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2114ORDINANCE NO. 21 114 AN ORDINANCE OF THE CITY OF BLAIR, NEBRASKA, AUTHORIZING THE ISSUANCE AND SALE OF SEWER REVENUE BOND ANTICIPATION NOTES OF THE CITY OF BLAIR, NEBRASKA, IN THE PRINCIPAL AMOUNT OF ONE MILLION FOUR HUNDRED FIFTY -FIVE THOUSAND DOLLARS ($1,455,000), FOR THE PURPOSE OF PROVIDING INTERIM FINANCING FOR THE COST OF EXTENDING, ENLARGING, IMPROVING AND MAINTAINING THE CITY'S SEWAGE DISPOSAL PLANT AND SANITARY SEWER SYSTEM PENDING THE ISSUANCE OF PERMANENT REVENUE BONDS OF THE CITY; PRESCRIBING THE FORM OF SAID NOTES; AGREEING TO ISSUE THE CITY'S SEWER REVENUE BONDS TO PAY THE NOTES AT MATURITY OR TO PAY THE NOTES FROM OTHER AVAILABLE FUNDS; ENTERING INTO A CONTRACT ON BEHALF OF THE CITY WITH THE HOLDERS OF SAID NOTES; AND PROVIDING FOR PUBLICATION OF THIS ORDINANCE IN PAMPHLET FORM. BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF BLAIR, NEBRASKA: Section 1. The Mayor and Council of the City of Blair hereby find and determine that the City owns and operates its own sewage disposal plant and sanitary sewer system (the "Sewer System ") which constitutes a revenue - producing undertaking; that it is necessary and advisable to extend, enlarge, improve and maintain the Sewer System by constructing improvements to include sanitary sewer mains, replacement of an existing sludge pump, installation of a new lift pump, replacement of the aeration equipment with a new air diffuser system, replacement of the existing air pumps and construction of a new chlorine building as well as a new SCADA control system and other related improvements and equipment; that based upon the estimate furnished by the City's engineer, the cost of such proposed project, including design and engineering costs and costs associated with the issuance of the Notes herein authorized, is not less than $1,455,000; that it is necessary and advisable for such purposes that the City issue its Sewer Revenue Bond Anticipation Notes in the principal amount of $1,455,000 pending permanent revenue bond fmancing pursuant to Sections 18 -1803 to 18 -1805, R.R.S. Neb. 1997, as amended; that there are presently outstanding bonds of the City for which the revenues of the Sewer System have been pledged as follows: Sewer System Revenue Refunding Bonds, Series 2004, of which there are presently bonds outstanding in the principal amount of $800,000 (the "Outstanding Bonds "), issued pursuant to Ordinance No. 2017 passed and approved on November 9, 2004 (the "Outstanding Bond Ordinance "); and that said Outstanding Bonds are the only presently outstanding indebtedness which constitute a lien upon the revenues of the Sewer System; that the ordinance authorizing the Outstanding Bonds permit the issuance by the City of bonds or notes which are junior in lien to the Outstanding Bonds with the principal and interest of such bonds or notes to be payable from monies in the Surplus Account previously established under the relating to the Outstanding Bonds (hereinafter, the "Surplus Account "). Section 2. For the purpose of providing interim financing for the costs of the improvements set out in Section 1, pending the issuance of permanent sewer revenue bonds by the City of Blair, as described in Section 1 hereof, there shall be and there are hereby ordered issued notes of the City of Blair, Nebraska to be known as Sewer Revenue Bond Anticipation Notes, Series 2007 (the "Notes ") in the aggregate principal amount of One Million Four Hundred Fifty -Five Thousand Dollars ($1,455,000), with said notes bearing interest at the rate of 4.05% per annum (said interest to be computed on the basis of a 360 -day year consisting of twelve 30 -day months), and to become due on October 1, 2010. The Notes 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 Notes shall be the date of delivery thereof. Interest on the Notes shall be payable semiannually on April 1 and October 1 of each year, commencing April 1, 2008 (each of said dates an "Interest Payment Date ") and the Notes shall bear such interest from the date of original issue or the most recent Interest Payment Date, whichever is later. 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 fifteenth 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 Notes shall be numbered from 1 upwards in the order of their issuance. The initial numbering and principal amounts for each of the Notes shall be designated by the City Treasurer as directed by the initial purchaser thereof. Payments of interest due on the Notes 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 Note, 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 Notes to said Paying Agent and Registrar. The City and said Paying Agent and Registrar may treat the registered owner of any Note 2 as the absolute owner of such Note 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 Note 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 Note in accordance with the terms of this 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 Notes or claims for interest to the extent of the sum or sums so paid. Section 3. The City Treasurer is hereby designated as Paying Agent and Registrar for the Notes. The Paying Agent and Registrar shall keep and maintain for the City books for the registration and transfer of the Notes at the City's offices. The names and registered addresses of the registered owner or owners of the Notes shall at all times be recorded in such books. Any Note may be transferred pursuant to its provisions at the offices of said Paying Agent and Registrar by surrender of such Note for cancellation, accompanied by a written instrument of transfer, in form satisfactory to said Paying Agent and Registrar, duly executed by the registered owner in person or by such owner's duly 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 such transferee owner or owners, a new Note or Notes of the same interest rate, aggregate principal amount and maturity. To the extent of the denominations authorized for the Notes by this ordinance, one such Note may be transferred for several such Notes of the same interest rate and maturity, and for a like aggregate principal amount, and several such Notes may be transferred for one or several such Notes, respectively, of the same interest rate and maturity and for a like aggregate principal amount. In every case of transfer of a Note, the surrendered Note or Notes shall be canceled and destroyed. All Notes issued upon transfer of the Notes so surrendered shall be valid obligations of the City evidencing the same obligations as the Notes surrendered and shall be entitled to all the benefits and protection of this ordinance to the same extent as the Notes upon transfer of which they were delivered. The City and said Paying Agent and Registrar shall not be required to transfer any Note during any period from any Record Date until its immediately following Interest Payment Date or to transfer any Note called for redemption for a period of 30 days next preceding the date fixed for redemption. 3 Section 4. In the event that payments of interest due on the Notes 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 Notes as of a special date of record for payment of such defaulted interest as shall be designated by the Paying Agent and Registrar whenever monies for the purpose of paying such defaulted interest become available. Section 5. If the date for payment of the principal of or interest on the Notes shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the City of Blair, Nebraska, 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 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. The Notes of this issue shall be subject to redemption, in whole or in part, prior to maturity at the option of the City at any time on or after April 1, 2009, at par plus accrued interest on the principal amount redeemed to the date fixed for redemption. The City may select the Notes to be redeemed in its sole discretion, but Notes shall be redeemed only in amounts of $5,000 or integral multiples thereof. Notes redeemed in part only shall be surrendered to the Paying Agent and Registrar in exchange for new Notes evidencing the unredeemed principal thereof. Notice of redemption of any Note called for redemption shall be given at the direction of the City by the Paying Agent and Registrar by mail not less than thirty days prior to the date fixed for redemption, first class, postage prepaid, sent to the registered owner of such Note at such owner's registered address. Such notice shall designate the Note or Notes to be redeemed by number, the date of original issue and the date fixed for redemption and shall state that such Note or Notes are to be presented for prepayment at the office of the Paying Agent and Registrar. In case of any Note partially redeemed, such notice shall specify the portion of the principal amount of such Note to be redeemed. No defect in the mailing of notice for any Note shall affect the sufficiency of the proceedings of the City designating the Notes called for redemption or the effectiveness of such call for Notes for which notice by mail has been properly given and the City shall have the right to further direct notice of redemption for any such Note for which defective notice has been given. Section 7. The Notes shall be in substantially the following form: 4 No. Registered Owner: UNITED STATES OF AMERICA STATE OF NEBRASKA COUNTY OF WASHINGTON SEWER REVENUE BOND ANTICIPATION NOTE SERIES 2007 OF THE CITY OF BLAIR, NEBRASKA Interest Rate Maturity Date Date of Oriuinal Issue CUSIP No. October 1, 2010 Principal Amount: Dollars KNOW ALL PERSONS BY THESE PRESENTS: That the City of Blair, in the County of Washington, in the State of Nebraska, hereby acknowledges itself to owe and for value received promises to pay (but only from the sources specified herein) 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 maturity date 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, payable semiannually on April 1 and October 1 of each year, commencing April 1, 2008 (each of said dates an "Interest Payment Date "), or earlier date of redemption. Said interest shall be computed on the basis of a 360 -day year consisting of twelve 30 -day months. 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 note at the office of the City Treasurer of the City of Blair, Nebraska, as Paying Agent and Registrar, in Blair, Nebraska. Interest on this note 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 note, as shown on the books of record maintained by the Paying Agent and Registrar, at the close of business on the fifteenth 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 note (or of one or more predecessor notes hereto) on such special record date for payment of such defaulted interest as shall be fixed by the Paying Agent and Registrar whenever monies for such purpose become available. All notes of this issue are subject to redemption prior to maturity on April 1, 2009, or at any time thereafter at par plus accrued interest on the principal amount redeemed to the date set for redemption. Notice of redemption shall be given by mail to the registered owner of any note to be redeemed, not less than thirty days prior to the date set for redemption, in the manner specified in the ordinance authorizing the issuance of said notes. Individual notes may be redeemed in part but only in the amount of $5,000 or any integral multiple thereof. This note is one of an issue of fully registered notes of the total principal amount of $1,455,000, of even date and like tenor herewith, except as to denomination, which were issued by the City for the purpose of providing interim financing for the cost of extending, enlarging, improving and maintaining the City's sewage disposal plant and sanitary sewer system pending the issuance of permanent sewer revenue bonds. The issuance of this note and the other notes of this issue has been lawfully authorized by an ordinance duly passed, approved and published by the Mayor and Council of the City of Blair in strict compliance with Sections 18 -1803 to 18 -1805, Reissue Revised Statutes of Nebraska, 1997, as amended. 5 The interest and principal of this note are payable from monies in the Surplus Account previously established in connection with the issuance and sale by the City of its Sewer System Revenue Refunding Bonds, Series 2004, of which there are presently outstanding bonds in the principal amount of $800,000 (the "Outstanding Bonds "), all as described in the ordinance authorizing the issuance of said series of notes. Reference is hereby made to said ordinance for a full description of the covenants of the City with respect to said series of notes. In said ordinance, the City has agreed, among other things, to issue and sell its sewer revenue bonds in an amount sufficient, along with other available funds, to enable it to take up and pay off said series of notes at or prior to maturity. This note shall not be a debt of the City of Blair, Nebraska, within the meaning of any constitutional, statutory or charter limitation upon the creation of general obligation indebtedness of said City and said City shall not be liable for the payment thereof out of any monies of the City other than from the proceeds of sewer revenue bonds to be issued and monies in the Surplus Account. This note is junior and subordinate to the Outstanding Bonds (and any "Additional Bonds" which may hereafter be issued under the terms of the ordinance authorizing the Outstanding Bonds) with respect to the revenues of the Sewer System. The City reserves the right to issue additional Sewer Revenue Bond Anticipation Notes for the purpose of refunding the notes of this issue at or prior to maturity and for the purpose of paying for additional improvements for its Sewer System. The ordinance under which the notes are issued constitutes an irrevocable contract between the City and the holders of all of said notes and said contract cannot be changed or altered without the written consent of the holders of seventy -five per cent (75 %) in principal amount of the notes then outstanding. This note is transferable by the registered owner or such owner's attorney duly authorized in writing at the 'office of the City Treasurer of Blair, Nebraska, as Paying Agent and Registrar, upon surrender and cancellation of this note and thereupon a new note or notes of the same aggregate principal amount will be issued to the transferee as provided in the ordinance authorizing said issue of notes, 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 note 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 note be overdue or not. If the date for payment of the principal of or interest on this note shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the City of Blair, Nebraska, 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 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. 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 note did exist, did happen and were done and performed in regular and due form and time as required by law and that the indebtedness of the City, including this note, does not exceed any limitation imposed by law. AS PROVIDED IN THE ORDINANCE REFERRED TO HEREIN, UNTIL THE TERMINATION OF THE SYSTEM OF BOOK - ENTRY -ONLY 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 NOTE MAY BE PAID OR REDEEMED WITHOUT SURRENDER HEREOF TO THE PAYING AGENT AND REGISTRAR. DTC OR A NOMINEE, TRANSFEREE OR ASSIGNEE OF DTC OF THIS NOTE 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. 6 UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED OFFICER OF DTC (A) TO THE PAYING AGENT AND REGISTRAR FOR REGISTRATION OF TRANSFER OR EXCHANGE OR (B) TO THE PAYING AGENT AND REGISTRAR FOR PAYMENT OF PRINCIPAL, AND ANY NOTE ISSUED IN REPLACEMENT HEREOF OR SUBSTITUTION HEREOF 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 PERSONS IS WRONGFUL BECAUSE ONLY THE REGISTERED OWNER HEREOF, DTC OR ITS NOMINEE, HAS AN INTEREST HEREIN. This note shall not be valid for any purpose until the Certificate of Authentication hereon shall have been signed by the Paying Agent and Registrar. IN WITNESS WHEREOF, the Mayor and Council of the City of Blair, Nebraska; have caused this note to be executed on behalf of the City with the signatures of its Mayor and City Clerk, both of which signatures may be facsimile signatures, and by having affixed hereto or imprinted hereon the City's seal, all as of the date of issue shown above. (SEAL) ATTEST: City Clerk THE CITY OF BLAIR, NEBRASKA By: Mayor 7 For value received, transfers unto Security or Taxpayer I.D. N constitutes and appoints registration in the office of substitution in the premises. CERTIFICATE OF AUTHENTICATION AND REGISTRATION This note is one of the series designated therein and has been registered to the owner named in said note and the name of such owner has been recorded in the books of record maintained by the undersigned as Paying Agent and Registrar for said issue of notes. Signature Guaranteed By Authorized Officer City Treasurer, Paying Agent and Registrar for the City of Blair, Nebraska (FORM OF ASSIGNMENT) hereby sells, assigns and , (Social o. ) the within note and hereby irrevocably , attorney, to transfer the same on the books of the within- mentioned Paying Agent and Registrar with full power of 8 Dated: Registered Owner(s) Note: The signature(s) of this assignment MUST CORRESPOND with the name(s) as written on the face of the within note 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. Section 8. Each of the Notes shall be executed on behalf of the City with the facsimile signatures of the Mayor and the City Clerk and shall have imprinted thereon the City's seal. The Notes shall be issued initially as "book- entry- only" notes under the services of The Depository Trust Company (the "Depository"), with one typewritten note certificate 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 (which may be in the form of a blanket letter, including any such 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 Notes. Upon the issuance of the Notes as "book -entry- only" notes, the following provisions shall apply: (a) The City 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 Notes as securities depository (each, a "Note Participant ") or to any person who is an actual purchaser of a Note from a Note Participant while the Notes 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 Note Participant with respect to any ownership interest in the Notes, (ii) the delivery to any Note Participant, any Beneficial Owner or any other person, other than the Depository, of any notice with respect to the Notes, including any notice of redemption, or (iii) the payment to any Note Participant, any Beneficial Owner or any other person, other than the Depository, of any amount with respect to the Notes. The Paying Agent and Registrar shall make payments with respect to the Notes 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 Notes to the extent of the sum or sums so paid. No person other than the Depository shall receive an authenticated Note, except as provided in (e) below. (b) Upon receipt by the Paying Agent and Registrar of written notice from the Depository to the effect that the Depository is unable or unwilling to discharge its responsibilities, the Paying Agent and Registrar shall issue, transfer and exchange Notes requested by the Depository in appropriate amounts. 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 Notes or (ii) to make available Notes registered in whatever name or names as the Beneficial Owners transferring or exchanging such Notes shall designate. 9 (c) If the City determines that it is desirable that certificates representing the Notes be delivered to the ultimate beneficial owners of the Notes 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 Note Participants of the availability through the Depository of note certificates representing the Notes. In such event, the Paying Agent and Registrar shall issue, transfer and exchange note certificates representing the Notes as requested by the Depository in appropriate amounts and in authorized denominations. (d) Notwithstanding any other provision of this ordinance to the contrary, so long as any Note is registered in the name of the Depository or any nominee thereof, all payments with respect to such Note and all notices with respect to such Note shall be made and given, respectively, to the Depository as provided in the Letter of Representations. (e) Registered ownership of the Notes may be transferred on the books of registration maintained by the Paying Agent and Registrar, and the Notes may be delivered in physical form to the following: (i) any successor securities depository or its nominee, or (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. (f) In the event of any partial redemption of a Note unless and until such partially redeemed Note has been replaced in accordance with the provisions of this ordinance, the books and records of the Paying Agent and Registrar shall govern and establish the principal amount of such Note as is then outstanding and all of the Notes issued to the Depository or its nominee shall contain a legend to such effect. If for any reason the Depository is terminated or resigns and is not replaced, the City shall immediately provide a supply of printed note certificates, duly executed by manual or facsimile signatures of the Mayor and City Clerk and sealed with the City's seal, for issuance upon the transfers from the Depository and subsequent 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 Note shall cease to be such officer before the delivery of such Note (including such note certificates delivered to the Paying Agent 1 0 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 Note. The City Treasurer shall maintain a record of information with respect to said Notes in accordance with the requirements of Section 10 -140, R.R.S. Neb. 1997, as amended, and shall cause the same to be filed with the Auditor of Public Accounts of the State of Nebraska. After execution of the Notes they shall be delivered to the Paying Agent and Registrar for registration and said Paying Agent and Registrar shall execute a certificate on each Note showing such registration and authentication thereof. Upon execution and registration of the Notes, 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 98.90% of the principal amount of the Notes plus accrued interest thereon to date of payment for the Notes. The officers of the City (or any one of them) are hereby authorized to execute and deliver the Note Purchase Agreement for and on behalf of the City. Said initial purchaser shall have the right to direct the registration of the Notes and the denominations, subject to the restrictions of this ordinance. Such purchaser and its agents, representatives and counsel (including its bond counsel) are hereby authorized to take such actions on behalf of the City as are necessary to effectuate the closing of the issuance and sale of the Notes, including, without limitation, authorizing the release of the Notes by the Depository at closing. Section 9. The City Clerk is hereby directed to make and certify a transcript of the proceedings of the City precedent to the issuance of said Notes which shall be delivered to the purchaser of said Notes. Section 10. The City hereby covenants and agrees to issue and sell its sewer revenue bonds in a sufficient amount and at such times as will enable it to take up and pay off the Notes herein ordered issued, both principal and interest, at or prior to maturity, if not previously paid from other sources. The City agrees that the payment of interest on the Notes shall be provided for out of the Surplus Account, from revenues of the City's Sewer System, to the extent permitted, from the proceeds of the Notes (during any construction period) or from the issuance of other sewer revenue bond anticipation notes or sewer revenue bonds. The City further agrees that it will establish, maintain and collect rates and charges for its Sewer System throughout the life of said Notes sufficient to enable the City to issue and sell its sewer 1 1 revenue bonds in an amount sufficient to pay in full the Notes at or prior to maturity and agrees to use the proceeds of such sale of sewer revenue bonds for taking up and paying off said Notes at or prior to maturity to the extent not provided for from other sources. The City further agrees that said rates and charges shall also be sufficient, after taking into consideration any other revenues available, to provide for all costs associated with the ownership, operation, maintenance, renewal and replacement of the City's Sewer System, including providing for payment of debt service on the Outstanding Bonds and the Notes herein authorized. The Notes shall not be a debt of the City within the meaning of any constitutional, statutory, or charter limitation upon the creation of general obligation indebtedness of the City, and the City shall not be liable for the payment thereof out of any money of the City other than from monies received by the issuance and sale of permanent sewer revenue bonds, as described herein, and from monies in the Surplus Account as required to be maintained by the Outstanding Bond Ordinance and this ordinance. The Surplus Account, previously established under the Outstanding Bond Ordinance, is hereby ratified and confirmed. Pending payment from the proceeds of such sewer system revenue bonds, the Notes are payable only and solely from the Surplus Account, and as such are subject to the prior payment of operation and maintenance expenses and all payments with respect to the Outstanding Bonds and any Additional Bonds which may from time to time be issued and outstanding, all as described in the Outstanding Bond Ordinance. Subject to the terms of the Outstanding Bond Ordinance, the holders of the Notes have a lien on the revenue and earnings of the City's Sewer System, which lien shall be in all respects junior to the lien in favor of the Outstanding Bonds (and any "Additional Bonds" which may be issued under the terms of the Outstanding Bond Ordinance). The lien provided for in this ordinance in favor of the holders of the Notes shall not prevent the City from applying the revenues of the Sewer System to any purpose permitted by law including the payment of the costs of further improvements to the Sewer System and payments on general obligation indebtedness incurred for improvements to the Sewer System, so long as there is no default in the payment of principal or interest due on the Notes. The City reserves the right to issue additional sewer revenue bond anticipation notes for the purpose of refunding the Notes at or prior to maturity and for the purpose of paying additional costs of extending, enlarging and improving the Sewer System. Any such additional notes may be issued on the basis of an 12 equal lien with the lien in favor of the Notes upon the revenues of the City's Sewer System. Section 11. Monies in the Surplus Account shall be invested as provided in the Outstanding Bond Ordinance. Such investments shall mature or be redeemable at the option of the holder at such time or times as shall make funds available when needed for the purposes of paying said principal and interest. Any earnings on such investments when realized and collected shall be transferred to the Construction Fund, as described herein, and held and applied in the same manner as other moneys therein. The City Treasurer is hereby directed to disburse moneys in the Surplus Account to pay principal and interest on the Notes herein authorized as the same fall due, without further authorization. Section 12. There is hereby established with the City Treasurer of the City of Blair, Nebraska, a special fund to be known as the "City of Blair, Sewer Revenue Bond Anticipation Note Construction Fund ", herein referred to as the "Construction Fund ". Into the Construction Fund there shall be deposited the balance of proceeds from the sale of the Notes herein authorized after payment of issuance expenses. Said Construction Fund shall be kept separate and apart from all other funds of the City. Moneys in the Construction Fund shall be used and applied to pay the costs of the improvements to the City's Sewer System as directed by the Mayor and Council of the City of Blair, and moneys in the Construction Fund not required to pay for improvements may be applied to the redemption of said Notes on or before maturity. Moneys in the Construction Fund which are not immediately required for paying the costs of the improvements shall be invested in any investments which are permissible for funds of a city of the first class. Such investments shall mature or be redeemable at the option of the holder at such time or times as shall make funds available when needed for purposes of paying the costs of the improvements to the Sewer System. Any earnings on such investments shall be used for paying the costs of the improvements in the same manner as other moneys in the Construction Fund. Monies in the Construction Fund may be transferred to the Surplus Account for payment of interest falling due on the Notes. Section 13. The City hereby reserves the right, subject to the terms of the Outstanding Bond Ordinance and this ordinance, to issue additional Sewer Revenue Bond Anticipation Notes for the purpose of refunding the Notes herein ordered issued at or prior to maturity and for paying additional costs of extending, enlarging and improving the City's Sewer System. This ordinance shall constitute an 13 irrevocable contract between the City and the registered owners of all of said Notes and said contract cannot be changed or altered without the written consent of the registered owners of 75% in principal amount of Notes then outstanding. Section 14. The City Treasurer shall be bonded, including coverage under his official bond, in an amount sufficient to cover the moneys which maybe placed in his hands pursuant to the provisions of this ordinance and otherwise sufficient to comply with the Outstanding Bond Ordinance Any other person employed by the City in the collection or handling of moneys derived from or related to the City's Sewer System and derived from and related to the funds provided for in this ordinance shall also be bonded in amounts sufficient to cover the moneys which may be placed in his hands. The amount and sufficiency of such bonds shall be determined by the Mayor and Council and such bonds shall have as surety thereon a reputable insurance company authorized to do business in the State of Nebraska. Section 15. The City will maintain as long as any of said Notes are outstanding with reputable insurance companies insurance as required under the terms of the Outstanding Bond Ordinance, which shall include insurance on the City's Sewer System including improvements described in Section 1, of the kind and in the amounts as would commonly be carried by private utilities engaged in and operating the same or similar utilities. Such insurance shall include, but not necessarily be limited to, workers' compensation, public liability, fire, windstorm and comprehensive coverage. In the event of any loss or damage to any part of the Sewer System, the proceeds of which may be collected or paid on any policy or policies covering the same, shall be used by the City to rehabilitate said Sewer System. Section 16. The holders of the Notes of this issue shall be subrogated to all rights of the registered owners of any claims which are paid from the proceeds of said Notes. Section 17. The City hereby covenants to the purchasers and registered owners of the Notes hereby authorized that it will make no use of the proceeds of said Note issue, including monies held in any sinking fund for the Notes, which would cause the Notes to be arbitrage bonds within the meaning of Sections 103(b) and 148 of the Internal Revenue Code of 1986, as amended (the "Code "), and further covenants to comply with said Sections 103(b) and 148 and all applicable regulations thereunder throughout the term of said issue. The City hereby covenants and agrees to take all actions necessary under the Code to maintain the tax exempt status (as to taxpayers generally) of interest payable on the 14 Notes, including reporting and payment of rebate amounts under Section 148 of the Code if and to the extent required. Section 18. 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 Underwriter, the City shall provide annual financial and operating information generally consistent with the information set forth under the heading "SUMMARY FINANCIAL STATEMENT" in the Official Statement for the Notes 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 the business -type activities contained in the government -wide and fund financial statements as well as the proprietary fund and fiduciary fund financial statements using the economic resources measurement focus and the accrual basis of accounting in conformity with generally accepted accounting principles; (b) in a timely manner to each NRMSIR or to the Municipal Securities Rulemaking Board ( "MSRB "), notice of the occurrence of any of the following events with respect to the Notes, 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, (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 Notes, (7) modifications to rights of the Noteholders, (8) Note calls, (9) defeasances, (10) release, substitution, or sale of property securing repayment of the Notes, and (11) rating changes. 15 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 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. Any filing with respect to this ordinance may be made solely by transmitting such filing to the Texas Municipal Advisory Council (the "MAC ") as provided at http: / /www.disclosureusa.org unless the United States Securities and Exchange Commission has withdrawn the interpretive advice in its letter to the MAC dated September 7, 2004. 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. Disclosure to the MSRB under this section shall be required only as and to the extent provided in the Rule as it may be amended from time to time. The City hereby agrees that such covenants are for the benefit of the registered owners of the Notes (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 this ordinance. The continuing disclosure obligations of the City under this ordinance, as described above, shall cease when none of -the Notes remain outstanding. Section 19. All ordinances, resolutions or orders, or parts thereof, in conflict with the provisions of this ordinance are to the extent of said conflict hereby repealed. Section 20. The Preliminary Official Statement is hereby approved and the Mayor and City Clerk are hereby authorized to approve on behalf of the City a final Official Statement with any changes deemed appropriate by them. The Mayor, City Clerk, Treasurer and Fiscal Administrator of the City are hereby authorized to do all things and execute all such documents as may by them be deemed necessary and proper to complete the issuance and sale of the Notes. 16 Section 21. This ordinance shall be published in pamphlet form and shall be in full force and effect from and after its passage as provided by law. PASSED AND APPROVED this 2 (p day of ' S U rl e- . 2007. (SEAL) Z6/41„, City Clerk 17