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06/12/2001 Ordinances 8677A I I I ORDINANCE NO. 8677 A AN ORDINANCE SUPPLEMENTING AND AMENDING ORDINANCE NO. 8677 OF THE CITY OF GRAND ISLAND, NEBRASKA APPROVING THE FINAL TERMS WITH RESPECT TO THE CITY'S ELECTRIC SYSTEM REVENUE BONDS, 2001 SERIES; MAKING CERTAIN AMENDMENTS OF TERMS TO PROVIDE FOR CERTAIN RIGHTS OF THE BOND INSURER WITH RESPECT TO AND FOR AND ON BEHALF OF SUCH BONDS AND PROVIDING FOR PUBLICATION OF THIS ORDlNANCE IN PAMPHLET FORM. WHEREAS, the City of Grand Island, Nebraska, a municipal corporation (the "City"), by Ordinance No. 8677 passed and approved on May 22, 2001 (the "2001 Series and Supplemental Ordinance") has authorized the issuance of its Electric System Revenue Bonds, Series 2001, in a principal amount not to exceed $55,000,000 (the "2001 Bonds"), with the final terms of the 2001 Bonds to be set by an Addendum to Bond Purchase Agreement (the "Addendum") executed and delivered on behalf of the City by the Mayor in accordance with parameters set in the 2001 Series and Supplemental Ordinance; and WHEREAS, in accordance with the authorization provided for in the 2001 Series and Supplemental Ordinance, the 2001 Bonds are being sold with bond insurance and in connection therewith it is necessary to provide for certain amendments to the 2001 Series and Supplemental Ordinance in order to meet requirements ofthe insurer. BE IT ORDAlNED by the Mayor and Council of the City of Grand Island, Nebraska: Section 1. Approval of Addendum to Bond Purchase Agreement and Final Terms of 2001 Bonds. The execution and delivery of the Addendum to Bond Purchase Agreement is hereby ratified, confirmed and approved in all respects. In accordance with the Addendum to I Bond Purchase Agreement, the following terms for the 2001 Bonds as set by the Addendum to Bond Purchase Agreement and Ordinance No. 8677 are hereby approved: (a) The 2001 Bonds shall bear interest at rates per annum and become due on August 15 of the years as indicated below: Maturing on August 15 Principal Amount ofthe Year Shown Interest Rate Per Annum $2,725,000 2004 3.800% $2,830,000 2005 4.000% $2,945,000 2006 4.150% $3,065,000 2007 4.350% $3,195,000 2008 4.750% I $3,340,000 2009 4.250% $3,485,000 2010 4.250% $4,425,000 2011 4.250% $4,610,000 2012 5.000% $4,845,000 2013 5.000% $5,085,000 2014 5.000% $5,340,000 2015 5.125% $5,610,000 2016 5.125% (b) The sale of the 2001 Bonds to Ameritas Investment Corp. for $51,401,671.95 I plus accrued interest, if any, on the stated principal amount of the 2001 Bonds to date ofpayrnent and delivery. Such purchase price takes into consideration underwriter's discount in the amount of 2 I I I $605,125.00, aggregate original issuance premium in the amount of $646,930.00 and aggregate original issuance discount in the amount $140,133.05, with such original issue premium and original issue discount attributable to the specific maturities of the 2001 Bonds as follows: Original Issue Premium Maturity on August Principal Amount (Discount) for Price for Each $100 15 of Year Maturing Maturitv of Principal 2004 $2,725,000 $23,952.75 $100.879 2005 $2,830,000 $32,148.80 $101.136 2006 $2,945,000 $40,670.45 $101.381 2007 $3,065,000 $49,346.50 $101.610 2008 $3,195,000 $107,192.25 $103.355 2009 $3,340,000 ($11,523.00) $99.655 2010 $3,485,000 ($39,136.55) $98.877 2011 $4,425,000 ($89,473.50) $97.978 2012 $4,610,000 $127,835.30 $102.773 2013 $4,845,000 $95,494.95 $101.971 2014 $5,085,000 $55,833.30 $101.098 2015 $5,340,000 $72,997.80 $101.367 2016 $5,610,000 $41,457.90 $100.739 (c) The 2001 Bonds 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 and without premium. All of the 2001 Bonds are serial bonds with there being no term bonds subject to mandatory redemption requirements. 3 I I I (d) The 2001 Bonds are being sold with provision for bond insurance from MBIA Insurance Corporation (the "Insurer") and the execution and delivery of the Bond Insurer's "Commitment to Issue a Financial Guaranty Insurance Policy" pursuant to Application No.: 2001- 004003-01 (the "Commitment") by the Mayor pursuant to the authorization set forth in Section 13 of Ordinance No. 8677 is hereby approved, ratified and confirmed in all respects. The premium for bond insurance payable under the terms of the Commitment shall be paid (or reimbursed) from the proceeds of the 2001 Bonds along with other expenses of issuing the 2001 Bonds. In accordance with the agreement provided for in Subsection 13(h) of the 2001 Series and Supplemental Ordinance, the terms and provisions of Ordinance No. 8677 are to be amended to meet the requirements of the Bond Insurer, as set forth in Section 2 hereof. Section 2. Provisions Relating to Bond Insurance. The 2001 Series and Supplemental Ordinance (Ordinance No. 8677) is hereby amended to include the following additional Section 21: "Section 21. Bond Insurance. The 2001 Bonds are being sold to Arneritas Investment Corp. on the basis of bond insurance to be provided under a Financial Guaranty Insurance Policy (the "Policy") provided by MBIA Insurance Corporation (the "Insurer") which is to be issued pursuant to a Commitment to Issue a Financial Guaranty Insurance Policy-Application No.: 2001-004003-01 (the "Commitment"). In connection with the requirements set forth in the Commitment relating to the issuance of the Policy, the 2000 Ordinance is hereby supplemented with specific reference to the 2001 Bonds as follows: (a) Notice to Insurer. Any notice required to be given by the City to any party (the Trustee, the Underwriter or any Bondholder) pursuant to the 2000 Ordinance or this 2001 Series and Supplemental Ordinance shall also be given to the Insurer, with such notice to be sent to the following address: MBIA Insurance Corporation Attention Insured Portfolio Management 113 King Street Armonk, NY 10504 4 I (b) Insurer's Exercise of Bondholder's Rights; Consents to Amendments. The Mayor and Council hereby provide and determine that, as required by the Commitment, the Insurer shall be treated and recognized as having the right to exercise all rights and privileges ofthe holders ofthe 2001 Bonds under the terms of the 2000 Ordinance and this 2001 Series and Supplemental Ordinance and each holder of the 2001 Bonds by purchasing and taking delivery of such holder's 2001 Bond or 2001 Bonds shall be conclusively deemed to have appointed the Insurer as its attorney and agent for such purposes. In connection with such rights, the Insurer shall have the right to receive notice of and to vote (exercising the rights of the holders of the 2001 Bonds) with respect to all amendments to the 2000 Ordinance and this 2001 Series Supplemental Ordinance for which the consent of holders of the 2001 Bonds is required or permitted under Section 17 or Section 19 of the 2000 Ordinance. The City shall give the Insurer notice of any and all amendments to the 2000 Ordinance and this 2001 Series and Supplemental Ordinance for any and all amendments which do not require consent of the holders of the Bonds under the terms of the 2000 Ordinance and this 2001 Series and Supplemental Ordinance. The City agrees to provide a copy of any amendment to the 2000 Ordinance or the 2001 Series and Supplemental Ordinance to which the Insurer has consented to Standard & Poor's Ratings Services. I (c) Insurer's Rights as to Remedies. The Insurer shall have the right to exercise, on behalf of the holders of the 2001 Bonds, any and all rights of such holders to direct remedies to be taken by the Trustee. The Insurer shall have the right to institute any suit, action or proceedings at law or in equity under the same terms as a holder or holders of the 2001 Bonds under the terms of the 2000 Ordinance and this 2001 Series and Supplemental Ordinance. Any declaration of principal of and interest on the 2001 Bonds as immediately due and payable under the terms of Section 18 of the 2000 Ordinance, may not be made without the consent of the Insurer, as and to the extent that such acceleration would require the consent or direction of the holders ofthe 2001 Bonds. I (d) Additional Requirements for Series 2001 Reserve Sub-account. In addition to the requirements provided for the Series 2001 Reserve Sub-account in Section 14 ofthis 2001 Series and Supplemental Ordinance, the Series 2001 Reserve Sub-account shall be subject to the following requirements: (i) the Investment Securities held in the Series 2001 Reserve Sub-account, in addition to any valuation permitted or provided for under the terms of the 2000 Ordinance and this 2001 Series and Supplemental Ordinance, shall be valued at fair market value and marked to market at least once per year and transfers from the Series 2001 Reserve Sub- account to the Debt Service Sub-account shall be permitted as provided in the 2000 Ordinance and this 2001 Series and Supplemental Ordinance only so long as the 2001 Debt Reserve Requirement has been met based upon such marking to market, provided that the amount required to be maintained in the Series 2001 Reserve Sub- account shall not at any time exceed the amount permitted to be held and invested as a reasonably required reserve or replacement fund and as a minor portion under the 5 I terms of Section 148 of the Code and applicable regulations thereunder and (ii) Investment Securities held in the Series 2001 Reserve Sub-account shall not have a maturity in excess of five years, except for investment agreements approved by the Insurer. (e) Definition of "Government Obligations". For purposes of any discharge or satisfaction of the 2001 Bonds under the terms of Section 24 of the 2000 Ordinance, the term "Government Securities" shall mean and include only the following securities: (i) Cash (ii) U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series - "SLGs") (iii) Direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities I (iv) Resolution Funding Corp. (REFCORP) - Only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable. (v) Obligations issued by the following agencies which are backed by the full faith and credit ofthe U.S.: A U.S. Export-Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership B Farmers Horne Administration (FmHA) Certificates of beneficial ownership C Federal Financing Bank D General Services Administration Participation certificates I E U.S. Maritime Administration Guaranteed Title XI financing 6 I I I F u.s. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures u.s. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds (f) Approval of Revised Trustee, Paying Agent and Registrar's Agreement. The form of the Trustee, Paying Agent and Registrar's Agreement, previously approved under the terms of Section 3 of the 2001 Series and Supplemental Ordinance, as revised to meet the requirements of the Insurer, 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. (g) Statement of Insurance to Be Printed on 2001 Bonds. A statement of insurance in form corresponding to the requirements of the Commitment shall be printed on each ofthe 2001 Bonds as initially issued. (h) Conditions upon Rights of Insurer. In all cases where the direction or consent of the Insurer is required or permitted under the terms of the 2000 Ordinance or this 2001 Series and Supplemental Ordinance, the right of the Insurer to require or withhold consent or to direct any actions to be taken shall be conditioned upon the Insurer's not then being in default under the express terms of the Policy as of the time for such consent or direction. Section 3. Severability. If anyone or more of the covenants or agreements provided in this Ordinance or the 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 7 I I I the other provisions of this Ordinance or the 2001 Series and Supplemental Ordinance or of the 2001 Bonds issued under the 2001 Series and Supplemental Ordinance. Section 4. Determination as to Ordinance; Effective Date of Ordinance. The Mayor and Council hereby find and determine that by prior measures adopted by the Mayor and Council, including the 2001 Series and Supplemental Ordinance, the City has awarded contracts for the acquisition of the Project and for the sale of the 2001 Bonds; that the parties to such contracts have incurred costs under such contracts or have taken actions in reliance on such contracts ; that this Ordinance constitutes a measure necessary to carry out the City's contractual obligations under measures previously adopted which were subject to limited referendum under Section 18-2528, R.R.S. Neb. 1997 and which will have been adopted more than thirty days prior to the delivery of the 2001 Bonds; that this Ordinance shall be published in pamphlet form as provided by law and shall take effect immediately upon its publication in pamphlet form. Section 5. Section Headings. The headings or titles of the 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. PASSED AND APPROVED this ~ day of ~T U{"\JL.., ,2001. MaYO~ ATTEST: Q~\\~L c(DL~ City Clerk (SEAL) 8