Section 105-128; Ord. 18028; Authorizing the issuance and sale of Water and Electric System Improvement Revenue Bonds, 2004 Series A, of the City of Columbia, Missouri

Ordinance No.           018028                        Council Bill No. _____B 76-04_____



AN ORDINANCE

authorizing the issuance and sale of Water and Electric System Improvement Revenue Bonds, 2004 Series A, of the City of Columbia, Missouri, for the purpose of providing funds for payment of the cost of acquiring, constructing, equipping and furnishing certain improvements and additions to the system; prescribing the form and details of said bonds and the covenants and agreements made by the City to facilitate and protect the payment thereof; and prescribing other matters relating thereto; and fixing the time when this ordinance shall become effective.

    WHEREAS, the City of Columbia, Missouri, a municipal corporation duly created, organized and existing under and by virtue of the laws of the State of Missouri (the “City”), owns and operates a revenue producing municipal water and electric light works system (the “System”) serving the City and its inhabitants; and

    WHEREAS, the System is operated as one plant and under one management, and the revenues produced by the water facilities and the revenues produced by the electric facilities are accounted to a common fund; and

    WHEREAS, the City is fully authorized by its Charter and the Constitution and laws of the State of Missouri, including particularly Section 27 of Article VI of the Constitution of Missouri (the "Act") to issue its Bonds as hereinafter described; and

    WHEREAS, on August 27, 1985, the City adopted Ordinance No. 10653 of the City (which Ordinance, as amended and supplemented is referred to herein as the “Original Ordinance”) which created and established an issue of Bonds of the City designated as “Water and Electric System Revenue Bonds” (the “Bonds”); and

    WHEREAS, on August 4, 1992, the City issued and delivered $34,140,000 principal amount of Water and Electric System Refunding and Improvement Revenue Bonds, Series 1992 (the “1992 Series A Bonds”), pursuant to the Original Ordinance and Ordinance No. 13375 adopted on July 20, 1992 (the “1992 Bond Ordinance”), for the purpose of refunding certain outstanding Bonds and to extend and improve the City’s waterworks facilities; and

    WHEREAS, on March 17, 1998, the City issued and delivered $28,295,000 aggregate principal amount of Water and Electric System Refunding and Improvement Bonds, 1998 Series A (the “1998 Series A Bonds”), pursuant to the Original Ordinance and Ordinance No. 015543 adopted March 2, 1998 (the “1998 Bond Ordinance”), for the purpose of refinancing a portion of the Series 1992A Bonds and of paying the cost of extending, expanding, improving, repairing, replacing and equipping the System; and

    WHEREAS, on February 4, 2002, the City issued and delivered $16,490,000 principal amount of Water and Electric System Revenue Bonds, 2002 Series A (the “2002 Series A Bonds”), pursuant to the Original Ordinance and Ordinance No. 017170 adopted on February 4, 2002 (the “2002 Bond Ordinance”), for the purpose of paying the cost of extending, expanding, improving, repairing, replacing and equipping the System; and

    WHEREAS, on February 27, 2003, the City issued and delivered $8,950,000 principal amount of Water and Electric System Revenue Refunding Bonds, 2003 Series A (the “2003 Series A Bonds”), pursuant to Ordinance No. 17571 adopted on February 3, 2003  (the “2003 Bond Ordinance”), for the purpose of refunding certain outstanding Bonds; and

WHEREAS, the City, proceeding under the authority of the Act, adopted an ordinance providing for the submission to the qualified electors of the City at an election held therein on November 4, 2003 (the “Election”), of the following question (the “Question”):

QUESTION

Shall the City of Columbia, Missouri, issue its Water and Electric System Revenue Bonds in the amount of Twenty-Eight Million Three Hundred Thousand Dollars ($28,300,000) for the purpose of extending, expanding, improving, repairing, replacing and equipping the City-owned waterworks and electric systems?

and

        WHEREAS, notice of said election was duly prepared, executed and published in the manner provided by law, and said election was duly held in accordance with the provisions of said ordinance and notice and the statutes of the State of Missouri; and

WHEREAS, the votes cast at said Election on said Question were duly canvassed as provided by law and it was found and declared that more than a majority of the qualified electors of the City voting at said Election on said question voted in favor of the issuance of said Bonds, the vote on said Question having been as follows:  5,328 votes for the issuance of said bonds and 2,120 votes against the issuance of said bonds; and

WHEREAS, the water and electric system revenue bonds authorized at the Election remain unissued; and


    WHEREAS, the City is authorized by the Act and the Election to issue its revenue bonds in the principal amount of $17,095,000 for the purpose of paying the cost of extending, expanding, improving, repairing, replacing and equipping the System; and

    WHEREAS, the City now finds it necessary and in the best interests of the City to adopt this Ordinance (the “2004A Ordinance”) authorizing the issuance of the City’s Water and Electric System Improvement Revenue Bonds, 2004 Series A, for the purpose of paying the cost of extending, expanding, improving, repairing, replacing and equipping the System; and

    WHEREAS, the City Council of the City does hereby determine that the City now issue the Bonds for such purpose; and

    WHEREAS, the 2004 Series A Bonds will be issued on a parity with the 1992 Series A Bonds, the 1998 Series A Bonds, the 2002 Series A Bonds, and the 2003 Series A Bonds (collectively the “Outstanding Parity Bonds”); and

    WHEREAS, in the Original Ordinance, the City covenanted that no Additional Bonds or other obligations would be issued on a parity with the Bonds Outstanding unless Revenues Available for Debt Service (as defined in the Original Ordinance) or estimated Revenues Available for Debt Service, adjusted as provided in the Original Ordinance, for certain 12-month periods described in the Original Ordinance, were not less than one and twenty-five hundredths times the maximum total Debt Service for any succeeding Fiscal Year on all Bonds which would be Outstanding immediately after the issuance of the proposed Additional Bonds (as such capitalized terms are defined in the Original Ordinance); and

    WHEREAS, the City has complied with the provisions of the Original Ordinance described in the preceding paragraph, and, prior to the issuance of the 2004 Series A Bonds, the City will obtain a certificate of an Authorized Officer (as herein defined) of the City evidencing such compliance; and

    WHEREAS, the City Council of the City has heretofore determined that it is in the best interest of the City to sell said 2004 Series A Bonds at a public sale and said bonds have been duly sold at public sale; and

    WHEREAS, pursuant to advertisement, bids for the aforesaid 2004 Series A Bonds were received on March 15, 2004 and the best offer therefor was submitted by UBS Financial Services Inc., which bid should now be accepted; and

    WHEREAS, it is hereby found and determined that it is necessary and advisable and in the best interest of the City and of its inhabitants that revenue bonds be issued and secured in the form and manner as hereinafter provided to provide funds for the purpose hereinafter set forth.

    NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBIA, MISSOURI AS FOLLOWS:


ARTICLE I.    


DEFINITIONS


Section 101.     Definitions of Words and Terms

.  In addition to words and terms defined elsewhere in this Ordinance, the following words and terms as used in this Ordinance shall have the following meanings:

“1992 A Bonds” or “Series 1992A Bonds” means the Water and Electric System Refunding and Improvement Revenue Bonds, 1992 Series A, of the City issued pursuant to the 1992 Bond Ordinance.

“1992 Bond Ordinance” means Ordinance No. 13376 adopted on July 20, 1992, which authorized $34,140,000 principal amount of Water and Electric System Refunding and Improvement Revenue Bonds, 1992 Series A of the City.

“1998 A Bonds” or “1998 Series A Bonds” means the Water and Electric System Refunding and Improvement Revenue Bonds, 1998 Series A, of the City issued pursuant to the 1998 Bond Ordinance.

“1998 Bond Ordinance” means Ordinance No. 015543 adopted on March 2, 1998, which authorized $28,295,000 principal amount of  Water and Electric System Refunding and Improvement Revenue Bonds, 1998 Series A of the City.

“2002 A Bonds” or “2002 Series A Bonds” means the Water and Electric System Revenue Bonds, 2002 Series A, of the City issued pursuant to the 2002 Bond Ordinance.

“2002 Bond Ordinance” means Ordinance No. 017170 adopted on February 4, 2002, which authorized $16,490,000 principal amount of Water and Electric System Revenue Bonds, 2002 Series A of the City.

“2003 A Bonds” or “2003 Series A Bonds” means the Water and Electric System Revenue Bonds, 2003 Series A, of the City, issued pursuant to the 2003 Bond Ordinance.

“2003 Bond Ordinance” means Ordinance No. 17571 adopted on February 3, 2003, which authorized $8,950,000 principal amount of Water and Electric System Revenue Refunding Bonds, 2003 Series A of the City.

“2004 A Bonds” or “2004 Series A Bonds” means the City’s Water and Electric System Improvement Revenue Bonds, 2004 Series A.

“2004 Bond Account” means the Principal and Interest Account for Water and Electric System Improvement Revenue Bonds, 2004 Series A, created in Section 501 of this Ordinance.

”2004 Bond Insurance Policy” means the municipal 2004 Bond Insurance Policy issued by the 2004 Bond Insurer  guaranteeing scheduled payment of principal of and interest on the 2004 Insured Bonds.

”2004 Bond Insurer ” means  MBIA, New York, New York, or any successor thereto.*

“2004 Bond Ordinance” means Ordinance No. _________ adopted on March 15, 2004, which authorizes $17,095,000 principal amount of Water and Electric System Revenue Improvement Bonds, 2004 Series A of the City.

“2004 Bond Reserve Account” means the Reserve Account for Water and Electric System Improvement Revenue Bonds, 2004 Series A, created in Section 501 of this Ordinance.

“2004 Construction Account” means the Water and Electric System Construction Account of 2004 created in Section 501 of this Ordinance.

“2004 Insured Bonds” means 2004 Series A Bonds maturing in the years 2015 and thereafter which are insured by the 2004 Bond Insurance Policy.

“2004 Rebate Fund” means the 2004 Water and Electric System Revenue Bond Rebate Fund created in Section 501 of this Ordinance

“2004 Reserve Requirement” means initially $1,159,118.75 and thereafter the reserve requirement for the 2004 Series A Bonds determined in accordance with Section 706 hereof.

“Act” means the City’s Charter and the Constitution and laws of the State of Missouri, including particularly Section 27 of Article VI of the Constitution of Missouri.

“Additional Bonds” means any Bonds issued as Parity Bonds pursuant to the provisions of Section 1002 hereof.

“Approving Ordinance” means an ordinance adopted by the City Council authorizing the issuance of any Parity Bonds or Subordinate Bonds pursuant to the provisions hereof.

“Authorized Denominations” means the authorized denominations for each Series of the Bonds established in the Approving Ordinance authorizing such Series.

"Balloon Bonds" means any series of Bonds 25% or more of the principal of which (i) is due in any 12-month period or (ii) may, at the option of the Bondowners, be required to be redeemed, prepaid, purchased directly or indirectly by the City, or otherwise paid in any 12-month period; provided that, in calculating the principal of such Bonds due or required to be redeemed, prepaid, purchased, or otherwise paid in any 12-month period, such principal shall be reduced to the extent that all or any portion of such amount is required to be redeemed or amortized prior to such 12 month period.

"Balloon Date" means any principal Maturity Date or Put Date on which more than 25% of the principal of related Balloon Bonds mature or are subject to mandatory redemption or could, at the option of the Bondowners, be required to be redeemed, prepaid, purchased directly or indirectly by the City, or otherwise paid.

“Beneficial Owner” means any person for which a Participant acquires an interest in any Bond.

“Bond Counsel” means Sonnenschein Nath & Rosenthal LLP, St. Louis, Missouri, or other attorney or firm of attorneys with a nationally recognized standing in the field of municipal bond financing selected by the City.

“Bondowner” or “Owner” or “Registered Owner” or the lower case forms of such words means the person in whose name a Bond is registered in the registration books maintained by the Bond Registrar.

“Bonds” means the Outstanding Parity Bonds, the 2004 Series A Bonds, any Additional Bonds secured on a parity basis by the Net Revenues and any Subordinate Bonds.   

“Business Day” means a day on which financial institutions located in New York, New York or St. Louis, Missouri are not required or authorized to remain closed.

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

“City” means the City of Columbia, Missouri.

“City Council” means the City Council of the City.

“Code” means the Internal Revenue Code of 1986, as amended and the applicable regulations of the Treasury Department proposed or promulgated thereunder or under the Internal Revenue Code of 1954, as amended.

“Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate executed by the City and dated the date of issuance and delivery of the 2004 Series A Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof.

"Credit Facility" means any letter of credit, insurance policy, guaranty, surety bond, standby bond purchase agreement, line of credit, revolving credit agreement, or similar obligation, arrangement, or instrument issued by a bank, insurance company, or other financial institution which is used by the City to perform one or more of the following tasks:  (i) enhancing the City's credit by assuring owners of any of the Bonds that principal of and interest on such Bonds will be paid promptly when due; (ii) providing liquidity for the owners of Bonds through undertaking to cause Bonds to be bought from the owners thereof when submitted pursuant to an arrangement prescribed by a Approving Ordinance; or (iii) remarketing any Bonds so submitted to the Credit Facility Provider (whether or not the same Credit Facility Provider is remarketing the Bonds).  The term Credit Facility shall not include a Reserve Account Credit Facility.

"Credit Facility Agreement" means an agreement between the City and a Credit Facility Provider pursuant to which the Credit Facility Provider issues a Credit Facility and may include the promissory note or other instrument evidencing the City's obligations to a Credit Facility Provider pursuant to a Credit Facility Agreement.  The term Credit Facility Agreement shall not include a Reserve Account Credit Facility.

"Credit Facility Provider" means any issuer of a Credit Facility then in effect for all or part of the Bonds.  The term Credit Facility Provider shall not include any Reserve Account Credit Facility Provider.  Whenever in the Bond Ordinance the consent of the Credit Facility Provider is required, such consent shall only be required from the Credit Facility Provider whose Credit Facility is issued with respect to the Bonds for which the consent is required.

"Current Interest Bonds" means those Bonds which are not Compound Interest Bonds.

"Debt Service Requirement" means the total principal and interest coming due, whether at maturity or upon mandatory redemption, in any specified period.  If any Bonds Outstanding or proposed to be issued shall bear interest at a Variable Rate, the interest coming due in any specified future period shall be determined as if the Variable Rate in effect at all times during such future period equaled, at the option of the City, either (1) the average of the actual Variable Rates which were in effect (weighted according to the length of the period during which each such Variable Rate was in effect) for the most recent twelve-month period immediately preceding the date of calculation for which such information is available (or shorter period if such information is not available for a twelve-month period), or (2) the current average annual long-term fixed rate of interest on securities of similar quality having a similar maturity date as certified by a Financial Advisor.  If any Compound Interest Bonds are Outstanding or proposed to be issued, the total principal and interest coming due in any specified period shall be determined, with respect to such Compound Interest Bonds, by the Approving Ordinance of the City authorizing such Compound Interest Bonds. With respect to any Bonds secured by a Credit Facility, Debt Service Requirement shall include (i) any upfront or periodic commission or commitment fee obligations with respect to such Credit Facility, (ii) the outstanding amount of any Reimbursement Obligation owed to the applicable Credit Facility Provider and interest thereon, (iii) any Additional Interest owed on Pledged Bonds to a Credit Facility Provider, and (iv) any remarketing agent fees.  With respect to any Hedged Bonds, the interest on such Hedged Bonds during any Hedge Period and for so long as the provider of the related Hedge Agreement has not defaulted on its payment obligations thereunder shall be calculated by adding (x) the amount of interest payable by the City on such Hedged Bonds pursuant to their terms and (y) the amount of Hedge Payments payable by the City under the related Hedge Agreement and subtracting (z) the amount of Hedge Receipts payable by the provider of the related Hedge Agreement at the rate specified in the related Hedge Agreement; provided, however, that to the extent that the provider of any Hedge Agreement is in default thereunder, the amount of interest payable by the City on the related Hedged Bonds shall be the interest calculated as if such Hedge Agreement had not been executed.  In determining the amount of Hedge Payments or Hedge Receipts payable or receivable for any future period which are not fixed throughout the Hedge Period (i.e., which are variable), such Hedge Payments or Hedge Receipts for any period of calculation (the "Determination Period") shall be computed by assuming that the variables comprising the calculation (e.g., indices) applicable to the Determination Period are equal to the average of the actual variables which were in effect (weighted according to the length of the period during which each such variable was in effect) for the most recent twelve-month period immediately preceding the date of calculation for which such information is available (or shorter period if such information is not available for a twelve-month period).  For the purpose of calculating the Debt Service Requirement on Balloon Bonds (1) which are subject to a Commitment or (2) which do not have a Balloon Date within 12 months from the date of calculation, such Bonds shall be assumed to be amortized in substantially equal annual amounts to be paid for principal and interest over an assumed amortization period of 20 years at an assumed interest rate (which shall be the interest rate certified by a Financial Advisor to be the interest rate at which the City could reasonably expect to borrow the same amount by issuing Bonds with the same priority of lien as such Balloon Bonds and with a 20-year term); provided, however, that if the maturity of such Bonds (taking into account the term of any Commitment) is in excess of 20 years from the date of issuance, then such Bonds shall be assumed to be amortized in substantially equal annual amounts to be paid for principal and interest over an assumed amortization period of years equal to the number of years from the date of issuance of such Bonds to maturity (including the Commitment) and at the interest rate applicable to such Bonds.  For the purpose of calculating the Debt Service Requirement on Balloon Bonds (1) which are not subject to a Commitment and (2) which have a Balloon Date within 12 months from the date of calculation, the principal payable on such Bonds on the Balloon Date shall be calculated as if paid on the Balloon Date.  The principal of and interest on Bonds and Hedge Payments shall be excluded from the determination of Debt Service Requirement to the extent that the same were or are expected to be paid with amounts on deposit on the date of calculation (or Bond proceeds to be deposited on the date of issuance of proposed Bonds) in the Project Fund, the Sinking Fund, or a similar fund for Subordinate Bonds.

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

“Defeasance 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 Ordinance Funding Corporation) that are not subject to redemption in advance of their maturity dates.

“Depository” means the depository of each fund established under the Bond Ordinance, and any successor depository of such fund hereafter designated by the City from time to time by Supplemental Ordinance.

“Dissemination Agent” means UMB Bank, N.A., and any successor or assigns.  

“DTC” means The Depository Trust Company of New York, New York.

“Financial Advisor” means, A.G. Edwards & Sons, Inc., St. Louis, Missouri.

“Fitch” means Fitch, Inc. or, if such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the City. The notice address of Fitch shall be One State Street Plaza, New York, New York  10004.

"Hedge Agreement" means, without limitation, (i) any contract provided by a Qualified Hedge Provider known as or referred to or which performs the function of an interest rate swap agreement, currency swap agreement, forward payment conversion agreement, or futures contract; (ii) any contract provided by a Qualified Hedge Provider providing for payments based on levels of, or changes or differences in, interest rates, currency exchange rates, or stock or other indices; (iii) any contract provided by a Qualified Hedge Provider to exchange cash flows or payments or series of payments; (iv) any type of contract provided by a Qualified Hedge Provider called, or designed to perform the function of, interest rate floors, collars, or caps, options, puts, or calls, to hedge or minimize any type of financial risk, including, without limitation, payment, currency, rate, or other financial risk; and (v) any other type of contract or arrangement provided by a Qualified Hedge Provider that the City determines is to be used, or is intended to be used, to manage or reduce the cost of any Bonds, to convert any element of any Bonds from one form to another, to maximize or increase investment return, to minimize investment return risk, or to protect against any type of financial risk or uncertainty.
"Hedged Bonds" means any Bonds for which the City shall have entered into a Hedge Agreement.

"Hedge Payments" means amounts payable by the City pursuant to any Hedge Agreement, other than termination payments, fees, expenses and indemnity payments.

"Hedge Period" means the period during which a Hedge Agreement is in effect.

"Hedge Receipts" means amounts payable by any provider of a Hedge Agreement pursuant to such Hedge Agreement, other than termination payments, fees, expenses and indemnity payments.

"Independent Certified Public Accountant" means a certified public accountant, or a firm of certified public accountants, who or which is "independent" as that term is defined in Rule 101 and related interpretations of the Code of Professional Ethics of the American Institute of Certified Public Accountants, of recognized standing, who or which does not devote his or its full time to the City (but who or which may be regularly retained by the City).

“Moody’s” means Moody’s Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency designated by the City Council and not objected to by the 2004 Bond Insurer  by notice to the Trustee.

“Net Revenues” means Revenues less Operating Expenses.

“Nominee” means the nominee from time to time of the Securities Depository.

“Operating Expenses” means the City’s expenses of operating the System, including all costs due under any type of contractual arrangement in respect of power and power entitlements, operation, maintenance, generation, production, transmission, distribution, repairs, replacements, engineering, transportation, administrative and general, audit, legal, financial, pension, retirement, health, hospitalization, insurance, taxes, and other expenses actually paid or accrued, including, without limitation, any expenses of the City applicable to the System, as recorded on its books pursuant to standard governmental accounting practice and any other expenses of the City applicable to the System, as recorded on its books pursuant to standard governmental accounting practice. Operating Expenses shall not include any costs or expenses for new construction, charges for depreciation, voluntary payments in lieu of taxes, payments in respect of any “take or pay” power contract under which no power is available to the City for such payment, or payment of principal or interest on the Bonds.

“Ordinance” means this Ordinance as from time to time amended in accordance with the terms hereof.

“Original Ordinance” means Ordinance No. 10653 adopted by the Council of the City on August 1, 1985, authorizing Water and Electric System Revenue Bonds, 1985 Refunding Series of the City, as amended and supplemented by the 1992 Bond Ordinance, the 1998 Bond Ordinance, the 2002 Bond Ordinance, and the 2003 Bond Ordinance.

“Original Purchaser” means UBS Financial Services Inc..

“Outstanding” means, when used in reference to Bonds, all Bonds which have been duly authenticated and delivered under the Bond Ordinance, with the exception of (a) Bonds in lieu of which other Bonds have been issued under agreement to replace lost, mutilated, stolen, or destroyed obligations, (b) Bonds surrendered by the owners in exchange for other Bonds under Section 2.9 or Section 3.4, and (c) Bonds for the payment of which provision has been made in accordance with Article IX.  

“Outstanding Parity Bonds” means the 1992 Series A Bonds, the 1998 Series A Bonds, the 2002 Series A Bonds, and the 2003 Series A Bonds.

“Parity Bonds” means the Outstanding Parity Bonds, the 2004 Series A Bonds, and any Additional Bonds secured on a parity basis by the Net Revenues.  

“Participants” means those financial institutions for whom the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference.

“Paying Agent and Bond Registrar” means UMB Bank, N.A., in St. Louis, Missouri, and its successors and assigns.

“Payment Date” means each date on which interest or principal is to become due on any Bonds, by maturity or mandatory sinking fund redemption, as established in the Approving Ordinance for such Bonds.

“Permitted Investments” means the following to the extent permitted by Missouri law, and with respect to the 2004 Series A Bonds the 2004 Bond Insurer,  for the investment of funds of the City:

(a)    Direct obligations of the United States of America (including obligations issued or held in bookentry form on the books of the Department of the Treasury, and CATS and TIGRS) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America.

(b)    Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself):

(1)    U.S. ExportImport Bank:  Direct obligations or fully guaranteed certificates of beneficial ownership;

(2)    Farmers Home Administration: Certificates of beneficial ownership;

(3)    Federal Financing Bank;

(4)    Federal Housing Administration Debentures;

(5)    General Services Administration: Participation certificates;

(6)    Government National Mortgage Association (“GNMA”):  GNMA guaranteed mortgagebacked bonds; GNMA guaranteed passthrough obligations (not acceptable for certain cash-flow sensitive issues);

(7)    U.S.Maritime Administration: Guaranteed Title XI financing; and

(8)    U.S. Department of Housing and Urban Development:  Project Notes and Local Authority Bonds; New Communities Debentures - U.S. government guaranteed debentures; U.S. Public Housing Notes and Bonds - United States government guaranteed public housing notes and bonds.

(c)    Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following United States government agencies (nonfull faith and credit agencies) (stripped securities are only permitted if they have been stripped by the agency itself):

(1)    Federal Home Loan Bank System: Senior debt obligations;

(2)    Federal Home Loan Mortgage Corporation:  Participation Certificates: Senior debt obligations;

(3)    Federal National Mortgage Association: Mortgagebacked securities and senior debt obligations;

(4)    Student Loan Marketing Association:  Senior debt obligations;

(5)    Ordinance Funding Corporation:  obligations; and

(6)    Farm Credit System:  Consolidated systemwide bonds and notes.

(d)    Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of AAAmG; AAA-m; or AA-m and if rated by Moody’s rated Aaa, Aa1 or Aa2.

(e)    Certificates of deposit secured at all times by collateral described in (a) and/or (b) above.  Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks.  The collateral must be held by a third party and the Bondowners must have a perfected first security interest in the collateral.

(f)    Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by the Federal Deposit Insurance Corporation including BIF and SAIF.

(g)    Investment agreements, including guaranteed investment contracts, forward purchase agreements and reserve fund put agreements acceptable to the 2004 Bond Insurer , if any.

(h)    Commercial paper rated, at the time of purchase, “Prime 1” by Moody’s or “Al” or better by S&P.

(i)    Bonds or notes issued by any state or municipality which are rated by Moody’s or S&P in one of the two highest rating categories assigned by such agencies.

(j)    Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of “Prime 1” or “A3” or better by Moody’s and “Al” or “A” or better by S&P.

(k)    Repurchase Agreements for 30 days or less must follow the following criteria.  Repurchase Agreements which exceed 30 days must be acceptable to the 2004 Bond Insurer , if any.  Repurchase agreements provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to the City (buyer/lender), and the transfer of cash from the City to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the City in exchange for the securities at a specified date.

1.    Repos must be between the City and a dealer bank or securities firm.

a.    Primary dealers on the Federal Reserve reporting dealer list which are rated A or better by Standard & Poor’s Corporation and Moody’s Investor Services, or

b.    Banks rated “A” or above by Standard & Poor’s Corporation and Moody’s Investor Services.

2.    The written repo contract must include the following:

    a.    Securities which are acceptable for transfer are:


        (1)    Direct U.S. governments, or


        (2)    Federal agencies backed by the full faith and credit of the U.S. government (and FNMA & FHLMC).


    b.    The term of the repos may be up to 30 days.


c.    The collateral must be delivered to the City, trustee (if trustee is not supplying the collateral) or third party acting as agent for the trustee (if the trustee is supplying the collateral) before/simultaneous with payment (perfection by possession of certificated securities).

d.    Valuation of Collateral.

    (1)    The securities must be valued weekly, marked-to-market at current market price plus accrued interest.


        (a)    The value of collateral must be equal to 104% of the amount of cash transferred by the municipal entity to the dealer bank or security firm under the repo plus accrued interest.  If the value of securities held as collateral slips below 104% of the value of the cash transferred by municipality, then additional cash and/or acceptable securities must be transferred.  If, however, the securities used as collateral are FNMA or FHLMC, then the value of collateral must equal 105%.



3.    Legal opinion which must be delivered to the City:

    a.    Repo meets guidelines under state law for legal investment of public funds.



“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.

“Project” means the acquisition, construction, equipping and furnishing of certain improvements and additions to the System.

"Pledged Bond" means any Bond purchased and held by a Credit Facility Provider pursuant to a Credit Facility Agreement.  A Bond shall be deemed a Pledged Bond only for the actual period during which such Bond is owned by a Credit Facility Provider pursuant to a Credit Facility Agreement.

"Pledged Bond Rate" means the rate of interest payable on Pledged Bonds, as may be provided in a Credit Facility or Credit Facility Agreement.

"Put Date" means any date on which a Bondowner may elect to have Balloon Bonds redeemed, prepaid, purchased directly or indirectly by the City, or otherwise paid.

"Qualified Hedge Provider" means an entity whose senior unsecured long term obligations, financial program rating, counterparty rating, or claims paying ability, or whose payment obligations under the related Hedge Agreement are absolutely and unconditionally guaranteed by an entity whose senior unsecured long term obligations, financial program rating, counterparty rating, or claims paying ability, are rated either (i) at least as high as the third highest Rating of each Rating Agency, but in no event lower than any Rating on the related Hedged Bonds at the time of execution of the Hedge Agreement, or (ii) in any such lower Rating which each Rating Agency indicates in writing to the City will not, by itself, result in a reduction or withdrawal of its Rating on the related Hedged Bonds that is in effect prior to entering into the Hedge Agreement.  An entity's status as a "Qualified Hedge Provider" is determined only at the time the City enters into a Hedge Agreement with such entity and shall not be redetermined with respect to that Hedge Agreement.

“Rating Agencies” means Moody’s, S&P and Fitch.

“Record Date” means the fifteenth day (whether or not a business day) of the calendar month next preceding an interest payment date.

"Reimbursement Obligation" means the obligation of the City to directly reimburse any Credit Facility Provider for amounts paid by such Credit Facility Provider under a Credit Facility, whether or not such obligation to so reimburse is evidenced by a promissory note or other similar instrument.

“Renewal and Replacement Account” means the Renewal and Replacement Reserve Account ratified and confirmed in Section 502 of this Ordinance.

“Renewal and Replacement Requirement” shall mean, so long as the Outstanding Parity Bonds are Outstanding, the amount required to be on deposit in the Renewal and Replacement Account pursuant to the Original Ordinance, and thereafter, shall be the amount determined by the City as reasonably necessary for such purposes.

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

“Representation Letter” means the Representation Letter from the City and Paying Agent to DTC with respect to the 2004 Series A Bonds.

"Reserve Account Credit Facility" means any letter of credit, insurance policy, line of credit, or surety bond, together with any substitute or replacement therefor, if any, complying with the provisions of the Bond Ordinance, thereby fulfilling all or a portion of the Debt Service Reserve Requirement.

"Reserve Account Credit Facility Provider" means any provider of a Reserve Account Credit Facility.

"Reserve Requirement" means an amount established from time to time by the City in an Approving Ordinance related to an issuance of a series of Parity Bonds as a reasonable reserve for the payment of principal of and interest on Parity Bonds.  Initially, this amount shall be the maximum annual Debt Service Requirement with respect to Parity Bonds in the then current or any succeeding Fiscal Year.  The City may in its sole discretion change, reduce or increase this amount from time to time by Supplemental Ordinance or Approving Ordinance in connection with the issuance of a series of Additional Bonds, but in no event may the City reduce this amount below the greater of (i) the maximum annual Debt Service Requirement with respect to such series of Parity Bonds in the then current or any succeeding Fiscal Year, or (ii) 50% of the average annual Debt Service Requirement with respect to such series of Parity Bonds in the then current or any succeeding Fiscal Year, and unless each Rating Agency with an outstanding rating on the Bonds indicates in writing to the City that such reduction will not, by itself, result in a reduction or withdrawal of its current Rating on the Bonds.

“Revenues” means all revenues, income and rents accrued by the City from the ownership and operation of the System and the proceeds of any insurance covering business interruption loss relating to the System, including interest received on any moneys or securities held pursuant to the Ordinance and paid into the Water and Electric Account.  

“Revenues Available For Debt Service” means for any Fiscal Year or period of 12 calendar months shall mean all Net Revenues for such year or period.

“S&P” means Standard & Poor’s Ratings Group, a division of McGraw Hill, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized securities rating agency designated by the City Council and not objected to by the 2004 Bond Insurer by notice to the Trustee.

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

“Special Record Date” means the date fixed by the Paying Agent pursuant to Section 205 hereof for the payment of Defaulted Interest.

“Stated Maturity” when used with respect to any 2004 Series A Bond or any installment of interest thereon means the date specified in such 2004 Series A Bond and this Ordinance as the fixed date on which the principal of such 2004 Series A Bond or such installment of interest is due and payable.

“Subordinate Bonds” means any Bonds issued on a junior lien basis to the Parity Bonds with respect to the pledge of the Net Revenues pursuant to the provisions of Section 1003 hereof.

“System” means (i) properties and assets relating to the City’s wholly-owned water and electric system to which legal title is vested in the City and all properties and assets acquired by the City as renewals and replacements, additions and expansion, and improvements thereto, as recorded in the books of the City pursuant to standard governmental accounting practices, and (ii) all renewals and replacements, additions and expansions and improvements thereto paid for or financed in whole or in part from Revenues, proceeds of Bonds, Subordinate Bonds or other funds under this Ordinance.  System as used in the Ordinance shall not include any facilities for the generation of power and energy financed by the City through the issuance of obligations of the City which shall be secured in part by contracts with other utilities for the sale of the power and energy from such facilities.

“System Revenue Fund” means the System Revenue Fund ratified and confirmed in Section 502 of this Ordinance.

“Tax Letter of Instructions” means the Tax Letter of Instructions dated as of the date of issuance of the 2004 Series A Bonds, from Sonnenschein Nath & Rosenthal LLP, as Bond Counsel, as amended and supplemented in accordance with the terms thereof.

"Tax-Exempt Bonds" means any Bonds the interest on which has been determined, in an opinion of Bond Counsel, to be excludable from the gross income of the owners thereof for federal income tax purposes.

"Term Bonds" means Bonds which mature on one principal Maturity Date yet a portion of which are required to be redeemed, prior to maturity, under a schedule of mandatory redemptions established by the Bond Ordinance.

"Variable Rate" means a rate of interest applicable to Bonds, other than a fixed rate of interest which applies to a particular maturity of Bonds, so long as that maturity of Bonds remains Outstanding.


ARTICLE II.    

AUTHORIZATION AND SALE OF THE BONDS


Section 201.     Authorization of the Bonds and the 2004 Series A Bonds, Award of Bid for Sale of the 2004 Series A Bonds, and Authorization of the Preliminary and Final Official Statement Relating to the 2004 Series A Bonds

.  (a) There is hereby created and established an issue of Bonds of the City to be designated as “Water and Electric System Revenue Bonds.”  The aggregate principal amount of the Bonds which may be issued, executed and delivered under the Ordinance is not limited except as may hereafter be provided by ordinance or as may be limited by law. The Bonds may, if and when authorized by the City pursuant to ordinance, be issued in one or more series (each a “Series”), and the designation thereof, in addition to the name “Water and Electric System Revenue Bonds,” shall include such further appropriate particular designation added to or incorporated in such title for the Bonds of any particular Series, or, in the case of commercial paper issued hereunder, may be such a different appropriate name as the City may determine.  Each Bond shall bear upon its face the designation so determined for the Series to which it belongs.

    (b)    There is hereby authorized to be issued, sold and delivered a series of Water and Electric System Improvement Revenue Bonds, 2004 Series A, of the City in the principal amount of $17,095,000 (the “Bonds”) for the purpose of (i) financing the cost of the Project, (ii) making the necessary deposit to the 2004 Bond Reserve Account and (iii) paying certain costs incurred in connection with the issuance of the 2004 Series A Bonds, as provided in this Ordinance.  The Series 2004A Bonds shall be dated as of their date of initial issuance and delivery.  Each series of Series 2004A Bonds shall be numbered in a convenient manner, established by the Bond Registrar and shown by the Bond Register.

The Series 2004A Bonds and the Bond Registrar's Certificate of Authentication shall be in substantially the form set forth in Exhibit A attached hereto, with such variations, omissions, substitutions and insertions as are required or permitted by this Master Bond Ordinance.

    The Series 2004A Bonds shall bear interest at the rates per annum set forth below, computed on the basis of a 360-day year consisting of twelve 30-day months, payable on each April 1 and October 1 of each year, beginning October 1,2004, and shall mature semiannually on April 1 and October 1, beginning April 1, 2007 through and including April 1, 2009 in the principal amounts as follows, unless earlier called for redemption, and annually thereafter on October 1 in the years and in the principal amounts as follows, unless earlier called for redemption:


SERIAL BONDS

Semiannual Principal Payments

Stated Maturity  
Principal Amount  
Annual Rate  
of Interest  
April 1, 2007  
$480,000
2.0000
October 1, 2007  
250,000
2.0000
April 1, 2008  
250,000
2.0000
October 1, 2008  
255,000
2.0000
April 1, 2009  
260,000
2.5000


Annual Principal Payments

Stated Maturity  
October 1  
Principal Amount  
Annual Rate  
of Interest  
2009  
$535,000
2.5000
2010  
555,000
4.0000
2011  
570,000
3.0000
2012  
590,000
4.0000
2013  
605,000
4.0000
2014  
630,000
4.0000
2015  
650,000  
4.0000
2016  
675,000
4.0000
2017  
700,000
4.0000
2018  
730,000
4.0000
2019  
760,000
4.0000
2020  
790,000
4.0000
2021  
825,000
4.0000
2022  
870,000
4.1000
2023  
910,000
4.1000
2024  
950,000
4.2000
2025  
995,000
4.2500

TERM BONDS


Stated Maturity  
Principal Amount  
Annual Rate  
of Interest  
October 1, 2028  
$3,260,000  
4.25%  



    Some or all of the Bonds issued after the Series 2004A Bonds may be Term Bonds maturing in one or more years yet subject to mandatory redemption prior to maturity.  Any requirement for the mandatory redemption of Term Bonds prior to maturity may be satisfied to the extent that any Bonds of the same series and maturity shall have been acquired by the City and presented for cancellation to the Bond Registrar on or prior to the mandatory redemption date.


    (c)    The 2004 Series A Bonds, are hereby awarded to UBS Financial Services Inc. at a purchase price of $17,096,748.05 (which is equal to 100% of the principal amount of the 2004 Series A Bonds, plus a premium of $1748.05), plus accrued interest to the date of delivery of said 2004 Series A Bonds and at a true interest cost of 4.016907%, all in accordance with the terms of sale as set forth in the Notice of Bond Sale and in the Proposal (attached hereto as Exhibit A) for the Purchase of Water and Electric System Improvement Revenue Bonds, 2004 Series A of the City of Columbia, Missouri, as authorized in the ordinance adopted by the City Council on March 15, 2004.

    (d)    The Preliminary Official Statement, in substantially the form attached hereto as Exhibit B, is hereby ratified and approved with such changes in said Preliminary Official Statement as shall be approved by the Director of Finance of the City.  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 and as shall be approved by the Director of Finance of the City.  The City Manager and Director of Finance of the City are 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 Original 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, dated as of the date of payment for and delivery of the Bonds.

    For the purpose of enabling the Original Purchaser to comply with the requirements of Rule 15c212(b)(1) of the Securities and Exchange Commission, the City Council hereby authorizes the Director of Finance to deem 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 15c212(b)(1), and the Director of Finance is hereby authorized, if requested, to provide the Original Purchaser a letter or certification to such effect and to take such other actions or execute such other documents as such officer in his reasonable judgment deem necessary to enable the Original Purchaser to comply with the requirement of such Rule.

    The City agrees to provide to the Original Purchaser within seven business days of the date of the sale of Bonds sufficient copies of the final Official Statement to enable the Original Purchaser to comply with the requirements of Rule 15c212(b)(4) of the Securities and Exchange Commission and with the requirements of Rule G32 of the Municipal Securities Rulemaking City Council.

    (d)    The Certificate of Net Revenues, in substantially the form attached hereto as Exhibit C, is hereby approved with such changes as shall be approved by the Director of Finance of the City.

Section 202.     Security for the Bonds

.  The Bonds and the interest thereon shall constitute 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 from the operation and ownership of the System (excluding amounts payable to the United States pursuant to Section 148 of the Code) and other funds herein pledged, and such obligations shall not constitute general obligations or an indebtedness of the State of Missouri, the City, the City Council or of the individual members of the City Council.  The Owners of the Bonds shall have no right to demand payment out of funds raised or to be raised by taxation or appropriation.  In addition the 2004 Insured Bonds are secured by the provisions of the 2004 Bond Insurance Policy as provided herein.

The covenants and agreements of the City Council 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 revenues 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 2004 Series A Bonds shall stand on a parity and shall be equally and ratably secured with respect to the payment of principal and interest from the Net Revenues of the System and in all other respects with the Outstanding Parity Bonds.  The 2004 Series A Bonds shall not have any priority with respect to the payment of principal or interest from the Net Revenues or otherwise over the Outstanding Parity Bonds nor over any other Water and Electric System Revenue Bonds of the City hereafter issued in accordance with the provisions of this Ordinance and standing on a parity with the Bonds, nor shall the Outstanding Parity Bonds or any other Water and Electric System Revenue Bonds of the City hereafter issued have any priority with respect to the payment of principal or interest from the Net Revenues or otherwise over the 2004 Series A Bonds.

Section 203.     Description of the 2004 Series A Bonds

.  The 2004 Series A Bonds shall consist of fully registered bonds without coupons, numbered from R1 consecutively upward in order of issuance, in the denomination of $5,000 or any integral multiple thereof.  The 2004 Series A Bonds shall be substantially in the form set forth in Article IV hereof, and shall be subject to registration, transfer and exchange as provided in Section 206 hereof.  The 2004 Series A Bonds shall be dated the date of their original issuance and delivery to the Original Purchaser.

Section 204.     Designation of Paying Agent and Bond Registrar

.  UMB Bank, N.A., in St. Louis, Missouri, is hereby designated as the City’s paying agent for the payment of principal of, redemption premium, if any, and interest on the 2004 Series A Bonds and bond registrar with respect to the registration, transfer and exchange of 2004 Series A Bonds (the “Paying Agent and Bond Registrar”).  The City Manager and City Clerk are hereby authorized to execute on behalf of the City an agreement with said bank to act as Paying Agent and Bond Registrar for the 2004 Series A Bonds.  The Paying Agent and Bond Registrar shall be paid the usual fees for its services in connection therewith, which said fees shall be paid as other Operating Expenses of the System are paid.

Section 205.     Method and Place of Payment of Bonds

.  The principal of, redemption premium, if any, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of debts due the United States of America.  Payments which become due on Saturdays, Sundays and holidays may be made on the next succeeding Business Day.

The principal of and redemption premium, if any, on each Bond shall be paid at maturity or upon earlier redemption to the person in whose name such Bond is registered at the maturity or redemption date thereof, upon presentation and surrender of such Bond at the principal payment office of the Paying Agent and Bond Registrar.

The interest payable on each Bond on any interest payment date shall be paid (a) by check or draft mailed by the Paying Agent and Bond Registrar to the person in whose name such Bond is registered at the close of business on the Record Date for such interest or (b) in the case of an interest payment to any Registered Owner of $500,000 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.

Notwithstanding the foregoing provisions of this Section, any Defaulted Interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the 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 in the following manner:  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 firstclass mail postage prepaid, to each Owner of a Bond entitled to such notice at the address of such Owner as it appears in the registration books maintained by the Paying Agent and Bond Registrar not less than 10 days prior to such Special Record Date.

The Paying Agent and Bond Registrar shall keep in its office a record of payment of principal of, redemption premium, if any, and interest on all Bonds.

Section 206.     Registration, Transfer and Exchange of Bonds

.  The City Council covenants that it will, to the extent such Bond Registrar is within its control, as long as any of the Bonds remain outstanding, cause to be kept at the principal payment office of the Paying Agent and Bond Registrar books 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 registration books kept by the Paying Agent and Bond Registrar.  Bonds may be transferred and exchanged only upon the registration books maintained by the Paying Agent and Bond Registrar as provided in this Section.

The Paying Agent may make a charge against the Bondowner sufficient for the reimbursement of any governmental charge required to be paid in the event such Bondowner fails to provide a correct taxpayer identification number to the Paying Agent.  Such charge may be deducted from a debt service payment due to such Bondowner.

Upon surrender thereof at the principal office of the Paying Agent and Bond Registrar, the Paying Agent and Bond Registrar shall transfer or exchange any Bond for a new Bond or Bonds in any authorized denomination of the same maturity and in the same aggregate principal amount as the Bond which was presented for transfer or exchange.  All 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 and Bond Registrar, duly executed by the registered owner thereof or by the registered owner’s duly authorized agent.  All Bonds presented for transfer or exchange shall be surrendered to the Paying Agent and Bond Registrar for cancellation.

In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Paying Agent and Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of this Ordinance.  The City Council shall pay the fees and expenses of the Paying Agent and Bond Registrar 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 and Bond Registrar, are the responsibility of the bondowners.

The City Council and the Paying Agent and Bond Registrar may deem and treat the person in whose name any Bond shall be registered as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of, redemption premium, if any, and interest on said Bond and for all other purposes, and all such payments so made to any such registered owner or upon the registered owner’s 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 and Bond Registrar shall be affected by any notice to the contrary, but such registration may be changed as herein provided.

Section 207.     Execution, Authentication and Delivery of the Bonds

.  Each of the Bonds, including any Bonds issued in exchange or as substitutions for the Bonds initially delivered, shall be signed by the manual or facsimile signature of the Mayor of the City, attested by the manual or facsimile signature of the City Clerk of the City and shall have the official seal of the City affixed thereto or imprinted thereon.  In case any officer whose signature or facsimile thereof appears on any Bonds shall cease to be such officer before the delivery of such Bonds, 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 signed by such persons who at the actual time of the execution of such Bond shall be the proper officers to sign such Bond although at the date of such Bond such persons may not have been such officers.  

The Mayor and City Clerk of the City are hereby authorized and directed to prepare and execute the 2004 Series A Bonds as hereinbefore specified, and when duly executed, to deliver the 2004 Series A Bonds to the Paying Agent and Bond Registrar for authentication.  Upon authentication, and pursuant to the written direction of the City Manager, the Paying Agent and Bond Registrar shall deliver the 2004 Series A Bonds to the Original Purchaser of the Bonds, upon payment of the purchase price specified in Section 201 hereof.

The Bonds shall have endorsed thereon a certificate of authentication substantially in the form set forth in Section 401 hereof, which shall be manually executed by the Paying Agent and Bond Registrar.  No Bond shall be entitled to any security or benefit under this Ordinance or be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Paying Agent and Bond Registrar.  Such executed certificate of authentication upon any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Ordinance.  The certificate of authentication on any Bond shall be deemed to have been duly executed if signed by any authorized officer or employee of the Paying Agent and 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.

Section 208.     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 their satisfaction of the mutilation, destruction, loss or theft of any Bond, and (b) there is delivered to the City and the Paying Agent such security or indemnity as may be required by each of them, then, in the absence of notice to the City or the Paying Agent that such Bond has been acquired by a bona fide Original Purchaser, the City shall execute and, upon the City’s 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 maturity and of like tenor and principal amount.

In case 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 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 209.     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 shall file an executed counterpart of such certificate with the City.

Section 210.     BookEntry 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 bookentry 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 bookentry system to the exclusion of any Bonds being issued to any Bondowner 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 bookentry system to the exclusion of any Bonds being issued to any Bondowner 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 Bondowners 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 210(c) hereof to effect bookentry 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 Bondowners are unable to locate a qualified successor of the Securities Depository in accordance with Section 210(c) hereof, then the Paying Agent shall authenticate and cause delivery of Replacement Bonds to Bondowners, 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 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 Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Paying Agent receives written evidence satisfactory to the Paying Agent 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 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.     Continuing Disclosure Agreement

.  The City is authorized to enter into the Continuing Disclosure Agreement between the City and the Dissemination Agent in substantially the form attached hereto as Exhibit D. The City Manager is authorized to execute the Continuing Disclosure Agreement with such changes therein as such official deems appropriate, for and on behalf of and as the act and deed of the City.

Section 212.     Documents to be Delivered at Closing

.  Prior to or simultaneously with the authentication and delivery of each Series of the Bonds, the following items shall be filed with the Paying Agent and Bond Registrar:

(1)    An opinion of Bond Counsel, which may appear on the Bonds, to the effect that (i) the City has the right and power under the Act as amended to the date of such opinion to adopt the Approving Ordinance, and the Approving Ordinance has been duly and lawfully adopted by the City, is in full force and effect and is valid and binding upon the City and enforceable in accordance with its terms, and no other authorization for the Approving Ordinance is required; (ii) the Approving Ordinance creates the valid pledge and security interest which it purports to create of the Revenues, moneys, securities and funds held or set aside under the Approving Ordinance, subject to the application thereof to the purposes and on the conditions permitted by the Approving Ordinance; and (iii) the Bonds of such Series are valid and binding obligations of the City as provided in the Approving Ordinance, enforceable in accordance with their terms and the terms of the Approving Ordinance and entitled to the benefits of the Approving Ordinance and of the Act as amended to the date of such opinion, and such Bonds have been duly and validly authorized and issued in accordance with law, including the Act as amended to the date of such opinion, and in accordance with the Approving Ordinance; provided, however, that such Bond Counsel may qualify such opinion, insofar as the same relates to enforceability with respect to bankruptcy or other similar laws relating to the enforcement of creditors’ rights generally;

(2)    In the case of each Series of Bonds, a copy of the Approving Ordinance authorizing such Bonds, certified by the City Clerk, which shall specify or provide the manner of determining: (a) The maximum authorized principal amount, designation and Series of such Bonds; (b) The purposes for which such Series of Bonds is being issued, or (ii) the refunding of Bonds; (c) The date, and the maturity date or dates, of the Bonds of such Series, provided that each maturity date shall fall upon an interest payment date; (d) The interest rate or rates of the Bonds of such Series, and the interest payment dates therefor; (e) The denominations of and the manner of dating, numbering and lettering the Bonds of such Series; (f) The Paying Agent or Paying Agents and Bond Registrar, and the manner and place or places of payment of the principal and redemption price, if any, of, and interest on, the Bonds of such Series; (g) The redemption price or prices, if any, or provisions for determining redemption price or prices, if any, and, the redemption terms for the Bonds of such Series or provisions for the redemption of the Bonds of such Series; (h) If so determined by the City, provisions for the sale of the Bonds of such Series; (i) The forms of the Bonds of such Series and the Certificate of Authentication to be endorsed thereon; and (j) The amount, if any, to be deposited in the reserve account with respect to such Series;

(3)    Except in the case of Refunding Bonds issued for the purposes of refunding the Outstanding Bonds, a certificate of an Authorized Officer of the City stating that the City is not in default in the performance of any of the covenants, conditions, agreements or provisions contained in the Ordinance;

(4)    A request and authorization to the Paying Agent and Bond Registrar on behalf of the City, executed by an Authorized Officer of the City, to authenticate the Bonds and deliver the Bonds to the Original Purchasers therein identified upon payment to the City of the purchase price thereof, the Paying Agent and Bond Registrar being entitled to conclusively rely upon such request and authorization as to the names of the Original Purchasers and the amount of such purchase price; and

(5)    Such further documents, moneys and securities as are required by the provisions of this Ordinance or any Approving Ordinance.


ARTICLE III.    


REDEMPTION OF BONDS


Section 301.     Optional Redemption

.

(a)    Bonds subject to optional redemption prior to maturity pursuant to the applicable Approving Ordinance or subsection (b) hereof shall be redeemable, upon notice as provided in this Article, at such times, at such redemption prices and upon such terms in addition to the terms contained in this Article as may be specified in the Approving Ordinance authorizing such Series.

    (b)     At the option of the City, 2004 Series A Bonds or portions thereof maturing not later than October 1, 2015, and thereafter may be called for redemption and payment prior to the stated maturity thereof not later than October 1, 2014 and at any time thereafter, in whole at any time or in part on any interest payment date in any order of maturity selected by the City, at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the redemption date.  


Section 302.     Mandatory Redemption

.

(a)    Bonds subject to mandatory redemption prior to maturity pursuant to the applicable Approving Ordinance or subsection (b) hereof shall be redeemable, upon notice as provided in this Article, at such times, at such redemption prices and upon such terms in addition to the terms contained in this Article as may be specified in the Approving Ordinance authorizing such Series.

(b)    The 2004 Series A Bonds maturing in the year 2028 (the “Term Bonds”) are subject to mandatory redemption and payment, prior to Stated Maturity, in the years and in the principal amounts as follows:

                                     Principal

                Year                     Amounts

    2026    $1,040,000

    2027    $1,085,000

    2028      $1,135,000*


           *

_______

* Final Maturity



At its option, to be exercised on or before the 45th day next preceding any such mandatory redemption date, the City may:  (a) 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 (b) 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 use reasonable efforts to expend such funds for such purpose to such extent as may be practical;  or (c) 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 requirements of this Section) and cancelled by the Paying Agent and not theretofore applied as a credit against any redemption obligation under this Section.  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 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 (a), (b) or (c) 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 (a), (b) and (c) are to be complied with respect to such mandatory redemption payment.

Section 303.     Notice of Redemption; Effect of Redemption

.  Unless waived by any Owner of Bonds to be redeemed, official notice of any redemption shall be given by the Paying Agent on behalf of the City Council by mailing a copy of an official redemption notice by first class mail at least 30 days prior to the date fixed for redemption, to the Original Purchaser of the Bonds, to the 2004 Bond Insurer , ,if any, and to the Registered Owners of the Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such Registered Owners to the Paying Agent.

The Paying Agent shall call Bonds for optional redemption and payment pursuant to Section 301 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.



All official notices of redemption shall be dated and shall state:

    (1)    the redemption date,

    (2)    the redemption price,

    (3)    if less than all outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed,

    (4)    that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date,

    (5)    the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the principal office of the Paying Agent,

    (6)    the CUSIP numbers of all Bonds being redeemed, and

    (7)    any conditions to the effectiveness of such call for redemption.

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

On or prior to any redemption date, the City Council shall deposit with the Paying Agent an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date.

The Paying Agent is also directed to comply with any mandatory standards established by the Securities and Exchange Commission and 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.

Official notice of redemption having been given and money sufficient to pay the redemption price of the Bonds being redeemed having been deposited as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City Council shall default in the payment of the redemption price) such Bonds or portion of Bonds shall cease to bear interest, shall no longer be outstanding under, or entitled to any benefits of, this Ordinance.  Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Paying Agent at the redemption price.  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 maturity in the amount of the unpaid principal.  All Bonds which have been redeemed shall be cancelled and destroyed by the Paying Agent and shall not be reissued.

So long as the Securities Depository is effecting bookentry transfers of the Bonds, the City or 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, 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.

Section 304.     Selection of Bonds to Be Redeemed

.

(a)    Bonds shall be redeemed only in Authorized Denominations or any integral multiple thereof.  When less than all of the outstanding Bonds are to be redeemed and paid prior to maturity, the maturities of such Bonds to be redeemed shall be selected by the City, Bonds of less than a full maturity to be selected by the Paying Agent in Authorized Denominations in such equitable manner as the Paying Agent and Bond Registrar may determine subject to the requirements of Section 301 hereof.

(b)    In the case of a partial redemption of Bonds when Bonds of denominations greater than the minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each Authorized Denomination unit of face value shall be treated as though it was a separate Bond of the denomination of the minimum Authorized Denomination.  If one or more, but not all, of the minimum Authorized Denomination units of principal amount represented by any Bond are selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination unit or units, the Owner of such Bond or his attorney or legal representative shall forthwith present and surrender such Bond to the Trustee (i) for payment of the redemption price (including the interest to the date fixed for redemption) of the minimum Authorized Denomination unit or units of principal amount called for redemption, and (ii) for exchange, without charge to the 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 Owner of any such Bond of a denomination greater than minimum Authorized Denomination fails to present such Bond to the Trustee for payment and exchange as aforesaid, said Bond shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination unit or units of principal amount called for redemption (and to that extent only) and shall cease to accrue interest on the principal amount so called for redemption.

ARTICLE IV.    


FORM OF 2004 SERIES A BONDS



Section 401.     Form of 2004 Series A Bonds

.  Each of the Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be in substantially the form set forth in Exhibit E.


ARTICLE V.    


ESTABLISHMENT AND RATIFICATION

OF FUNDS AND ACCOUNTS


Section 501.     Creation of Funds

.  There are hereby created and ordered to be established and held in the account of the City, separate and apart from all other funds and accounts, the following separate funds:

(a)    Water and Electric System Construction Account of 2004 (the “2004 Construction Account”);

(b)    Bond Account for Water and Electric System Improvement Revenue Bonds, 2004 Series A (the “2004 Bond Account”);

(c)    Reserve Account for Water and Electric System Improvement Revenue Bonds, 2004 Series A (the “2004 Bond Reserve Account”); and

(d)    Water and Electric System Revenue Bond Rebate Account, 2004 Series A (the “2004 Rebate Account”).

Section 502.     Ratification of Funds and Accounts

.  The creation and establishment by the Original Ordinance of the following separate accounts are hereby ratified and confirmed:

(a)    Water and Electric Utility Fund of the City  (the “System Revenue Fund”) held in the name of the City by a Depository;

(b)    Water and Electric Bond Account (the “Bond Account”) which includes subaccounts for the 1992 Series A Bonds, the 1998 Series A Bonds, the 2002 Series A Bonds and the 2003 Series A Bonds, each held by the respective Bond Registrar and Paying Agent for the related Series of the Bonds;

(c)    Water and Electric Reserve Account (the “Outstanding Parity Bond Reserve”) which includes subaccounts for the 1992 Series A Bonds, the 1998 Series A Bonds, the 2002 Series A Bonds in the custody of the Trustee pursuant to the Outstanding Parity Bond Ordinance, and a subaccount for the 2003 Series A Bonds held by the City;

(d)    Water and Electric Construction Account (the “Construction Account”) held in the name of the City by a Depository;

(e)    Water and Electric Renewal and Replacement Account (the “Renewal and Replacement Account”) held in the name of the City by a Depository; and

(f)    Water and Electric Expense Account (the “Expense Account”) held in the name of the City by a Depository.

Section 503.     Administration of Funds and Accounts

.  The funds and accounts established pursuant to Section 501 hereof shall be maintained and administered by the City solely for the purposes and in the manner as provided in this Ordinance.  So long as any of the Outstanding Parity Bonds remain outstanding and unpaid, the funds referred to in subsections (a), (b), (c) and (e) of Section 501 hereof will be maintained and administered in accordance with the provisions of the Original Ordinance, and thereafter will be maintained and administered in accordance with the provisions of the Ordinance.  


ARTICLE VI.    

APPLICATION OF BOND PROCEEDS AND OTHER MONEYS


Section 601.     Disposition of Series A Bond Proceeds and Other Moneys

.  The proceeds received from the sale of the Series A Bonds, including any accrued interest thereon, shall be deposited simultaneously with the delivery of the Series A Bonds, as follows:

(a)    There shall be deposited in the 2004 Bond Account any amount received on account of accrued interest on the Series A Bond.

(b)    The sum equal to the 2004 Reserve Requirement shall be deposited in the 2004 Bond Reserve Account from available funds of the System.

(c)    There shall be deposited in the 2004 Construction Account the remaining balance of the proceeds of the Series A Bonds.

Section 602.     Application of Moneys in the 2004 Construction Account

.  Moneys in the 2004 Construction Account shall be used by the City for the sole purpose of paying the cost (including reimbursement for costs incurred either before or after the date of this Ordinance) of acquiring, constructing, equipping and furnishing the Project and for paying the costs and expenses incurred in connection with the issuance of the Series A Bonds[, including the premium for the 2004 Bond Insurance Policy].  Moneys in the 2004 Construction Account shall be withdrawn and expended by the City only for such purposes as shall have been previously specified in a signed certificate filed with and approved by the Director of Finance, or any successor to such position at the City. Nothing hereinbefore contained shall prevent the payment out of the 2004 Construction Account of the costs and expenses incurred in connection with the issuance of the Series A Bonds[, including the premium for the 2004 Bond Insurance Policy,] without a certificate from said official of the City.

ARTICLE VII.    

APPLICATION OF REVENUES


Section 701.     System Revenue Fund

.  The City Council covenants and agrees that as long as any of the Bonds remain outstanding and unpaid, all Revenues will be paid and deposited into the System Revenue Fund, and that said Revenues shall be segregated and kept separate and apart from all other moneys, revenues, funds and accounts of the City and shall not be commingled with any other moneys, revenues, funds and accounts of the City.  The System Revenue Fund shall be administered and applied solely for the purposes and in the manner provided in this Ordinance, and so long as any of the Outstanding Parity Bonds remain outstanding and unpaid, in the manner provided in the Original Ordinance.

Section 702.     Application of Moneys in Funds and Accounts

.  The City covenants and agrees that from and after the delivery of the 2004 Series A Bonds and continuing so long as any of the Bonds shall remain outstanding and unpaid, the System Revenue Fund shall be expended and used by the City in the manner and order specified below, to wit:

(a)    Operating Expenses of the System shall be payable, as a first charge, from the System Revenue Fund as the same become due and payable.  

(b)    There shall next be transferred from the System Revenue Fund and deposited into the 2004 Bond Account, on a parity with any payments into the subaccounts in the Bond Account for any Outstanding Parity Bonds and any Parity Bonds hereinafter issued, on each Payment Date, the amount of principal and interest due and payable on the 2004 Series A Bonds on such date.  All amounts paid and credited to the 2004 Bond Account shall be expended and used by the City for the sole purpose of paying the principal of, redemption premium, if any, and interest on the 2004 Series A Bonds as and when the same become due.

If at any time the moneys in the System Revenue Fund shall be insufficient to make in full the payments and credits at the time required to be made to the 2004 Bond Account and to the subaccounts in the Bond Account for any Outstanding Parity Bonds and any Parity Bonds hereafter issued, the available moneys in the System Revenue Fund shall be divided among such debt service accounts in proportion to the respective principal amounts of said Series of Parity Bonds at the time Outstanding which are payable from the moneys in said debt service accounts.

(c)    Concurrently with the issuance of the 2004 Series A Bonds, there shall be deposited into the 2004 Bond Reserve Account from available funds of the System a sum equal to the 2004 Reserve Requirement.  All amounts paid and credited to the 2004 Bond Reserve Account shall be expended and used by the City solely to prevent any default in the payment of interest on or principal of the 2004 Series A Bonds if the moneys in the 2004 Bond Account are insufficient to pay the interest on or principal of said 2004 Series A Bonds as they become due. So long as the 2004 Bond Reserve Account aggregates the Reserve Requirement, no further payments into said Account shall be required, but if (i) the City shall ever be required to expend and use a part of the moneys in said Account for the purpose herein authorized and such expenditure shall reduce the amount of said Account below the Reserve Requirement, on or before each April 1 and October 1, after paying all Operating Expenses and making the required transfers pursuant to subparagraphs (a) and (b) hereof the City Council shall transfer from the System Revenue Fund to the 2004 Bond Reserve Account, one-half of the amount expended from said Account during the previous six month period until said Account shall aggregate a sum equal to the Reserve Requirement or (ii) the value (determined in accordance with Section 802 hereof) of the amount held in the 2004 Bond Reserve Account is less than the Reserve Requirement due to market fluctuations, on or before each April 1 and October 1, the City Council shall transfer from the System Revenue Fund to the 2004 Bond Reserve Account, one-half of such deficiency so that said Account shall aggregate at the time of making the second of such transfers a sum equal to the Reserve Requirement.

If at any time the moneys in the System Revenue Fund shall be insufficient to make in full the payments and credits at the time required to be made to the 2004 Bond Reserve Account and to the Outstanding Parity Bond Reserve and any debt service reserve accounts established to protect the payment of any Parity Bonds hereinafter issued, the available moneys in the System Revenue Fund shall be divided among such debt service reserve accounts in proportion to the respective principal amounts of said series of Parity Bonds at the time Outstanding which are payable from the moneys in such debt service reserve accounts.

(d)    So long as the Renewal and Replacement Account aggregates the Renewal and Replacement Requirement, no further payments shall be required, but if amount in said account is less than the Renewal and Replacement Requirement, after making the required transfers pursuant to subparagraphs (a), (b) and (c) hereof, on or before each April 1 and October 1, the City Council shall transfer from the System Revenue Fund to the Renewal and Replacement Account, one-half of such deficiency so that said Account shall aggregate at the time of making the second of such transfers a sum equal to the Reserve Requirement.

All moneys in the Renewal and Replacement Account may be drawn on and used by the City Council for the purpose of paying the cost of unusual or extraordinary maintenance or repairs, renewals and replacements, not paid as part of the ordinary and normal expense for the operation of the System, provided however, in the event that the funds and investments in the Renewal and Replacement Account shall be reduced below the Renewal and Replacement Requirement, funds on deposit in the Renewal and Replacement Account shall be transferred to the 2004 Bond Reserve Account to the extent necessary to eliminate the deficiency in that Account.

(d)    After making the required transfers pursuant to subparagraphs (a), (b), (c) and (d) hereof, the amounts remaining in the System Revenue Fund may be transferred to satisfy  any deficiencies in or satisfy any funding requirements for the Accounts described in paragraphs (a), (b), (c) and (d) above, and then, as the City Council may from time to time direct, but only for any of the following purposes:  

    (i)    For payments into the general System Revenue Fund of the City of an amount substantially equivalent to that sum which would be paid in taxes if the System were privately-owned;

    (ii)    For the construction and acquisition of and extensions and improvements to the System;

    (iii)    For the redemption of Bonds prior to maturity;

    (iv)    For payment in respect of any “take or pay” power contract under which no power is available to the City for such payment; or

    (v)    For any lawful purpose connected with the System.


Section 703.     Transfer of Funds to Paying Agent and Bond Registrar; Nonpresentment of Bonds

.  The Director of Finance is hereby authorized and directed to withdraw from the 2004 Bond Account sums sufficient to pay the principal of and interest on the 2004 Series A Bonds.  The Director of Finance is also authorized to pay as Operating Expenses the fees and expenses of the Paying Agent and Bond Registrar when the same become due, and to forward such sums in immediately available funds to the Paying Agent and Bond Registrar prior to dates when such principal, interest and fees of the Paying Agent and Bond Registrar will become due.  

If, through lapse of time, or otherwise, the owners of Bonds shall no longer be entitled to enforce payment of their obligations, it shall be the duty of the Paying Agent and Bond Registrar forthwith to return said funds to the City. All moneys deposited with the Paying Agent and Bond Registrar shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance.  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 and Bond Registrar 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 and Bond Registrar 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 four years following the date when such Bond becomes due at Maturity, the Paying Agent and Bond Registrar 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 Bond Registrar, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money.

Section 704.     The 2004 Bond Insurance Policy

.

The City shall obtain the 2004 Bond Insurance Policy guaranteeing the payment of the principal of and interest on the 2004 Insured Bonds.  The 2004 Bond Insurer or its designated agent shall be given access to the registration books kept by the Paying Agent and Bond Registrar upon the occurrence of an event requiring payment by the 2004 Bond Insurer  under the 2004 Bond Insurance Policy.  The 2004 Bond Insurance Policy shall insure the payment of the 2004 Insured Bonds as provided in Exhibit F hereto and the restrictions set forth in the commitment for the 2004 Bond Insurance Policy as provided in Exhibit F hereto shall be a part of this Ordinance.

    A.    In the event that, on the second Business Day, and again on the Business Day, prior to the payment date on the 2004 Insured Bonds, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the 2004 Insured Bonds due on the second following or following, as the case may be, Business Day, the Paying Agent shall immediately notify the 2004 Bond Insurer or its designee on the same Business Day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency.

    B.    If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify the 2004 Bond Insurer or its designee.

    C.    In addition, if the Paying Agent has notice that any Bondowner has been required to disgorge payments of principal or interest on the 2004 Insured Bonds to a trustee in bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such Bondowner within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify the 2004 Bond Insurer or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail.

    D.    The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Holders of the 2004 Insured Bonds as follows:

    1.    If and to the extent there is a deficiency in amounts required to pay interest on the 2004 Insured Bonds, the Paying Agent shall (a) execute and deliver to U.S. Bank Trust National Association, or its successors under the 2004 Bond Insurance Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the 2004 Bond Insurer as agent for such Holders in any legal proceeding related to the payment of such interest and an assignment to the 2004 Bond Insurer of the claims for interest to which such deficiency relates and which are paid by the 2004 Bond Insurer, (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the 2004 Bond Insurance Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holders; and

    2.    If and to the extent of a deficiency in amounts required to pay principal of the 2004 Insured Bonds, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing the 2004 Bond Insurer as agent for such Holder in any legal proceeding relating to the payment of such principal and an assignment to the 2004 Bond Insurer of any of the Obligation surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the 2004 Bond Insurance Policy payment therefor from the Insurance Paying Agent, and (c) disburse the same to such Holders.

    E.    Payments with respect to claims for interest on and principal of 2004 Insured Bonds disbursed by the Paying Agent from proceeds of the 2004 Bond Insurance Policy shall not be considered to discharge the obligation of the City with respect to such 2004 Insured Bonds, and the 2004 Bond Insurer shall become the owner of such unpaid Obligation and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise.

    F.    Irrespective of whether any such assignment is executed and delivered, the City and the Paying Agent hereby agree for the benefit of the 2004 Bond Insurer that:

    1.    They recognize that to the extent the 2004 Bond Insurer makes payments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the 2004 Insured Bonds, the 2004 Bond Insurer will be subrogated to the rights of such Holders to receive the amount of such principal and interest from the City, with interest thereon as provided and solely from the sources stated in this Indenture and the 2004 Insured Bonds; and

    2.    They will accordingly pay to the 2004 Bond Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the 2004 Bond Insurance Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in this Indenture and the Obligation, but only from the sources and in the manner provided herein for the payment of principal of and interest on the 2004 Insured Bonds to Holders, and will otherwise treat the 2004 Bond Insurer as the owner of such rights to the amount of such principal and interest.

    G.    In connection with the issuance of additional 2004 Insured Bonds, the City shall deliver to the 2004 Bond Insurer a copy of the disclosure document, if any, circulated with respect to such additional 2004 Insured Bonds.

    H.    Copies of any amendments made to the documents executed in connection with the issuance of the 2004 Insured Bonds which are consented to by the 2004 Bond Insurer shall be sent to Standard & Poor's Corporation.

    I.    The 2004 Bond Insurer shall receive notice of the resignation or removal of the Paying Agent and the appointment of a successor thereto.

    J.    The 2004 Bond Insurer shall receive copies of all notices required to be delivered to Bondowners and, on an annual basis, copies of the City's audited financial statements and Annual Budget.

    Notices:  Any notice that is required to be given to a holder of the Obligation or to the Paying Agent pursuant to the Indenture shall also be provided to the 2004 Bond Insurer.  All notices required to be given to the 2004 Bond Insurer under the Indenture shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York  10504  Attention:  Surveillance.

K.    The City agrees to reimburse the 2004 Bond Insurer immediately and unconditionally upon demand, to the extent permitted by law, for all reasonable expenses, including attorneys’ fees and expenses, incurred by the 2004 Bond Insurer in connection with (i) the enforcement by the 2004 Bond Insurer of the City’s /Obligor’s 2004 Insured Bonds, or the preservation or defense of any rights of the 2004 Bond Insurer, under this Resolution/Indenture and any other document executed in connection with the issuance of the 2004 Insured Bonds, and (ii) any consent, amendment, waiver or other action with respect to the Resolution/Indenture or any related document, whether or not granted or approved, together with interest on all such expenses from and including the date incurred to the date of payment at Citibank’s Prime Rate plus 3% or the maximum interest rate permitted by law, whichever is less.  In addition, the 2004 Bond Insurer reserves the right to charge a fee in connection with its review of any such consent, amendment or waiver, whether or not granted or approved .

L.    The City agrees not to use MBIA's name in any public document including, without limitation, a press release or presentation, announcement or forum without MBIA's prior consent.  In the event that the City is advised by counsel that it has a legal obligation to disclose MBIA's name in any press release, public announcement or other public document, the City shall provide MBIA with at least three (3) business days' prior written notice of its intent to use MBIA's name together with a copy of the proposed use of MBIA's name and of any description of a transaction with MBIA and shall obtain MBIA's prior consent as to the form and substance of the proposed use of MBIA's name and any such description.

M.    The City /Obligor shall not enter into any agreement nor shall it consent to or participate in any arrangement pursuant to which Bonds are tendered or purchased for any purpose other than the redemption and cancellation or legal defeasance of such Bonds without the prior written consent of MBIA.


Section 705.     Deposits into and Application of Moneys in the Rebate Fund

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(a)    Notwithstanding the provisions of Section 702 hereof and the Original Ordinance, there shall be deposited in the Rebate Fund, from time to time, such amounts as are required to be deposited therein pursuant to the Arbitrage Instructions.  Subject to the payment provisions provided in subsection (b) below, all money at any time deposited in the Rebate Fund shall be held in trust, to the extent required to satisfy the rebate amounts due, for payment to the federal government of the United States of America, and neither the City nor the owner of any Bonds 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, by Section 802 and by the Tax Compliance Certificate (which is incorporated herein by reference).

(b)    Pursuant to the Tax Compliance Certificate, the City shall pay part or all of the balances in the Rebate Fund to the United States.  Any funds remaining in the Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any Rebate Amount, or provision made therefor, shall be withdrawn and released to the City.

(c)    Notwithstanding any other provision of this Ordinance, including in particular Article XII hereof, the obligation to pay the Rebate Amounts to the United States and to comply with all other requirements of this Section, Section 802 and the Tax Compliance Certificate shall survive the defeasance or payment in full of the Bonds.

Section 706.     Required Deposits into and Application of Moneys in the Outstanding Parity Bond Reserve, the 2004 Bond Reserve Account  and Any Reserve Accounts Established For Additional Bonds

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(a)      So long as any of the Outstanding Parity Bonds remain Outstanding and unpaid, the total funds on deposit in the various subaccounts in the Outstanding Parity Bond Reserve, the 2004 Bond Reserve Account, and any reserve account established to secure any Additional Bonds that are hereafter issued, shall aggregate the maximum cumulative debt service payable in any Fiscal Year on the Outstanding Parity Bonds, the 2004 Series A Bonds and any such Additional Bonds that are hereafter issued.

(b)    The 2004 Reserve Requirement for the 2004 Series A Bonds shall be determined at the beginning of each Fiscal Year and shall be the maximum Debt Service Requirement payable on the 2004 Series A Bonds during such Fiscal Year or any subsequent Fiscal Year.  Except as otherwise provided in the Original Ordinance, amounts held in the 2004 Bond Reserve Account shall be applied only to the payment of the principal of, premium, if any, or interest on the 2004 Series A Bonds.

(c)    The Reserve Requirement for any Additional Bonds shall be determined at the time of issuance of such Bonds and shall be established in the Approving Ordinance for such Bonds.  Except as otherwise provided in the Original Ordinance, amounts held in the Reserve Account established in connection with a series of Additional Bonds shall be applied only to the payment of the principal of, premium, if any, or interest on such series of Additional Bonds.

(d)    The City may provide, in lieu of any amounts required to be on deposit in the 2004 Bond Reserve Account or a Reserve Account established in connection with a Series of Additional Bond hereafter issued, a bond insurance policy in favor of the Trustee issued by an insurance company rated AAA or its equivalent by one of the Rating Agencies and sufficient, in the opinion of the Trustee, to provide to the Bondowners the amounts which would otherwise have been on deposit in such Reserve Account at the times the Bondowners would have otherwise received such amounts.

ARTICLE VIII.    

DEPOSIT AND INVESTMENT OF FUNDS

Section 801.     Deposits of Moneys

.  Moneys in each of the funds and accounts created by and referred to in this Ordinance shall be deposited in a bank or banks located in the State of Missouri which are members of the Federal Deposit Insurance Corporation, and all such bank deposits shall be continuously and adequately secured by the banks holding such deposits as provided by the laws of the State of Missouri.

Section 802.     Investment of Funds

.  Subject to the applicable requirements of the Original Ordinance so long as any of the Outstanding Parity Bonds remain outstanding, moneys held in any Fund or Account referred to in this Ordinance may be invested by the City in accordance with the Tax Compliance Certificate, in Permitted Investments.  No such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such Fund or Account was created provided that no investment in the 2004 Bond Reserve Account may have a maturity more than five years after the date of the investment without the approval of the 2004 Bond Insurer.  All interest on any investments held in any Fund or Account shall accrue to and become a part of such Fund or Account.  In determining the amount held in any Fund or Account under any of the provisions of this Ordinance, obligations shall be valued as of March 15 and November 15 of each year at the market value thereof (exclusive of accrued interest) taking into account any contracts relating to the obligations held in such Fund or Account.  If and when the amount held in any Fund or Account shall be in excess of the amount required by the provisions of this Ordinance, such excess shall be paid and credited to the System Revenue Fund.


ARTICLE IX.         

PARTICULAR COVENANTS OF THE CITY

The City Council covenants and agrees, on behalf of itself and the City, with each of the Original Purchasers and owners of any of the Bonds, that so long as any of the Bonds remain Outstanding and unpaid, as follows and subject to the applicable requirements of the Original Ordinance so long as any of the Outstanding Parity Bonds remain outstanding:

Section 901.     Performance of Duties

.  The City Council will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance and in each and every Bond executed and delivered hereunder; that it will promptly pay or cause to be paid, but solely from the Trust Estate, the principal of and interest on every Bond issued hereunder, on the dates and in the places and manner prescribed in such Bond, and that it will, prior to the maturity of each installment of interest and prior to the maturity of each such Bond, at the times and in the manner prescribed herein, deposit or cause to be deposited, from the Net Revenues pledged, the amounts of money specified herein.  All Bonds, when paid, shall be cancelled by the Paying Agent and Bond Registrar.

Section 902.     Legal Authority

.  The City Council is duly authorized under the Act, to issue the Bonds, it is lawfully qualified to pledge the Net Revenues of the System and other income pledged to the payment of the Bonds in the manner prescribed herein and has lawfully exercised such rights, all action on its part for the creation and issuance of the Bonds has been duly and effectively taken, and the Bonds in the hands of the owners thereof are and will be valid and enforceable special obligations of the City in accordance with their terms.

Section 903.     Rate Covenant

.  1.  The City shall charge and collect rates, fees and other charges for the sale of electric power and energy, water and other services, facilities and commodities of the System as shall be required to provide revenues and income (including investment income) at least sufficient in each Fiscal Year for the payment of the sum of:

(a)    will equal at least 110% of the Debt Service Requirement on all Parity Bonds then Outstanding for the year of computation and 100% of the Debt Service Requirement on all Subordinate Bonds then Outstanding for the year of computation;

(b)    will enable the City to make all required payments, if any, into the Reserve Account, the Renewal and Replacement Account, and the Rebate Fund and to any Credit Facility Provider, any Reserve Account Credit Facility Provider, and any Qualified Hedge Provider;

(c)    will remedy all deficiencies in required payments into any of the funds and accounts established under the Bond Ordinance from prior Fiscal Years; and

(d)    all other charges or liens whatsoever payable out of Revenues during such Fiscal Year.

The collection of revenues and income (including investment income) in any Fiscal Year in an amount in excess of the aggregate payments specified in this subsection 1 for such Fiscal Year shall not be taken into account as a credit against such aggregate payments for any subsequent Fiscal Year or years.

2.    The City shall review its financial condition in accordance with the provisions of the Charter of the City for the purpose of estimating whether the Revenues and income (including investment income) from the operation of the System will be sufficient to provide all of the payments and meet all other requirements as specified in this Section.  If as a result of such review the City determines that such Revenues and income may not be sufficient to provide such payments and meet such other requirements, it shall forthwith make a study for the purpose of making a schedule of rates, fees and charges for the System which will cause sufficient Revenues and income to be collected in the following Fiscal Year to provide funds for all the payments and other requirements as specified in this Section for such following Fiscal Year and will cause additional revenues and income to be collected in such following and later Fiscal Years sufficient to restore the amount of such deficiency at the earliest practicable time.  If, in any Fiscal Year, the revenues and income collected shall not have been sufficient to provide all of the payments and meet all other requirements as specified in said subsection 1, the City shall as promptly as permitted by law establish and place in effect a schedule of rates, fees and charges which will cause sufficient revenues and income to be collected.

3.    The City will not furnish or supply power, energy, water or any other service or commodity free of charge to any person, firm or corporation, public or private, and the City will promptly enforce the payment of any and all accounts owing to the City by reason of the ownership and operation of the System, to the extent dictated by sound business practice.

4.    The failure in any Fiscal Year to comply with the covenant in subsection 1 of this Section shall not constitute an Event of Default under the Ordinance, if the City shall comply with subsection 2 of this Section.

Nothing in this Ordinance contained shall be construed to prevent the continuous collection of reasonable rates, charges, and fees for the use of said System and facilities after the Bonds issued pursuant to this Ordinance shall have been paid and redeemed, together with all interest thereon, nor to prevent at that time the pledge and application of said Net Revenues to the payment of other bonds which may be issued by the City.

Section 904.     Restrictions on Mortgage or Sale of System

.  Except as expressly permitted in the Bond Ordinance, the City irrevocably covenants, binds, and obligates itself not to sell, lease, encumber, or in any manner dispose of the System as a whole or in part until all of the Bonds and all interest thereon shall have been paid in full or provision for payment has been made in accordance with Article XII.

The City shall have and hereby reserves the right to sell, lease, or otherwise dispose of any of the property comprising a part of the System in the following manner, if any one of the following conditions exists:  (i) such property is not necessary for the operation of the System; (ii) such property is not useful in the operation of the System; (iii) such property is not profitable in the operation of the System; or (iv) the disposition of such property will be advantageous to the System and will not adversely affect the security for the Bondowners.  Further, the City reserves the right to transfer the System as a whole to any political subdivision or authority or agency of one or more political subdivisions of the State to which may be delegated the legal authority to own and operate the System, or any portion thereof, on behalf of the public, and which undertakes in writing, filed with the City, the City's obligations under the Bond Ordinance.  In connection with any sale, lease or disposition authorized by this paragraph, there shall be first filed with the City:  (i) an opinion of Bond Counsel to the effect that such sale will not adversely affect the extent to which interest on any Tax-Exempt Bonds is excluded from gross income for federal income tax purposes; and (ii) the Director of Finance certifies that the estimated Net Revenues of the remaining System facilities for the then next succeeding Fiscal Year (and any other Revenues pledged as security) plus the estimated Net Revenues of the facilities, if any, to be added to the System satisfy the earnings test provided for in Article X of this Ordinance governing the issuance of Additional Bonds.  The City shall apply the proceeds of any such sale, lease or disposition, (i) to redemption of Outstanding Bonds in accordance with the provisions governing repayment of Bonds in advance of maturity, (ii) to replacement of the facility so disposed of by another facility, the revenues of which shall be incorporated into the System as hereinbefore provided or (iii) for any lawful expenditure with respect to the System;

The City may lease or make contracts or grant licenses for the operation of, or grant easements or other rights with respect to, any part of the System if such lease, contract, license, easement or right does not, in the opinion of the City, materially impede or unduly restrict the operation by the City of the System.

Section 905.     Operation of the System

.  The System shall be maintained by the City so long as any of the Bonds remain outstanding.  The City will not do or suffer any act or thing whereby the System or any part thereof might or could be impaired, and at all times it will maintain, preserve, and keep the real and tangible property constituting the System and every part thereof in good condition, repair, and working order and maintain, preserve, and keep all structures and equipment pertaining thereto and every part and parcel thereof in good condition, repair, and working order.  The System and the facilities thereof and therein shall be operated and maintained under the direction and supervision of the Director of the System, subject to the direction of the City Manager and the City Council, and all fees, charges, and other revenues received from the operation of said System shall be collected by said officer, through agents or employees thereunto duly authorized, and all such Revenues shall be deposited at least weekly by the City in a bank which is a member of the Federal Deposit Insurance Corporation, and shall be credited by the appropriate officer of the City, on the books of the City, to the System Revenue Fund, as provided in Section 701 of this Ordinance.

Section 906.     Insurance

.  With respect to the System, the City will carry adequate public liability, fidelity and property insurance, such as is maintained by similar utilities as the System.

The City shall indemnify itself against the usual hazards incident to the construction of any Project, and without in any way limiting the generality of the above, shall:  (a) require each construction contractor and each subcontractor to furnish a bond, or bonds, of such type and in amounts adequate to assure the faithful performance of their contracts and the payment of all bills and claims for labor and material arising by virtue of such contracts; and (b) require each construction contractor or the subcontractor to maintain at all times until the completion and acceptance of the Project adequate compensation insurance for all of their employees and adequate public liability and property damage insurance for the full and complete protection of the City from any and all claims of every kind and character which may arise by virtue of the operations under their contracts, whether such operations be by themselves or by anyone directly or indirectly for them, or under their control.

All such policies shall be for the benefit of and made payable to the City and shall be on deposit with the City; provided, however, the City may elect to be a self-insurer with respect to any risks for which insurance is required under this Section.  The cost of such insurance may be paid as an Operating Expense.

    All moneys received for losses under any such insurance policies, except public liability policies, are hereby pledged by the City as security for the Bonds until and unless such proceeds are paid out in making good the loss or damage in respect of which such proceeds are received, either by repairing the property damaged or replacing the property destroyed or by depositing the same in the Renewal and Replacement Account.  Adequate provision for making good such loss and damage shall be made within 120 days from the date of the loss. Insurance proceeds not used in making such provision shall be deposited in the Renewal and Replacement Account on the expiration of such 120-day period. Such insurance proceeds shall be payable to the City by appropriate clause to be attached to or inserted in the policies.

Section 907.     Books, Records and Accounts

.  The City will keep accurate financial records and proper books and accounts (entirely separate but within all other records and accounts of the City) in which complete and correct entries will be made of all dealings and transactions of or in relation to the System of the City.  Such accounts shall show the amount of revenues received from the System, the application of such revenues, and all financial transactions in connection therewith. Said books shall be kept by the City according to standard governmental accounting practices.

Section 908.     Annual Budget

.  Prior to the commencement of each Fiscal Year, the Director of Finance will cause to be prepared and submitted to the City Council for approval and filed in the office of the City Clerk a budget setting forth the estimated receipts and expenditures of the System for the next succeeding Fiscal Year in accordance with the Act.  The Director of Finance shall mail a copy of said budget to the 2004 Bond Insurer at the time said budget are made available to the City Council and the Director of Finance.  The Director of Finance will mail a copy of said budget to the Original Purchaser of the Bonds upon request.  Said annual budget shall be prepared in accordance with the requirements of the Act and the laws of Missouri and shall contain all information as shall be required by the Act and such laws.

Section 909.     Annual Audit

.  Annually, promptly after the end of the Fiscal Year, the City Council will cause an audit to be made of the System for the preceding Fiscal Year by a certified public accountant or firm of certified public accountants to be employed by the City Council for that purpose, or, where appropriate, reflecting in reasonable detail the financial condition and record of operation of the City, the System, Revenues and Operating Expenses, including particularly the use of and rates charged for the use of, and the insurance on, the System and the status of the several Accounts and Funds established in this Ordinance.

Within 30 days after the completion of each such audit, a copy thereof shall be filed in the office of the Director of Finance, and, upon request, a duplicate copy of said audit shall be mailed to the Original Purchaser of the Bonds.  The Director of Finance shall mail a copy of said audit to the 2004 Bond Insurer , any, at the time said audit is made available to the City Council and the Director of Finance.  Such audits shall at all times during the usual business hours be open to the examination and inspection by any Owner of any of the Bonds, or by anyone acting for or on behalf of such Owner.

As soon as possible after the completion of such annual audit, the City Council shall review such audit, and if any audit shall disclose that proper provision has not been made for all of the requirements of this Ordinance and the Act, the City covenants and agrees that it will promptly cure such deficiency and will promptly proceed to increase the rates, fees and charges to be charged for the use and services furnished by the System as may be necessary to adequately provide for such requirements.

Section 910.     Bondowner’s and 2004 Bond Insurer’s Right of Inspection

.  The Owner or Owners of any of the Bonds and the 2004 Bond Insurer shall have the right at all reasonable times to inspect the System and all records, accounts and data relating thereto, and any such Owner shall be furnished all such information concerning the System and the operation thereof which such Owner may reasonably request.

Section 911.     Contract

.  The provisions of this Ordinance shall constitute a contract between the City, acting by and through the City Council, and the owners of the Bonds herein authorized to be issued, and each of them, and the said City Council hereby pledges its good faith to the performance of each and every covenant thereof.

Section 912.     Tax Covenants

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(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 gross income for federal income tax purposes of the interest on the Bonds and (2) it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on the Bonds.  The City will, in addition, adopt such other ordinances or Ordinances and take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, 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 comply with all requirements of Section 148 of the Code to the extent applicable to the Bonds, (2) it will use the proceeds of the Bonds as soon as practicable and with all reasonable dispatch for the purposes for which the Bonds are issued, and (3) 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 and agrees that it will pay or provide for the payment from time to time of all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any Treasury Regulations applicable to the Bonds from time to time.  This covenant shall survive payment in full or defeasance of the Bonds.  The City specifically covenants to pay or cause to be paid to the United States, the required amounts of rebatable arbitrage at the times and in the amounts as determined by the Tax Compliance Certificate.  Notwithstanding anything to the contrary contained herein, the Tax Compliance Certificate may be amended or replaced if, in the opinion of Bond Counsel, such amendment or replacement will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds.

(d)    The City covenants and agrees that (to the extent within its power or direction) it will not use any portion of the proceeds of the Bonds, including any investment income earned on such proceeds, directly or indirectly, (1) in a manner that would cause any Bond to be a “private activity bond” (other than qualified §501(c)(3) bonds) within the meaning of Section 141(a) of the Code, or (2) to make or finance loans to persons who are not taxexempt organizations. For purposes of the preceding sentence, a loan to an organization described in Section 501(c)(3) of the Code for use with respect to an unrelated trade or business, determined according to Section 513(a) of the Code, constitutes a loan to a person who is not a taxexempt organization.

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

Section 913.     Further Assurance

.    At any and all times the City shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, acts, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, pledging, assigning and confirming all and singular the rights, Revenues and other moneys, securities and funds hereby pledged or assigned, or intended so to be, or which the City may become bound to pledge or assign.

Section 914.     Operation and Maintenance of System

.  The City shall at all times operate or cause the System to be operated properly and in an efficient and economical manner, consistent with good business and utility operating practices, and shall maintain, preserve, reconstruct and keep the same or cause the same to be so maintained, preserved, reconstructed and kept, with the appurtenances and every part and parcel thereof, in good repair, working order and condition, and shall from time to time make, or cause to be made, all necessary and proper repairs, replacements and renewals so that at all times the operation of the System may be properly and advantageously conducted.

Section 915.     Payment of Taxes and Charges

.  The City will from time to time duly pay and discharge or cause to be paid and discharged all taxes, assessments and other governmental charges, or required payments in lieu thereof, lawfully imposed upon the properties of the City or upon the rights, revenues, income, receipts, and other moneys, securities and funds of the City when the same shall become due (including all rights, moneys and other property transferred, assigned or pledged under the Ordinance), and all lawful claims for labor and material and supplies, except those taxes, assessments, charges or claims which the City shall in good faith contest by proper legal proceedings if the City shall in all such cases have set aside on its books reserves deemed adequate with respect thereto.

ARTICLE X.    

ADDITIONAL BONDS


Section 1001.     Senior Lien Bonds

.  The City Council covenants and agrees that so long as any of the Bonds remain outstanding and unpaid, the City will not issue any Additional Bonds or other debt obligations payable out of the Net Revenues of the System or any part thereof which are superior to the Bonds.

Section 1002.     Parity Lien Bonds

.  The City may issue one or more additional series of revenue bonds to finance the cost of the System or to refund Outstanding Bonds, to be secured by a parity lien on and equally and ratably payable from the Net Revenues pledged to the Bonds, provided in each instance that the applicable requirements of the Original Ordinance are met so long as any of the Outstanding Parity Bonds remain Outstanding and that the following conditions are met:

(a)    The City is in compliance with all covenants and undertakings in connection with all Parity Bonds of the City then Outstanding and payable from the Net Revenues of the System or any part thereof; and

(b)    The additional facility or facilities (if any) to be built or acquired from the proceeds of the Additional Bonds is or are to be made a part of the System, and its or their Net Revenues are pledged as additional security for the Additional Bonds and all Bonds Outstanding against the System; and

(c)    Additional Bonds may be issued for any purpose permitted by applicable law on a parity with all Parity Bonds and secured by an equal charge and lien on the Net Revenues, provided that the City shall provide the following as a condition to the issuance and delivery of such Parity Bonds:

    (1)  A Certificate of an Authorized Officer of the City certifying that the Revenues Available For Debt Service of any 12 consecutive calendar months out of the 24 calendar months immediately preceding the issuance of such proposed Additional Bonds, are not less than one and twenty-five percent (125%) of the maximum total Debt Service for any succeeding Fiscal Year on all Parity Bonds which will be Outstanding immediately after the issuance of the proposed Additional Bonds.  In the event any adjustment of rates with respect to the System has become effective subsequent to the beginning of the 12-month period selected for such calculation, the Authorized Officer may adjust the Revenues Available For Debt Service by adding thereto an estimate of such additional Revenues Available For Debt Service for such 12 month period which would have resulted had such rate adjustment been in effect for the entire period; or

    (2)    A Certificate of Consulting Engineers certifying that the estimated Revenues Available For Debt Service for the Fiscal Year immediately following the year in which the project, the cost of construction of which is being financed by such Additional Bonds, is to be in commercial operation (or for the Fiscal Year immediately following the year in which such Additional Bonds are issued, if no project is to be financed thereby) are not less than one and twenty-five percent (125%) of the maximum total Debt Service for any succeeding Fiscal Year on all Parity Bonds which will be Outstanding immediately after the issuance of the proposed Additional Bonds.  The Consulting Engineers may adjust the estimated Revenues Available For Debt Service by adding thereto any estimated increase in revenue resulting from any increase in water and electric rates which, in the opinion of the Consulting Engineers, are economically feasible and reasonably considered necessary based on projected operations of the System.  Additional Bonds may be issued notwithstanding the restrictions upon the issuance of Additional Bonds set out in this subparagraph, if in the opinion of the Consulting Engineer, the proceeds of such Additional Bonds are necessary to repair any damage or loss to the System if the System has been destroyed or damaged by disaster to such an extent that it cannot be operated or if it is necessary to keep the System in good operating condition after such damage or loss.

    (e)    The Ordinance of the City Council authorizing the Additional Bonds shall provide for, among other things and without limitation, the following:

        (1)    payments of principal and interest on any dates;


        (2)    such additional deposits to the Renewal and Replacement Account as the City Council deems necessary and desirable; and


        (3)    such provisions for the redemption of bonds as the City Council deems necessary and desirable.

Section 1003.     Alternative Bond Structures

.  Nothing contained herein shall be construed to prohibit or restrict the ability of the City to issue variable rate obligations with or without demand or tender options, alone or in combination with such other obligations as may be authorized hereunder, as Additional Bonds hereunder in accordance with the provisions hereof to the extent permitted by law. Nothing contained herein shall be construed to prohibit or restrict the ability of the City to issue commercial paper, alone or in combination with such other obligations as may be authorized hereunder, as Additional Bonds hereunder in accordance with the provisions hereof to the extent permitted by law.  No provision contained in the Ordinance, shall be construed to limit or restrict the ability or authority of the City to issue any type of obligation under the Ordinance to the extent the same is permitted by applicable law and not contrary to the provisions of the Ordinance, or to secure the payment of any Series of Bonds by security in addition to the Revenues and Accounts established by the Ordinance, which additional security need not secure the payment of all Series of Bonds.

Any Approving Ordinance that authorizes the issuance of variable rate obligations may, to the extent permitted by law, provide that, for any period with respect to which a numerical interest rate for such obligation cannot be ascertained on the date of the initial issuance and delivery-thereof, the interest rate thereon for such period may be assumed to be a rate equal to the rate fixed-rate bonds of the City having a term of 20 years and level debt service would then bear, for purposes of determining Debt Service Requirement and Reserve Requirement under the Ordinance.  Any Approving Ordinance that authorizes the issuance of obligations, the calendar dates on which any portion of the principal amount thereof will become due and payable (other than at the option of the City) cannot be ascertained on the date of the initial issuance and delivery thereof, may, to the extent permitted by applicable law, provide that, for purposes of determining Debt Service Requirement and Reserve Requirement under the Ordinance, the principal amount of such obligations may be assumed to become due and payable in accordance with a 20-year level debt service schedule.  For purposes of this paragraph, the word “obligations” when used with respect to any issue of commercial paper shall include the commercial paper initially issued and all commercial paper issued in all subsequent rollovers of all or any portion of the commercial paper initially issued, and, after such initial issuance, the principal amount of such obligation consisting of an issue of commercial paper shall be deemed to be the initial principal amount issued or such lesser principal amount as may be most recently authorized and issued subsequent thereto.

Section 1004.     Refunding Bonds

.  Additional Bonds issued to refund all or any part of any outstanding series of Parity Bonds may be issued without compliance with the requirements of Section 1002 (a) and (c) if the City shall have obtained a report from a Financial Advisor demonstrating that the refunding will reduce the total debt service payments on Outstanding Senior Bonds on a present value basis.    

Section 1005.     Subordinate Bonds

.  The City may issue one or more additional series of revenue bonds or other revenue obligations payable out of the Net Revenues of the System, which are junior and subordinate to the Parity Bonds provided at the time of the issuance of such additional revenue bonds or obligations the following conditions are met:

(a)    The City shall not be in default in the payment of principal of or interest on the Parity Bonds 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; and

(b)    The additional facilities to be constructed or acquired from the proceeds of the additional Subordinate Bonds are made part of the System, and the Net Revenues derived therefrom are pledged as security for the Subordinate Bonds and all Bonds Outstanding against the System.

Such Subordinate Bonds shall be junior and subordinate to the Parity Bonds so that if at any time the City shall be in default in paying either interest on or principal of the Parity Bonds, or if the City shall be in default in making any payments required to be made by it under the provisions of Section 702 of this Ordinance, the City shall make no payments of either principal of or interest on said Subordinate Bonds until said default or defaults be cured.  In the event of the issuance of any such Subordinate Bonds, the City, subject to the provisions aforesaid, may make provision for paying the principal of and interest on said Subordinate Bonds out of moneys in the System Revenue Fund.

Section 1006.     Credit Facilities and Hedge Agreements

.  In connection with the issuance of any Bonds under the Bond Ordinance, the City may obtain or cause to be obtained one or more Credit Facilities providing for payment of all or a portion of the principal of, premium, if any, or interest due or to become due on such Bonds, providing for the purchase of such Bonds by the Credit Facility Provider, or providing funds for the purchase of such Bonds by the City.  In connection therewith the City shall enter into Credit Facility Agreements with such Credit Facility Providers providing for, among other things, (i) the payment of fees and expenses to such Credit Facility Providers for the issuance of such Credit Facilities; (ii) the terms and conditions of such Credit Facilities and the Bonds affected thereby; and (iii) the security, if any, to be provided for the issuance of such Credit Facilities.  The City may secure any Credit Facility by an agreement providing for the purchase of the Bonds secured thereby with such adjustments to the rate of interest, method of determining interest, maturity, or redemption provisions as are specified by the City in the applicable Approving Ordinance.  The City may in a Credit Facility Agreement agree to directly reimburse such Credit Facility Provider for amounts paid under the terms of such Credit Facility, together with interest thereon; provided, however, that no Reimbursement Obligation shall be created for purposes of the Bond Ordinance until amounts are paid under such Credit Facility.  Any such Reimbursement Obligation shall be deemed to be a part of the Bonds to which the Credit Facility relates which gave rise to such Reimbursement Obligation, and references to principal and interest payments with respect to such Bonds shall include principal and interest (except for Additional Interest and principal amortization requirements with respect to the Reimbursement Obligation that are more accelerated than the amortization requirements for the related Bonds, without acceleration) due on the Reimbursement Obligation incurred as a result of payment of such Bonds with the Credit Facility.  All other amounts payable under the Credit Facility Agreement (including any Additional Interest and principal amortization requirements with respect to the Reimbursement obligation that are more accelerated than the amortization requirements for the related Bonds, without acceleration) shall be fully subordinate to the payment of debt service on the related class of Bonds.  Any such Credit Facility shall be for the benefit of and secure such Bonds or portion thereof as specified in the applicable Approving Ordinance.

    In connection with the issuance of any Bonds or at any time thereafter so long as such Bonds remain Outstanding, the City may enter into Hedge Agreements with Qualified Hedge Providers, and no other providers, with respect to any Bonds. The City shall authorize the execution, delivery, and performance of each Hedge Agreement in a Supplemental Ordinance, in which it shall designate the related Hedged Bonds.  The City's obligation to pay Hedge Payments may be secured by a pledge of, and lien on, the Net Revenues on a parity with the lien to secure the related Hedged Bonds, or may be subordinated in lien and right of payment to the payment of the Bonds, as determined by the City.

Section 1007.     Other Obligations

.  The City expressly reserves the right, at any time, to adopt one or more other bond ordinances and reserves the right, at any time, to issue any other obligations not secured by the amounts pledged under the Bond Ordinance.

ARTICLE XI.    

DEFAULT AND REMEDIES


Section 1101.     Acceleration of Maturity in Event of Default

.  The City covenants and agrees that if any of the following events (“Events of Default”) shall occur:

(a)    Default by the City in the due and punctual payment of any interest on any Bond;

(b)    Default by the City in the due and punctual payment of the principal of or redemption premium, if any, on any Bond, whether at the stated maturity or accelerated maturity thereof, or at the redemption date thereof;

(c)    Default in the performance or observance of any other of the covenants, agreements or conditions on the part of the City in this Ordinance or in the Bonds contained (other than a default described in (a) or (b) above) or in any other document or instrument that secures or otherwise relates to the debt and obligations hereby secured, and the continuance thereof for a period of 30 days after written notice thereof shall have been given to the City by the Owners of not less than 25% in aggregate principal amount of Bonds then outstanding or by the 2004 Bond Insurer , if any; provided, however, if any default shall be such that it cannot be corrected within such 30day period, it shall not constitute an Event of Default if corrective action is instituted by the City within such period and diligently pursued until the default is corrected; or

(d)    The City files a petition as a debtor under the United States Bankruptcy Code;

then at any time thereafter and while such Event of Default shall continue, the 2004 Bond Insurer acting alone, or the owners of 25% in principal amount of the Bonds then outstanding with the prior written consent of the 2004 Bond Insurer may, by written notice to the City filed in the office of the Director of Finance or delivered in person to said President, 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 shall have 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 shall have 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 shall have been cured, then and in every such case the owners of a majority in principal amount of the Bonds then outstanding, by written notice to the City given as hereinbefore specified, and only with the written approval of the 2004 Bond Insurer so long as the 2004 Bond Insurer is not in default in its payment obligations under the 2004 Bond Insurance Policy, 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 1102.     Remedies

.  The provisions of this Ordinance, including the covenants and agreements herein contained, shall constitute a contract among the City, the owners of the Bonds and the 2004 Bond Insurer and either (i) the owner or owners of not less than 10% in principal amount of the Bonds at the time outstanding, with the prior written consent of the 2004 Bond Insurer or (ii) the 2004 Bond Insurer  who shall be deemed to be the owner of all Bonds insured by it, shall have the right for the equal benefit and protection of all 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 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 owners of the Bonds.

Section 1103.     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 owners of such outstanding Bonds.

Section 1104.     Remedies Cumulative

.  No remedy conferred herein upon the bondowners or the 2004 Bond Insurer 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 owner of any Bond or the 2004 Bond Insurer shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon.  No delay or omission of any bondowner or the 2004 Bond Insurer 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 owners of the Bonds and the 2004 Bond Insurer  by this Ordinance may be enforced and exercised from time to time and as often as may be deemed expedient.  In case any suit, action or proceedings taken by any bondowner or the 2004 Bond Insurer  on account of any default or to enforce any right or exercise any remedy shall have been discontinued or abandoned for any reason, or shall have been determined adversely to such bondowner or the 2004 Bond Insurer then, and in every such case, the City, the owners of the Bonds and the 2004 Bond Insurer  shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the bondowners and the 2004 Bond Insurer shall continue as if no such suit, action or other proceedings had been brought or taken.

Section 1105.     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 XII.    

DEFEASANCE


Section 1201.     Defeasance

.  When any or all of the Bonds or the interest payments thereon shall 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 or the interest payments thereon 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 shall have 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 of said Bonds or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned on any such Defeasance Obligations, 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 give such notice of redemption in compliance with Section 303 and to redeem such Bonds.  Any moneys 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 Owners of the Bonds, and such moneys 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. A copy of any accountant’s report with respect to the sufficiency of any amounts deposited in escrow pursuant to this Section 1201 shall be provided to the 2004 Bond Insurer , if any.


ARTICLE XIII.    

AMENDMENTS


Section 1301.     Amendments

.  Subject to the provisions hereinafter set forth, the rights and duties of the City, the City Council 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 Council with the written consent of the Owners of not less than a majority in aggregate principal amount of the Bonds then outstanding and the 2004 Bond Insurer such consent to be evidenced by an instrument or instruments executed and acknowledged by such Owners and the 2004 Bond Insurer in like manner as a deed for the conveyance of real estate in the State of Missouri and accompanied by appropriate proof of ownership of the Bond or Bonds with respect to which such consent is given, which said instruments shall be filed with the City Clerk, provided always:

(a)    that the obligation of said City Council to pay the principal of the Bonds at maturity, and the interest thereon, as the same from time to time become due, shall continue unimpaired and the maturity of any payment of principal or interest due upon any Bond shall not be extended;

(b)    that no modification shall give any Bond or Bonds any preference over any other Bond or Bonds hereby authorized; and

(c)    that no modification shall reduce the percentage of Bonds required for the modification or alteration of the terms and provisions of the Bonds or of this Ordinance.

Any provision of the Bonds or of this Ordinance may, however, be amended or modified by Ordinance duly adopted by the City Council at any time in any respect with the written consent of the Owners of all of the Bonds at the time outstanding and the 2004 Bond Insurer , if any.

Without the consent of Bondowners, but with the notice to the 2004 Bond Insurer the City Council may amend or supplement the 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.

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 consent to such modification by the requisite Owners of the Bonds then outstanding and the 2004 Bond Insurer , if any.  It shall not be necessary to note on any of the outstanding Bonds any reference to such amendment or modification.

The City Clerk shall furnish a complete, executed original transcript of proceedings had in connection with any amendment of, or supplement to, this Ordinance to the 2004 Bond Insurer and to each Rating Service if then rating the Bonds, within 30 days of the effective date of such amendment or supplementation.


ARTICLE XIV.    

MISCELLANEOUS PROVISIONS

Section 1401.     Notices, Consents and Other Instruments

.  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 and Bond Registrar 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 registration books of the City maintained by the Paying Agent and Bond Registrar.

Any notice that is required to be given to a Owner of a Bond, to the Paying Agent or otherwise pursuant to this Ordinance shall also be provided to the 2004 Bond Insurer , if any.  All notices required to be given to the 2004 Bond Insurer under this Ordinance shall be in writing and shall be sent by registered or certified mail addressed to the 2004 Bond Insurer at the address set forth in Section 704 hereof..

Section 1402.     Further Authority

.  The officers of the City, including the President, Director of Finance, City Clerk, and Director of Finance and the Director of Finance and the Vice President, shall be, and they hereby are, authorized and directed to execute all agreements, documents and certificates 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 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 1403.     Matters Pertaining to the 2004 Bond Insurer

.  Except with respect to matters listed in parts (a), (b) and (c) of Section 1301 requiring consent of all of the Owners of the Bonds then outstanding, the 2004 Bond Insurer  shall be deemed to be the sole Owner of the Bonds insured by it for the purpose of exercising any voting right or privilege or giving any consent or direction or taking any other action that the Registered Owners of the Bonds insured by it are entitled to take pursuant to this Ordinance.

Anything contained in this Ordinance or in the Bonds to the contrary notwithstanding, the existence of all rights given to the 2004 Bond Insurer  under this Ordinance with respect to the giving of consents or approvals or the direction of proceedings are expressly conditioned upon its timely and full performance of its payment obligations under the 2004 Bond Insurance Policy.  Any exercise by the 2004 Bond Insurer  of such rights is merely an exercise of the 2004 Bond Insurer ’s contractual rights and shall not be construed or deemed to be taken for the benefit or on behalf of the Bondowner nor does such action evidence any position of the 2004 Bond Insurer  positive or negative, as to whether Bondowner consent is required in addition to the 2004 Bond Insurer , if any.  Any such rights shall not apply if at any time the 2004 Bond Insurer  fails to make any payment pursuant to the 2004 Bond Insurance Policy or has been judged insolvent; provided, that the Indenture shall not in any way limit or affect the rights of the 2004 Bond Insurer  as a Bondowner, as subrogee of a Bondowner, as assignee of a Bondowner or as subrogee of the Trustee or to otherwise be reimbursed and indemnified for its costs and expenses and other payment on or in connection with the Bonds or the 2004 Bond Insurance Policy either by operation of law or at equity or by contract.

Section 1404.     Severability

.  If any section, subsection, paragraph, sentence, clause, or phrase of this Ordinance, or of the Bonds, shall ever be held to be unconstitutional or otherwise invalid by any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance, or of the Bonds, but this Ordinance, and the Bonds shall be construed and enforced as if such illegal or invalid provision had not been contained herein or therein.

Section 1405.     Governing Law

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

Section 1406.     Effective Date

.  This Ordinance shall take effect and be in full force from and after its passage by the City Council.

PASSED this 15th of March, 2004.