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2102ORDINANCE NO. 2102 "AN ORDINANCE OF THE CITY OF BLAIR, NEBRASKA, AUTHORIZING THE ISSUANCE AND SALE OF WATER SYSTEM REVENUE BOND ANTICIPATION NOTES OF THE CITY OF BLAIR, NEBRASKA, IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED FIFTEEN MILLION DOLLARS ($15,000,000) FOR THE PURPOSE OF PROVIDING INTERIM FINANCING FOR THE COST OF EXTENDING, ENLARGING AND IMPROVING THE CITY'S WATERWORKS PLANT AND SYSTEM PENDING THE ISSUANCE OF PERMANENT REVENUE BONDS OF THE CITY; PRESCRIBING THE FORM OF SAID NOTES; AGREEING TO ISSUE THE CITY'S WATER SYSTEM REVENUE BONDS TO PAY THE NOTES AT MATURITY OR TO PAY THE NOTES FROM OTHER AVAILABLE FUNDS; PROVIDING FORA PLEDGE OF THE REVENUES OF THE WATER SYSTEM, JUNIOR AND SUBORDINATE TO THE PLEDGE OF REVENUES IN FAVOR OF THE CITY'S OUTSTANDING BONDS AND ADDITIONAL BONDS FROM TIME TO TIME ISSUED AND OUTSTANDING, FOR PAYMENT OF SUCH NOTES; 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 (the "City ") hereby find and determines as follows: (a) the City owns and operates its own waterworks plant and system (the "Water System "), which constitutes a revenue - producing undertaking of the City; (b) that it is necessary and advisable to enlarge, expand and improve the Water System by construction of expansions, enlargements and improvements (the "Project ") to the Water System, and particularly expansions, enlargements and improvements to the City's water treatment plant; (c) that based upon the estimate furnished by the City's engineer, the cost of the Project is not less than $15,000,000; (d) that in order to pay the costs of the Project pending permanent revenue bond financing it is necessary and advisable for the City to issue and sell its water system revenue bond anticipation notes in the principal amount of not to exceed $15,000,000 pursuant to —4— Sections 18 -1803 to 18 -1805, R.R.S. Neb. 1997, as amended; (e) that there are presently outstanding the following obligations of the City for which the revenues of the Water System have been pledged (collectively, the "Outstanding Bonds "): Water System Revenue Refunding Bonds, Series 2000, issued pursuant to Ordinance No. 1909 of the City adopted August 22, 2000, of which there are presently outstanding bonds in the principal amount of $1,065,000 (the "2000 Bonds "); and Nebraska Department of Environmental Quality Drinking Water State Revolving Loan Program Project/Loan No. D311007 (the "NDEQ Loan "), evidenced by a promissory note, the original principal amount of which was up to $6,815,700; and Water System Revenue Bond, Series 2006, issued pursuant to Ordinance No. 2065 of the City adopted May 9, 2006, of which there are presently outstanding bonds in the principal amount of $2,700,000 (the "2006 Bonds "); (f) that said Outstanding Bonds are the only presently outstanding obligations of the City for which the revenues of the Water System have been pledged; (g) that the ordinances authorizing the Outstanding Bonds (together, the "Outstanding Bond Ordinances ") 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 Retained Revenues Account established and maintained under the terms of the Outstanding Bond Ordinances; and (h) that all things, conditions and acts required by law to exist or to be done precedent to the issuance by the City of its Water System Revenue Bond Anticipation Notes, in one or more series, in the aggregate stated principal amount of not to exceed $15,000,000 as provided herein do exist and have been done as provided by law. Section 2. For the purpose of providing interim financing for the costs of the Project pending the issuance of permanent water system revenue bonds by the City, there shall be and there are hereby ordered issued notes of the City to be known as Water System Revenue Bond Anticipation Notes, in one or more series (the "Notes ") of the aggregate stated principal amount of not to exceed Fifteen Million Dollars ($15,000,000), with said Notes maturing on June 15, 2012, bearing interest at the rate of not to exceed 6.50% per annum (to be computed on the basis of a 360 -day year consisting —5— of twelve 30-day months), all as determined in one or more of the Designations referenced in Section 20 below. 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 of each series shall be the date of delivery thereof. Interest on the Notes shall be payable semiannually on June 15 and December 15 of each year (each of said dates an "Interest Payment Date "), with the initial such Interest Payment Date to be determined in the related Designation, or any date of earlier redemption, 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 immediately preceding the Interest Payment Date (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 as the absolute owner of such Note for the purpose of making payments thereon and for all other purposes —6— 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 stated 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. —7— 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. Section 4. In the event that payments of interest due on the Notes on any 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 are subject to redemption, in whole or in part, prior to maturity at the option of the City at any time on or after June 15, 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 —8— 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: UNITED STATES OF AMERICA STATE OF NEBRASKA COUNTY OF WASHINGTON WATER SYSTEM REVENUE BOND ANTICIPATION NOTE OF THE CITY OF BLAIR, NEBRASKA SERIES No. $ Interest Rate Maturity Date Date of Original Issue CUSIP No. % June 15, 20 , 200 Registered Owner: 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 on , 200 , and semiannually thereafter on June 15 and December 15 of each year (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, 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 immediately preceding the Interest Payment Date, 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 June 15, 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 $ , 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 enlarging, expanding and improving the City's waterworks plant and system pending the issuance of permanent water system 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 in strict compliance with Sections 18 -1803 to 18 -1805, Reissue Revised Statutes of Nebraska, 1997, as amended. The interest and principal of this note are payable from monies in the "Retained Revenues Account" described in the ordinance authorizing the issuance of said notes, as previously established with respect to the City's outstanding Water System Revenue Refunding Bonds, Series 2000, presently outstanding in the principal amount of $1,065,000 (the "2000 Bonds "), Nebraska Department of Environmental Quality Drinking Water State Revolving Loan Program Project/Loan No. D311007, evidenced by a promissory note, the original principal amount of which was up to $6,815,700 (the "NDEQ Loan"), and Water System Revenue Bond, Series 2006, issued pursuant to Ordinance No. 2065 of the City adopted May 9, 2006, of which there are presently outstanding bonds in the principal amount of $2,700,000 (the "2006 Bonds "). The Notes are payable only and solely from amounts to be received by the City from the issuance and sale of its permanent water system revenue bonds or from funds available in the Retained Revenues Account, and as such, are subject to the prior payment of operation and maintenance expenses and all payments with respect to the 2000 Bonds, the NDEQ Loan and the 2006 Bonds and any Additional Bonds which may from time to time be issued and outstanding, all as described in the ordinances authorizing the issuance of the 2000 Bonds, the NDEQ Loan, the 2006 Bonds or any Additional Bonds (collectively, the "Outstanding Bond Ordinances "). Reference is hereby made to the ordinance authorizing the Notes 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 water system 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 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 water system revenue bonds to be issued and monies in the Retained Revenues Account. The City —11— reserves the right to issue Additional Bonds which shall be senior in lien against the revenues of the Water System in relation to the notes of this issue. The City also reserves the right to issue additional water system 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 Water System. The ordinance under which these 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. 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. 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 HEREFOR IS REGISTERED IN THE NAME OF DTC AND ANY PAYMENT IS MADE TO DTC —12— 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 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. 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 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 original issue shown above. (SEAL) ATTEST: (Sample —Do Not Sign) City Clerk THE CITY OF BLAIR, NEBRASKA By: (Sample —Do Not Sian) Mayor 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. (Sample —Do Not Sian) City Treasurer, Paying Agent and Registrar (FORM OF ASSIGNMENT) For value received, hereby sells, assigns and transfers unto , (Social Security or Taxpayer I.D. No. ) the within note 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. Signature Guaranteed By: Authorized Officer 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 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 include 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 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. —15— (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. (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 and the terms of the ordinance. If for any reason the Depository 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 —16— 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 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 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 of each series, 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 a purchase price as provided in the related Designation, which purchase price shall take into account: (a) underwriter's discount not in excess of 1.5% of the stated principal amount of the Notes, (b) original issue premium and /or discount such that the aggregate net original issue discount for the entire issue of Notes is not more than 2.0% of the stated principal amount of the Notes, and (c) accrued interest thereon (if any) to date of payment for the Notes. Said initial purchaser shall have the right to direct the registration of the Notes and the denominations, subject to the restrictions of this ordinance. The form of the bond purchase agreement for the purchase of the Notes is hereby approved and, upon execution and delivery of the Designation for each respective issue of Notes, the officers of the City are authorized to finalize such bond purchase agreement for such issue, and its execution by any officer on behalf of the City is hereby authorized. Such initial 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 of each such issue, including, without limitation, authorizing the release of the Notes by the Depository at the closing of each such issue. 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 initial purchaser of said Notes. Section 10. The City hereby covenants and agrees to issue and sell its water system 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 "Retained Revenues Account" previously established under the terms of the Outstanding Bond Ordinances, is hereby ratified and confirmed. Pending payment from the proceeds of such water system revenue bonds, the Notes are payable only and solely from the Retained Revenues 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 Ordinances. The City further agrees that it will establish, maintain and collect rates and charges for its Water System throughout the life of said Notes sufficient to enable the City to make all payments with respect to the Outstanding Bonds and the Notes and any Additional Bonds issued and outstanding from time to time, and to issue and sell its water system revenue bonds in an amount sufficient to pay in full the 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 Water System. 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 water system revenue bonds, as described herein and from monies in the Retained Revenues Account. The holders of said notes have a lien on the revenue and earnings of the City's Water System, which lien shall be in all respects junior to the lien in favor of the Outstanding Bonds and any Additional Bonds from time to time issued and outstanding. 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 Water System to any purpose permitted by law and the Outstanding Bond Ordinances including the payment of the costs of further improvements to the Water System and payments on other indebtedness incurred for improvements to the Water System. Section 11. Moneys in the Retained Revenues Account which are not immediately required for paying principal or interest as the same falls due on the Notes herein authorized shall be invested as provided in the Outstanding Bond Ordinances, or 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 the purposes of paying said principal and interest. The City Treasurer is hereby directed to disburse moneys in the Retained Revenues 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 a special fund to —19— be known as the "City of Blair, Water System 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 Project as directed by the Mayor and Council of the City and moneys (if any) in the Construction Fund not required to pay for improvements may be applied to the redemption of said Notes prior to maturity. Moneys in the Construction Fund which are not immediately required for paying the costs of the Project 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 Project. Any earnings on such investments shall be used for paying the costs of the Project in the same manner as other moneys in the Construction Fund. Monies in the Construction Fund may be transferred to the Retained Revenues 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 Ordinances, to issue additional water system 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 Water System. This ordinance shall constitute an 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 her official bond, —20— in an amount sufficient to cover the moneys which may be placed in her hands pursuant to the provisions of this ordinance. Any other person employed by the City in the collection or handling of moneys derived from or related to the City's Water 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 or her 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 Ordinances, including insurance on the City's Water System (including the Project), 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 Water System, the proceeds of which may be collected or paid on any policy or policies covering the same, shall be used by the City as provided in the Outstanding Bond Ordinances to rehabilitate said Water System. Section 16. The City hereby covenants with the purchasers and registered owners of the Notes that it will make no use of the proceeds of said issue, including monies held in any sinking fund for the payment of principal of and interest on said Notes, which would cause said Notes to be arbitrage bonds within the meaning of Sections 103 (b) and 148 of the Code, and further covenants to comply with said Sections 103 (b) and 148 and all applicable regulations thereunder throughout the term of said note issue. The City hereby covenants and agrees to take all actions necessary under the —21— Code to maintain the tax exempt status (as to taxpayers generally) of interest payable on the Notes. The City hereby further covenants and warrants as follows: (a) No portion of the Project or the Water System financed with the proceeds of the Notes will consist of any airplane, health club facility, skybox or other luxury box, facility primarily used for gambling or store the principal business of which is the sale of alcoholic beverages for consumption off premises. (b) Any and all office space constituting a part of the property or improvements financed by the Notes shall be located at the City's Water Treatment Plant (of which the Project is a part) and not more than a de minimis amount of the functions to be performed at such office shall be other than directly related to the day -to -day operations of City's Water System. (c) The average maturity of the Notes does not and shall not exceed 120% of the remaining average reasonably expected economic life of the Project. (d) Less than 25% of the proceeds of the Notes will be applied for the acquisition of land or an interest in land. (e) All of the Project will be new property with its first use being made pursuant to acquisition from such proceeds. (f) No more than 2% of the proceeds of the Notes shall be applied to pay any expenses related to the issuance of the Notes. (g) The City shall make payments and reports with respect to arbitrage rebates as required under the terms of Section 148 of the Code and applicable regulations thereunder. (h) No portion of the proceeds of the Notes will be used to acquire property to be leased to the government of the United States of America or to any department, agency or instrumentality of the government of the United States of America; and no moneys in the debt service fund (or other fund created under the Ordinance) shall be invested in investments which cause the Notes to be federally guaranteed within the meaning of Section 149(b) of the Code. If at any time the moneys in such funds exceed, within the meaning of Section 149(b)(3)(B) of the Code, (i) amounts invested for an initial temporary period until the moneys are needed for the purpose for which the Notes were issued, (ii) investments of a bona fide debt service fund, and (iii) investments of a reserve which meet the requirement of Section 148(d) of the Code, such excess moneys shall be invested in only those government obligations, as otherwise appropriate, which are (A) obligations issued by the United States Treasury, (B) other investments permitted under regulations, or (C) obligations which are (a) not issued by, or guaranteed by, or insured by, the United States or any agency or —22— instrumentality thereof or (b) not federally insured deposits or accounts, all within the meaning of Section 149(b)(3)(B) of the Code. (i) Water from the Water System is and will be made available to members of the general public (including electric utility, industrial, agricultural, or commercial users). (j) The Water System is and will be owned by the City, and rates for the furnishing or sale of water from the Water System have been and will be established and approved by the City. The covenants set forth in this Section are intended to apply to the Notes generally. The City's covenants are not intended to provide assurance of the tax - exempt status of interest on the Notes in the event that, and for any period of time when, any of the Notes are held by a "substantial user" of the Project or a "related person" of any such substantial user within the meaning of Section 147(a) of the Code. Section 17. 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 Notes, 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 notes, information concerning the rates and numbers of users for the Water System 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 cash basis (with general fixed assets excluded) and as to proprietary fund types on an accrual basis; (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 Notes, if in the judgment of the City, such event is material: (1) principal and interest payment delinquencies, —23— (2) non - payment related defaults, (3) (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) unscheduled draws on debt service reserves reflecting financial difficulties, 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. 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. 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 —24-- 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 the Ordinance. The continuing disclosure obligations of the City under the Ordinance, as described above, shall cease when none of the Notes remain outstanding. Section 18. The Preliminary Official Statement is hereby approved and the Mayor and City Clerk are hereby authorized to approve and deem final on behalf of the City a final Preliminary Official Statement and a final Official Statement with any changes deemed appropriate by them. Section 19. The Mayor, 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 as contemplated by this Ordinance. Section 20. The aggregate principal amount of Notes to be issued in each series, and the series description, initial Interest Payment Date, final interest rates and pricing (taking into account underwriter's discount and original issue discount and /or premium) for the Notes shall be determined in a written designation or bond purchase agreement for each issue of Notes (each, a "Designation" and together, the "Designations ") to be executed on behalf of the City by the Mayor and, and such Designations, when executed by the Mayor and agreed to by the initial purchaser of the Notes, shall constitute the final approving action of the City for each series of Notes without further action of the City Council. Section 21. If any section, paragraph, clause, or provision of this ordinance shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this ordinance. Section 22. All ordinances, resolutions or orders, or parts thereof, in conflict with the —25— effect from and after its passage as provided by law. (SEAL) PASSED AND APPROVED this l3 day of March, 2007. i City Clerk