KC Skyline

City Clerk Web Search

Search the Ordinances:

Legislation #: 980278 Introduction Date: 3/19/1998
Type: Ordinance Effective Date: 4/19/1998
Sponsor: None
Title: Authorizing the issuance of Water Refunding Revenue Bonds, Series 1998A, of the City of Kansas City, Missouri, in the principal amount not to exceed $42,000,000.00, for the purpose of providing funds to refund certain maturities of the City´s Water Revenue Bonds, 7th Issue, Series C, and the City´s Water Revenue Bonds, 7th Issue, Series D, prescribing the form and details of said bonds and the covenants and agreements to provide for the payment and security thereof, and authorizing certain actions and documents and prescribing other matters relating thereto.

Legislation History
DateMinutesDescription
3/19/1998

Prepare to Introduce

3/19/1998

Referred Finance & Administration Committee

3/25/1998

Do Pass as a Committee Substitute

3/26/1998

Assigned to Third Read Calendar

4/2/1998

Held on Docket

4/9/1998

Amended

4/9/1998

Passed as Substituted and Amended


View Attachments
FileTypeSizeDescription
98278.pdf Authenticated 6199K authenticated

Printer Friendly Version

 

COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 980278, AS AMENDED

 

Authorizing the issuance of Water Refunding Revenue Bonds, Series 1998A, of the City of Kansas City, Missouri, in the principal amount not to exceed $42,000,000.00, for the purpose of providing funds to refund certain maturities of the Citys Water Revenue Bonds, 7th Issue, Series C, and the Citys Water Revenue Bonds, 7th Issue, Series D, prescribing the form and details of said bonds and the covenants and agreements to provide for the payment and security thereof, and authorizing certain actions and documents and prescribing other matters relating thereto.

 

WHEREAS, the City has heretofore issued its Water Revenue Bonds, 7th Issue, Series C, dated March 1, 1992, in the original principal amount of $20,000,000.00 of which $17,145,000.00 remains outstanding (the Series C Bonds), its Water Revenue Bonds, 7th Issue, Series D, dated December 1, 1994, in the original principal amount of $35,000,000.00 (the Series D Bonds) of which $32,115,000.00 remains Outstanding, its Water Refunding Revenue Bonds, Series 1996A, in the original principal amount of $45,550,000.00 (the Series 1996A Bonds) of which $44,065,000.00 remains outstanding, and its Water Revenue Bonds, Series 1996B, in the original principal amount of $28,000,000.00 (the Series 1996B Bonds) of which $27,135,000.00 remains outstanding; and

 

WHEREAS, concurrently herewith the City has issued $14,410,000.00 principal amount of Water Revenue Bonds, Series 1998B, to provide funds to extend and improve the Citys waterworks system; and

 

WHEREAS, the City is authorized under the provisions of Article VI, Section 27 of the Constitution of Missouri, 1945, as amended, Section 108.140(2) of the Revised Statutes of Missouri, as amended, and its Charter to refund, extend and unify the whole or part of its indebtedness; and

 

WHEREAS, the City hereby finds and determines that it is in the best interests of the City to issue and deliver its Water Refunding Revenue Bonds, Series 1998A (the Bonds), in the principal amount of not to exceed $42,000,000.00 to provide funds to refund the outstanding Series C Bonds maturing in the years 2002 and thereafter, and the outstanding Series D Bonds maturing in the years 2006 and thereafter (collectively the Refunded Bonds); NOW, THEREFORE,

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

ARTICLE I

DEFINITIONS

 

Section 101. Definitions. In addition to the words and terms otherwise defined herein, unless the context shall clearly indicate some other meaning, the words and terms as used in this Ordinance shall have the following meanings:

 

Additional Bonds means any bonds on a parity with the bonds issued pursuant to and in accordance with Section 902 of this Ordinance.


Arbitrage Instructions means the Arbitrage Instructions attached as Exhibit A to the Citys Arbitrage Certificate, as the same may be amended or supplemented in accordance with the provisions thereof.

 

Bond Counsel means Gilmore & Bell, P.C., and Viveros & Barrera, L.C., or other attorney or firm of attorneys with a nationally recognized standing in the field of municipal bond financing.

 

Bond Payment Date means any date on which principal of or interest on any Bond is payable at Maturity or on any Interest Payment Date.

 

Bond Register means the books for the registration, transfer and exchange of Bonds kept at the office of the Paying Agent as bond registrar.

 

Bond Reserve Account means, with respect to each series of Bonds, the account established for deposit and maintenance of the bond reserve requirement, if any, with respect to such series of Bonds.

 

Bond Reserve Requirement means the amount on the date of original issuance and delivery of the Bonds equal to the lesser of (1) 10% of the stated principal amount of the Bonds, (2) the maximum Debt Service Requirements for the Bonds during any fiscal year, or (3) 125% of the average annual Debt Service Requirements for the Bonds over the term of the Bonds. If the aggregate initial offering price of the Bonds to the public is less than 98% or more than 102% of par, such offering price shall be used in clause (1) in lieu of the stated principal amount.

 

Bond Year means the one-year period beginning on the day after the expiration of the preceding Bond Year. The first Bond Year begins on the date of initial issuance and delivery of the Bonds and ends one (1) year later.

 

Bondowner or Registered Owner when used with respect to any Bond means the Person in whose name such Bond is registered on the Bond Register.

 

Bonds means the Water Refunding Revenue Bonds, Series 1998A, of the City, in the aggregate principal amount set forth in the Terms Ordinance, authorized and issued pursuant to this Ordinance.

 

Business Day means a day other than a Saturday, Sunday or holiday on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its banking operations.

 

Cede & Co. means Cede & Co., as nominee name of The Depository Trust Company, New York, New York.

 

City means the City of Kansas City, Missouri, and any successors or assigns.

Code means the Internal Revenue Code of 1986, as amended, and the applicable regulations of the Treasury Department proposed or promulgated thereunder.

 

Costs of Issuance Fund means the fund by that name created by Section 502.

 

Council means the Council of the City.

 

Debt Service Requirements means the aggregate principal payments (whether at maturity or pursuant to scheduled mandatory sinking fund redemption requirements) and interest payments on all Water Revenue Bonds for the period of time for which calculated; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that such principal or interest is payable from amounts deposited in trust, escrowed or otherwise set aside for the payment thereof with the Paying Agent or other commercial bank or trust company located in the State of Missouri and having full trust powers.

 

Defaulted Interest means interest on any Bond which is payable but not paid on any Interest Payment Date.

 

Defeasance Obligations means any of the following obligations:

 

(a) United States Government Obligations that are not subject to redemption in advance of their maturity dates; or

 

(b) obligations of any state or political subdivision of any state, the interest on which is excluded from gross income for federal income tax purposes and which meet the following conditions:

 

(1) the obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for such obligations has been given irrevocable instructions concerning their call and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions;

 

(2) the obligations are secured by cash or United States Government Obligations that may be applied only to principal of, premium, if any, and interest payments on such obligations;

 

(3) such cash and the principal of and interest on such United States Government Obligations serving as security for the obligations, plus any cash in the escrow fund, are sufficient to meet the liabilities of the obligations;

 

(4) such cash and United States Government Obligations serving as security for the obligations are held in an escrow fund by an escrow agent or a trustee irrevocably in trust;

 

(5) such cash and United States Government Obligations serving as security for the obligations, are not available to satisfy any other claims, including those against the trustee or escrow agent; and

 

(6) the obligations are rated in the highest rating category by Moodys Investors Service, Inc. (presently Aaa) or Standard & Poors Ratings Group (presently AAA).

 

Depository means DTC.

 

Director means the Director or any Deputy Director of the Department of Water Services of the City.

 

DTC means The Depository Trust Company.

 

Escrow Fund means the fund by that name referred to in Section 502 of this Ordinance.

 

Escrowed Securities means the direct, noncallable obligations of the United States of America as described in the Escrow Agreement.

 

Fiscal Year means the Citys fiscal year then in effect.

 

1998A Bond Reserve Account means the Water Revenue Bonds, Series 1998A, Reserve Account created pursuant to Section 502.

 

1998A Water Debt Fund means the Water Revenue Bonds, Series 1998A, Principal and Interest Sinking Fund created pursuant to Section 502.

 

Global Bond Certificate means one or more Bond certificates of the City, representing the entire principal amount of a particular Series due on a particular Stated Maturity, immobilized from general circulation in the Depository.

 

Interest Payment Date means the Stated Maturity of an installment of interest on any Bond.

 

Maturity when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or call for optional or mandatory redemption or otherwise.

 

Maximum Annual Debt Service means the maximum amount of Debt Service Requirements as computed for the then current or any future Fiscal Year.

 

Net Revenues means, for the period of determination, the Revenues less that portion of the Revenues expended for operating and maintaining the System (excluding depreciation, amortization, interest chargeable to income account and other similar payments or charges) pursuant to Section 601(a).

 

Net Revenues Available for Debt Service means, for the period of determination, all Revenues less all Expenses as determined in accordance with generally accepted accounting principles.

 

Ordinance means this Ordinance as from time to time amended.

 

Outstanding means, when used with reference to Bonds, as of any particular date, all Bonds theretofore issued and delivered hereunder, except the following Bonds:

 

(a) Bonds theretofore cancelled by the Paying Agent or delivered to the Paying Agent for cancellation;

 

(b) Bonds deemed to be paid in accordance with the provisions of Section 1101; and

 

(c) Bonds in exchange for or in lieu of which other Bonds have been registered and delivered.

 

Parity Bonds means the Series C Bonds, the Series D Bonds, the Series 1996A Bonds, and the Series 1996B Outstanding on the date of the issuance and delivery of the Bonds, the Series 1998B Bonds being issued concurrently with the issuance of the Bonds, and any Additional Bonds.

 

Parity Ordinances means the ordinances heretofore adopted by the City under which the outstanding Parity Bonds have been issued, the ordinance under which the Series 1998B Bonds are being issued, and the ordinances under which any additional Parity Bonds are hereafter issued pursuant to Section 902.

 

Participants means the financial institutions for whom the Depository effects book-entry transfers and pledges of securities deposited with the Depository.

 

Paying Agent means the paying agent selected from time to time by the Director of Finance.

 

Permitted Investments means any of the following securities and obligations, if and to the extent the same are at the time legal for investment of the Citys moneys held in the funds and accounts referred to in Article V:

 

(a) United States Government Obligations;

(b) bonds, notes or other obligations of the State of Missouri, or any political subdivision of the State of Missouri, that at the time of their purchase are rated in either of the two highest rating categories by a nationally recognized rating service;

 

(c) repurchase agreements with any bank, bank holding company, savings and loan association, trust company, or other financial institution organized under the laws of the United States or any state, that are continuously and fully secured by any one or more of the securities described in clause (a) or (b) above and have a market value, exclusive of accrued interest, at all times at least equal to the principal amount of such repurchase agreement and are held in a custodial or trust account for the benefit of the City;

 

(d) obligations of the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Financing Bank, the Federal Intermediate Credit Corporation, Federal Banks for Cooperatives, Federal Land Banks, Federal Home Loan Banks, Farmers Home Administration and Federal Home Loan Mortgage Corporation;

 

(e) certificates of deposit or time deposits, whether negotiable or nonnegotiable, issued by any bank or trust company organized under the laws of the United States or any state, provided that such certificates of deposit or time deposits shall be either (1) continuously and fully insured by the Federal Deposit Insurance Corporation, or (2) continuously and fully secured by such securities as are described above in clauses (a) through (c) above, inclusive, which shall have a market value, exclusive of accrued interest, at all times at least equal to the principal amount of such certificates of deposit or time deposits; and

 

(f) any other securities or investments that are lawful for the investment of moneys held in such funds or accounts under the laws of the State of Missouri.

 

Person means any natural person, corporation, partnership, firm, joint venture, association, joint‑stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body.

 

Purchaser means the original purchaser of the Bonds.

 

Rebate Fund means the fund by that name referred to in Section 502.

 

Record Date for the interest payable on any Interest Payment Date means the 15th day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date.

 

Redemption Date when used with respect to any Bond to be redeemed means the date fixed for such redemption pursuant to the terms of this Ordinance.

 

Redemption Price when used with respect to any Bond to be redeemed means the price at which such Bond is to be redeemed pursuant to the terms of this Ordinance, including the applicable redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before the Redemption Date.

 

Regular Record Date for the interest payable on any Interest Payment Date means the fifteenth calendar day of the calendar month (whether or not a business day) next preceding such Interest Payment Date.

 

Replacement Bonds means Bonds issued to the beneficial owners of the Bonds in accordance with Section 210(b) hereof.

 

Revenues means all income and revenues derived and accrued by the City from the ownership and operation of the System, including interest received on moneys and securities held pursuant to this Ordinance that is paid and credited to the Waterworks Revenue Fund pursuant to Section 501 of this Ordinance and any amounts held in escrow in connection with the construction of extensions and improvements to the System to be applied during the period of determination to pay interest on water system revenue bonds.

 

Securities Depository means, initially, The Depository Trust Company, New York, New York, and its successors and assigns.

 

Series and Series of Bonds means any series of Additional Bonds.

 

Series C Bonds means the Water Revenue Bonds, 7th Issue, Series C, of the City, authorized by Committee Substitute for Ordinance No. 911538.

 

Series D Bonds means the Water Revenue Bonds, 7th Issue, Series D, of the City, authorized by Committee Substitute for Ordinance No. 941459.

 

Series 1996A Bonds means the Water Refunding Revenue Bonds, Series 1996A, of the City, authorized by Committee Substitute for Ordinance No. 960924.

 

Series 1996B Bonds means the Water Revenue Bonds, Series 1996B, authorized by Ordinance No. 961462.

 

Series 1998B Bonds means the Water Revenue Bonds, Series 1998B, of the City proposed to be issued concurrently with the issuance of the Bonds.

 

Special Record Date means the date fixed by the Paying Agent pursuant to Section 204 for the payment of Defaulted Interest.

 

Stated Maturity when used with respect to any Bond or any installment of interest thereon means the date specified in such Bond and this Ordinance as the date on which the principal of such Bond or such installment of interest is due and payable.

 

Surety Bond means any surety bond or debt service reserve fund policy issued by a Surety Provider guaranteeing or insuring certain payments into the 1998A Bond Reserve Account with respect to the Bonds as provided therein and subject to the limitations set forth therein.

 

Surety Provider means any insurer providing a Surety Bond as permitted in this Ordinance.

 

Surplus Account means the account by that name referred to in Section 502.

 

System means the entire waterworks plant and system owned and operated by the City for the production, storage, treatment and distribution of water, to serve the needs of the City and its inhabitants and others, including all appurtenances and facilities connected therewith or relating thereto, together with all extensions, improvements, additions and enlargements thereto hereafter made or acquired by the City. At the discretion of the City there may be excluded from the System facilities hereafter constructed or acquired, connected or separate from the System, which are not financed with the proceeds of revenue bonds payable from the revenues of the System, and for which the City maintains separate and distinct operations, facilities and records, and which if connected to the System are billed for System use as a customer of the System in accordance with the ordinances and regulations of the City.

 

"Terms Ordinance" means an ordinance of the City adopted prior to the issuance of the Bonds, which, among other matters, establishes the maturities, interest rates and sinking fund redemption provisions for the Bonds.

 

United States Government Obligations means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America, including evidences of a direct ownership interest in future interest or principal payments on obligations issued or guaranteed by the United States of America (including the interest component of obligations of the Resolution Funding Corporation), or securities which represent an undivided interest in such obligations, which obligations are rated in the highest rating category by a nationally recognized rating service, and such obligations are held in a custodial or trust account for the benefit of the City.

 

Water Revenue Bonds means collectively the Bonds, the Parity Bonds and all other revenue bonds which are payable out of, or secured by an interest in, the income and Revenues derived from the operation of the System.

 

Water Revenue Fund means the fund created pursuant to Section 15 of Committee Substitute for Ordinance No. 63168 and referred to in Section 501.

 

ARTICLE II

AUTHORIZATION OF BONDS

 

Section 201. Authorization of Bonds. The Council hereby authorizes and directs the issuance of the Water Refunding Revenue Bonds, Series 1998A, of the City in the principal amount of not to exceed $42,000,000.00, for the purpose of providing funds to refund the Refunded Bonds.

 

Section 202. Description of Bonds. The Bonds shall consist of fully registered bonds without coupons, numbered from 1 upward, in denominations of $5,000.00 or any integral multiple thereof. The Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be substantially in the form set forth in Section 202A, and shall be subject to registration, transfer and exchange as provided in Section 205. The Bonds shall be dated April 15, 1998, shall become due on December 1 in the years 2000 to 2014, inclusive, in the amounts set forth in the Terms Ordinance (subject to optional and mandatory redemption prior to their Stated Maturities as provided in Article III hereof), and shall bear interest at the rates per annum.

 

At the election of the original purchasers of the Bonds, term Bonds maturing in the year 2014 may be issued in lieu of serial Bonds with Stated Maturities as in this section provided and such term Bonds shall be subject to mandatory redemption in the annual amounts and on the dates set forth in this section as the Stated Maturities for such serial Bonds.

 

The Bonds shall bear interest at the above‑specified rates (computed on the basis of a 360‑day year of twelve 30‑day months) from the date thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semiannually on June 1 and December 1 in each year, beginning on December 1, 1998.

 

Section 202A. Form of Bonds. The Bonds will be in substantially the following form, with appropriate insertions and deletions as are approved by the Director of Finance, which approval will be conclusively evidenced by the Director of finance's signature on the Bonds:

 

FORM OF BOND

 

EXCEPT AS OTHERWISE PROVIDED IN THE ORDINANCE (DESCRIBED HEREIN), THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY (DESCRIBED HEREIN) OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY.

 

REGISTERED REGISTERED

NUMBER R ________ $ ________________

 

UNITED STATES OF AMERICA

STATE OF MISSOURI

CITY OF KANSAS CITY

WATER REFUNDING REVENUE BOND

SERIES 1998A

 

Interest Maturity Dated CUSIP

Rate Date Date Number

December 1, _____

 

 

REGISTERED OWNER: ________________________________________________________

 

PRINCIPAL AMOUNT: _____________________________________________ DOLLARS

 

 

The CITY OF KANSAS CITY, MISSOURI, a constitutional charter City and a political subdivision of the State of Missouri (the City), for value received, hereby promises to pay to the Registered Owner shown above, or registered assigns, but solely from the source and in the manner herein specified, the principal amount shown above on the maturity date shown above, and to pay interest thereon, but solely from the source and in the manner herein specified, at the interest rate per annum shown above (computed on the basis of a 360‑day year of twelve 30‑day months) from the Dated Date shown above or from the most recent interest payment date to which interest has been paid or duly provided for, payable semiannually on June 1 and December 1 in each year, beginning on December 1, 1998, until said principal amount has been paid.

 

The principal or redemption price of this Bond shall be paid at maturity by check or draft or upon earlier redemption to the person in whose name this Bond is registered at the maturity or redemption date thereof, upon presentation and surrender of this Bond at the principal corporate trust office of [PAYING AGENT] in the City of Kansas City, Missouri (the Paying Agent and Bond Registrar). The interest payable on this Bond on any interest payment date shall be paid to the person in whose name this Bond is registered on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Paying Agent to such Registered Owner at the address shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner, or (b) in the case of an interest payment to any Registered Owner of $1,000,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank (which shall be in the continental United States), ABA routing number and account number to which such Registered Owner wishes to have such transfer directed.

 

THIS BOND is one of a duly authorized issue of fully registered bonds of the City designated Water Refunding Revenue Bond, Series 1998A aggregating the principal amount of $39,490,000 (the Bonds), issued for the purpose of providing funds to refund certain maturities of the Citys Water Revenue Bonds, 7th Issue, Series C, dated March 1, 1992, and the Citys Water Revenue Bonds, 7th Issue, Series D, dated December 1, 1994, (the Refunded Bonds) under the authority of and in full compliance with the Constitution and laws of the State of Missouri, and pursuant to ordinances duly adopted by the Council of the City authorizing the issuance and delivery of the Bonds (the Ordinance).

 

THE BONDS are special obligations of the City payable solely from, and secured as to the payment of principal and interest by a pledge of, the net revenues derived by the City from the operation of its waterworks system, including revenues derived from extensions and improvements to said waterworks system hereafter constructed or acquired by the City, after paying the operating expenses of said waterworks system, maintenance and repair charges, and costs due to obsolescence, and the taxing power of the City is not pledged to the payment of the Bonds with as to principal or interest. The Bonds shall not be or constitute a general obligation of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional or statutory provision, limitation or restriction.

 

THE BONDS stand on a parity as to the payment of principal, premium, if any, and interest with the Citys Water Revenue Bonds, 7th Issue, Series C, dated March 1, 1992, of which bonds in the principal amount of $17,145,000 remain outstanding, and the Citys Water Revenue Bonds, 7th Issue, Series D, dated December 1, 1994, of which bonds in the principal amount of $32,115,000 remain outstanding, the Citys Water Refunding Revenue Bonds, Series 1996A, of which bonds in the principal amount of $44,065,000 remain outstanding, the Citys Water Revenue Bonds, Series 1996B, of which bonds in the amount of $27,135,000 remain outstanding, and the Citys Water Revenue Bonds, Series 1998B, in the principal amount of $14,410,000 issued concurrently with the issuance of the Bonds. Under the terms of the Ordinance, the City has the right to issue additional parity bonds payable from the same source and secured by the same revenues as this Bond and the series of which it is a part, provided, however, such additional bonds may be so issued only in accordance with and subject to the covenants, conditions and restrictions relating thereto set forth in the Ordinance. Reference is made to the Ordinance for a description of the covenants of the City with respect to the collection, segregation and application of the revenues of the waterworks system of the City, the nature and extent of the security of the Bonds, the rights, duties and obligation of the City with respect thereto and the rights of the Owners thereof.

 

(The following paragraph is to be completed if Term Bonds are issued.)

 

THE BONDS maturing on December 1, 2014, are subject to mandatory redemption and payment prior to maturity in the following principal amounts pursuant to the mandatory redemption requirements of the Ordinance on December 1, ____, and on each December 1 thereafter to and including December 1, 2014, at the principal amount thereof plus accrued interest to the redemption date, without premium.

 

YEAR PRINCIPAL AMOUNT

 

 

THE BONDS maturing in the year 2009 and thereafter are subject to redemption and payment prior to maturity at the option of the City on and after December 1, 2008, as whole at any time or in part on any Interest Payment Date at the respective redemption prices (expressed as percentage of principal amount) set out below, plus accrued interest thereon to the Redemption Date:

 

 

Redemption Date Redemption

Both Inclusive Prices

 

December 1, 2008 to November 30, 2009 101%

December 1, 2009 to November 30, 2010 100%

December 1, 2010 and thereafter 100%

 

Bonds to be redeemed and paid pursuant to the provisions described above shall be selected by the Bond Registrar in such manner as it shall deem fair and appropriate.

 

WHEN BONDS are called for redemption as aforesaid, written notice thereof will be given by first class mail mailed not less than thirty (30) days prior to the redemption date to each Registered Owner of Bonds to be redeemed. All Bonds so called for redemption will cease to bear interest on the specified redemption date provided funds or certain securities in such funds are invested for their redemption are on deposit with the Paying Agent on such redemption date, and will no longer be secured by the Ordinance and will not be deemed to be outstanding under the provisions of the Ordinance. The failure of the Registered Owner of any Bond called for redemption to receive written notice mailed pursuant to the above provisions or any defect in such notice will not invalidate or affect the redemption of such Bond.

 

The Bonds are being issued by means of a book-entry system with no physical distribution of bond certificates to be made except as provided in the Ordinance. One Bond certificate with respect to each date on which the Bonds are stated to mature, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry system will evidence positions held in the Bonds by the Securities Depositorys participants, beneficial ownership of the Bonds in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The City, the Bond Registrar and the Paying Agent will recognize the Securities Depository nominee, while the registered owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (ii) notices, and (iii) voting. Transfers of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfers of principal, interest and any redemption premium payments to beneficial owners of the bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The City, the Bond Registrar and the Paying Agent will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Bond, notwithstanding the provision hereinabove contained, payments of principal of and interest on this Bond shall be made in accordance with existing arrangements among the City, the Bond Registrar and the Securities Depository.

 

EXCEPT AS OTHERWISE PROVIDED IN THE ORDINANCE, THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY.

 

THE CITY hereby covenants with the Registered Owner of this Bond to keep and perform all covenants and agreements contained in the Ordinance, and the City will fix, establish, maintain and collect such rates, fees and charges for the use and services furnished by or through the waterworks system of the City, including all extensions and improvements thereto hereafter constructed or acquired by the City, as will produce revenues sufficient to operate and maintain the waterworks system of the City, to pay the principal of and interest on the Bonds as and when the same become due and to provide reasonable and adequate reserve funds. Reference is made to the Ordinance for a description of the covenants and agreements made by the City with respect to the collection, segregation and application of the revenues of the waterworks system of the City, the nature and extent of the security for the Bonds, the rights, duties and obligations of the City with respect thereto, and the rights of the Registered Owners thereof.

 

THIS BOND is transferable, as provided in the Ordinance, only in the Bond Register of the City kept for that purpose at the office of the Bond Registrar upon surrender of this Bond duly endorsed or accompanied by a written instrument of transfer satisfactory to the Bond Registrar duly executed by the Registered Owner hereof or his duly authorized attorney or legal representative, and thereupon a new Bond or Bonds in the same aggregate principal amount shall be issued to the transferee in exchange therefor subject to the conditions provided in the Ordinance. The Bonds for each maturity are issuable only in the form of fully registered Bond without coupons in denomination of $5,000 or any integral multiple thereof. The Registered Owner of any Bond or Bonds may surrender the same in exchange or an equal aggregate principal amount of Bonds of any authorized denomination in the manner and subject to the conditions provided in the Ordinance. No service charge will be made for any such transfer or exchange, but the Bond Registrar or City may require payment of any tax or governmental charge in connection therewith. The City, the Bond Registrar and the Paying Agent may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the Principal Amount or redemption price hereof and interest due hereon and for all other purposes.

 

THIS BOND shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Ordinance until the Certificate of Authentication hereon shall have been dated and executed by the Bond Registrar.

THIS IS HEREBY CERTIFIED AND DECLARED that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of the Bonds have existed, happen and been performed in due time, form and manner as required by law.

 

IN WITNESS WHEREOF, THE CITY OF KANSAS CITY, MISSOURI, has executed this Bond by causing it to be signed by the manual or facsimile signature of its Mayor, attested by the manual or facsimile signature of its City Clerk and countersigned by the manual or facsimile signature of its Director of Finance, has caused its corporate sale to be affixed hereto or printed hereon, and has caused this Bond to be dated April 1, 1998.

 

CITY OF KANSAS CITY, MISSOURI

 

By:_________________________

Mayor

 

ATTEST: COUNTERSIGNED:

 

________________________

_______________________ Director of Finance

City Clerk

 

CERTIFICATE OF AUTHENTICATION

 

This Bond is one of the Bonds described in the within mentioned Ordinance.

 

REGISTRATION DATE: ___________________________

 

__________________________________

Bond Registrar and Paying Agent

 

By: ______________________________

Authorized Officer or Signatory





ASSIGNMENT

 

FOR VALUE RECEIVED the undersigned hereby sell(s), assigns(s) and transfer(s) unto

 

 

_________________________________________________________________________________

(Social Security or other identifying number of Transferee)

 

_________________________________________________________________________________

(Please Print or Typewrite Name and Address of Transferee)

 

________________________________________________________________________________

the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints

 

________________________________________________________________________________

as agent to transfer with the within Bond on the Bond Register kept by the Bond Registrar with full power and substitution in the premises.

 

DATE: _________________

 

 

_________________________________________

NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever.

 

Signature Guaranteed By:

 

_______________________________________

(Name of Eligible Guarantor Institution as defined by SEC Rule 17 Ad-15 (17 CFR 240.17 Ad-15))

 

By: ___________________________________

Title: __________________________________

 

 

 

 


 

SCHEDULE OF REDEMPTIONS

 

 

Date Amount Remaining Signature of

Redemption Redeemed Balance Bond Registrar

 

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

___________ ____________ ________________ ___________________

 

 

Section 203. Designation of Paying Agent. The Director of Finance shall designate the Paying Agent for the payment of principal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds.

 

The City will at all times maintain a Paying Agent meeting the qualifications herein described for the performance of the duties hereunder. The City reserves the right to appoint a successor Paying Agent by (1) filing with the bank or trust company then performing such function a certified copy of the proceedings giving notice of the termination of such bank or trust company and appointing a successor, and (2) causing notice to be given by first class mail to each Bondowner. No resignation or removal of the Paying Agent shall become effective until a successor has been appointed and has accepted the duties of the Paying Agent.

 

Every Paying Agent appointed shall at all times be a commercial banking association or corporation or trust company located in the State of Missouri organized and in good standing and doing business under the laws of the United States of America or of the State of Missouri and subject to supervision or examination by federal or state regulatory authority.

 

The Paying Agent shall be paid the usual fees and expenses for its services in connection therewith, which fees and expenses shall be paid as other Expenses are paid.

 

Section 204. Method and Place of Payment of Bonds. The principal or Redemption Price of and interest on the Bonds shall be payable in any coin or currency of the United States of America that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts.

 

The principal or Redemption Price of each Bond shall be paid at Maturity by check or draft to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal corporate trust office of the Paying Agent.

 

The interest payable on each Bond on any Interest Payment Date shall be paid to the Registered Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Paying Agent to such Registered Owner at the address shown on the Bond Register, or (b) in the case of an interest payment to any Registered Owner of $1,000,000.00 or more in aggregate principal amount of Bonds, by electronic transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank (which shall be in the continental United States), ABA routing number and account number to which such Registered Owner wishes to have such transfer directed.

 

Notwithstanding the foregoing provisions of this Section, any Defaulted Interest with respect to any Bond shall cease to be payable to the Registered Owner of such Bond on the relevant Record Date and shall be payable to the Registered Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified in this paragraph. The City shall notify the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. Following receipt of such funds, the Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Paying Agent shall promptly notify the City of such Special Record Date and, in the name and at the expense of the City, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed by first class mail, postage prepaid, to each Registered Owner of a Bond entitled to such notice at the address of such Registered Owner as it appears on the Bond Register not less than 10 days prior to such Special Record Date.

 

The Paying Agent shall keep a record of payment of principal and Redemption Price of and interest on all Bonds and shall at least annually forward a copy or summary of such records to the City.

 

Section 205. Registration, Transfer and Exchange of Bonds. The City covenants that, as long as any of the Bonds remain Outstanding, it will cause the Bond Register to be kept at the office of the Paying Agent for the registration, transfer and exchange of Bonds as herein provided. Each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register.

 

Bonds may be transferred and exchanged only on the Bond Register as provided in this Section. Upon surrender of any Bond at the principal corporate trust office of the Paying Agent, the Paying Agent shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Paying Agent, duly executed by the Registered Owner thereof or by the Registered Owner's duly authorized agent.

 

In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Paying Agent shall authenticate and deliver Bonds in accordance with the provisions of this Ordinance. The City shall pay the fees and expenses of the Paying Agent for the registration, transfer and exchange of Bonds provided for by this Ordinance and the cost of printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Paying Agent, are the responsibility of the Registered Owners of the Bonds. In the event any Registered Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against such Registered Owner sufficient to pay any governmental charge required to be paid as a result of such failure. In compliance with Section 3406 of the Code, such amount may be deducted by the Paying Agent from amounts otherwise payable to such Registered Owner hereunder or under the Bonds.

 

The City and the Paying Agent shall not be required (a) to register the transfer or exchange of any Bond after notice calling such Bond or portion thereof for redemption has been given or during the period of 15 days next preceding the first mailing of such notice of redemption, or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to Section 204.

 

The City and the Paying Agent may deem and treat the Person in whose name any Bond is registered on the Bond Register as the absolute owner of such Bond, whether such Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price of and interest on said Bond and for all other purposes. All payments so made to any such Registered Owner or upon the Registered Owners order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City nor the Paying Agent shall be affected by any notice to the contrary.

 

At reasonable times and under reasonable regulations established by the Paying Agent, the Bond Register may be inspected and copied by the Registered Owners (or a designated representative thereof) of 10% or more in principal amount of the Bonds then Outstanding or any designated representative of such Registered Owners to be evidenced to the satisfaction of the Paying Agent.

 

Section 206. Execution, Authentication and Delivery of the Bonds. The Bonds shall be executed on behalf of the City by the manual or facsimile signature of its Mayor and attested by the manual or facsimile certificate of its City Clerk and countersigned by the manual or facsimile signature of the Director of Finance of the City, and shall have the seal of the City affixed thereto or imprinted thereon. In the event any officer whose signature or facsimile thereof appears on any Bond shall cease to be such officer before the delivery of such Bond, such signature or facsimile thereof shall nevertheless be valid and sufficient for all purposes, the same as if such person had remained in office until delivery. Any Bond may be executed by such persons as at the actual time of the execution of such Bond shall be the proper officers to sign such Bond although at the original date of such Bond such persons may not have been such officers.

 

The Bonds shall have endorsed thereon a Certificate of Authentication substantially in the form set forth in Section 202A which shall have the Registration Date inserted and shall be manually executed by the Bond Registrar.

 

No Bond shall be entitled to any security or benefit under this Ordinance or shall be valid or obligatory for any purpose unless and until such Certificate of Authentication shall have been duly executed by the Bond Registrar by manual signature. Such executed Certificate of Authentication upon any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Ordinance and that such Owner has been entered on record in the Bond Register kept by the Bond Registrar. The Certificate of Authentication shall be deemed to have been duly executed if the Registration Date has been inserted and if it has been signed and dated by an authorized officer or employee of the Bond Registrar, but it shall not be necessary that the same officer or employee sign the Certificate of Authentication on all of the Bonds that may be issued hereunder at any one time.

 

The Mayor, the City Clerk and the Director of Finance are hereby authorized and directed to prepare and execute the Bonds in the manner hereinbefore specified, and when the Bonds have been duly registered with the Bond Registrar, the Director of Finance is hereby authorized and directed to deliver the Bonds to the original purchasers thereof upon the payment of the purchase price of the principal amount of the Bonds plus premium, if any, and accrued interest to the date of payment and delivery.

 

Section 207. Mutilated, Destroyed, Lost and Stolen Bonds. If (a) any mutilated Bond is surrendered to the Paying Agent, or the City and the Paying Agent receive evidence to its satisfaction of the destruction, loss or theft of any Bond, and (b) there is delivered to the Paying Agent such security or indemnity as may be required by the Paying Agent, then, in the absence of notice to the Paying Agent that such Bond has been acquired by a bona fide purchaser, the City shall execute and, upon the Citys request, the Paying Agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor and principal amount.

 

If any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable, the City in its discretion may pay such Bond instead of issuing a new Bond.

 

Upon the issuance of any new Bond under this Section, the City may require the payment by the Registered Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith.

 

Every new Bond issued pursuant to this Section shall constitute a replacement of the prior obligation of the City, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds.

 

Section 208. Cancellation and Destruction of Bonds Upon Payment. All Bonds that have been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before Maturity, shall be cancelled by the Paying Agent immediately upon the payment, redemption and surrender thereof to the Paying Agent and subsequently destroyed in accordance with the customary practices of the Paying Agent. The Paying Agent shall execute a certificate in duplicate describing the Bonds so cancelled and destroyed and shall file an executed counterpart of such certificate with the City.

 

Section 209. Preliminary and Final Official Statement. The Preliminary Official Statement, in the form on file in the office of the Director of Finance, is hereby ratified and approved, and the final Official Statement is hereby authorized and approved by supplementing, amending and completing the Preliminary Official Statement, with such changes and additions thereto as are necessary to conform to and describe the transaction. The Director of Finance is hereby authorized to execute the final Official Statement as so supplemented, amended and completed, and the use and public distribution of the Official Statement by the Purchaser in connection with the reoffering of the Bonds is hereby authorized. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Bonds.

 

For the purpose of enabling the Purchaser to comply with the requirements of Rule 15c2‑12(b)(1) of the Securities and Exchange Commission, the City hereby deems the information regarding the City contained in the Preliminary Official Statement to be final as of its date, except for the omission of such information as is permitted by Rule 15c2‑12(b)(1), and the appropriate officers of the City are hereby authorized, if requested, to provide the Purchaser a letter or certification to such effect and to take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser to comply with the requirement of such Rule.

 

The City agrees to provide to the Purchaser within seven business days of the date of the sale of Bonds sufficient copies of the final Official Statement to enable the Purchaser to comply with the requirements of Rule 15c2‑12(b)(4) of the Securities and Exchange Commission and with the requirements of Rule G‑32 of the Municipal Securities Rulemaking Board.

 

Section 210. Book-Entry Bonds; Securities Depository.

 

(a) The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no beneficial owner will receive certificates representing their respective interests in the Bonds, except in the event the Paying Agent issues Replacement Bonds as provided in subsection (b) hereof. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Paying Agent authenticates and delivers Replacement Bonds to the beneficial owners as described in subsection (b).

 

(b) (1) If the City determines (A) that the Securities Depository is unable to properly discharge its responsibilities, or (B) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (C) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the beneficial owners of the Bonds, or (2) if the Paying Agent receives written notice from Participants having interests in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the beneficial owners of the Bonds, then the Paying Agent shall notify the Owners of such determination or such notice and of the availability of certificates to Owners requesting the same, and the Paying Agent shall register in the name of and authenticate and deliver Replacement Bonds to the beneficial owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (1)(A) or (1)(B) of this subsection (b), the City, with the consent of the Paying Agent, may select a successor securities depository in accordance with Section 10(c) to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Paying Agent, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City, the Paying Agent or Owners are unable to locate a qualified successor of the Securities Depository in accordance with Section 210(c), then the Paying Agent shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Paying Agent may rely on information from the Securities Depository and its Participants as to the names of the beneficial owners of the Bonds. The cost of printing, registration, authentication and delivery of Replacement Bonds shall be paid for by the City.

 

(c) In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Paying Agent and the City receive written evidence with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Paying Agent upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of Bonds to the successor Securities Depository in appropriate denominations and form as provided herein.

 

Section 211. Persons Deemed Owners of Bonds. The Person in whose name any Bond shall be registered in the Bond Register shall be deemed and regarded by the City, the Bond Registrar and the Paying Agent as the absolute owner thereof, whether such Bond shall be overdue or not, for the purpose of receiving payment therefor or on account thereof and for all purposes, and neither the City, the Bond Registrar nor the Paying Agent shall be affected by notice to the contrary. Payment of or on account of the principal of, premium, if any, and interest on any Bond shall be made only to or upon the order of the Owner thereof or agent duly authorized in writing. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond, including the interest thereon, to the extent of the sum or sums so paid.

 

Section 212. Authorization of Escrow Agreement. The City is hereby authorized to enter into the Escrow Agreement, dated as of April 1, 1998, between the City and Paying Agent in substantially the form on file in the office of the Director of Finance and the Director of Finance and City Clerk are authorized and directed to execute the Escrow Agreement with such changes therein as such officials may deem appropriate, for and on behalf of and as the act and deed of the City, their signatures thereon to be affirmative proof of their consent to such changes. The Escrow Agent is hereby authorized to carry out, on behalf of the City, the duties, terms and provisions of the Escrow Agreement, and the Escrow Agent, the original purchasers and Bond Counsel are authorized to take all necessary actions for the subscription and purchase of the Defeasance Securities described therein.

 

ARTICLE III

REDEMPTION OF BONDS

 

Section 301. Redemption of Bonds.

 

(a) Optional Redemption by City. At the option of the City, Bonds or portions thereof maturing in the year 2009, and thereafter may be called for redemption and payment prior to the Stated Maturity thereof on December 1, 2008, and thereafter in whole at any time or in part on any Interest Payment Date at the Redemption Prices set forth below (expressed as percentages of principal amount), plus accrued interest thereon to the Redemption Date:

 

Redemption

Redemption Dates Prices

 

December 1, 2008 to November 30, 2009 101%

December 1, 2009 to November 30, 2010 100%

December 1, 2010, and thereafter 100%

 

(b) Mandatory Redemption. In the event term Bonds are issued as provided in Section 202, such Bonds shall be subject to mandatory redemption and payment prior to their Stated Maturity pursuant to the mandatory redemption requirements of the Terms Ordinance at the principal amount thereof plus accrued interest to the Redemption Date, without premium. The City shall redeem on such dates the principal amounts set forth in Section 202 and the remaining principal amount of Bonds maturing on December 1, 2014, shall be paid at their Stated Maturity.

 

At its option, to be exercised on or before the 45th day next preceding any mandatory Redemption Date, the City may: (1) deliver to the Paying Agent for cancellation Term Bonds subject to mandatory redemption on said mandatory Redemption Date, in any aggregate principal amount desired; or (2) furnish the Paying Agent funds, together with appropriate instructions, for the purpose of purchasing any Term Bonds subject to mandatory redemption on said mandatory Redemption Date from any Registered Owner thereof whereupon the Paying Agent shall expend such funds for such purpose to such extent as may be practical; or (3) receive a credit with respect to the mandatory redemption obligation of the City under this Section for any Term Bonds subject to mandatory redemption on said mandatory Redemption Date which, prior to such date, have been redeemed (other than through the operation of the mandatory redemption requirements of this subsection (b)) and cancelled by the Paying Agent and not theretofore applied as a credit against any redemption obligation under this subsection (b). Each Term Bond so delivered or previously purchased or redeemed shall be credited at 100% of the principal amount thereof on the obligation of the City to redeem Term Bonds of the same Stated Maturity on such mandatory Redemption Date, and any excess of such amount shall be credited on future mandatory redemption obligations for Term Bonds of the same Stated Maturity in chronological order, and the principal amount of Term Bonds of the same Stated Maturity to be redeemed by operation of the requirements of this Section shall be accordingly reduced. If the City intends to exercise any option granted by the provisions of clauses (1), (2) or (3) above, the City will, on or before the 45th day next preceding each mandatory Redemption Date, furnish the Paying Agent a written certificate indicating to what extent the provisions of said clauses (1), (2) and (3) are to be complied with respect to such mandatory redemption payment.

 

Section 302. Selection of Bonds to be Redeemed.

 

(a) The Paying Agent shall call Bonds for redemption and payment and shall give notice of such redemption as herein provided upon receipt by the Paying Agent at least 45 days prior to the Redemption Date of written instructions of the City specifying the principal amount, Stated Maturities, Redemption Date and Redemption Prices of the Bonds to be called for redemption. If the Bonds are refunded more than 90 days in advance of such Redemption Date, any escrow agreement entered into by the City in connection with such refunding shall provide that such written instructions to the Paying Agent shall be given by the escrow agent on behalf of the City not more than 90 days prior to the Redemption Date. The Paying Agent may in its discretion waive such notice period so long as the notice requirements set forth in Section 303 are met. The foregoing provisions of this paragraph shall not apply in the case of any mandatory redemption of Bonds hereunder, and Bonds shall be called by the Paying Agent for redemption pursuant to such mandatory redemption requirements without the necessity of any action by the City and whether or not the Paying Agent holds moneys available and sufficient to effect the required redemption.

 

(b) Bonds shall be redeemed only in the principal amount of $5,000.00 or any integral multiple thereof. When less than all of the Outstanding Bonds are to be redeemed, such Bonds shall be redeemed in from the Stated Maturities selected by the City, and Bonds of less than a full Stated Maturity shall be selected by the Paying Agent in $5,000.00 units of principal amount in such equitable manner as the Paying Agent may determine.

 

(c) In the case of a partial redemption of Bonds when Bonds of denominations greater than $5,000.00 are then Outstanding, then for all purposes in connection with such redemption each $5,000.00 of face value shall be treated as though it were a separate Bond of the denomination of $5,000.00. If it is determined that one or more, but not all, of the $5,000.00 units of face value represented by any Bond are selected for redemption, then upon notice of intention to redeem such $5,000.00 unit or units, the Registered Owner of such Bond or the Registered Owners duly authorized agent shall present and surrender such Bond to the Paying Agent (1) for payment of the Redemption Price and interest to the Redemption Date of such $5,000.00 unit or units of face value called for redemption, and (2) for exchange, without charge to the Registered Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Registered Owner of any such Bond fails to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the Redemption Date to the extent of the $5,000.00 unit or units of face value called for redemption (and to that extent only).

 

Section 303. Notice and Effect of Call for Redemption. Unless waived by any Registered Owner of Bonds to be redeemed, official notice of any redemption shall be given by the Paying Agent on behalf of the City by mailing a copy of an official redemption notice by first class mail at least 30 days prior to the Redemption Date, to the Purchaser of the Bonds and each Registered Owner of the Bonds to be redeemed at the address shown on the Bond Register.

 

All official notices of redemption shall be dated and shall contain the following information:

 

(a) the Redemption Date;

 

(b) the Redemption Price;

 

(c) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Bonds to be redeemed;

 

(d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and

 

(e) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal corporate trust office of the Paying Agent.

 

The failure of any Registered Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption.

 

Prior to any Redemption Date, the City shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on that date.

 

Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with such notice, the Redemption Price of such Bonds shall be paid by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Registered Owner a new Bond or Bonds of the same Stated Maturity in the amount of the unpaid principal as provided herein. All Bonds that have been redeemed shall be cancelled and destroyed by the Paying Agent as provided herein and shall not be reissued.

 

In addition to the foregoing notice, further notice shall be given by the Paying Agent on behalf of the City as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if official notice thereof is given as above prescribed.

 

(a) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (1) the CUSIP numbers of all Bonds being redeemed; (2) the date of issue of the Bonds as originally issued; (3) the rate of interest borne by each Bond being redeemed; (4) the Stated Maturity of each Bond being redeemed; and (5) any other descriptive information needed to identify accurately the Bonds being redeemed.

 

(b) Each further notice of redemption shall be sent at least one day before the mailing of notice to Bondowners by first class, registered or certified mail or overnight delivery as determined by the Paying Agent to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds.

 

(c) Each check or other transfer of funds issued for the payment of the Redemption Price of Bonds being redeemed, shall bear or have enclosed the CUSIP number of the Bonds being redeemed with the proceeds of such check or other transfer.

 

The Paying Agent is also directed to comply with any mandatory or voluntary standards established by the Securities and Exchange Commission then in effect for processing redemptions of municipal securities. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond.

 

For so long as the Securities Depository is effecting book-entry transfers of the Bonds, the Paying Agent shall provide the notices specified in this Section to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn will notify or cause to be notified the beneficial owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a beneficial owner of a Bond (having been mailed notice from the Paying Agent, the Securities Depository, a Participant or otherwise) to notify the beneficial owner of the Bond so affected, shall not affect the validity of the redemption of such Bond.

 

ARTICLE IV

SECURITY FOR BONDS

 

Section 401. Security for Bonds. The Bonds shall be special obligations of the City payable solely from, and secured as to the payment of principal and interest by a pledge of, the Net Revenues, and the City hereby pledges said Net Revenues to the payment of the principal of and interest on the Bonds. The Bonds shall not be or constitute a general obligation of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction, and the taxing power of the City is not pledged to the payment of the Bonds, either as to principal or interest.

 

The covenants and agreements of the City contained herein and in the Bonds shall be for the equal benefit, protection and security of the legal owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Ordinance. The Bonds shall stand on a parity and be equally and ratably secured with respect to the payment of principal and interest from the Net Revenues and in all other respects with any Parity Bonds. The Bonds shall not have any priority with respect to the payment of principal or interest from the Net Revenues or otherwise over the Parity Bonds and the Parity Bonds shall not have any priority with respect to the payment of principal or interest from the Net Revenues or otherwise over the Bonds.

 

As security for the Citys repayment obligations with respect to the Surety Bond, Surety Provider is hereby granted a security interest in the Net Revenues which shall be junior and subordinate to the security interest of the Bondowners therein.

 

ARTICLE V

CREATION AND RATIFICATION OF FUNDS AND ACCOUNTS;

DEPOSIT AND APPLICATION OF BOND PROCEEDS

 

Section 501. Waterworks Revenue Fund. So long as any of the Bonds remain outstanding and unpaid, the City covenants and agrees that all Revenues derived and to be derived by the City from the operation and use of the System, and the facilities and services furnished by the System, including the Revenues of all extensions and improvements thereto hereafter constructed or acquired, subject, however, to any liens upon or claims against the Revenues of any such extensions existing at the time of the acquisition thereof by the City, will be paid and deposited into the Waterworks Revenue Fund and that said Revenues will be segregated and kept separate and apart from the other revenues and funds of the City.

 

So long as any of the Bonds remain Outstanding, no Revenues shall be diverted to the general governmental or municipal functions of the City.

 

Section 502. Ratification and Creation of Funds and Accounts. The establishment by Committee Substitute for Ordinance No. 911538 of the account known as the Water Revenue Bonds, 7th Issue, Series C, Principal and Interest Sinking Account and the account known as the Reserve Account for Water Revenue Bonds, 7th Issue, Series C, the establishment by Committee Substitute for Ordinance No. 941459 of the account known as the Kansas City Water Revenue Bonds, 7th Issue, Series D, Principal and Interest Sinking Account, the account known as the Kansas City Water Revenue Bonds, 7th Issue, Series D, Reserve Account and the Water Revenue Bonds, 7th Issue, Series D, Surplus Account, heretofore designated by Ordinance No. 9611225 as the Water Revenue Bonds Surplus Account (the Surplus Account), and the establishment by Committee Substitute for Ordinance No. 960924 of the account known as the Water Refunding Revenue Bonds, Series 1996A, Principal and Interest Sinking Fund, the account known as the Water Refunding Revenue Bonds, Series 1996A, Reserve Account and the Rebate Fund for Water Refunding Revenue Bonds, Series 1996A, and the establishment by Ordinance No. 961462 of the account known as the Water Revenue Bonds, Series 1996B, Principal and Interest Sinking Fund, the account known as the Water Revenue Fund, Series 1996B, Reserve Account and the Rebate Fund for Water Revenue Bonds, Series 1996B, and the establishment concurrently herewith by ordinance of the account known as the Water Refunding Revenue Bonds, Series 1998B, Principal and Interest Sinking Fund, the account known as the Water Refunding Revenue Bonds, Series 1998B, Reserve Account and the Rebate Fund for Water Refunding Revenue Bonds, Series 1998B are hereby ratified and confirmed; and in addition to the funds and accounts aforesaid, there are hereby created and established in the appropriate existing funds, four (4) separate additional funds and accounts to be known as the:

 

(a) Water Refunding Revenue Bonds, Series 1998A, Principal and Interest Sinking Fund (the 1998A Water Debt Fund);

 

(b) Water Refunding Revenue Bonds, Series 1998A, Reserve Account (the 1998A Bond Reserve Account); and

(c) Costs of Issuance Fund;

 

(d) Rebate Fund for Water Refunding Revenue Bonds, Series 1998A (the Rebate Fund).

 

In addition to the funds and accounts described above, the Escrow Agreement established the Escrow Fund to be held and administered by the Escrow Agent in accordance with the Escrow Agreement. The investment and use of moneys in the Escrow Fund shall be governed by the Escrow Agreement.

 

Section 503. Disposition of Bond Proceeds. The net proceeds received from the sale of the Bonds shall be deposited simultaneously with the delivery of the Bonds as follows:

 

(a) All accrued interest received from the sale of the Bonds shall be deposited in the 1998A Water Debt Fund and applied in accordance with Section 601.

 

(b) A portion of the proceeds of the Bonds, which together with the earnings to accrue thereon, will be sufficient for the payment of the principal of and interest on the Refunded Bonds, as determined and certified in accordance with Section 608, shall be paid and transferred to the Escrow Agent for deposit in the Escrow Fund, to be applied in accordance with Section 607.

 

(c) The balance of the proceeds of the Bonds, together with additional funds of the City, if necessary, shall be deposited in the Costs of Issuance Fund and shall be disbursed by the Director of Finance to pay costs of issuing the Bonds, including the fees of attorneys, financial consultants, accountants, rating agencies, printers and others employed to render professional services and other costs, fees and expenses incurred in connection with the issuance of the Bonds and the creation of the trust described in and created by the Escrow Agreement and in carrying out the duties, terms and provisions of the Escrow Agreement. Any such moneys not used for such purpose and remaining on deposit on July 1, 1998, shall be transferred to and deposited in the 1998A Water Debt Fund.

 

ARTICLE VI

APPLICATION OF REVENUESPROVISIONS RELATING TO ESCROW FUND

 

Section 601. Application of Moneys in Funds and Account. The City covenants and agrees that so long as any of the Bonds remain Outstanding, moneys paid and deposited in the Waterworks Revenue Fund by the City will be administered and disposed of as follows:

 

(a) The City, each month, shall pay or make provision for the payment from the moneys in the Waterworks Revenue Fund of all operating expenses, all maintenance and repair charges and all costs of the System due to obsolescence or other causes.

 

(b) After paying or making provision for the payment each month of the reasonable and proper expenses of operating and maintaining the System for the current month, the City shall next pay and credit monthly from the Waterworks Revenue Fund to the Water Revenue Bonds, 7th Issue Series C, Principal and Interest Account created by Committee Substitute for Ordinance No. 911538 of the City so long as any of the Series C remain Outstanding and to the Water Revenue Bonds, 7th Issue Series D, Principal and Interest Sinking Fund created by Ordinance No. 961459 of the City so long as any of the Series D Bonds remain Outstanding, and to the Water Refunding Revenue Bonds, Series 1996A, Principal and Interest Sinking Fund created by Ordinance No. 961125 of the City so long as any of the Series 1996A Bonds remain Outstanding, and to the Water Revenue Bonds, Series 1996B, Principal and Interest Sinking Fund created by Ordinance No. 961462 of the City so long as any of the Series 1996B Bonds remain Outstanding, and to the Water Revenue Bonds, Series 1998B Principal and Interest Sinking Fund created by ordinance of the City so long as any of the Series 1998B Bonds remain Outstanding, all amounts required to be so paid and credited by the provisions of said ordinances and, at the same time that said payments and credits to said principal and interest sinking fund accounts are made, and on a parity therewith, the City shall pay and credit monthly from the Waterworks Revenue Fund to the 1998A Water Debt Fund, to the extent necessary to meet at the Maturity thereof all interest on and principal of the Bonds, the following sums:

 

(i) Beginning on the first of said monthly deposits, and continuing on the first day of each month thereafter to and including November 1, 1998, an equal pro rata portion of the amount of interest becoming due on the Bonds on December 1, 1998; and thereafter, beginning on December 1, 1998, and continuing on the first day of each month thereafter so long as any of the Bonds shall remain Outstanding, an amount not less than 1/6 of the amount of interest that will become due on the Bonds on the next succeeding Interest Payment Date; and

 

(ii) Beginning with the first of said monthly deposits and continuing on the first day of each month thereafter to and including November 1, 2001, an equal pro rata portion of the amount of principal becoming due on the Bonds on December 1, 2001; and continuing on the first day of each month thereafter, so long as any of the Bonds shall remain Outstanding an amount not less than 1/12 of the amount of principal that will become due on the Bonds on the next succeeding Principal Payment Date; and

 

(iii) On the first day of each month in which fees, if any, of the Bond Registrar and Paying Agent are scheduled to become due, such amounts as may be required to pay such fees of the Bond Registrar and the Paying Agent.

 

All amounts paid and credited to the 1998A Water Debt Fund shall be expended and used by the City for the sole purpose of paying any interest on and principal of the Bonds as and when the same become due and the fees of the Bond Registrar and the Paying Agent for acting as Bond Registrar and Paying Agent, if any.

 

If at any time the moneys in the Waterworks Revenue Fund shall be insufficient to make in full the payments and credits at the time required to be made by the City to the principal and interest accounts established to pay the then outstanding water revenue bonds of the City, including only the Bonds and other water revenue bonds of the City heretofore or hereafter issued and standing on a parity with the Bonds, the available moneys in the Waterworks Revenue Fund shall be divided among such principal and interest sinking fund accounts in proportion to the respective principal amounts of said series of water revenue bonds of the City at the time outstanding which are payable from the moneys in such principal and interest sinking fund accounts.

 

(c) Simultaneously with the issuance of the Bonds, the City shall provide for the 1998 Bond Reserve Account to contain an amount equal to the Bond Reserve Requirement. In lieu of a cash deposit, the Bond Reserve Requirement may be satisfied by Surety Bond.

 

The Director of Finance is hereby authorized to execute any and all agreements with a Surety Provider in order to effectuate the issuance of a Surety Bond, specifically including but not limited to any agreement necessary in order to reimburse the Surety Provider for moneys advanced under the Surety Bond. In the event moneys are advanced by a Surety Provider, the City shall reimburse the Surety Provider from all funds legally available to the Waterworks Revenue Fund, subject only to the payments required by subsection (a) and (b) of this Section and the provisions of the last paragraph to this Section.

 

As long as the Surety Bond shall be in full force and effect, the City and Paying Agent agree to comply with the following provisions:

 

(i) In the event that moneys on deposit in the 1998A Water Debt Fund are not available to pay the amount of principal and interest coming due, then upon the later of: (A) one (1) day after receipt by the general counsel of Surety Provider of a demand for payment in the form attached to the Surety Bond as Attachment 1 (the Demand for Payment), duly executed by the Paying Agent certifying that funds are not available in the 1998A Water Debt Fund or the 1998A Bond Reserve Account to pay both principal of and interest on the Bonds becoming due on the next Stated Maturity, or (B) the Stated Maturity on the Bonds as specified in the Demand for Payment presented by the Paying Agent to the general counsel of the Surety Provider, Surety Provider will make a deposit of funds in an account with the Paying Agent or its successor, in New York, New York, sufficient for the payment to the Paying Agent, of amounts which are then required to pay the principal of and interest becoming due on the Bonds on such Stated Maturity of the Bonds (as specified in the Demand for Payment) up to but not in excess of the Surety Bond Coverage, as defined in the Surety Bond;

 

(ii) the Paying Agent shall after submitting to the Surety Provider the Demand for Payment as provided in (i) above, make available to the Surety Provider all records relating to the funds and accounts maintained under this Ordinance; and

 

(iii) the Paying Agent shall, upon receipt of moneys received from a Demand for Payment under the Surety Bond, as specified in the Demand for Payment, credit the 1998A Bond Reserve Account to the extent of moneys received pursuant to such Demand for Payment.

 

(d) All moneys in any Bond Reserve Account will be used for the payment of principal of and interest on the related Series of bonds for which funds might not otherwise be available, or to pay a like amount of the last maturing bonds, of such Series; provided, however, that the City shall not make a Demand for Payment under the Surety Bond for the purpose of paying the last maturing Bonds. The Bond Reserve Account shall be valued annually on each December 1. Should the City expend any portion of the 1998A Bond Reserve Account and thereby reduce the amount therein below the Bond Reserve Requirement, except for the purpose of retiring all Outstanding Bonds, or should a valuation of the 1998A Bond Reserve Account indicate that it is below the Bond Reserve Requirement, the City shall, subject to the provisions of the last paragraph of this Section, transfer monthly to such 1998A Bond Reserve Account, all available funds after providing for the payment and transfers in clauses (b)(i)-(iii) set forth above and prior to any other transfers hereunder, until the 1998A Bond Reserve Account shall have again attained the Bond Reserve Requirement.

 

If at any time the moneys in the Waterworks Revenue Fund shall be insufficient to make in full any payments and credits at the time required to be made by the City to the Bond Reserve Accounts established by the City to protect the payment of the outstanding water revenue bonds of the City including the Outstanding Parity Bonds, and Additional Bonds issued and standing on a parity with the Bonds, the available moneys in said Waterworks Revenue Fund shall be divided among such Bond Reserve Accounts in proportion to the respective principal amounts of said Series of water revenue bonds of the City at the time Outstanding which are payable from the moneys in such Bond Reserve Accounts.

 

(e) When and after there shall be in the Water Revenue Fund an amount sufficient to pay the reasonable and proper expenses of operating and maintaining the System for the current month as provided in paragraph (a) of this Section and when and after all amounts at the time required to be paid and credited from the Water Revenue Fund under the provisions of paragraphs (b), (c) and (d) of this Section shall have been paid and credited, all moneys remaining in the Water Revenue Fund shall be credited monthly to the Surplus Account. Except as hereinafter provided, moneys in the Surplus Account shall be used solely for the following purposes, as determined by the Council:

 

(i) Paying the cost of operation, maintenance and repair of the System to the extent that may be necessary after the application of the moneys held in the Water Revenue Fund under the provisions of paragraph (a) of this Section;

 

(ii) Anticipating payments into or increasing the amounts of the 1998A Water Debt Fund and/or the 1998A Bond Reserve Account, referred to in paragraphs (b) and (c) of this Section, or either of them, or establishing or increasing the amount of any principal and interest account or bond reserve account created by the City for the payment of any water revenue bonds of the City heretofore or hereafter issued and standing on a parity with the Bonds;

 

(iii) Paying the cost of enlarging, extending or improving the System, including the acquisition of additional facilities by construction, purchase, or by operation of law from other governmental agencies and the assumption of the obligations thereof;

 

(iv) Paying the principal of and interest on any general obligation bonds of the City issued to provide funds to make enlargements, extensions or improvements of the System, exclusive of bonds payable wholly or in part from assessments against property benefitted;

 

(v) As and when moneys accumulate in the Surplus Account of not less than One Million Dollar ($1,000,000.00), the Director of Finance of the City may advertise for tenders from the Owners of any Bonds which at the time are subject to redemption from moneys in the Surplus Account. Each request for tenders shall be published once in an official newspaper or journal in the City of New York, New York. Said notice shall specify the date on which sealed tenders will be received and shall be published not less than fifteen days prior to the date so specified. A copy of said notice shall be mailed to the manager of the underwriting group that purchased the Bonds. Purchase of Bonds shall be made by the acceptance of the lowest price tenders received, such price not to exceed the redemption price;

 

(vi) Calling, redeeming and paying prior to their Stated Maturity the Bonds or any other water revenue bonds of the City heretofore or hereafter issued and standing on a parity with the Bonds; or

 

(vii) Paying all costs incident to the purchase or redemption of Bonds including any interest or premium thereon.

No moneys credited to the Surplus Account shall ever be diverted or applied to the general governmental or municipal functions of the City so long as any of the Bonds remain Outstanding.

 

Section 602. Deficiency of Payments into Funds or Accounts. If at any time the Revenues derived by the City from the operation of the System shall be insufficient to make any payment or credit on the date or dates specified, the City shall make good the amount of such deficiency by making payments or credits out of the first available Revenues thereafter received by the City from the operation of the System, such payments and credits being made and applied in the order specified in Section 601 of this Ordinance.

 

Section 603. Transfer of Funds to Paying Agent. The Director of Finance is hereby authorized and directed to withdraw from the 1998A Water Debt Fund, and, to the extent necessary to prevent a default in the payment of either principal of or interest on the Bonds, from the 1998A Bond Reserve Account and the Surplus Account as provided in Section 601, sums sufficient to pay the principal of and interest on the Bonds as and when the same become due on any Bond Payment Date, and to forward such sums to the Paying Agent in a manner which ensures the Paying Agent will have available funds in such amounts on or before the Business Day immediately preceding each Bond Payment Date. If, through lapse of time, or otherwise, the Registered Owners of Bonds are no longer entitled to enforce payment of their obligations, it shall be the duty of the Paying Agent forthwith to return said funds to the City. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance.

 

Section 604. Payments Due on Saturdays, Sundays and Holidays. In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date.

 

Section 605. Nonpresentment of Bonds. If any Bond is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Bond have been made available to the Paying Agent all liability of the City to the Registered Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Registered Owner of such Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Ordinance or on, or with respect to, said Bond. If any Bond is not presented for payment within six years following the date when such Bond becomes due at Maturity, the Paying Agent shall repay to the City the funds theretofore held by it for payment of such Bond, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City, and the Registered Owner thereof shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money.

Section 606. Application of Moneys in the Rebate Fund.

 

(a) There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Arbitrage Instructions. All money in the Rebate Fund shall be held in trust, to the extent required to satisfy the Rebate Amount (as defined in the Arbitrage Instructions), for payment to the United States of America, and neither the City nor the Registered Owner of any Bond shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and the Arbitrage Instructions.

 

(b) The City shall periodically determine the rebatable arbitrage under Section 148(f) of the Code in accordance with the Arbitrage Instructions, and the City shall make payments to the United States Government at the times and in the amounts determined under the Arbitrage Instructions. Any funds remaining in the Rebate Fund after redemption and payment of all of the Bonds and the interest thereon, and payment and satisfaction of any Rebate Amount, or provision made therefor, shall be released to the City.

 

(c) Notwithstanding any other provision of this Ordinance, including in particular Article XI, the obligation to pay rebatable arbitrage to the United States and to comply with all other requirements of this Section and the Arbitrage Instructions shall survive the defeasance or payment in full of the Bonds.

 

Section 607. Application of Moneys in Escrow Fund. Under the Escrow Agreement, the Escrow Agent will apply moneys in the Escrow Fund to purchase Defeasance Securities and to establish an initial cash balance in accordance with the Escrow Agreement. The cash and Defeasance Obligations held in the Escrow Fund will be applied by the Escrow Agent solely to the payment of principal of and interest on the Refunded Bonds.

 

Section 608. Verification of Certified Public Accountants. Prior to or concurrently with the issuance and delivery of the Bonds and the creation of the escrow provided for herein, the City shall obtain the certification of a firm of independent certified public accountants that such accountants have verified the accuracy of the calculations which demonstrate that the moneys and obligations required to be irrevocably deposited with the Escrow Agent pursuant to Section 503 hereof and the Escrow Agreement, together with the earnings to accrue thereon, will be sufficient for the timely payment of the principal of and interest on the Outstanding Refunded Bonds as the same come due.

 

Section 609. Redemption of Refunded Bonds. The Refunded Bonds are hereby called for redemption and payment prior to maturity as follows:

 

7th Issue Redemption Principal Maturities Redemption

  Series      Date     Amount Redeemed Redeemed     Price    

 

C March 1, 2001 $14,505,000 2002 to 2012, 100%

inclusive

D December 1, 2004 $21,145,000 2006 to 2014, 100%

inclusive

 

Said Refunded Bonds shall be redeemed at the office of the paying agents for such Refunded Bonds by the payment on the applicable redemption date of the principal thereof, together with redemption premium and accrued interest thereon to the applicable redemption date. In accordance with the requirements of the Ordinances of the City authorizing the Refunded Bonds, the bond registrars for the Refunded Bonds are hereby directed to cause notice of the call for redemption and payment of the Refunded Bonds described above to be given in the manner provided is said ordinances. The officers of the City and the bond registrars for the Refunded Bonds described above are hereby authorized and directed to take such other action as may be necessary in order to effect the redemption and payment of such Refunded Bonds as herein provided.

 

 

ARTICLE VII

DEPOSIT AND INVESTMENT OF MONEYS

 

Section 701. Investments of Moneys in Funds and Accounts. Any money held in or credited to the Waterworks Revenue Fund, the 1998A Water Debt Fund and the Reserve Fund may be invested by the City in Permitted Investments, provided, however, that no such investment shall be made for a period extending longer than the date when the moneys invested may be needed for the purpose for which such fund or account was created. Cash moneys in each of the funds and accounts created or established in the Ordinance shall be deposited in a bank or banks in the City of Kansas City, Missouri, which are members of the Federal Deposit Insurance Corporation and all such bank deposits shall be secured by the banks holding such deposits as required by the Citys Charter and Administrative Code.

 

The interest on any investments held in any fund or account created by or referred to in this Ordinance shall accrue to and become a part of the Waterworks Revenue Fund, except that if and when the amount held in the 1998A Bond Reserve Account shall be less than the Bond Reserve Requirement, then at all such times the interest earned on investments or money held in the 1998A Bond Reserve Account shall be deposited in the 1998A Bond Reserve Account. In determining the amount held in any fund or account under any of the provisions of the Ordinance, obligations of the United States Government shall be valued at the market value thereof. If and when the amount held in any fund or account shall be in excess of the amount required by the provisions of the Ordinance, the City, by and through its Director of Finance, may direct that such excess be paid into the Waterworks Revenue Fund.

 

 

ARTICLE VIII

GENERAL COVENANTS AND PROVISIONS

 

Section 801. Tax Covenants.

(a) The City covenants and agrees that (1) it will comply with all applicable provisions of the Code, including Sections 103 and 141 through 150, necessary to maintain the exclusion from federal gross income of the interest on the Bonds and (2) it will not use or permit the use of any proceeds of Bonds or any other funds of the City, nor take or permit any other action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from federal gross income of the interest on the Bonds. The City will also pass such other ordinances or resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future law in order to ensure that the interest on the Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the City.

 

(b) The City covenants and agrees that (1) it will use the proceeds of the Bonds as soon as practicable for the purposes for which the Bonds are issued, and (2) it will not invest or directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the City in any manner, or take or omit to take any action, that would cause the Bonds to be arbitrage bonds within the meaning of Section 148(a) of the Code.

 

(c) The City covenants that it will pay or provide for the payment from time to time of all rebatable arbitrage to the United States pursuant to Section 148(f) of the Code ad the Arbitrage Instruction. This covenant shall survive payment in full or defeasance of the Bonds. The Arbitrage Instructions may be amended or replaced if, in the opinion of Bond Counsel, such amendment or replacement will not adversely affect the exclusion from federal gross income of the interest on the Bonds.

 

(d) The City represents that (1) it is a governmental unit under Missouri law with general taxing powers, (2) none of the Bonds is a private activity bond within the meaning of Section 141 of the Code and (3) ninety‑five percent (95%) or more of the net proceeds of the Bonds will be used for local government activity of the City.

 

(e) The foregoing covenants shall remain in full force and effect notwithstanding the defeasance of the Bonds pursuant to Article XI or any other provision of this Ordinance, until the final Maturity of all Bonds Outstanding.

 

Section 802. Application of Moneys in the Rebate Fund.

 

(a) There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Arbitrage Instruction. All money in the Rebate Fund shall be held in trust, to the extent required to satisfy the Rebate Amount (as defined in the Arbitrage Instructions), for payment to the United States of America, and neither the City nor the Registered Owner of any Bond shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and the Arbitrage Instructions.

 

(b) The City shall periodically determine the rebatable arbitrage under Section 148(f) of the Code in accordance with the Arbitrage Instruction, and the City shall make payments to the United States Government at the times and in the amounts determined under the Arbitrage Instructions. Any funds remaining in the Rebate Fund after redemption and payment of all of the bonds and the interest thereon and payment and satisfaction of any Rebate Amount, or provision made therefor, shall be released to the City.

 

(c) Notwithstanding any other provision of this Ordinance, including in particular Section 1101 hereof, the obligation to pay rebatable arbitrage to the United States and to comply with all other requirements of this Section and the Arbitrage Instructions shall survive the defeasance or payment in full of the Bonds.

 

Section 803. Particular Covenants of the City. The City covenants with each of the Owners of any of the Bonds, that so long as any of said Bonds remain Outstanding:

 

(a) The City will continuously own and will operate the System in an efficient and economical manner and will keep and maintain the same in good condition, repair and working order. The System will be operated on the basis of the same Fiscal Year on which the City operates.

 

(b) The City will fix and maintain rates and make and collect charges for the use and services of the System sufficient to produce Revenues to pay the cost of maintenance and operation thereof, to pay the principal of and the interest on the Bonds, to provide in each Fiscal Year Net Revenues not less than 110% of the amount required to be paid in the current Fiscal Year on account of principal of and interest on all obligations payable from the revenues of the System at the time outstanding (taking into account any scheduled mandatory redemptions) and to provide funds ample to meet the requirements of this Ordinance, and it will revise said rate from time to time so as fully to meet said requirements and the requirements of the statutes of the State of Missouri.

 

(c) None of the facilities or services afforded by the System will be furnished to any water user, excepting the City itself, without a reasonable charge being made therefor. If the Revenues derived by the City from the System shall at any time prove insufficient to pay the cost of maintenance and operation of the System and also to pay all principal of and interest on the Bonds as and when the same become due, then the City will thereafter pay into the Waterworks Revenue Fund a fair and reasonable payment for all water service and other facilities, if any, furnished to the City or any of its departments by the System, including any such service furnished by any extensions or improvements of the System, and such payments will continue so long as the same may be necessary in order to prevent any default in the payment of the principal of or interest on the water revenue bonds of the City, or while any such default shall exist.

 

(d) The City will not mortgage, pledge or otherwise encumber the System, nor will it sell, lease or otherwise dispose of the System or any substantial part thereof; provided, however, the City may sell at fair market value any portion of such property which shall have been replaced by other similar property of at least equal value, or which shall cease to be necessary for efficient operation of the System, and in the event of sale, the City will apply the proceeds to either (i) redemption of Outstanding Parity Bonds or water revenue bonds hereafter issued on a parity with the Bonds in accordance with the provisions governing prepayment of bonds in advance of maturity or (ii) replacement of the property so disposed of by other property the revenues of which shall be incorporated into the System as hereinbefore provided; and provided further, however, that the City, with the written approval of the Director of the Water Services, may dispose of any property which has become obsolete, nonproductive or otherwise unusable to the advantage of the City.

 

(e) The City will carry and maintain reasonable and adequate insurance upon all of the properties forming a part of the System which may be of an insurable nature, such insurance to be of the character and coverage and for such amount or amounts as is customarily carried and maintained by other municipalities rendering service of a similar character. In the event of loss or damage, the City will use the proceeds of such insurance in reconstructing and replacing the property damaged or destroyed, or if such reconstruction or replacement be unnecessary, then in redeeming and paying the Citys outstanding water revenue bonds, including only the Bonds, the Outstanding Parity Bonds or other water revenue bonds of the City heretofore or hereafter issued and standing on a parity with the Bonds, or for purchasing at the market price thereof any of said bonds. The cost of all insurance shall be paid as an operating cost out of the Revenues of the System. Nothing in this Ordinance shall be construed as preventing the City from satisfying the insurance requirements herein set forth through self insurance or the Citys risk retention program.

 

(f) The City will maintain and keep proper books, records and accounts (separate from all other records and accounts) in which complete and correct entries will be made of all dealings and transactions relating to the System. Such accounts shall show the Revenues received from the System, the application of such Revenues, and all financial transactions in connection therewith. In accordance with the provisions of Section 85, Article IV, of the Citys Charter, the Council will provide that an independent certified audit of the Citys books and records relating to the System will be made annually by certified public accountants, experienced and qualified in municipal and governmental accounting. Each such audit shall be detailed in scope and said accountants shall certify as to the correctness of the schedules contained in the audit report.

 

The annual financial report relating to the Citys finances, required by Section 96, Article IV, of the Charter, shall contain complete statements covering the results of the year's operations and the financial condition of the System. Said statements shall bear the certificate of the firm of certified public accountants making the annual audit. A copy of each such annual report will be filed with the City Clerk and will be open for public inspection, and a copy will be forwarded promptly without cost to the manager of the underwriting group purchasing the Bonds.

 

If such audit and report shall disclose that proper provision has not been made for all of the requirements of the law under which the Bonds are issued, and of this Ordinance, the City covenants and agrees that it will promptly proceed to cause to be charged for the services rendered by the System rates which will adequately provide for such requirements.

 

(g) The Owner or Owners of not less than ten percent (10%) in aggregate principal amount of the Bonds at the time Outstanding, or their duly authorized representative, shall have the right at all reasonable times to inspect the System, and all records, accounts and data relating thereto, and such Owners or their representative shall be furnished by the City with all such information concerning the System and the operation thereof which may be reasonably requested.

 

(h) The City hereby represents and covenants that the Bonds directed to be issued by this Ordinance are issued in full compliance with the restrictions and conditions upon the issuance of additional parity bonds as set forth and contained in the ordinances of the City authorizing the Outstanding Parity Bonds, and that the Bonds herein directed to be issued are issued in all respected on a parity and equality with the Outstanding Parity Bonds heretofore issued and outstanding.

 

(i) The City will punctually perform all duties with respect to the operation of the System now or thereafter imposed upon the City by the Constitution and laws of the State of Missouri, and including all other duties and obligations imposed by law, and by the provisions of this Ordinance. The City further covenants not to issue Parity Debt or Subordinate Debt in any manner that inhibits the issuance of bonds or other refunding obligations.

 

Section 804. Administrative Personnel. The City shall use its best efforts to employ at all times administrative personnel experienced and well qualified to operate the System. The City further agrees that such administrative personnel shall be employed in sufficient numbers to ensure that the System will be operated in a prudent and efficient manner, following procedures generally accepted within the United States of America.

 

Section 805. Parity Bond Certification. The City represents and covenants that the Bonds directed to be issued by this Ordinance are so issued in full compliance with the restrictions and conditions upon which the City may issue additional bonds payable out of the revenues derived from the operation of the System and which stand on a parity with the Parity Bonds heretofore issued and outstanding, as set forth and contained in the Parity Ordinances under which such Parity Bonds have been issued, in the Parity Ordinance, and that the Bonds herein directed to be issued are so issued in all respects on a parity and equality with the Parity Bonds heretofore issued and outstanding.

 

ARTICLE IX

ADDITIONAL BONDS AND OBLIGATIONS

 

Section 901. Senior Lien Bonds. The City covenants and agrees that so long as any of the Bonds remain Outstanding, the City will not issue any additional bonds or incur or assume any other debt obligations appearing as liabilities on the balance sheet of the City for the payment of moneys determined in accordance with generally accepted accounting principles consistently applied, including capital leases as defined by generally accepted accounting principles, payable out of the net income and revenues of the System or any part thereof which are superior to the Bonds.

 

Section 902. Parity Lien Bonds and Other Obligations. The City covenants and agrees that so long as any of the Bonds remain Outstanding, it will not issue any additional bonds or other long‑term obligations payable out of the net income and revenues of the System or any part thereof which stand on a parity or equality with the Bonds unless the following conditions are met:

 

(a) The City shall not be in default in the payment of principal of or interest on any Bonds or any Parity Bonds at the time outstanding or in making any payment at the time required to be made into the respective funds and accounts created by and referred to in this Ordinance or any Parity Ordinance (unless such additional revenue bonds or obligations are being issued to provide funds to cure such default); and

 

(b) The Net Revenues for the Fiscal Year which ended next preceding the authorization of additional bonds shall have been equal to at least 120% of the maximum amount required to be paid out of said Net Revenues in any succeeding Fiscal Year on account of both principal and interest becoming due (taking into account scheduled mandatory redemptions, if any) with respect to all water revenue obligations of the City, including the additional revenue bonds proposed to be issued; PROVIDED, HOWEVER, that if the City shall have made an increase in its water service charges and such increased charges have not been in effect during the entire Fiscal Year which ended next preceding the authorization of additional bonds, then the City may obtain an investigation and report from an independent firm of consulting engineers having a wide and favorable reputation for operation, skill and experience in the construction and operation of similar municipal utilities as to the amount of Net Revenues that the City will derive during the ensuing year from the operation of the System on the basis of such new rates and if said engineer or engineers shall certify:

 

(i) that on the basis of such new rates the Net Revenues of the System for the ensuing Fiscal Year will be equal to at least 120% of the maximum amount required to be paid out of said Net Revenues in any succeeding Fiscal Year on account of both principal and interest becoming due with respect to all water revenue obligations of the City, including the additional revenue bonds proposed to be issued, and

 

(ii) that the issuance of the additional water revenue bonds proposed to be issued is advisable and will not impair the ability of the City to pay when due the principal of or interest on the Bonds or to meet all obligations resting upon the City by reason of the covenants and agreements contained in this Ordinance, then the City may issue such additional water revenue bonds.

 

Additional Bonds of the City issued under the conditions hereinbefore in this Section set forth shall stand on a parity with the Bonds and shall enjoy complete equality of lien on and claim against the revenues of the System with the Bonds and the City may make equal provision for paying said Bonds and the interest thereon out of the Waterworks Revenue Fund and may likewise provide for the creation of a reasonable principal and interest account and a reasonable bond reserve account for the payment of such Additional Bonds and the interest thereon out of moneys in the Waterworks Revenue Fund.

Nothing in this Section shall prohibit or restrict the right of the City to issue additional bonds or other revenue obligations for the purpose of reconstructing, altering, repairing, enlarging, extending or improving the System and to provide that the principal of and interest on said revenue bonds or obligations shall be payable out of the revenues of the System, provided at the time of the issuance of such additional revenue bonds or obligations, the City shall not be in default in the performance of any covenant or agreement contained in this Ordinance, and provided further, that such additional revenue bonds or obligations shall be junior or subordinate to the Bonds so that if at any time the City shall be in default in paying either interest on or principal of the Bonds, or if the City shall be in default in making any payments required to be made by it under the provisions of this Ordinance, the City shall make no payments of either principal of or interest on said junior and subordinate revenue bonds or obligations until said default or defaults be cured and no default shall exist on the part of the City under the covenants, agreements and conditions contained in this Ordinance. In the event of the issuance of any such junior and subordinate revenue bonds or obligations, the City, subject to the provisions aforesaid, may make provisions for paying the principal of and interest on said revenue bonds or obligations out of moneys in the Waterworks Revenue Fund.

 

Notwithstanding any provisions of this Section to the contrary, the City shall not issue any additional bonds without the prior written consent of the Surety Provider if any costs are past due and owing to the Surety Provider under the Surety Bond.

 

 

Section 903. Refunding Bonds. The City shall have the right, without complying with the provisions of Section 902, to refund any of the Bonds under the provisions of any law then available, and the refunding bonds so issued shall enjoy complete equality of pledge with any of the Bonds which are not refunded, if any, upon the revenues of the System; provided, however, that if only a portion of the Bonds are refunded and if said Bonds are refunded in such manner that the refunding bonds bear a higher average rate of interest or become due on a date earlier than that of the Bonds which are refunded, then said Bonds may be refunded without complying with the provisions of Section 902 only by and with the written consent of the Registered Owners of a majority in principal amount of the Bonds not refunded.

 

ARTICLE X

DEFAULT AND REMEDIES

 

Section 1001. Acceleration of Maturity Upon Default. The City covenants and agrees that if it defaults in the payment of the principal of or interest on any of the Bonds as the same become due on any Bond Payment Date, or if the City or the Council of the City or any of the officers, agents or employees thereof fail or refuse to comply with any of the provisions of this Ordinance or of the constitution or statutes of the State of Missouri, and such default continues for a period of 60 days after written notice specifying such default has been given to the City by the Registered Owner of any Bond then Outstanding, then, at any time thereafter and while such default continues, the Registered Owners of 25% in principal amount of the Bonds then Outstanding may, by written notice to the City filed in the office of the City Clerk or delivered in person to said City Clerk, declare the principal of all Bonds then Outstanding to be due and payable immediately, and upon any such declaration given as aforesaid, all of said Bonds shall become and be immediately due and payable, anything in this Ordinance or in the Bonds contained to the contrary notwithstanding. This provision, however, is subject to the condition that if at any time after the principal of said Outstanding Bonds has been so declared to be due and payable, all arrears of interest upon all of said Bonds, except interest accrued but not yet due on such Bonds, and all arrears of principal upon all of said Bonds has been paid in full and all other defaults, if any, by the City under the provisions of this Ordinance and under the provisions of the statutes of the State of Missouri have been cured, then and in every such case the Registered Owners of a majority in principal amount of the Bonds then Outstanding, by written notice to the City given as hereinbefore specified, may rescind and annul such declaration and its consequences, but no such rescission or annulment shall extend to or affect any subsequent default or impair any rights consequent thereon.

 

Section 1002. Other Remedies. The provisions of this Ordinance, including the covenants and agreements herein contained, shall constitute a contract between the City and the Registered Owners of the Bonds, and the Registered Owner or Owners of not less than 10% in principal amount of the Bonds at the time Outstanding shall have the right for the equal benefit and protection of all Registered Owners of Bonds similarly situated:

 

(a) by mandamus or other suit, action or proceedings at law or in equity to enforce the rights of such Registered Owner or Owners against the City and its officers, agents and employees, and to require and compel duties and obligations required by the provisions of this Ordinance or by the Constitution and laws of the State of Missouri;

 

(b) by suit, action or other proceedings in equity or at law to require the City, its officers, agents and employees to account as if they were the trustees of an express trust; and

 

(c) by suit, action or other proceedings in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the Registered Owners of the Bonds.

 

Section 1003. Limitation on Rights of Bondowners. No one or more Bondowners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Registered Owners of such Outstanding Bonds.

 

Section 1004. Remedies Cumulative. No remedy conferred herein upon the Bondowners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred herein. No waiver of any default or breach of duty or contract by the Registered Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies consequent thereon. No delay or omission of any Bondowner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Registered Owners of the Bonds by this Ordinance may be enforced and exercised from time to time and as often as may be deemed expedient. If any suit, action or proceedings taken by any Bondowner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or has been determined adversely to such Bondowner, then, and in every such case, the City and the Registered Owners of the Bonds shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Bondowners shall continue as if no such suit, action or other proceedings had been brought or taken.

 

Section 1005. No Obligation to Levy Taxes. Nothing contained in this Ordinance shall be construed as imposing on the City any duty or obligation to levy any taxes either to meet any obligation incurred herein or to pay the principal of or interest on the Bonds.

 

ARTICLE XI

DEFEASANCE

 

Section 1101. Defeasance. When any or all of the Bonds or the interest payments thereon have been paid and discharged, then the requirements contained in this Ordinance and the pledge of revenues made hereunder and all other rights granted hereby shall terminate with respect to the Bonds so paid and discharged. Bonds or the interest payments thereon shall be deemed to have been paid and discharged within the meaning of this Ordinance if there has been deposited with the Paying Agent, or other commercial bank or trust company located in the State of Missouri and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Bonds, in trust for and irrevocably appropriated thereto, money and/or Defeasance Obligations which, together with the interest to be earned thereon, will be sufficient for the payment of the principal or Redemption Price of said Bonds, and/or interest to accrue on such Bonds to the Stated Maturity or Redemption Date, as the case may be, or if default in such payment shall have occurred on such date, then to the date of the tender of such payments; provided, however, that if any such Bonds shall be redeemed prior to the Stated Maturity thereof, (1) the City shall have elected to redeem such Bonds, and (2) either notice of such redemption shall have been given, or the City shall have given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Paying Agent to redeem such Bonds in compliance with Section 302(a) of this Ordinance. Any money and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the City, for the purpose of paying and discharging any of the Bonds or the interest payments thereon, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Registered Owners of the Bonds, and such money shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All moneys and Defeasance Obligations deposited with the Paying Agent or other bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance.

Notwithstanding any provisions of this Article to the contrary, this Ordinance shall remain in full force and effect until all Policy Costs shall have been paid in full.

 

ARTICLE XII

MISCELLANEOUS PROVISIONS

 

Section 1201. Consent of Surety Provider. The Surety Providers consent hereunder shall be required in addition to consent of the Owners, when required, for the following purposes: (i) execution and delivery of any supplemental Ordinance or any amendment thereof; (ii) removal of the Paying Agent or selection and appointment of any successor paying agent; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires consent of the Owners.

 

Section 1202. Information to be Given to Surety Provider. While the Surety Bond is in effect, the City shall furnish to the Surety Provider the information required by the Terms Ordinance.

 

Section 1203. Amendments. The rights and duties of the City and the Bondowners, and the terms and provisions of the Bonds or of this Ordinance, may be amended or modified at any time in any respect by ordinance of the City with the written consent of the Registered Owners of not less than a majority in principal amount of the Bonds then Outstanding, such consent to be evidenced by an instrument or instruments executed by such Registered Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the City Clerk, but no such modification or alteration shall:

 

(a) extend the maturity of any payment of principal or interest due upon any Bond;

 

(b) effect a reduction in the amount which the City is required to pay by way of principal of or interest on any Bond;

 

(c) permit the creation of a lien on the revenues of the System prior or equal to the lien of the Bonds or Parity Bonds;

 

(d) permit preference or priority of any Bonds over any other Bonds; or

 

(e) reduce the percentage in principal amount of Bonds required for the written consent to any modification or alteration of the provisions of this Ordinance.

 

Any provision of the Bonds or of this Ordinance may, however, be amended or modified by ordinance duly adopted by the Council of the City at any time in any respect with the written consent of the Registered Owners of all of the Bonds at the time Outstanding.

 

Without notice to or the consent of any Bondowners, the City may amend or supplement this Ordinance for the purpose of curing any formal defect, omission, inconsistency or ambiguity therein or in connection with any other change therein which is not materially adverse to the interests of the Bondowners.

 

Every amendment or modification of the provisions of the Bonds or of this Ordinance, to which the written consent of the Bondowners is given, as above provided, shall be expressed in an ordinance adopted by the Council of the City amending or supplementing the provisions of this Ordinance and shall be deemed to be a part of this Ordinance. A certified copy of every such amendatory or supplemental ordinance, if any, and a certified copy of this Ordinance shall always be kept on file in the office of the City Clerk, and shall be made available for inspection by the Registered Owner of any Bond or a prospective purchaser or owner of any Bond authorized by this Ordinance, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental ordinance or of this Ordinance will be sent by the City Clerk to any such Bondowner or prospective Bondowner.

 

Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the City Clerk a copy of the ordinance of the City hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Registered Owners of the Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification.

 

The City shall furnish to the Paying Agent a copy of any amendment to the Bonds or this Ordinance made hereunder which affects the duties or obligations of the Paying Agent under this Ordinance.

 

Notwithstanding any provisions of this Section to the contrary, so long as the Reserve Policy shall remain in effect, this Ordinance shall not be modified or amended without the prior written consent of the Surety Provider.

 

Section 1204. Notices, Consents and Other Instruments by Bondowners. Any notice, consent, request, direction, approval, objection or other instrument required by this Ordinance to be signed and executed by the Bondowners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Bondowners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Ordinance, and shall be conclusive in favor of the City and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely:

 

(a) The fact and date of the execution by any person of any such instrument may be proved by a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument acknowledged before such officer the execution thereof, or by affidavit of any witness to such execution.

 

(b) The fact of ownership of Bonds, the amount or amounts, numbers and other identification of Bonds, and the date of holding the same shall be proved by the Bond Register.

 

In determining whether the Registered Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Ordinance, Bonds owned by the City shall be disregarded and deemed not to be Outstanding under this Ordinance, except that, in determining whether the Bondowners shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Bondowners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Bondowners the pledgees right so to act with respect to such Bonds and that the pledgee is not the City.

 

Section 1205. Further Authority. The officers of the City, including the Mayor and City Clerk, shall be, and they hereby are, authorized and directed to execute all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Ordinance and to make ministerial alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve and the execution or taking of such action shall be conclusive evidence of such necessity or advisability.

 

Section 1206. Continuing Disclosure. The City covenants and agrees to enter into a Continuing Disclosure Agreement for the benefit of the Bondholders or similar undertaking intended to satisfy the ongoing disclosure requirements of Securities and Exchange Commission Rule 15c2‑12. The Director of Finance is authorized to enter into a Continuing Disclosure Agreement substantially in the form on file with the office of the Director of Finance with such changes therein as she deems necessary or desirable.

 

Section 1207. Severability. If any section or other part of this Ordinance, whether large or small, is for any reason held invalid, the invalidity thereof shall not affect the validity of the other provisions of this Ordinance.

 

Section 1208. Governing Law. This Ordinance shall be governed exclusively by and constructed in accordance with the applicable laws of the State of Missouri.

 

Section 1209. Effective Date. This Ordinance shall take effect and be in full force and effect ten (10) days from and after its passage.

 

__________________________________________________________________

 

Approved as to form and legality:

 

 

______________________________________

Assistant City Attorney