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HomeMy WebLinkAboutOrd 540-2011 Authorizing Issuance and Sale of Public Property Finance Contractual Obligation, Series 2011ORDINANCE NO. S '10 .. ..201 , ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF CITY OF ANNA, TEXAS, PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATION, SERIES 2011; LEVYING AN ANNUAL AD VALOREM TAX FOR PAYMENT OF SAID OBLIGATION; AND ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT THE STATE OF TEXAS § COUNTY OF COLLIN § CITY OF ANNA § WHEREAS, the Public Property Finance Act, Tex. Loc. Gov't Code §§271.001 through 271.009, inclusive (the "Act"), authorizes, among others, cities to execute, perfonn, and make payments under contracts with any person for the use, acquisition or purchase ofpersonal property as described in the Act; WHEREAS, the City Council (the "City Council") of the City of Anna, Texas (the "Issuer") has found and determined that it is necessary, useful and appropriate for its public purposes to acquire or purchase the personal property described in Schedule I attached hereto, or such other personal property, appliances, equipment, facilities, furnishings or interests therein, whether movable or fixed, deemed by the City Council to be necessary, useful and/or appropriate for the purposes of the Issuer (the "Property"); WHEREAS, the City Council has found and deems it necessary, useful and appropriate for its public purposes to acquire the Property and to adopt this Ordinance and issue the contractual Obligation herein authorized as permitted by the Act; and WHEREAS, it is officially found, determined, and declared that the meeting at which this Ordinance has been adopted was open to the public and public notice ofthe time, place and subject matter ofthe public business to be considered and acted upon at said meeting, including this Ordinance, was given, all as required by the applicable provisions of Tex. Gov't Code Ann. ch. 551; Now, Therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS: Section 1. RECITALS, AMOUNT AND PURPOSE OF THE OBLIGATION. The recitals and definitions set forth in the preamble hereof are incorporated herein and shall have the same force and effect as if set forth in this Section. The public property finance contractual obligation (the "Obligation") of the City ofAnna, Texas (the "Issuer") is hereby authorized to be issued and delivered for the public purpose of the acquisition ofthe personal property described in Schedule I, and to pay the costs of issuance incurred in connection with the issuance of the Obligation. Section 2. DESIGNATION, DATE, DENOMINATION, NUMBER, AND MATURITY AND INTEREST RATE OF CONTRACTUAL OBLIGATION. Each contractual obligation issued pursuant to this Ordinance shall be designated: "CITY OF ANNA, TEXAS, PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATION, SERIES 2011," and there shall be issued, sold, and delivered hereunder one fully registered Obligation, without interest coupons, dated March 1, 2011, in the denomination and principal amount of $360,000, numbered R-l, with any Obligation issued in replacement thereof being in the denomination and principal amount hereinafter stated and numbered consecutively from R-2 upward. Principal of said Obligation shall mature and be payable in installments to the registered owner thereof, or to the registered assignee of said Obligation (in each case, the "Registered Owner") on the dates and in the amounts stated in the FORM OF OBLIGATION set forth in this Ordinance. The Obligation shall bear interest on the unpaid balance of the principal amount thereof from the date ofdelivery to the scheduled due date of the principal installments of the Obligation at the rate of interest stated in the FORM OF OBLIGATION set forth in this Ordinance. Said interest shall be payable in the manner provided and on the dates stated in the FORM OF OBLIGATION set forth in this Ordinance. The term "Obligation" as used in this Ordinance shall mean and include collectively the Obligation initially issued and delivered pursuant to this Ordinance and any substitute Obligation exchanged therefor, as well as any other substitute or replacement Obligation issued pursuant hereto, and the term "Obligation" shall mean any such Obligation. Section 3. CHARACTERISTICS OF THE OBLIGATION. (a) Registration. The Issuer shall keep or cause to be kept at the principal corporate trust office of Houston Conununity Bank, Houston, Texas (the "Paying Agent/Registrar"), books or records for the registration ofthe transfer and exchange ofthe Obligation (the "Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such registrations of transfers and exchanges under such reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe; and the Paying AgentlRegistrar shall make such registrations, transfers and exchanges as herein provided. The Paying Agent/Registrar shall obtain and record in the Registration Books the address ofthe Registered Owner of each Obligation to which payments with respect to the Obligation shall be mailed, as herein provided; but it shall be the duty of each Registered Owner to notifY the Paying AgentlRegistrar in writing of the address to which payments shall be mailed, and such interest payments shall not be mailed unless such notice has been given. The Issuer shall have the right to inspect the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity. The Issuer shall pay the Paying AgentlRegistrar's standard or customary fees and charges for making such registration, transfer, exchange and delivery of a substitute Obligation. Registration of assignments, transfers and exchanges of a Obligation shall be made in the manner provided and with the effect stated in the FORM OF OBLIGATION set forth in this Ordinance. Each substitute Obligation shall bear a letter and/or number to distinguish it from each other Obligation. (b) Transfer and Exchange. Except as provided in Section 3(f) of this Ordinance, an authorized representative of the Paying AgentlRegistrar shall, before the delivery of any such Obligation, date and manually sign said Obligation, and no such Obligation shall be deemed to be issued or outstanding unless such Obligation is so executed. The Paying AgentlRegistrar promptly shall cancel any Obligation surrendered for exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the governing body of the Issuer or any other body or person so as to accomplish the foregoing transfer and exchange of any Obligation, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of a substitute Obligation in the manner prescribed herein. Pursuant to Chapter 1201, Government Code, as amended, the duty of transfer of a Obligation as aforesaid is hereby imposed upon the Paying AgentlRegistrar, and, upon the execution of said Obligation, the exchanged Obligation shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Obligation that initially was issued and delivered pursuant to this Ordinance, approved by the Attorney General and registered by the Comptroller of Public Accounts. (c) Payment of Obligation and Interest. The Issuer hereby further appoints the Paying AgentlRegistrar to act as the paying agent for paying the principal of and interest on the Obligation, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records ofall payments made by the Issuer and the Paying AgentlRegistrar with respect to the Obligation, shall properly and accurately record 2 all payments on the Obligation on the Registration Books, and shall keep proper records of all exchanges of Obligations, and all replacements of Obligations, as provided in this Ordinance. However, in the event of a nonpayment ofinterest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying AgentlRegistrar, ifand when funds for the payment of such interest have been received from the Issuer. Notice of the past due interest shall be sent at least 5 business days prior to the Special Record Date by United States mail, first-class postage prepaid, to the address of the Registered Owner appearing on the Registration Books at the close of business on the last business day next preceding the date of mailing of such notice. (d) In General. The Obligation (i) shall be issued in fully registered form, without interest coupons, with the principal ofand interest on such Obligation to be payable only to the Registered Owner thereof, (ii) may and shall be prepaid or redeemed prior to its scheduled maturity (notice of which shall be given to the Paying AgentlRegistrar by the Issuer at least 30 days prior to any such redemption date), (iii) may be exchanged for another Obligation, (iv) may be transferred and assigned, (v) shall have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal of and interest on the Obligation shall be payable, and (viii) shall be administered and the Paying AgentlRegistrar and the Issuer shall have certain duties and responsibilities with respect to the Obligation, all as provided, and in the manner and to the effect as required or indicated, in the FORM OF OBLIGATION set forth in this Ordinance. The Obligation initially issued and delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated by the Paying AgentlRegistrar, but on each substitute Obligation issued in exchange for any Obligation issued under this Ordinance the Paying AgentlRegistrar shall execute the PAYING AGENTIREGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the FORM OF OBLIGATION. (e) Paying AgentlRegistrar. The Issuer covenants with the Registered Owner ofthe Obligation that at all times while the Obligation is outstanding the Issuer will provide a competent and legally qualified bank, trust company, financial institution, or other entity to act as and perform the services of Paying AgentlRegistrar for the Obligation under this Ordinance, and that the Paying AgentlRegistrar will be one entity. The Issuer reserves the right to, and may, at its option, change the Paying AgentlRegistrar upon not less than 20 days written notice to the Paying AgentlRegistrar, to be effective not later than 15 days prior to the next principal or interest payment date after such notice. In the event that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust company, financial institution, or other agency to act as Paying Agent/Registrar under this Ordinance. Upon any change in the Paying AgentlRegistrar, the previous Paying AgentlRegistrar promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to the Obligation, to the new Paying Agent/Registrar designated and appointed by the Issuer. Upon any change in the Paying AgentlRegistrar, the Issuer promptly will cause a written notice thereof to be sent by the new Paying AgentlRegistrar to the Registered Owner of the Obligation, by United States mail, first-class postage prepaid, which notice also shall give the address of the new Paying AgentlRegistrar. By accepting the position and performing as such, each Paying AgentlRegistrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy ofthis Ordinance shall be delivered to each Paying AgentlRegistrar. (f) Authentication. Except as provided below, no Obligation shall be valid or obligatory for any purpose or be entitled to any security or benefit ofthis Ordinance unless and until there appears thereon the Certificate ofPaying AgentlRegistrar substantially in the form provided in this Ordinance, duly authenticated by manual execution of the Paying AgentlRegistrar. It shall not be required that the same authorized representative ofthe Paying AgentlRegistrar sign the Certificate ofPaying AgentlRegistrar on the Obligation. 3 In lieu ofthe executed Certificate ofPaying AgentlRegistrar described above, the Initial Obligation delivered on the closing date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided in this Ordinance, manually executed by the Comptroller of Public Accounts of the State of Texas or by his duly authorized agent, which certificate shall be evidence that the Initial Obligation has been duly approved by the Attorney General of the State of Texas and that it is a valid and binding obligation of the Issuer, and has been registered by the Comptroller. (g) Delivery ofInitial Obligation. On the closing date, one initial Obligation representing the entire principal amount of the Obligation, payable in stated installments to the Purchaser designated in Section 10 or its designee, executed by manual or facsimile signature of the Mayor and City Secretary of the Issuer, approved by the Attorney General ofTexas , and registered and manually signed by the Comptroller ofPublic Accounts ofthe State ofTexas, and with the date ofdelivery inserted thereon by the Paying Agent/Registrar, will be delivered to such Purchaser or its designee. Section 4. FORM OF OBLIGATION. The form of the Obligation, including the form of Paying Agent/Registrar's Authentication Certificate, the form ofAssignment and the form ofRegistration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the Obligation initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as follows, with such appropriate variations, omissions or insertions as are permitted or required by this Ordinance. (a) Form of Obligation. NO.R­UNITED STATES OF AMERICA STATE OF TEXAS PRINCIPAL AMOUNT $360,000 CITY OF ANNA, TEXAS PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATION SERIES 2011 Interest Rate Delivery Date As Shown Below March 14,2011 REGISTERED OWNER: PRINCIPAL AMOUNT: THREE HUNDRED SIXTY THOUSAND DOLLARS The City of Anna, Texas (the "Issuer"), being a political subdivision of the State of Texas located in Collin County, Texas (the "Issuer"), being a political subdivision ofthe State ofTexas, for value received, promises to pay, from the sources described herein, to the registered owner specified above, or registered assigns (the "Registered Owner"), the principal amount specified above, and to pay interest thereon, from the Delivery Date set forth above, on the balance of said principal amount from time to time remaining unpaid, at the rates per annum for each principal installment as set forth below, calculated on the basis of a 360-day year of twelve 30-day months. The unpaid principal of this Obligation shall mature and shall be payable in installments on the dates and in the amounts set forth in the table below: 4 Payment Date February 15,2013 February 15,2014 February 15, 2015 February 15, 2016 February 15, 2017 February 15,2018 February 15,2019 February 15, 2020 February 15,2021 February 15,2022 February 15,2023 February 15,2024 February 15,2025 February 15,2026 Principal Installment $ 8,000 8,000 8,000 9,000 9,000 10,000 33,000 34,000 36,000 38,000 39,000 41,000 43,000 44,000 The Obligation will bear interest at the Initial Interest Rate of3.34% per annum, which shall be adjusted to the Adjusted Rate on February 15,2014. For the purposes ofthis paragraph, the following terms shall have the respective meanings as follows: "Publication Date" means February 14,2014. "Adjusted Rate" shall mean the greater of (i) 4.49% per annum or (ii) the United States Prime Rate as listed in the Eastern print edition of the Wall Street Journal as published on the Publication Date; provided that the Adjusted Rate shall never exceed the Maximum Rate. "Initial Interest Rate" means 3.34% per annum, which shall be the rate on the Bond for the period beginning on the date of delivery and ending on and including February 14,2014. "Maximum Rate" means the maximum interest rate permitted by applicable Texas law. THE PRINCIPAL OF AND INTEREST ON TillS Obligation are payable in lawful money of the United States of America, without exchange or collection charges. The Issuer shall pay interest on this Obligation on February 15,2012, and on each August 15 and February 15 thereafter to the date of maturity or redemption prior to maturity. The last principal installment of this Obligation shall be paid to the registered owner hereof upon presentation and surrender ofthis Obligation at maturity, or upon the date fixed for its redemption prior to maturity, at the principal office of Houston Community Bank, N.A., Houston, Texas, which is the "Paying AgentlRegistrar" for this Obligation. The payment of all other principal installments ofand interest on this Obligation shall be made by the Paying AgentlRegistrar to the registered owner hereof on each principal and interest payment date by check or draft, dated as of such principal and interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds ofthe Issuer required by the ordinance authorizing the issuance ofthis Obligation (the "Obligation Ordinance") to be on 5 deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be sent by the Paying AgentlRegistrar by United States mail, first-class postage prepaid, on each such interest payment date, to the registered owner hereof, at its address as it appeared on the last business day ofthe month next preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. In addition, principal and interest may be paid by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. ANY ACCRUED INTEREST due in connection with the final installment of principal of this Obligation or upon redemption of this Obligation in whole at the option of the Issuer prior to maturity as provided herein shall be paid to the registered owner upon presentation and surrender ofthis Obligation for payment at the principal corporate trust office ofthe Paying Agent/Registrar. The Issuer covenants with the registered owner ofthis Obligation that on or before each principal payment date and interest payment date for this Obligation it will make available to the Paying AgentlRegistrar, from the "Interest and Sinking Fund" created by the Obligation Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Obligation, when due. IF THE DATE for the payment of the principal ofor interest on this Obligation shall be a Saturday, Sunday, a legal holiday or a day on which banking institutions in the city where the principal corporate trust office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day that is not such a Saturday, Sunday, legal holiday or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. THIS Obligation is dated March 1,2011, authorized in accordance with the Constitution and laws ofthe State ofTexas in the principal amount of $360,000 for the public purpose ofacquisition of a fire truck and related equipment, and to pay the costs of issuance incurred in connection with the issuance of the Obligation. THE PRINCIPAL INSTALLMENTS OF THIS OBLIGATION may be redeemed prior to their scheduled payment, at the option of the Issuer in whole or in part on February 15, 2014, or any date thereafter, and, if in part, the particular principal installments or portions thereof to be redeemed shall be selected and designated by the Issuer, at a redemption price equal to the principal to be redeemed plus accrued interest to the date of redemption. AT LEAST 20 DAYS PRIOR to the date fixed for any optional redemption of the Obligation or portions thereof prior to maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, to the Registered Owner ofthe Obligation at its address as it appeared on the Registration Books on the day such notice of redemption is mailed; provided, however, that the failure ofthe Registered Owner to receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption ofthis Obligation. By the date fixed for any such redemption, due provision shall be made with the Paying Agent/Registrar for the payment of the required redemption price for the Obligation or portions thereof which are to be so redeemed. If such written notice of redemption is sent and if due provision for such payment is made, all as provided above, the Obligation or portions thereof which are to be so redeemed thereby automatically shall be treated as redeemed prior to its scheduled maturity, and shall not bear interest after the date fixed for redemption, and shall not be regarded as being outstanding except for the right ofthe Registered Owner to receive the redemption price from the Paying AgentlRegistrar out ofthe funds provided for such payment. 6 UPON THE PAYMENT ofthe principal installments ofthis Obligation, the Paying AgentlRegistrar, shall Obligation in the Payment Record appearing on this Obligation the amount of such payment and the date said payment was made and shall then have said entry signed by an authorized official of the Paying Agent/Registrar. The Paying AgentlRegistrar shall also record such information in the Obligation Registration Books. THIS OBLIGA nON IS ISSUABLE in the form ofone fully-registered Obligation without coupons in the denomination of $360,000. This Obligation may be transferred or exchanged in whole as provided in the Obligation Ordinance, only upon the registration books kept for that purpose at the above-mentioned office ofthe Paying AgentlRegistrar upon surrender ofthis Obligation together with a written instrument of transfer or authorization for exchange satisfactory to the Paying Agent/Registrar and duly executed by the registered owner or his duly authorized attorney, and thereupon a new Obligation of the same maturity and in the same aggregate principal amount shall be issued by the Paying Agent/Registrar to the transferee in exchange therefor as provided in the Obligation Ordinance, and upon payment of the charges therein prescribed. The Issuer and the Paying Agent/Registrar may deem and treat the person in whose name this Obligation is registered as the absolute owner hereof for the purpose ofreceiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes. The Paying Agent/Registrar shall not be required to make any such transfer or exchange (i) during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date, or (ii) with respect to any Obligation or any portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date. IN THE EVENT any Paying AgentlRegistrar for this Obligation is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Obligation Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed to the registered owner of the Obligation. THIS OBLIGA nON SHALL NOT be valid or become obligatory for any purpose or be entitled to any security or benefit under the Obligation Ordinance until the Certificate ofAuthentication shall have been executed by the Paying Agent/Registrar or the Comptroller's Registration Certificate hereon shall have been executed by the Texas Comptroller of Public Accounts. IT IS HEREBY certified, recited and covenanted that this Obligation has been duly and validly authorized, issued and delivered; that all acts, conditions and things required or proper to be performed, exist and be done precedent to or in the authorization, issuance and delivery of this Obligation have been performed, existed and been done in accordance with law; that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Obligation, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in said Issuer, and have been pledged for such payment, within the limit prescribed by law. THE ISSUER HAS RESERVED THE RIGHT to amend the Obligation Ordinance as provided therein, and under some (but not all) circumstances amendments thereto must be approved by the registered owner ofthe Obligation. BY BECOMING the registered owner ofthis Obligation, the registered owner thereby acknowledges all ofthe terms and provisions ofthe Obligation Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Obligation Ordinance is duly recorded and available for inspection in the official minutes and records of the governing body of the Issuer, and agrees that the terms and provisions of this 7 Obligation and the Obligation Ordinance constitute a contract between each registered owner hereof and the Issuer. IN WITNESS WHEREOF, the Issuer has caused this Obligation to be signed with the manual or facsimile signature of the Mayor of the Issuer (or in the Mayor's Absence, the Mayor Pro Tern) and countersigned with the manual or facsimile signature of the City Secretary of said Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Obligation. (signature) (signature ) City Secretary Mayor (SEAL) (b) Form of Payment Record. PAYMENT RECORD Principal Payment (amount and Remaining Name and Title of Date of installment(s) to which Principal Authorized Officer Signature of Payment payment is applied) Balance making Entry Authorized Officer (c) Form of Paying AgentlRegistrar's Authentication Certificate. PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE (To be executed if this Obligation is not accompanied by an executed Registration Certificate of the Comptroller of Public Accounts of the State of Texas) It is hereby certified that this Obligation has been issued under the provisions of the Obligation Ordinance described in the text of this Obligation; and that this Obligation has been issued in replacement of, or in exchange for, a Obligation that originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated: _________ Houston Community Bank, N.A. Paying Agent/Registrar 8 By: _____________________________ Authorized Representative (d) Form of Assignment. ASSIGNMENT (Please print or type clearly) For value received, the undersigned hereby sells, assigns and transfers unto: Transferee's Social Security or Taxpayer Identification Number: Transferee's name and address, including zip code: the within Obligation and all rights thereunder, and hereby irrevocably constitutes and appoints ___________________________, attorney, to register the transfer of the within Obligation on the books kept for registration thereof, with full power of substitution in the premises. Dated: _________ Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by an NOTICE: The signature above must correspond eligible guarantor institution participating in a with the name of the registered owner as it appears securities transfer association recognized signature upon the front ofthis Obligation in every particular, guarantee program. without alteration or enlargement or any change whatsoever. (e) Form of Registration Certificate of the Comptroller of Public Accounts. COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. _____ I hereby certify that this Obligation has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and that this Obligation has been registered by the Comptroller of Public Accounts of the State of Texas. Witness my signature and seal this ___________ Comptroller of Public Accounts of the State of Texas (COMPTROLLER'S SEAL) 9 Section 5. INTEREST AND SINKlNG FUND. (a) A special "Interest and Sinking Fund" is hereby created and shall be established and maintained by the Issuer at an official depository bank of said Issuer. Said Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of said Issuer, and shall be used only for paying the interest on and principal of said Obligation. All ad valorem taxes levied and collected for and on account of said Obligation shall be deposited, as collected, to the credit of said Interest and Sinking Fund. During each year while any of said Obligation is outstanding and unpaid, the governing body of said Issuer shall compute and ascertain a rate and amount of ad valorem tax that will be sufficient to raise and produce the money required to pay the interest on said Obligation as such interest comes due, and to provide and maintain a sinking fund adequate to pay the principal ofsaid Obligation as such principal matures (but never less than 2% ofthe original amount of said Obligation as a sinking fund each year); and said tax shall be based on the latest approved tax rolls of said Issuer, with full allowances being made for tax delinquencies and the cost of tax collection. Said rate and amount ofad valorem tax is hereby levied, and is hereby ordered to be levied, against all taxable property in said Issuer, for each year while said Obligation is outstanding and unpaid, and said tax shall be assessed and collected each such year and deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of said Obligation, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. Iflawfully available moneys of the Issuer are actually on deposit in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year, then the amount of taxes that otherwise would have been required to be levied pursuant to this Section may be reduced to the extent and by the amount of the lawfully available funds then on deposit in the Interest and Sinking Fund. (b) Article 1208, Government Code, applies to the issuance ofthe Obligation and the pledge of the taxes granted by the Issuer under this Section, and is therefore valid, effective, and perfected. Should Texas law be amended at any time while the Obligation is outstanding and unpaid, the result of such amendment being that the pledge of the taxes granted by the Issuer under this Section is to be subject to the filing requirements ofChapter 9, Business & Commerce Code, in order to preserve to the Registered Owner ofthe Obligation a security interest in said pledge, the Issuer agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions ofChapter 9, Business & Commerce Code and enable a filing of a security interest in said pledge to occur. Section 6. DEFEASANCE OF OBLIGATION. (a) Any Obligation and the interest thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased Obligation") within the meaning of this Ordinance, except to the extent provided in subsection Cd) of this Section, when payment of the principal of such Obligation, plus interest thereon to the due date (whether such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent/Registrar in accordance with an escrow agreement or other instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Defeasance Securities that mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money to provide for such payment, and when proper arrangements have been made by the Issuer with the Paying AgentlRegistrar for the payment of its services until the Defeased Obligation shall have become due and payable. At such time as a Obligation shall be deemed to be a Defeased Obligation hereunder, as aforesaid, such Obligation and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied and IO pledged as provided in this Ordinance, and such principal and interest shall be payable solely from such money or Defeasance Securities. Notwithstanding any other provision of this Ordinance to the contrary, it is hereby provided that any determination not to redeem a Defeased Obligation that is made in conjunction with the payment arrangements specified in subsection 6( a )(i) or (ii) shall not be irrevocable, provided that: (1) in the proceedings providing for such payment arrangements, the Issuer expressly reserves the right to call the Defeased Obligation for redemption; (2) gives notice ofthe reservation ofthat right to the Registered Owner ofthe Defeased Obligation immediately following the making of the payment arrangements; and (3) directs that notice of the reservation be included in any redemption notices that it authorizes. (b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer be invested in Defeasance Securities, maturing in the amounts and times as hereinbefore set forth, and all income from such Defeasance Securities received by the Paying Agent/Registrar that is not required for the payment of the Obligation and interest thereon, with respect to which such money has been so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer. Any Future Escrow Agreement pursuantto which the money and/or Defeasance Securities are held for the payment ofa Defeased Obligation may contain provisions permitting the investment or reinvestment ofsuch moneys in Defeasance Securities or the substitution of other Defeasance Securities upon the satisfaction of the requirements specified in subsection 6(a)(i) or (ii). All income from such Defeasance Securities received by the Paying Agent/Registrarwhich is not required for the payment ofthe Defeased Obligation, with respect to which such money has been so deposited, shall be remitted to the Issuer or deposited as directed in writing by the Issuer. (c) The term "Defeasance Securities" means (i) direct, noncallable obligations of the United States ofAmerica, including obligations that are unconditionally guaranteed by the United States of America., (ii) noncallable obligations ofan agency or instrumentality ofthe United States ofAmerica, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of the purchase thereof are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and (iii) noncallable obligations ofa state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date the governing body of the Issuer adopts or approves the proceedings authorizing the financial arrangements are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. (d) Until the Defeased Obligation shall have become due and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Obligation the same as if they had not been defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required by this Ordinance. Section 7. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED OBLIGATION. (a) Replacement Obligation. In the event any outstanding Obligation is damaged, mutilated, lost, stolen or destroyed, the Paying Agent/Registrar shall cause to be printed, executed and delivered, a new Obligation of the same principal amount, maturity and interest rate, as the damaged, mutilated, lost, stolen or destroyed Obligation, in replacement for such Obligation in the manner hereinafter provided. (b) Application for Replacement Obligation. Application for replacement ofa damaged, mutilated, lost, stolen or destroyed Obligation shall be made by the Registered Owner thereof to the Paying Agent/Registrar. In every case ofloss, theft or destruction of a Obligation, the Registered Owner applying for a replacement Obligation shall furnish to the Issuer and to the Paying AgentlRegistrar such security or indemnity as may be required by them to save each of them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft or destruction of a Obligation, the Registered Owner shall furnish 11 to the Issuer and to the Paying Agent/Registrar evidence to their satisfaction ofthe loss, theft or destruction ofsuch Obligation, as the case may be. In every case of damage or mutilation of a Obligation, the Registered Owner shall surrender to the Paying Agent/Registrar for cancellation the Obligation so damaged or mutilated. (c) No Default Occurred. Notwithstanding the foregoing provisions ofthis Section, in the event any such Obligation shall have matured, and no default has occurred that is then continuing in the payment of the principal of, redemption premium, if any, or interest on the Obligation, the Issuer may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Obligation) instead of issuing a replacement Obligation, provided security or indemnity is furnished as above provided in this Section. (d) Charge for Issuing Replacement Obligation. Prior to the issuance ofany replacement Obligation, the Paying AgentlRegistrar shall charge the Registered Owner ofsuch Obligation with all legal, printing, and other expenses in connection therewith. Every replacement Obligation issued pursuant to the provisions of this Section by virtue ofthe fact that any Obligation is lost, stolen or destroyed shall constitute a contractual obligation of the Issuer whether or not the lost, stolen or destroyed Obligation shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits ofthis Ordinance. (e) Authority for Issuing Replacement Obligation. In accordance with Section 1206.022, Government Code, this Section of this Ordinance shall constitute authority for the issuance of any such replacement Obligation without necessity offurther action by the governing body of the Issuer or any other body or person, and the duty ofthe replacement of such Obligation is hereby authorized and imposed upon the Paying AgentlRegistrar, and the Paying Agent/Registrar shall authenticate and deliver such Obligation in the form and manner and with the effect, as provided in Section 3(a) ofthis Ordinance for a Obligation issued in exchange for another Obligation. Section 8. CUSTODY, APPROVAL, AND REGISTRATION OF OBLIGATION; BOND COUNSEL'S OPINION; CUSIP NUMBERS AND ENGAGEMENT OF BOND COUNSEL. (a) The Mayor of the Issuer is hereby authorized to have control of the Obligation initially issued and delivered hereunder and all necessary records and proceedings pertaining to the Obligation pending its delivery and their investigation, examination, and approval by the Attorney General of the State ofTexas, and its registration by the Comptroller of Public Accounts ofthe State ofTexas. Upon registration of the Obligation said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate attached to such Obligation, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such Obligation. The approving legal opinion ofthe Issuer's Bond Counsel and the assigned CUSIP numbers (ifobtained) may, at the option of the Issuer, be printed on the Obligation issued and delivered under this Ordinance, but neither shall have any legal effect, and shall be solely for the convenience and information of the Registered Owner of the Obligation. (b) The obligation ofthe Purchaser to accept delivery of the Obligation is subject to the Purchaser being furnished with the final, approving opinion ofMcCall, Parkhurst & Horton L.L.P., bond counsel to the Issuer, which opinion shall be dated as of and delivered on the date of initial delivery of the Obligation to the Purchaser. The engagement ofsuch firm as bond counsel to the Issuer in connection with issuance, sale and delivery of the Obligation is hereby approved and confirmed. The execution and delivery of an engagement letter between the Issuer and such firm, with respect to such services as bond counsel, is hereby authorized in such form as may be approved by the Mayor, and the Mayor is hereby authorized to execute such engagement letter. 12 Section 9. COVENANTS REGARDlNG TAX EXEMPTION OF lNTEREST ON THE OBLIGATION. (a) Covenants. The Issuer covenants to take any action necessary to assure, or refrain from any action that would adversely affect, the treatment of the Obligation as an obligation described in section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which is not includable in the"gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the Issuer covenants as follows: (I) to take any action to assure that no more than 10 percent of the proceeds of the Obligation (less amounts deposited to a reserve fund, ifany) are used for any "private business use," as defined in section 141 (b)( 6) ofthe Code or, ifmore than 10 percent ofthe proceeds or the projects financed therewith are so used, such amounts, whether or not received by the Issuer, with respect to such private business use, do not, under the tenns of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment ofmore than 10 percent ofthe debt service on the Obligation, in contravention of section 141 (b )(2) of the Code; (2) to take any action to assure that in the event that the "private business use" described in subsection (I) hereofexceeds 5 percent ofthe proceeds ofthe Obligation or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for a "private business use" that is "related" and not "disproportionate," within the meaning of section 14 I (b)(3) of the Code, to the governmental use; (3) to take any action to assure that no amount that is greater than the lesser of $5,000,000, or 5 percent of the proceeds of the Obligation (less amounts deposited into a reserve fund, if any) is directly or indirectly used to fmance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code; (4) to refrain from taking any action that would otherwise result in the Obligation being treated as a "private activity bond" within the meaning of section 141 (b) ofthe Code; (5) to refrain from taking any action that would result in the Obligation being "federally guaranteed" within the meaning of section 149(b) of the Code; (6) to refrain from using any portion ofthe proceeds ofthe Obligation, directly or indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) ofthe Code) that produces a materially higher yield over the term of the Obligation, other than investment property acquired with­ (A) proceeds of the Obligation invested for a reasonable temporary period of 3 years or less or, in the case of an advance refunding bond, for a period of 30 days or less until such proceeds are needed for the purpose for which the Obligation is issued, (B) amounts invested in a bona fide debt service fund, within the meaning of section 1.148-1 (b) of the Treasury Regulations, and (C) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the proceeds of the Obligation; 13 (7) to otherwise restrict the use of the proceeds of the Obligation or amounts treated as proceeds of the Obligation, as may be necessary, so that the Obligation does not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings); and (8) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Obligation) an amount that is at least equal to 90 percent of the "Excess Earnings," within the meaning ofsection 148(t) ofthe Code and to pay to the United States of America, not later than 60 days after the Obligation has been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(t) ofthe Code; and (9) to assure that the proceeds ofthe Obligation will be used solely for new money projects. (b) Rebate Fund. In order to facilitate compliance with the above covenant (a)(8), a "Rebate Fund" is hereby established by the Issuer for the sole benefit ofthe United States ofAmerica, and such Fund shall not be subject to the claim of any other person, including without limitation the Registered Owner. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. (c) Use of Proceeds. The Issuer understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations (hereinafter defined). It is the understanding ofthe Issuer that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department ofthe Treasury pursuant thereto (the "Treasury Regulations"). In the event that regulations or rulings are hereafter promulgated that modify or expand provisions of the Code, as applicable to the Obligation, the Issuer will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of nationally recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Obligation under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated that impose additional requirements applicable to the Obligation, the Issuer agrees to comply with the additional requirements to the extent necessary, in the opinion ofnationally recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Obligation under section 103 of the Code. This Ordinance is intended to satisfY the official intent requirements set forth in section 1.150-2 of the Treasury Regulations In furtherance hereof, the Issuer hereby authorizes and directs the Mayor, City Manager or Director of Finance to execute any documents, certificates or reports required by the Code and to make such elections, on behalfofthe Issuer, that may be permitted by the Code as are consistent with the purpose for the issuance of the Obligation. (d) Allocation of, and Limitation on, Expenditures for the Proj ects. The Issuer covenants to account for the expenditure ofsale proceeds and investment earnings to be used for the construction and acquisition ofthe projects financed with the proceeds ofthe Obligations on its books and records by allocating proceeds to expenditures within 18 months ofthe later of the date that (1) the expenditure is made, or (2) the Projects are completed. The foregoing notwithstanding, the Issuer shall not expend proceeds of the sale of the Obligations or investment earnings thereon more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Obligations, or (2) the date the Obligations are retired, unless the Issuer obtains an opinion ofnationally-recognized bond counsel that such expenditure will not adversely affect the status, for federal income tax purposes, ofthe Obligations or the interest thereon. For purposes hereof, the Issuer shall not be obligated to comply with this covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. 14 (e) Disposition of Projects. The Issuer covenants that the Projects will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer ofcash or other compensation, unless the Issuer obtains an opinion of nationally-recognized bond counsel that such sale or other disposition will not adversely affect the tax-exempt status of the Obligation. For purposes of the foregoing, the portion of the property comprising personal property and disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes hereof, the Issuer shall not be obligated to comply with this covenant if it obtains a legal opinion that such failure to comply will not adversely affect the excludability for federal income tax proposes from gross income of the interest. (f) Designation as a Qualified Tax -Exempt Obligation. The Issuer hereby designates the Obligation as a "qualified tax-exempt obligation" as defined in section 265(b)(3) of the Code. In furtherance of such designation, the Issuer represents, covenants and warrants the following: (a) that during the calendar year in which the Obligation is issued, the Issuer (including any subordinate entities) has not designated nor will designate obligations that when aggregated with the Obligation, will result in more than $10,000,000 of "qualified tax-exempt obligations" being issued; (b) that the Issuer reasonably anticipates that the amount of tax-exempt obligations issued, during the calendar year in which the Obligation is issued, by the Issuer (or any subordinate entities) will not exceed $10,000,000; and, ( c) that the Issuer will take such action or refrain from such action as necessary, and as more particularly set forth in this Section, hereof, in order that the Obligation will not be considered a "private activity bond" within the meaning ofsection 141 ofthe Code. Section 10. SALE OF Obligation. The Obligation is hereby initially sold and shall be delivered to Houston Community Bank, N.A., Sugar Land, Texas (the "Purchaser"), for cash for the par value thereof, pursuant to the private placement letter dated the date ofthe final passage ofthis Ordinance which the Mayor is hereby authorized to execute and deliver. The Obligation shall initially be registered in the name of the Purchaser. It is hereby officially found, determined, and declared that the terms of this sale are the most advantageous reasonably obtainable. Section 11. FURTHER PROCEDURES. The Mayor, Mayor Pro Tern and City Manager, and each of them, shall be and they are hereby expressly authorized, empowered and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalfofthe Issuer a Paying Agent/Registrar Agreement with the Paying Agent/Registrar and all other instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions ofthis Ordinance, the Obligation and the sale ofthe Obligation. In case any officer whose signature shall appear on any Obligation shall cease to be such officer before the delivery of such Obligation, such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. Section 12. NO RULE 15c2-12 UNDERTAKING. The Issuer has not made an undertaking in accordance with Rule 15c2-12 ofthe Securities and Exchange Commission (the "Rule"). The Issuer is not, therefore, obligated pursuant to the Rule to provide anyon-going disclosure relating to the Issuer or the Obligation. Section 13. DEFAULT AND REMEDIES. (a) Events ofDefault. Each ofthe following occurrences or events for the purpose ofthis Ordinance is hereby declared to be an Event of Default: (i) the failure to make payment of the principal of or interest on the Obligation when the same becomes due and payable; or 15 (ii) default in the perfonnance or observance ofany other covenant, agreement or obligation of the Issuer, the failure to perfonn which materially, adversely affects the rights of the registered owners of the Obligation, including, but not limited to its prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of 60 days after notice of such default is given by the registered owner to the Issuer. (b) Remedies for Default. Upon the happening of any Event ofDefault, then and in every case, any registered owner or an authorized representative thereof, including, but not limited to, a trustee or trustees therefor, may proceed against the Issuer for the purpose of protecting and enforcing the rights of the registered owner under this Ordinance, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific perfonnance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the registered owner hereunder or any combination of such remedies. (c) Remedies Not Exclusive. (i) No remedy herein conferred or reserved is intended to be exclusive ofany other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Obligation or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision ofthis Ordinance, the right to accelerate the debt evidenced by the Obligation shall not be available as a remedy under this Ordinance. (ii) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. (iii) By accepting the delivery of a Obligation authorized under this Ordinance, such registered owner agrees that the certifications required to effectuate any covenants or representations contained in this Ordinance do not and shall never constitute or give rise to a personal or pecuniary liability or charge against the officers, employees or trustees of the Issuer or the City Council. Section 14. METHOD OF AMENDMENT. The Issuer hereby reserves the right to amend this Ordinance subject to the following terms and conditions, to-wit: (a) The Issuer may from time to time, without the consent of the Registered Owner, except as otherwise required by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure any ambiguity, defect or omission in this Ordinance that does not materially adversely affect the interests of the holders, (ii) grant additional rights or security for the benefit ofthe holders, (iii) add events ofdefault as shall not be inconsistent with the provisions of this Ordinance and that shall not materially adversely affect the interests of the holders, (iv) qualify this Ordinance under the Trust Indenture Act of 1939, as amended, or corresponding provisions of federal laws from time to time in effect, or (v) make such other provisions in regard to matters or questions arising under this Ordinance as shall not be inconsistent with the provisions of this Ordinance and that shall not in the opinion of the Issuer's Bond Counsel materially adversely affect the interests of the holders. (b) Except as provided in paragraph ( a) above, the Registered Owner shall have the right from time to time to approve any amendment hereto that may be deemed necessary or desirable by the Issuer; provided, 16 however, that without the consent of the Registered Owner, nothing herein contained shall pennit or be construed to pennit amendment of the terms and conditions of this Ordinance or in the Obligation so as to: (1) Make any change in the maturity of the Obligation; (2) Reduce the rate of interest borne by the Obligation; (3) Reduce the amount of the principal of, or redemption premium, ifany, payable on the Obligation; (4) Modify the terms ofpayment of principal or of interest or redemption premium on the Obligation or impose any condition with respect to such payment; or (5) Change the requirement with respect to Registered Owner consent to such amendment. (c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the Issuer shall send by u.S. mail to the Registered Owner of the Obligation a copy of the proposed amendment. (d) Whenever at any time within one year from the date of mailing of such notice the Issuer shall receive an instrument or instruments executed by the Registered Owner ofthe Obligation, which instrument or instruments shall refer to the proposed amendment and that shall specifically consent to and approve such amendment, the Issuer may adopt the amendment in substantially the same form. (e) Upon the adoption of any amendatory Ordinance pursuant to the provisions ofthis Section, this Ordinance shall be deemed to be modified and amended in accordance with such amendatory Ordinance, and the respective rights, duties, and obligations of the Issuer and the Registered Owner of the Obligation shall thereafter be detennined, exercised, and enforced, subject in all respects to such amendment. (f) Any consent given by the Registered Owner ofthe Obligation pursuant to the provisions ofthis Section shall be irrevocable for a period of 6 months from the date of the mailing of the notice provided for in this Section, and shall be conclusive and binding upon all future holders of the same Obligation during such period. Such consent may be revoked at any time after 6 months from the date of the mailing of said notice by the Registered Owner, or by a successor in title, by filing notice with the Issuer. For the purposes of establishing ownership of the Obligation, the Issuer shall rely solely upon the registration ofthe ownership ofsuch Obligation on the registration books kept by the Paying Agent/Registrar. Section 15. PROJECT FUND. (a) The Issuer hereby creates and establishes and shall maintain on the books ofthe Issuer a separate fund or account to be entitled the "Series 2011 Obligation Project Fund" for use by the Issuer for payment of all lawful costs associated with the Projects as hereinbefore provided, and to pay the costs of issuance of the Obligation. The proceeds of the Obligation are hereby appropriated and budgeted for payment of the costs of the Project and shall be deposited into such Project Fund. Upon payment of all such costs, any moneys remaining on deposit in said fund shall be transferred to the Interest and Sinking Fund. Amounts so deposited to the Interest and Sinking Fund shall be used in the manner described in Section 5 of this Ordinance. 17 (b) The Issuer may place proceeds of the Obligation (including investment earnings thereon) and amounts deposited into the Interest and Sinking Fund in investments authorized by the Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended; provided, however, that the Issuer hereby covenants that the proceeds of the sale of the Obligation will be used as soon as practicable for the purposes for which the Obligation is issued. (c) All deposits authorized or required by this Ordinance shall be secured to the fullest extent required by law for the security of public funds. Section 16. SEVERABILITY. Ifany section, article, paragraph, sentence, clause, phrase or word in this Ordinance, or application thereof to any persons or circumstances is held invalid or unconstitutional by a court ofcompetent jurisdiction, such holding shall not affect the validity ofthe remaining portion ofthis Ordinance, despite such invalidity, which remaining portions shall remain in full force and effect. Section 17. EFFECTIVE DATE. In accordance with the provisions of Texas Government Code Section 1201.028, this Ordinance shall be effective immediately upon its adoption by the City Council. (Execution Page Follows) 18 PASSED, APPROVED AND EFFECTIVE this Pj,tu,'t U, lIlIl. ATTEST: SCHEDULE I Acquisition of fire truck and related equipment.