of the Bonds. 24. Federal Income Tax Exclusion. (a) General. The City intends that the interest on the Bonds shall be excludable from gross income for federal income t�purposes pursuant to sections 103 and 141 through 150 of the -16- . . Internal Revenue Code of 1986, as amended (the "Code"), and the 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 talc purposes. In particular, the City covenants and agrees to comply with 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 O�inion")that such noncompliance will not adversely affect the exclusion from gross income for federal income t� 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 the 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 Pavrnent 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 Refunded Obligations have not been used, and that proceeds of the Refunded Obligations and the Bonds will not be used,in a manner that would cause the Bonds to be"private activitybonds"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 Refunded Obligations and the Bonds including interest or other investment income derived from Bond proceeds,regulate the use of property financed, directly or indirectly,with such proceeds,and take such other and further action as may be required so that the Bonds will not be"private activity bonds"within the meaning of section 141 of the Code and the Regulations promulgated thereunder. (c) No Federal Guarantee. The City covenants and agrees that it has not and will not take 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"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 Hedge Bonds. The City covenants and agrees that it has not and will not to take 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 not 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 -17- r . "arbitrage bonds"within the meaning of section 148(a)of the Code and the applicable Regulations promulgated thereunder. (fl Arbitra�e Rebate. If the City does not qualify for an exception to the requirements of section 148(fl 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(�(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 amount earned on the investment of the gross proceeds of the Bonds separately from records of amounts on deposit in the funds and accounts of the City allocable to other bond issue 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. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal govermnent 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 smaller profit or a larger loss than would have resulted if the anangement had been at arm's length and had the yield on the issue not been relevant to either party. (g) Information Reportin�. The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury,not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Bonds are issued, an information statement concerning the Bonds, all under and in accordance with section 149(e)of the Code and the applicable Regulations promulgated thereunder. (h) Continuin O�bl'� ag tion. 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. 25. Oualified Tax-Exempt Obli at�. The City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of section 265(b) of the Code. In connection therewitl�,the City represents(a)that the aggregate amount of tax-exempt obligations issued by the City during calendar year 2005,including the Bonds,which have been designated as"qualified tax- exempt obligations"under section 265(b)(3)of the Code does not exceed$10,000,000,and(b)that the reasonably anticipated amount of tax-exempt obligations which will be issued by the City during calendar year 2005,including the Bonds,will not exceed$10,000,000. For purposes of this Section, the term "tax-exempt obligation" does not include "private activity bonds"within the meaning of section 141 of the Code,other than"qualified 501(c)(3)bonds"within the meaning of section 145 of the Code. In addition, for purposes of this Section, the City includes all entities which are aggregated with the City under the Code. -18- , _ 26. Use of Proceeds. (a) Accrued interest in the amount of$3,200.00 shall be deposited in the Interest and Sinking Fund; (b) Proceeds of the Bonds (including $35,000 in premium) in the amount of $7,900,000 shall be used for public improvements as described in Section 3 of this Ordinance; and (c) The remaining proceeds from the sale of the Bonds, together with other available funds of the City, shall be deposited directly with the paying agent for the Refunded Obligations to pay all principal of and interest on the Refunded Obligations due on the redemption date specified in Section 27 below, and all costs incurred in the issuance of the Bonds and the refunding of the Refunded Obligations. Any proceeds of the Bonds remaining after making all such deposits and payments, including interest earned on the investment of such proceeds,shall be deposited into the Interest and Sinking Fund. 27. Redemption Prior to Maturitv of Refunded Obli atg ions. The City hereby calls the following obligations of the City for redemption prior to maturity on the date shown below,at a price of par plus accrued interest to the date fixed for redemption,and authorizes and directs notice of such redemption to be given in accordance with the ordinance authorizing the issuance of such obligations: Redemption Issue Maturitv Amount Date Combination Tax and Revenue Certificates of Obligation Series 1995 2008 $225,000 09-21-2005 2009 815,000 09-21-2005 2010 870,000 09-21-2005 28. Related Matters. To satisfy in a timely manner all of the City's obligations under this Ordinance and the Bond Purchase Agreement,the Mayor or Mayor Pro Tem,the City Secretary or an Assistant City Secretary, and all other appropriate officers and agents of the City are hereby authorized and directed to take all other actions that are reasonably necessary to provide for the refunding of the Refunded Obligations, including, without limitation, executing and delivering on behalf of the City all certificates, consents, receipts, requests, and other documents as may be reasonably necessary to satisfy the City's obligations under the Bond Purchase Agreement and this Ordinance and to direct the application of funds of the City consistent with the provisions of this Ordinance. -19- . . 29. Re 'ig S��. 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. . 30. No Personal Liabilitv. No recourse shall be had for payrnent of the principal of or interest on any Bonds or for any claim based thereon, or on this Ordinance, against any official or employee of the City or any person executing any Bonds. 31. Open Meeting. The meeting at which this Ordinance is 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;and such notice as given is hereby authorized,approved,adopted and ratified. -20- a PASSED AND APPROVED this 15�'day of August, 2005. � � �� Mayor City of Friendswood, Texas ATTEST: c /�� , � `� �" P City Secretary City of Friendswood, Texas �►�� f{t1EpO��O (SEAL) � o v � * �P�,,tE � �tP'h -21-