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05/22/2001 Ordinances 8677 I I I ORDINANCE NO. 810 17 SERIES AND SUPPLEMENTAL ORDINANCE AUTHORIZING AND DIRECTING THE ISSUANCE OF $51,500,000 (MORE OR LESS BUT NOT TO EXCEED $55,000,000) PRINCIPAL AMOUNT OF ELECTRIC SYSTEM REVENUE BONDS, 2001 SERIES, OF THE CITY OF GRAND ISLAND, NEBRASKA, FOR THE PURPOSE IMPROVING, EXTENDING AND EQUIPPING THE CITY'S ELECTRIC LIGHT AND POWER PLANT AND ELECTRIC DISTRIBUTION SYSTEM; DIRECTING THE APPLICATION OF THE PROCEEDS OF SAID BONDS; PRESCRIBING THE FORM, TERMS AND DETAILS OF SAID BONDS; PLEDGING AND HYPOTHECATING THE REVENUE AND EARNINGS OF THE ELECTRIC LIGHT AND POWER PLANT AND ELECTRIC DISTRIBUTION SYSTEM OF SAID CITY FOR THE PAYMENT OF SAID BONDS AND INTEREST THEREON; PROVIDING FOR THE COLLECTION, SEGREGATION AND APPLICATION OF THE REVENUES OF SAID PLANT AND SYSTEM; ENTERING INTO A CONTRACT ON BEHALF OF THE CITY WITH THE HOLDERS OF SAID BONDS; PROVIDING FOR THE SALE OF SAID BONDS; AUTHORIZING THE MAYOR TO DETERMINE THE FINAL TERMS OF SAID BONDS WITHIN CERTAIN SET LIMITATIONS AND PROVIDING FOR PUBLICATION OF THIS ORDINANCE IN PAMPHLET FORM. WHEREAS, the City of Grand Island (the "City") owns and operates its own electric light and power plant and electric distribution system which represents a revenue-producing undertaking of the City. WHEREAS, the City of Grand Island, Nebraska, a municipal corporation (the "City"), by Ordinance No. 8611 passed and approved on July 25,2000, entitled: AN ORDINANCE AUTHORIZING THE ISSUANCE OF ELECTRIC SYSTEM REVENUE BONDS, SERIES 2000, OF THE CITY OF GRAND ISLAND, NEBRASKA, IN THE AGGREGATE PRINCIPAL AMOUNT OF SIX MILLION ONE HUNDRED FORTY-FIVE THOUSAND DOLLARS ($6,145,000) FOR THE PURPOSE OF PAYING THE COSTS OF IMPROVING, EXTENDING AND EQUIPPING THE CITY'S ELECTRIC LIGHT AND POWER PLANT AND ELECTRIC DISTRIBUTION SYSTEM; DIRECTING THE APPLICATION OF THE PROCEEDS OF SAID BONDS; PRESCRIBING THE FORM, TERMS AND DETAILS OF SAID BONDS; PLEDGING AND HYPOTHECATING THE REVENUE AND EARNINGS OF THE ELECTRIC LIGHT AND POWER PLANT AND ELECTRIC DISTRIBUTION SYSTEM OF SAID CITY FOR THE PAYMENT OF SAID BONDS AND INTEREST THEREON; PROVIDING FOR THE COLLECTION, SEGREGATION AND APPLICATION OF THE REVENUES OF SAID PLANT AND SYSTEM; ENTERING INTO A CONTRACT ON BEHALF OF THE CITY WITH THE HOLDERS OF SAID I I I BONDS; AND PROVIDING FOR PUBLICATION OF THIS ORDINANCE IN PAMPHLET FORM. (said ordinance being hereinafter called "2000 Ordinance") has authorized the issuance of its Electric System Revenue Bonds, Series 2000 (the "2000 Bonds") for the purpose stated in the title thereto; and WHEREAS, the City has no bonds outstanding which are secured by the Revenues of the Electric System, other than the 2000 Bonds; and WHEREAS, it is necessary and advisable for the City to construct improvements and extensions for the Electric System consisting of two 40-Megawatt simple-cycle gas/oil-fIred combustion turbines and related equipment, to pay the costs of installation of such turbines and equipment and related site improvements (collectively, the "2001 Project"), and in order to pay the costs of the 2001 Project it is necessary and advisable for the City to. issue its Electric System Revenue Bonds as herein provided in the principal amount of $51,500,000 (subject to increase in such amount up to $55,000,000, in accordance with the provisions of Section 13 ofthis 2001 Series and Supplemental Ordinance) (the "2001 Bonds"). WHEREAS, the 2000 Ordinance authorizes the City to issue Additional Bonds, subject to certain conditions as set forth in Section 14 of the 2000 Ordinance, which conditions are determined and directed to be satisfIed in accordance with Section 13 of this 2001 Series and Supplemental Ordinance, and requires that such Additional Bonds be authorized by a Series and Supplemental Ordinance of the City (being this ordinance, herein referred to as the "2001 Series and Supplemental Ordinance"); and WHEREAS, it is deemed necessary and advisable that the City authorize, issue and sell, pursuant to the 2000 Ordinance and this 2001 Series and Supplemental Ordinance, Additional 2 I Bonds for the purposes and in the amounts hereinafter set forth and pursuant to the authorization provided in Sections 18-1803 to 18-1805, R.R.S. Neb. 1997. BE IT ORDAINED by the Mayor and Council of the City of Grand Island, Nebraska: Section 1. Definitions of Particular Words and Terms. Unless the context shall clearly indicate some other meaning or may otherwise require, the words and terms used in this 2001 Series and Supplemental Ordinance (including the preambles hereto) which are defined in the 2000 Ordinance shall have, as used herein, the meanings set forth in the 2000 Ordinance. Section 2. Authorization of 2001 Bonds. For the purpose of paying the cost of the 2001 Project, paying certain costs of issuance of the 2001 Bonds, and funding the 2001 Reserve Sub-Account (as hereinafter defined), there is hereby authorized to be issued, pursuant to Section 14 I of the 2000 Ordinance, a series of Additional Bonds in the principal amount of Fifty-one Million Five Hundred Thousand Dollars ($51,500,000) (subject to increase in such amount up to $55,000,000, in accordance with the provisions of Section 13 ofthis 2001 Series and Supplemental Ordinance), to be designated "Electric System Revenue Bonds, Series 2001" (the "2001 Bonds"). The 2001 Bonds shall bear interest at rates per annum determined in accordance with the provisions of Section 13 and become due on August 15 of the years as indicated below:i I 3 I I I Principal Amount $2,605,000 $2,735,000 $2,870,000 $3,015,000 $3,165,000 $3,320,000 $3,490,000 $4,455,000 $4,680,000 $4,910,000 $5,155,000 $5,415,000 $5,685,000 Maturing on August 15 Of the Year Shown 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 The 2001 Bonds shall be issued in fully registered form in the denomination of $5,000 or any integral multiple thereof. The date of original issue for the 2001 Bonds shall be the date of delivery thereof. Interest on the 2001 Bonds, at the respective rates for each maturity, shall be payable semiannually on February 15 and August 15 of each year, commencing February 15,2002 (each of said dates an "Interest Payment Date") and the 2001 Bonds shall bear such interest to maturity (or earlier redemption) from the date of original issue or the most recent Interest Payment Date, whichever is later. Interest shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The interest due on each Interest Payment Date shall be payable to the registered owners of record as of the close of business on the last business day of the month immediately preceding the month in which such Interest Payment Date occurs (the "Record Date"), subject to the provisions of Section 4 hereof. The 2001 Bonds shall be numbered from 1 upwards in the order of their issuance. No 2001 Bond shall be issued originally or upon transfer or partial redemption having more than one principal maturity. The initial bond numbering and principal amounts for each of the 2001 Bonds issued shall be designated by the City's Treasurer as directed by the initial 4 I I I purchaser thereof. Payments of interest due on the 2001 Bonds prior to maturity or early redemption shall be made by the Paying Agent and Registrar, as designated pursuant to Section 3 hereof, by mailing a check or draft in the amount due for such interest on each Interest Payment Date to the registered owner of each 2001 Bond, as of the Record Date for such Interest Payment Date, to such owner's registered address as shown on the books of registration as required to be maintained in Section 3 hereof. Payments of principal due at maturity or at any date fixed for redemption prior to maturity, together with any unpaid interest accrued thereon, shall be made by said Paying Agent and Registrar to the registered owners upon presentation and surrender of the 2001 Bonds to said Paying Agent and Registrar. The City and said Paying Agent and Registrar may treat the registered owner of any 2001 Bond as the absolute owner of such bond for the purpose of making payments thereon and for all other purposes and neither the City nor the Paying Agent and Registrar shall be affected by any notice or knowledge to the contrary, whether such 2001 Bond or any installment of interest due thereon shall be overdue or not. All payments on account of interest or principal made to the registered owner of any 2001 Bond in accordance with the terms of this 2001 Series and Supplemental Ordinance shall be valid and effectual and shall be a discharge of the City and said Paying Agent and Registrar, in respect of the liability upon the 2001 Bonds or claims for interest to the extent of the sum or sums so paid. The maturity schedule set forth in this Section 2 is subject to modification and final determination in accordance with the provisions of Section 13 of this 2001 Series and Supplemental Ordinance. The terms of this Section 2 relating to the manner of payment for the 2001 Bonds are subject to the provisions of Section 8 with respect to the 2001 Bonds so long as the 2001 Bonds are issued and outstanding as "book-entry-only" bonds. Section 3. Paying Agent and Registrar, Registration of 2001 Bonds. Bank One Trust Company, National Association, Chicago, Illinois, has been designated as Trustee Paying 5 I Agent and Registrar under the 2000 Ordinance and is hereby designated to serve as Trustee, Paying Agent and Registrar for the 2001 Bonds (sometimes herein referred to as the "Paying Agent and Registrar" and sometimes as the "Trustee"). The Paying Agent and Registrar shall serve in such capacities under the terms of an agreement entitled "Trustee, Paying Agent and Registrar's Agreement" between the City and said Paying Agent and Registrar, the form of which is hereby approved. The Mayor and Clerk are hereby authorized to execute said agreement in substantially the form presented but with such changes as they shall deem appropriate or necessary. The Paying Agent and Registrar shall keep and maintain for the City books for the registration and transfer of the 2001 Bonds at the designated corporate trust office, as designated under the terms of said Trustee, Paying Agent and Registrar's Agreement. Any such designation may be changed by the Paying Agent and Registrar in accordance with the terms of said agreement. The names and I registered addresses of the registered owner or owners of the 2001 Boods shall at all times be recorded in such books. Any 2001 Bond may be transferred pursuant to its provisions at the designated corporate trust office of the Paying Agent and Registrar by surrender of such bond for cancellation, accompanied by a written instrument of transfer, in form satisfactory to the Paying Agent and Registrar, dilly executed by the registered owner in person or by such owner's dilly authorized agent, and thereupon the Paying Agent and Registrar on behalf of the City will deliver at its office (or send by registered mail to the transferee owner or owners thereof at such transferee owner's or owners' risk and expense), registered in the name of the transferee owner or owners, a I new 2001 Bond or 2001 Bonds of the same interest rate, aggregate principal amount and maturity. To the extent of the denominations authorized for the 2001 Bonds by this 2001 Series and Supplemental Ordinance, one 2001 Bond may be transferred for several such 2001 Bonds of the same interest rate and maturity, and for a like aggregate principal amount, and several such 2001 6 I I I Bonds may be transferred for one or several such bonds, respectively, of the same interest rate and maturity and for a like aggregate principal amount. In every case of transfer of a 2001 Bond, the surrendered 200 1 Bond or Bonds shall be cancelled and destroyed. All 2001 Bonds issued upon transfer of the 2001 Bonds so surrendered shall be valid obligations of the City evidencing the same obligations as the 2001 Bonds surrendered and shall be entitled to all the benefits and protection of this 2001 Series and Supplemental Ordinance and the 2000 Ordinance to the same extent as the 200 1 Bonds upon transfer of which they were delivered. The City and said Paying Agent and Registrar shall not be required to transfer any 2001 Bond during any period from any Record Date until its immediately following Interest Payment Date or to transfer any 2001 Bond called for redemption for a period of 30 days next preceding the date fixed for redemption. The terms of this Section 3 are subject to the provisions of Section 8 with respect to the 2001 Bonds so long as the 2001 Bonds are issued and outstanding as "book-entry-only" bonds. Section 4. Special Record Date. In the event that payments of interest due on the 2001 Bonds on an Interest Payment Date are not timely made, such interest shall cease to be payable to the registered owners as of the Record Date for such Interest Payment Date and shall be payable to the registered owners of the 2001 Bonds as of a special date of record for payment of such defaulted interest as shall be designated by the Paying Agent and Registrar whenever moneys for the purpose of paying such defaulted interest become available. Section 5. Non-Business Days. If the date for payment of the principal of or interest on the 2001 Bonds shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the city (or cities) where the designated corporate trust office of the Paying Agent and Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which 7 I I I such banking institutions are authorized to close, and payment on such day shall have the same force and effect as if made on the nominal date of payment. Section 6. 2001 Bonds Subject to Redemption. 2001 Bonds maturing on or after August 15,2011, shall be subject to redemption, in whole or in part, prior to maturity at any time on or after the tenth anniversary of the date of delivery of the 2001 Bonds, at par plus accrued interest on the principal amount redeemed to the date fixed for redemption, provided that a redemption premium applicable to . such redemptions not to exceed 3% may be designated under the terms of Section 13 of this 2001 Series and Supplemental Ordinance. The 2001 Bonds from any maturity may be designated for such optional redemption in the sole discretion of the City. If less than an entire maturity is to be redeemed, the Trustee shall determine the selection of 2001 Bonds in any random manner deemed appropriate by the Trustee. 2001 Bonds shall be subject to redemption in part in a principal amount equal to $5,000 or any integral multiples thereof. Any 2001 Bond redeemed in part only shall be surrendered to the Paying Agent and Registrar in exchange for a new 2001 Bond evidencing the unredeemed principal thereof. Notice of redemption of any 2001 Bond called for redemption shall be given at the direction of the City by said Paying Agent and Registrar by mail not less than 30 days prior to the date fixed for redemption, first class, postage prepaid, sent to the registered owner of such 2001 Bond at said owner's registered address. Such notice shall designate the 2001 Bond or 2001 Bonds to be redeemed by maturity or otherwise, the date of original issue and the date fixed for redemption and shall state that such 2001 Bond or 2001 Bonds are to be presented for prepayment at the designated corporate trust office of said Paying Agent and Registrar. In case of any 2001 Bond partially redeemed, such notice shall specify the portion of the principal amount of such 2001 Bond to be redeemed. No defect in the mailing of notice for any 2001 Bond shall affect the sufficiency of the proceedings of the City designating the 2001 Bonds 8 I called for redemption or the effectiveness of such call for 2001 Bonds for which notice by mail has been properly given and the City shall have the right to direct further notice of redemption for any such bond for which defective notice has been given. The provisions of this Section 6 shall apply to any mandatory redemptions of2001 Bonds determined in accordance with the provisions of Section 13 of this 2001 Series and Supplemental Ordinance, except that such redemptions as determined shall be made by the Trustee without further direction. Any such mandatory redemptions shall be made at 100% of the stated principal amount of the 2001 Bonds to be redeemed plus accrued interest to the date fixed for redemption. The Trustee shall select 2001 Bonds to be redeemed within any maturity in the case of partial redemptions of a specific maturity for any such mandatory redemptions using any random method of selection deemed appropriate by the Trustee. Section 7. Form of 2001 Bonds. The 2001 Bonds shall be in substantially the I following form: I 9 I I I UNITED STATES OF AMERICA STATE OF NEBRASKA COUNTY OF HALL ELECTRIC SYSTEM REVENUE BOND, 2001 SERIES OF THE CITY OF GRAND ISLAND, NEBRASKA No. $ Interest Rate Maturity Date Date of Original Issue CUSIP No. August 15, 20_ , 2001 Registered Owner: Principal Amount: KNOW ALL PERSONS BY THESE PRESENTS: That the City of Grand Island, in the County of Hall, in the State of Nebraska, hereby acknowledges itself to owe and for value received promises to pay, but only from the special sources hereinafter described, to the registered owner specified above, or registered assigns, the principal amount specified above in lawful money of the United States of America on the date of maturity specified above with interest thereon to maturity (or earlier redemption) from the date of original issue or most recent Interest Payment Date, whichever is later, at the rate per annum specified above (said interest to be computed on the basis of a 360-day year consisting of twelve 30-day months), payable on February 15 and August 15 of each year, commencing of February 15, 2002 (each of said dates an "Interest Payment Date"). The principal hereof, together with any unpaid interest accrued thereon due at maturity or upon earlier redemption, is payable upon presentation and surrender of this bond at the designated corporate trust office of Bank One Trust Company, National Association, the Paying Agent and Registrar in . Interest on this bond due prior to maturity or earlier redemption will be paid on each Interest Payment Date by a check or draft mailed by the Paying Agent and Registrar to the registered owner of this bond, as shown on the books of record maintained by the Paying Agent and Registrar, at the close of business on the last business day of the month immediately preceding the month in which the Interest Payment Date occurs, to such owner's address as shown on such books and records. Any interest not so timely paid shall cease to be payable to the person entitled thereto as of the record date such interest was payable and shall be payable to the person who is the registered owner of this bond (or of one or more predecessor bonds hereto) on such special record date for payment of such defaulted interest as shall be fixed by the Paying Agent and Registrar whenever moneys for such purpose become available. Any or all of the bonds of said issue maturing on or after August 15, 2011 are subject to redemption at the option of the City, in whole or in part, prior to maturity at any time on or after the tenth anniversary of the date of original issue shown above, at par plus accrued interest on the principal amount redeemed to the date fixed for redemption. 10 I I I [Bonds maturing , 20_, are subject to mandatory redemption by the City on August 15 of each of the following years and in the following amounts, beginning August 15 _, 20_, from amounts required to be credited as mandatory sinking fund installments to the Debt Service Sub-account, as provided for in the Ordinance, in part, at a redemption price equal to 100% of the principal amount thereof being redeemed plus accrued interest to the redemption date: Mandatory Redemption Date Amount to be Redeemed (fmal maturity)] Notice of redemption shall be given by mail to the registered owner of any bond to be redeemed at said registered owner's address in the manner specified in the Ordinance authorizing said issue of bonds. Individual bonds may be redeemed in part but only in $5,000 amounts or integral multiples thereof. This bond is one of an issue of fully registered bonds of the total principal amount of Fifty-one Million Five Hundred Thousand Dollars ($51,500,000) of even date and like tenor, except as to denomination, date of maturity and rate of interest, which are issued by the City for the purpose of paying the costs of constructing, acquiring and installing improvements and extensions for the Electric System (the "2001 Project"), to pay certain costs of issuance associated with the 2001 Bonds and to fund the Series 2001 Reserve Sub-Account, as provided by Sections 18-1803 to 18-1805 R.R.S. Neb. 1997, as amended, and has been duly authorized by ordinances legally passed, approved and published and by proceedings duly had by the Mayor and Council of said City. This bond and the bonds of the series of bonds of which it is one are issued under the authority of and in full compliance with the Constitution and statutes of the State of Nebraska, and under and pursuant to Ordinance No. 8611 of City, as supplemented by Ordinance No. of the City (herein referred to, together, as the "Ordinance"). This bond is transferable by the registered owner or such owner's attorney duly authorized in writing at the designated corporate trust office of the Paying Agent and Registrar upon surrender and cancellation of this bond, and thereupon a new bond or bonds of the same aggregate principal amount, interest rate and maturity will be issued to the transferee as provided in the Ordinance authorizing the bonds of this issue, subject to the limitations therein prescribed. The City, the Paying Agent and Registrar and any other person may treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment due hereunder and for all purposes and shall not be affected by any notice to the contrary, whether this bond be overdue or not. If the date for payment of the principal of or interest on this bond shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the city (or cities) where the designated corporate trust office of the Paying Agent and Registrar is located are authorized by 11 I I I law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such day shall have the same force and effect as ifmade on the nominal date of payment. The revenue and earnings of the electric light and power plant and electric distribution system (the "Electric System") owned by the City of Grand Island, Nebraska, have been pledged and hypothecated, equally and ratably for the payment of this bond and the other bonds of this issue, the City's outstanding Electric System Revenue Bonds, Series 2000, presently outstanding in the principal amount of $6,145,000 (the "2000 Bonds") and any additional bonds of equal priority issued in accordance with the Ordinance authorizing the bonds of this issue. The bonds of this issue are a lien only upon said revenue and earnings and are not general obligations of the City of Grand Island, Nebraska. The Ordinance authorizing the issuance of this bond and the other bonds of this issue sets forth the covenants and obligations of the City with respect to the Electric System and the application of the revenues to be derived therefrom, which revenues are by the terms of said Ordinance to be deposited into the "Electric System Fund" (as established under such Ordinance) and disbursed to pay costs of operation and maintenance, make payments of principal and interest on the bonds of this issue and make other payments as specified in said Ordinance. Said Ordinance designates the terms and conditions on which additional bonds of equal lien to the bonds of this issue and the 2000 Bonds may be issued. Said Ordinance also designates the terms and conditions on which this bond shall cease to be entitled to any lien, benefit or security under such Ordinance and all covenants, agreements and obligations of the City under such Ordinance may be discharged and satisfied at or prior to the maturity or redemption of this bond if moneys or certain specified securities shall have been deposited with the Paying Agent and Registrar or other trustee. The City also reserves the right to issue bonds junior in lien to the bonds of this issue and the 2000 Bonds, the principal and interest of which shall be payable from moneys in the "Surplus Account" of such Electric System Fund, as described in said Ordinance. AS PROVIDED IN THE ORDINANCE REFERRED TO HEREIN, UNTIL THE TERMINATION OF THE SYSTEM OF BOOK-ENTRY-ONL Y TRANSFERS THROUGH THE DEPOSITORY TRUST COMPANY, NEW YORK, NEW YORK (TOGETHER WITH ANY SUCCESSOR SECURITIES DEPOSITORY APPOINTED PURSUANT TO THE ORDINANCE, "DTC"), AND NOTWITHSTANDING ANY OTHER PROVISIONS OF THE ORDINANCE TO THE CONTRARY, A PORTION OF THE PRINCIPAL AMOUNT OF THIS BOND MAY ~YAID OR REDEEMED WITHOUT SURRENDER HEREOF TO THE PAYING AGEN.l. ~~GISTRAR. DTC OR A NOMINEE, TRANSFEREE OR ASSIGNEE OF DTC OF THIS B(JidJ MAY NOT RELY UPON THE PRINCIPAL AMOUNT INDICATED HEREON AS THE PRINCIPAL AMOUNT HEREOF OUTSTANDING AND UNPAID. THE PRINCIPAL AMOUNT HEREOF OUTSTANDING AND UNPAID SHALL FOR ALL PURPOSES BE THE AMOUNT DETERMINED IN THE MANNER PROVIDED IN THE ORDINANCE. UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED OFFICER OF DTe (A) TO THE PAYING AGENT AND REGISTRAR FOR REGISTRATION OF 12 I I I TRANSFER OR EXCHANGE OR (B) TO THE PAYING AGENT AND REGISTRAR FOR PAYMENT OF PRINCIPAL, AND ANY BOND ISSUED IN REPLACEMENT HEREOF OR SUBSTITUTION HEREFOR IS REGISTERED IN THE NAME OF DTC AND ANY PAYMENT IS MADE TO DTC OR ITS NOMINEE, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE ONLY THE REGISTERED OWNER HEREOF, DTC OR ITS NOMINEE, HAS AN INTEREST HEREIN. IT IS HEREBY CERTIFIED AND WARRANTED that all conditions, acts and things required by law to exist or to be done precedent to and in the issuance of this bond did exist, did happen and were done and performed in regular and due form and time as required by law. This bond shall not be valid and binding on the City until authenticated by the Paying Agent and Registrar. IN WITNESS WHEREOF, the Mayor and Council have caused this bond to be executed on behalf of the City of Grand Island, Nebraska, by being signed by manual or facsimile signatures of the Mayor and City Clerk and by causing the official seal of the City to be imprinted hereon, all as of the date of original issue specified above. CITY OF GRAND ISLAND, NEBRASKA By: Mayor ATTEST: City Clerk Certificate of Authentication This bond is one of the bonds authorized by Ordinance of the Mayor and Council of the City of Grand Island, in the County of Hall, in the State of Nebraska, described in the foregoing bond. BANK ONE TRUST COMPANY, NA TIONAL ASSOCIATION, Paying Agent and Registrar By: Authorized Signature 13 I I I (Form of Assignment) hereby sells, assigns and (Social Security or Taxpayer I.D. No. ) the within bond and hereby irrevocably constitutes and appoints , attorney, to transfer the same on the books of registration in the office of the within mentioned Paying Agent and Registrar with full power of substitution in the premises. For value received transfers unto Dated: Registered Owner Signature Guaranteed By: Authorized Officer Note: The signature on this assignment MUST CORRESPOND with the name as written on the face of the within bond in every particular, without alteration, enlargement or any change whatsoever, and must be guaranteed by a commercial bank or a trust company or by a fIrm having membership on the New York, Midwest or other stock exchange. 14 I I I Section 8. Execution of 2001 Bonds, Book-entry Securities. Each of the 2001 Bonds shall be executed on behalf of the City with the manual or facsimile signatures of the Mayor and City Clerk and shall have imprinted thereon the City's seal. The 2001 Bonds shall be issued initially as as "book-entry-only" bonds under the services of The Depository Trust Company (the "Depository"), with one typewritten bond per maturity being issued to the Depository. In such connection said officers are authorized to execute and deliver a Letter of Representations (the "Letter of Representations") in the form required by the Depository (including any blanket letter previously executed and delivered), for and on behalf of the City, which shall thereafter govern matters with respect to registration, transfer, payment and redemption of the 2001 Bonds. Upon issuance of the 2001 Bonds as "book-entry-only" bonds, the following provisions shall apply: (a) The City, the Trustee and the Paying Agent and Registrar shall have no responsibility or obligation to any broker-dealer, bank or other financial institution for which the Depository holds 2001 Bonds as securities depository (each, a "Bond Participant") or to any person who is an actual purchaser of a 2001 Bond from a Bond Participant while the 2001 Bonds are in book-entry form (each, a "Beneficial Owner") with respect to the following: (i) the accuracy of the records of the Depository, any nominees of the Depository or any Bond Participant with respect to any ownership interest in the 2001 Bonds, (ii) the delivery to any Bond Participant, any Beneficial Owner or any other person, other than the Depository, of any notice with respect to the 2001 Bonds, including any notice of redemption, or (iii) the payment to any Bond Participant, any Beneficial Owner or any other person, other than the Depository, of any amount with respect to the 2001 Bonds. The Paying Agent and Registrar shall make payments with respect to the 2001 Bonds only to or upon the order of the Depository or its nominee, and all such payments shall be valid and effective fully to satisfY and discharge the obligations with respect to such 2001 Bonds to the extent of the sum or sums so paid. No person other than the Depository shall receive an authenticated Bond, except as provided in (e) below. 15 I (b) Upon receipt by the Paying Agent and Registrar of written notice from the Depository to the effect that the Depository is ooable or oowilling to discharge its responsibilities, the Paying Agent and Registrar shall issue, transfer and exchange 200 1 Bonds requested by the Depository in appropriate amooots. Whenever the Depository requests the Paying Agent and Registrar to do so, the Paying Agent and Registrar will cooperate with the Depository in taking appropriate action after reasonable notice (i) to arrange, with the prior written consent of the City, for a substitute depository willing and able upon reasonable and customary terms to maintain custody of the 2001 Bonds or (ii) to make available 2001 Bonds registered in whatever name or names the Beneficial Owners transferring or exchanging such 2001 Bonds shall designate. (c) If the City determines that it is desirable that certificates representing the 2001 Bonds be delivered to the ultimate beneficial owners of the 2001 Bonds and so notifies the Paying Agent and Registrar in writing, the Paying Agent and Registrar shall so notify the Depository, whereupon the Depository will notify the Bond Participants of the availability through the Depository of bond certificates representing the 2001 Bonds. In such event, the Paying Agent and Registrar shall issue, transfer and exchange bond certificates representing the 2001 Bonds as requested by the Depository in appropriate amooots and in authorized denominations. I (d) Notwithstanding any other provlSlon of this 2001 Series and Supplemental Ordinance to the contrary, so long as any 2001 Bond is registered in the name of the Depository or any nominee thereof, all payments with respect to such 2001 Bond and all notices with respect to such 2001 Bond shall be made and given, respectively, to the Depository as provided in the Letter of Representations. (e) Registered ownership of the 2001 Bonds may be transferred on the books of registration maintained by the Paying Agent and Registrar, and the 2001 Bonds may be delivered in physical form to the following: (i) any successor securities depository or its nominee; (ii) any person, upon (A) the resignation of the Depository from its functions as depository or (B) termination of the use of the Depository pursuant to this Section and the terms of the Paying Agent and Registrar's Agreement. I (f) In the event of any partial redemption of a 2001 Bond, unless and ootil such partially redeemed 2001 Bond has been replaced in accordance with the provisions of this 2001 Series and Supplemental Ordinance, the books and records of the Paying Agent and Registrar shall govern and establish the principal amooot of such 2001 Bond as is then outstanding and all of the 2001 Bonds issued to the Depository or its nominee shall contain a legend to such effect. 16 I I I (g) Delivery of the 2000 Bonds to the Depository is hereby authorized to be made through the Paying Agent and Registrar, with the Paying Agent and Registrar holding bond certificates for the Depository under such Depository' s "FAST" procedures as in effect from time to time. If for any reason the Depository resigns and is not replaced, the City shall immediately provide a supply of printed bond certificates for issuance upon the transfers from the Depository and subse- quent transfers or in the event of partial redemption. In the event that such supply of certificates shall be insufficient to meet the requirements of the Paying Agent and Registrar for issuance of replacement certificates upon transfer or partial redemption, the City agrees to order printed an additional supply of such certificates and to direct their execution by manual or facsimile signatures of its then duly qualified and acting Mayor and City Clerk and by imprinting thereon or affixing thereto the City's seal. In case any officer, whose signature or facsimile thereof shall appear on any 2001 Bond, shall cease to be such officer before the delivery of such bond (including such bond certificates delivered to the Paying Agent and Registrar for issuance upon transfer or partial redemption), such signature or such facsimile signature shall nevertheless be valid and sufficient for all purposes the same as if such officer or officers had remained in office until the delivery of such 2001 Bond. The 2001 Bonds shall not be valid and binding on the City until authenticated by the Paying Agent and Registrar. The 2001 Bonds shall be delivered to the Paying Agent and Registrar for registration and authentication. Upon execution, registration and authentication of the 2001 Bonds, they shall be delivered to the City Treasurer, who is authorized to deliver them to Ameritas Investment Corp., as initial purchaser thereof, upon receipt of the purchase price therefor as determined in accordance with the terms and conditions set forth in the Bond Purchase Agreement (as defmed below) and Section 13 of this 2001 Series and Supplemental Ordinance. Said initial purchaser shall have the right to direct the registration of the 2001 Bonds and the denominations thereof within each maturity, subject to the restrictions of this 2001 Series and Supplemental 17 I I Ordinance. The City Clerk shall make and certify a transcript of the proceedings of the Mayor and Council with respect to the 2001 Bonds which shall be delivered to said purchaser. Section 9. Application of Proceeds of 2001 Bonds. The proceeds, including accrued interest, of the 2001 Bonds shall be applied concurrently with the delivery of such bonds as follows: (a) Any accrued interest received upon the issuance of the 2001 Bonds shall be deposited to the Debt Service Sub-account to be applied to make payment next falling due for interest on the 2001 Bonds. (b) An amount equal to (i) 10% of the stated principal amount of the 2001 Bonds, (ii) the maximum annual principal and interest requirements on the 2001 Bonds or (iii) 125% of the average annual principal and interest requriements of the of the 2001 Bonds, whichever is the least amount, shall be deposited into the Series 2001 Reserve Sub-Account, as established pursuant to Section 14 of this 2001 Series and Supplemental Ordinance. (b) The net principal proceeds of the 2001 Bonds, after payment or provision for payment of all expenses of issuing the 2001 Bonds and funding of the 2001 Reserve Sub-Account, shall be deposited to a special construction and acquisition account held separate and apart from all other funds of the City (including holding by the Trustee if determined appropriate by officers of the City, or anyone or more of them) and applied upon order of the Mayor and Council to the payment of costs of the 2001 Project. Section 10. Covenants. The City covenants and agrees with the purchasers and holders of the Bonds from time to time outstanding that it shall take all action reasonably practicable to proceed in a sound and business-like manner in acquiring, constructing, reconstructing, improving, expanding, equipping, maintaining and furnishing the City's Electric System. Section 11. The 2001 Bonds as "Bonds" and "Additional Bonds" under the provisions of the 2000 Ordinance. This 2001 Series and Supplemental Ordinance is adopted pursuant to Section 14 of the 2000 Ordinance, and the 2001 Bonds are hereby found, determined and declared to be "Bonds" and "Additional Bonds" within the meaning of the quoted words as defined and used in the 2000 Ordinance and the terms and provisions of the 2000 Ordinance shall 18 I apply to and be for the benefit of the 2001 Bonds. In such connection, the following orders and determinations are hereby made: (a) an Independent Accountant's letter as required by Section 14(a) of the 2000 Ordinance shall be filed with the Trustee prior to the issuance of the 2001 Bonds; and (b) the Consulting Engineer's opinion as required by Section 14(b) of the 2000 Ordinance shall be filed with the Trustee prior to the issuance of the 2001 Bonds. The principal of and premium, if any, and interest on the 2001 Bonds (as "Additional Bonds" and "Bonds" under the terms of the 2000 Ordinance) shall be payable solely from the Revenues which have been previously pledged under the 2000 Ordinance and are hereby pledged in this 2001 Series and Supplemental Ordinance for the payment of the 2000 Bonds and the 2001 Bonds, equally and ratably, subject to the charge on Revenues for the payment of Operating Expenses. The terms and I provisions of Section 11 of the 2000 Ordinance are hereby confirmed, made applicable to the 2001 Bonds and incorporated in this 2001 Series and Supplemental Ordinance by reference. I Section 12. Covenant with Respect to Exemption of Interest. The City hereby covenants to the purchasers and registered owners of the 2001 Bonds that it will make no use of the proceeds of said issue, including moneys held in any sinking fund for the payment of said 2001 Bonds, which would cause said 2001 Bonds to be "arbitrage bonds" or "private activity bonds" within the meaning of Sections 1 03 (b), 141 and 148 of the Internal Revenue Code of 1986, as amended (the "Code") and further covenants to comply with said Sections 103, 141 and 148 and all applicable regulations thereunder throughout the term of said bond issue, including keeping of appropriate records and making of any rebate payments required under said Section 148 and applicable regulations thereunder. The City hereby covenants and agrees to take all actions necessary under the Code to maintain the status of interest payable on the 200 1 Bonds as excludable 19 I from gross income for taxpayers generally ooder the Code but such undertaking shall not extend to or include other provisions of the Code relating to the tax status of interest on the 2001 Bonds including but not limited to provisions relating to the additional minimum tax on corporations, provisions relating to treatment of insurance companies, S corporations and foreign branches and provisions relating to railroad retirement or social security income. This 2001 Series and Supplemental Ordinance shall constitute a declaration of official intent for any expenditures relating to the 2001 Project advanced by the City from its other funds and for which reimbursement from the proceeds of the 2001 Bonds may be made. Section 13. Determination of Final Terms for 2001 Bonds; Sale of 2001 Bonds. The 2001 Bonds are hereby sold to Ameritas Investment Corp. (the "Underwriter"), in accordance with the terms of that Bond Purchase Agreement, dated as of May 22, 2001, (the "Bond Purchase I Agreement") by and between the City and said purchaser in the form presented to the Council and the Mayor is hereby authorized to execute said Bond Purchase Agreement for and on behalf of the City in the form presented or with such changes consistent with the terms of this 2001 Series Supplemental Ordinance as such officers shall deem appropriate on behalf of the City. The Mayor acting for and on behalf of the City and pursuant to the terms of the Bond Purchase Agreement is hereby authorized to set the fmal maturity schedule, interest rates and terms for the 2001 Bonds in accordance with the following provisions and limitations: (a) the aggregate stated principal amount of the 2001 Bonds shall not exceed $55,000,000; I (b) the interest rates as set for each maturity shall not result in an aggregate average coupon rate which exceeds that index then most recently published in The Bond Buyer and therein designated as "Bond Buyer Indexes-- Average Municipal Bond Yields-Compiled Weekly--25-Bond Revenue" by more than thirty basis points (.30 of 1 %); 20 I I I (c) any principal maturity amount as set forth in Section 2 of this 2001 Series and Supplemental Ordinance may be increased by as much as 10% or reduced by as much as 10%; (d) any individual maturity may be sold to the Underwriter for offering and sale to the general public with an original issue discount not to exceed 2% or with an original issue premium not to exceed 5% provided that the aggregate net amount for original issue discount and original issue premium (not taking into consideration the Underwriter's discount) shall not result in a net original discount amount of more than $825,000; (e) the Underwriter's discount shall not exceed 1.5% of stated principal ofthe 2001 Bonds; (f) a redemption premium of up to 3% may be placed on principal redeemed after the first optional call date with such premium to be reduced to 0% by no later than August 15,2013; and (g) any maturity amounts as set forth in Section 2 of this 2001 Series and Supplemental Ordinance may be aggregated with anyone or more preceding or following maturity amounts into a term maturity with mandatory sinking fund requirements so long as the amortization of principal resulting from such term maturity or maturities results in an amortization of principal approximately proportional to the amortization set forth in Section 2 of this 2001 Series and Supplemental Ordinance, with variation permitted within the limitations set forth in subsection 13(c) above as to any given maturity. (h) the sale of the 2001 Bonds may be made with or without provision for bond insurance or other credit enhancement as shall be deemed to the best advantage of the City as to overall credit costs (with premium or other price for such enhancement to be payable from the proceeds of the 2001 Bonds, if determined appropriate) and the City hereby covenants and agrees to make appropriate adjustments in the terms of this 2001 Series and Supplemental Ordinance, as maybe required by the provider of such credit enhancement consistent with and permitted under the terms of the 2000 Ordinance. The [mal terms for the 2001 Bonds shall be set forth in an addendum to the Bond Purchase Agreement (the "Addendum") which shall be executed on behalf of the City by the Mayor and the Addendum shall constitute the final setting of the terms of the 2001 Bonds by the City as issuer thereof. The use of the Preliminary Official Statement, in substantially the form presented on behalf of the City is hereby authorized and the Official Statement with such final changes, modifications, 21 I I I additions and deletions therein as shall by the Mayor, City Clerk, City Treasurer, Chairman of the Board of the Board of Public Works or Director of Utility Operations be deemed necessary, desirable or appropriate is hereby authorized to be approved for use by the Underwriter in connection with the offering and sale of the 2001 Bonds. The officers of the City or anyone or more of them are hereby authorized to execute and deliver any documents and certifications and to take any and all actions as may be deemed necessary or appropriate for purposes of carrying out the terms of this 2001 Series and Supplemental Ordinance. Section 14. Debt Service on 2001 Bonds; Series 2001 Reserve Sub-Account. The terms of the 2000 Ordinance are hereby incorporated in this 2001 Series Supplemental Ordinance. The payments of principal of and interest on the 2001 Bonds (including any mandatory redemption payments) are fully provided for by the terms of Section 13 of the 2000 Ordinance. There is hereby ordered established in the Bond Account (as previously established under the terms of the 2000 Ordinance), for the purpose of providing a reserve for the payment of the principal of and premium, if any, and interest on the 2001 Bonds and only the 2001 Bonds, a special account in the Bond Account to be known as the "Series 2001 Reserve Sub-Account". The initial deposit to the Series 2001 Reserve Sub-Account shall be made as provided in Section 9 of this 2001 Series and Supplemental Ordinance from the proceeds of the 2001 Bonds and such amount shall also constitute the reserve requirement for such sub-account (the "Series 2001 Reserve Requirement"). As provided in the 2000 Ordinance, the Series 2001 Reserve Sub-Account shall be an account in the Bond Account of equal status with the Debt Service Sub-Account and the Series 2000 Reserve Sub- Account and into which deposits (if necessary) shall be made simultaneously and without preference of one account over another, with consideration given to and allowance made for moneys deposited in, credited or accrued to the Debt Service Sub-Account, the Series 2000 Reserve 22 I Sub-Account and the Series 2001 Reserve Sub-Account, all subject to the terms and conditions set forth in the 2000 Ordinance. So long as the amount on deposit in the Series 2001 Reserve Sub- Account is being maintained at the Series 2001 Reserve Requirement, moneys attributable to income earned on amounts and investments held in the Series 2001 Reserve Sub-Account shall be transferred to the Debt Service Sub-Account and applied to make payments due on the 2001 Bonds (with such moneys to be used an applied as a credit against the amount next required to be deposited thereto by the City with respect to the 2001 Bonds). The moneys and value of Investment Securities in the Bond Account for credit to the Series 2001 Reserve Sub-Account therein shall, except for the transfer therefrom to the Debt Service Sub-Account of excess amounts therein, as above required, be used and applied solely for the purpose of paying the principal of, premium (if any) and interest on the 2001 Bonds when due, whether at their maturity or upon the redemption or purchase thereof I from moneys in the Debt Service Sub-Account and shall be so used and applied whenever there are insufficient moneys in the Bond Account for credit to the Debt Service Sub-Account therein for such purposes. The Trustee shall promptly make up any deficiency in the Debt Service Sub- Account with respect to the 2001 Bonds from the Series 2001 Reserve Sub-Account by the withdrawal of cash therefrom for that purpose and by the sale or redemption of obligations (Investment Securities) held in the Series 2001 Reserve Sub-Account sufficient to make up such deficiency. If at any time the moneys and value of Investment Securities in the Bond Account for credit to the Series 2001 Reserve Sub-Account therein are in an amount less than the Series 2001 Reserve Requirement as the result of a withdrawal from the Series 2001 Reserve Sub-Account, there shall be credited to the Series 2001 Reserve Sub-Account from the first moneys available I therefor, such amounts as shall be necessary until there is again on credit to the Series 2001 Reserve Sub-Account an amount at least equal to the Series 2001 Reserve Requirement. As set forth in 23 I I I Section 12 of the 2000 Ordinance, amounts available for restoring reserve sub-accounts for separate series of Bonds (including the Series 2001 Reserve Sub-Account) shall be applied pro rata in accordance with the respective outstanding principal amounts of each such series for which restoration of withdrawals is required. The explanation of the term "value of Investment Securities set forth in Section 13 of the 2000 Ordinance shall apply to such phrase as used in this Section 14 of this 2001 Series and Supplemental Ordinance. Section 15. Continuing Disclosure. In accordance with the requirements of Rule 15c2-12 (the "Rule") promulgated by the Securities and Exchange Commission, the City hereby agrees that it will provide the following continuing disclosure information: (a) to each nationally recognized municipal securities information repository (a "NRMSIR") and to the initial purchaser of the 2001 Bonds, the City shall provide annual financial and operating information generally consistent with the information set forth under the heading "FINANCIAL STATEMENT" in the Official Statement for said bonds, the "Operating Statistics" for the Electric System as shown in the schedule to that Appendix of the Official Statement which includes the financial statements of the City's Electric Department and the City's audited financial statements; such information is expected to be available not later than seven months after the end of each fiscal year for the City; audited financial information shall be provided for governmental and fiduciary fund types based on the modified accrual basis of accounting (in conformity with generally accepted accounting principles) and for enterprise fund types on the accrual basis (in conformity with generally accepted accounting principles); (b) in a timely manner to each NRMSIR or to the Municipal Securities Rule Making Board ("MSRB"), notice of the occurrence of any of the following events with respect to the 2001 Bonds, if in the judgment of the City, such event is material: (1) principal and interest payment delinquencies, (2) non-payment related defaults, (3) unscheduled draws on debt service reserves reflecting financial difficulties, 24 I (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax- exempt status of the 2001 Bonds, (7) modifications to rights of the Bondholders, (8) bond calls, (9) defeasances, (10) release, substitution, or sale of property securing repayment of the 2001 Bonds, and (11) rating changes. I The City has not undertaken to provide notice of the occurrence of any other material event, except the events listed above. (c) in a timely manner to each NRMSIR or to the Municipal Securities Rule Making Board ("MSRB") notice of any failure on the part of the City to provide required annual financial information not later than seven months from the close of the City's fiscal year. The City reserves the right to modify from time to time the specific types of information provided or the format of the presentation of such information, to the extent necessary or appropriate in the judgment of the City, consistent with the Rule. The City hereby agrees that such covenants are for the benefit of the registered owners of the 2001 Bonds (including Beneficial Owners) and that such covenants may be enforced by any registered owner or Beneficial Owner, provided that any such right to enforcement shall be limited to specific enforcement of such undertaking and any failure shall not constitute an event of default under I this 2001 Series and Supplemental Ordinance. The continning disclosure obligations of the City 25 I under this 2001 Series and Supplemental Ordinance, as described above, shall cease when none of the 2001 Bonds remain outstanding. Section 16. Provisions Relating to Investment of Funds Relating to 2001 Bonds. Amounts held in the construction and acquisition account for the proceeds of the 2001 Bonds or in the Series 2001 Reserve Sub-Account may be invested in Investment Securities (as defmed in the 2000 Ordinance) and, in addition, may be invested as follows: (a) if invested in repurchase agreements as set forth in (vi) of the defmition of Investment Securities (shown in the 2000 Ordinance) may also be invested with securities dealers or other fmancial institutions (in addition to banks) and (b) in investment agreements provided by any bank, securities dealer, insurance company or other fmancial institution (including affiliates of any thereof) so long as the obligation under such investment agreement (taking into consideration any guaranty) is rated in one or another I of the two highest rating categories (without regard to subordinate designations within any such category) by one or more nationally recognized rating agencies. Section 17 Severability. If anyone or more of the covenants or agreements provided in this 2001 Series and Supplemental Ordinance on the part of the City to be performed shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements shall be null and void and shall be. deemed separable from the remaining covenants and agreements, and shall in no way affect the validity of the other provisions of this 2001 Series and Supplemental Ordinance or of the 2001 Bonds issued hereunder. Section 18. Effective Date of Ordinance. This 2001 Series and Supplemental Ordinance shall become, effective upon publication as herein provided as provided by law. I 26 Ii'. . Section 19. Section Headings. The headiogs or titles of 1he several sections hereof shall be solely for convenience of reference and shall not affect the meaning or construction, interpretation or effect of this 2001 Series and Supplemental Ordinance. Section 20. Publication. In lieu of and in place of newspaper publication, this 2001 Series and Supplemental Ordinance after its passage shall be published in pamphlet form. PASSED AND APPROVED this ~ day of \'<\ 0..'1 , 2001. ATTEST: Q~\\~_ ffiw~ City Clerk I (SEAL) I 27