859 KILLION LID BAN
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CITY OF YELM, WASHINGTON
, KILLION ROAD LOCAL IMPROVEMENT DISTRICT
BOND ANTICIPATION NOTES, 2006,
, ORDINANCE NO. 859
, AN ORDINANCE OF THE CITY OF YELM,W ASHINGTON,
PROVIDING' FOR THE ISSUANCE, 'AND SALE. OF' BOND
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ANTICIPATION NOTES FOR, THE PURPOSE OF PROVIDING
INTERIM FINANCING FOR IMPROVEMENTS WITHIN KILLION"
, : ROAD LOCAL, ' IMPROVEMENT DISTRICT IN, THE
'AGGREGATE PRINCIPAL 'AMOUNT OF,' $5,100,000; ,
, , PROVIDING, THE FORM, TERMS'AND MATURITY OF SAID
NOTES; CREATING A SPECIAL FUND FOR THEPA~ENT OF,
SAID NOTES; AUTHORIZING A,PRELIMlNARY OFFICIAL
STATEMENT; AND APPROVING THE SALE ,OF SUCH NOTES,
, 'APPROVED ON OCTOBER 24, 2006 '
,PREPARED BY:
" , PRESTON GATES & ELLIS LLP
Seattle, Washington
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Section 1.
Section 2.
Section 3. .'
. Section 4.
Section 5.
. Section 6.'
Section 7. .
Section 8.
Section 9.
Section 10;
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CITY OF YELM, WASHINGTON
ORDINANCE NO. 859
TABLE OF CONTENTS *
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Definitions.................................~.................. .....:................................. ~...........; .........2
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. Authorization of Notes..... ..: .:......... ........ .................... .:..............~... ..... .... ......; ......:.... 4 .'
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Redemption.. ......... ........ ...... ............... ~.............. :.... ............. ......... :...... ....... ........:...........5
. Registration, Exchange and Payments .................................................u:...........:... 7 .
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Repayment Fund-,-Security and Sources of Payment of Notes......................:..... 12 .
Execution and Delivery of Notes....................:...~..........................:.. ~..............:.. 12
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Sale of the Notes ...... ..~... ....... .... ............... ........ ........ ....... .......... ....... .... ........ .... ..... ..... 13:'
. App licatio~ of Note Proceeds... ~:...........:.... ....... ........,..........................,.:........... 13 ·
Defeasance.. ....... .................................... ............ .................. ........~.......... .... ...... ....... .': .14 .
Lost, Destroyed or Mutilated Notes .....:.~.......~..........:......;.~...................................;.14
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Section 11. .'. Repres'entations and Warrantie$...........~....~.......;...........;...;.................................... 15
. Section 12.
'Section 13.
Section 14.
Section 15.
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Covenants of the City......;...;......................................u..:............:........................ 16
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Form of Notes and Certificate of Authentication..............:..~................................17
. TaxDesignation............. ............ ............ ~............. ;~'."'" :...~......... ................... ........ 19 . .
General Authorization.... ~...:...:...........................:.."...:............;...~... .........;...... ...... 21.
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Section 16..' Effect of Partial Invalidity.:..........,.... .... .... ~... ...;~............:...'...:................ .:'.~.... ...:.... ",21
Seqtion 17. Effect of Covenants, Etc. .........:..:......;..............::.....:.........................~.....~..~.:...... 21
Section 18. Un~ertaking to Provide Ongoing Disclosure:.,..~...;....:..............:..;....;................:..22 ·
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, Section 19. Ordinance to Constitute Contract.....;.........................~....................:..........'......... 23
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. .. * This Table of Contents is provided for .<?onvenience only and is not a part of t~is ordinance. '
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ORDINANCE NO. 859
AN ORDINANCE 'OF THE CITY, OF'YELM, WASHINGTON,'
PROVIDING, FOR' THE, ISSUANCE AND' SALE OF BOND,
ANTICIPATION NOTES FOR THE PURPOSE OF P-ROVIDING
, INTERIM FINANCING FOR IMPROVEMENTS WITHIN KILLION'
'ROAD' ,LOCAL IMPROVEMENT DISTRICT IN THE
AGGREGA TE.PRINCIP AL' ,'AMOUNT OF . . $5,100,000;
PROVIDING THE. FORM, TERMS AND MATURITY",OF SAID '
'NOTES; CREATING'ASPECIAL FUND FOR THE PAYMENT, OF ,
',SAID, NOT~S; AUTHORIZING' A PRELIMINARY OFfICIAL,'
, STATEMENT; AND APPROVING THE SALE OF'SUCB NOTES.
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WHEREAS" the City Council of the City of Yelm,< Washingto.n (the "City")" by
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Ordinance No. 847, ,~pproved on June l4, 2006~ createdLocal'Impro~ement Di,strict No.2, also'
known as and referred to herein as the Killian Road Local Improvement Pistrict(the "District';)
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and provid~d for the issuance of .loc~l improvement, district bonds, and Interim,' short-term
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obligations to pay 'the cost of impr()vements. in the District and' the expenses i1;1cidehtal thereto; ,
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WHEREAS, pur~uant 'to'RCW Ch.35.45, the City: is, authonzed to, issue local
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· improvement district bonds to' provide financing, for improvements to, be made in theDist~ct;','
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WHEREAS, pursuant to RCW. Ch: 39.50, the' City i~~uthonzedtojssue short term '
-: obligations in anticipation of the issuance of such local improvement district bonds; and .'
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WHEREAS; it is d,eemed ne~es~aryand desirable' that the~ity, in o~d~r to pay.the costs':,'
. of the impr6vements in ~e District, issue and sell short-term. obligations in the form of local
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" improvement distD"ct bond anticipation notes; and
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WHEREAS, this City Council has received the offer of Martin Nelson & Company, Inc~
" to purchase the notes authorized herein, which offer the City Coun~il deems acceptable;
NOW, , THEREFORE,. THE CITY COUNCIL. OF . THE CITY OF YELM,.
WASHINGTON, DOES ORDAIN, as follows: '
Section 1.
Definitions.' As used in this ordinance, the following words, shall have the
following meanings:
Act means Chapter 39.50 RCW.
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,Beneficial Owner means any person that has or shares the power, directly or indirectly, to
make investment decisions concerning ownership of any Note (including persons holding Notes
through nominees, depositories or other intermediaries).
Bonds'mean the local improvementdistri.ct bonds of the City to be issued for the purpose
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of providing permanent financing for the Improvements.
City ,'means ,City of Y elm, Washington, a, municipal corporation duly' organized and
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Code means the, federal Internal Revenue Code of 1986, as amended from time to tim~,
and the applicable regulationsthereunder~' ,
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Co,!ncil means the duly constituted ,City Council as the generall~gislative bod~ of the
City....
,'. District ~eans Local Improvement District No.2 of the City, alsokno:wn ~s and referred,
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'to herein' as the Killion Road Local Improvement District.
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DTC means The Depository C o,mp any, ~ewYork, N.ew York, a 'limited purpose trust
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compat;lyorganized under the laws of the. State of New York,' as depositqry for the Notes
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Government Obligations means those. obligations now or hereafter defined. as ?uch in '
chapter 39.53 RCW. .,
Improvements mean the improvements to be undertaken within the District, as authorized
.by.Ordinance No. 847..
Killion Road Improvements FUlzd means the Killion Road Improvements Fund created.
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in the office of the Treasurer by Section 8 of this ordinance.
Killion Road LID No.2 Repayment Fund means the Killion Road LID No. ~ Repayment
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. Fund, created in the office of the Treasurer by Se~tion 5 of this ordinance.
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. Letter of Representations means the blanket issuer letter of representations from the City
to DTC.
MSRB means the Municipal ,Securities Rulemaking Board or any successor to its
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,Note Register means the registration books showing the name, . address. and tax
, : identification number of each . registered owner of the . Not~s, maintained pursuant.. to.
. Section. 149(a) of the Code. .
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. Note Registrar means th,e fiscal agency of the State of Washington for the purposes of
. registering, and aut~enticating the Notes, maintaining the Note Register, effecting'. transfer of.
ownership bfthe Notes and paying interest on and principal of the Notes.
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Notes means the 'City of YeIm~Washington Killion Road Local Improvement nist. rict
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Bond Anticipation Notes, 2006,.the sale and issuance of which are authorized herein..'
, NRMSIR means a' nationally recognized municipal securities information repository. .
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R'1gistered Owner means the person named as the registered owner of a Note in the Note,
Register. For so long as the Notes are held in'book-entry form, DTC shall be deemed to be the
, ~oie Registered Owner of the Notes.
, Rule means the SEC's Rule 15c2.J2 under the Securities and Exchange Act of 1934, as
the same maybe amended from time to time. ,
'SEe means the Securities and Exchange Commission.
SID mean's a state information depository for the State of Washington if one is hereafter
created.
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Treasurer means the Clerk-Treasurer of the City, or any successor to the functions of the
Treasurer.
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Underwriter 'means Martin Nelson & Company, Inc., Seattle, Washington. ,
Section 2.
Authorization of Notes. For the purpose of providing interim financing of
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the Improvements pending their cqmpletion and the issuance of the Bonds, the Council hereby ,
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authorizes the issuance and, sale of its bond anticipation notes in the aggregate principal amount,',
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" of $5,100,000 (the "Notes"). ' The Notes shall be design3;ted as the "City of Yehn, Washington
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Killion Road'Local Improvement District Bond Anticipation Notes, 2006," shall be dated as of
, the da~e of their initial issuance and delivery, shall be issued in fully regis,tered form in the
, denomination of $5,000 each or any integral multiple thereof, shall bear interest at a per annum
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, ",rate of 4.15%, payable at maturity and 'shall mature on Octob~r 1, 2009.' Interest on the Notes
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shall be calculated on thebasis of a 360.,.day year with 30~day months.
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The Notes shall bean' obligation only of the Kiilion Road LID No. 2. RepaYment Fund ,
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and shallbe payable and s~cured as provided herein. The Notes shall not be deemed to constitute', .
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a general obligation or a pledge of the faith and 'credit or taxing power of th~ City or the State of
Washington. ,
Section 3.
Redemption.
, (a) Optional Redemption. The Notes are subject to redemption at the option of the,
City in whole on April 1" 2008 and on'the first business day of any month there~fter, at a pric'e, of
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'par plus accrued interest, if any, to the date of redemption.
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(b) "Purchase of NO,tes. The City also reserves the right to purchase any of the Notes
offered to the City a~ any time at a price deemed reasonable by the City.
(c)
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Selection of Notes for Redemption. If any Notes are to be redeemed, the selection
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of Notes to be redeelned shall be made in accordance with the operational arrangements then in ..
effect at DTC.
(d) , Noticeo! ,Redemption. Written' notice of any redemption of Notes pnor to
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maturity shall be given by the Registrar on behalfof the City b,Y first class mail, postage prepaid;
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not less than 3~ days nor more ,'than 60 days before the, date fixed ,for redemption to the.
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R~gistered Owners of Notes that are to be redeemed~t their last addresses 'shown on the 'Note
Register. This requirement shall be' deemed complied ,wit~ when notice is ,rhail~d t'o the' '
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Registered Owners at their last addresses shown on the Note Register, whether or ,not such' n~tice " '
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,is act~allyreceived by the Registered Owners.
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So long as the'Notes are,in book-entry only form; notice 'of redemption shall, be given to
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. Beneficial Owners of ~btes to be redeemed in accordance with theoperationa.l arrangements:'
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then in effect. at DTC, andneithet th~' City nor the Registrar shall 'be obligated or responsible to
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confirm that- any notice of redemptIon is, in' fact, provided to Beneficial Ow~ers.'
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Each notice of re'demption prepared and given by the" Registrar to Registered Owners of
Notes shall contain the following infol!TIation: (1) the redemption date, (2) the redemptiol1pnce,
(3) that (unless the notice' of redemption is a conditional notice, in which case the notice shall
state that interest shall ceas~ to accrue from the date fixed for redemption if and to the extent that
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funds have been provided to the Registrar for the redemption of N:otes) on the date fixed for
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redemption the redemption price will become due and payable. upon each Note' or portion called ,
for redemption,' and that interest shall cease to accrue from the date fixed for redemption, (4) that
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the Notes areto'be~urrendered for payment at the principal office of the Registrar, (5) the CUSIP
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,numbers ~f all Notes being redeemed, (6) the date of the notice, and' (7) any other information
deemed necessary by the Registrar to identify the Notes being redeemed.
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Upon the payment of the redemption price of Notes being redeemed; each check or~other '
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, ," tninsfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and
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maturity, 'the Notes being "redeemed with the pro~eeds of such check or other transfer.'
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'(e) Effect of Redemption. Notice of an optional redemption may be conditiqnal upon'
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, the conditions set forth in set forth in' the redemption notice. ,Unless the City: has revoked a '
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notice of redemption (or unless the City providc:d a conditional notice and the conditions for
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, r.edemptionset forth therein are'nbt satisfied), the City shall transfer to the Registrar amounts'
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'that, in addition 'to other money, ifany, held by ,the Registrar for such purpose, will be'~.ufficient
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to :redeem, on the dateJixed for redemption, all the Notes to be redeemed. If and to the extent'
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" that funds have been pr~vided to the Registrar for th~ r~demption of Notes then such Notes shall '
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become due and payable on the date fixed for redemption and interest on such Note' shall cease to
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,'accrue from and after such date. .
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(f) Amendment of Notice Provisions. The foregoing notice provisions of this section,
, including but not limited to the information t6 be included in redemption notices and the persons.
designated to receive notices, may be amended by additions, deletions and changes to maintain
compliance with' duly promulgated regulations and recommendations regarding, notices of.
redempti()n of municipal securities. . c
Registration. Exchange and Payments.
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(a) Registrar/Note Register. The City hereby specifies and' adopts the system of .
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. registration approved by the Washington State Finance Commit~ee from time to time through the
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(. . appointment of state fiscal agencies. The City shall cause a bond register to be maintain~d by the
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. Registrar. . So long as any Notes remain outstanding, the' Registrar shall make ~ll n~cessary
provisions to permit the exchange or registration or transfer .of Not~s at its principal corporate .
trust office~~ .The Registrar may be removed at any time at the'option.ofthe Treasurer upon prior
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notice to the Registrar and a successor Registrar appointed by the Treasurer. No resignation or
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removal of the Registrar shall be effective until a' successor shall have been appointed and until'
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the successor Registrar shall have accepted the duties of the Registrar hereunder. . The Registrar
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is authorized~on behalf of the City, to authenticate and deliver Notes transferred or exchanged in
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accordance with the provisions of such Notes and this ordinance and to . carry out all of the
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Registrar~ s powers and duties under this ordinance. The'Registrar shall be responsible fo~ its
representatIons contained in the Certificate of Authentication of the Notes.
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R~gistered Ownership. . The City and t~eRegistrar, each in' its discretion, may' .
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. '. deem and treat the Registered Owner of each Note as the absolute. owner th~reof for all purposes
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(except as provided in Section 18 of this ordinance)~ and neither t~'e 'City nor the Registrar shall
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be affected by any notice to the contrary.. Payment of any such Note shall be made only as ."
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described in Section 4(h) hereof, but such Note may be transferred as herein provided. All such
payments made as described in Section 4(h) shall be valid and shall satisfy and" discharge the
'1iability of the City upon such Note to the extent of the amount or amounts so paid.
, (c)' D TC Acceptance/Letters of R~presentations. The Notes initially shall be held in
fully immobilized form by DTC acting as depository. To induceDIC to accept the, Notes as'
eligible for deposit at DTC, the City has executed and delivered to DTC a Blallket Issuer Letter
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of Representations. Neither the City, nor the Registrar,will have any responsibility or obligation
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to DTC participants or'the persons for'whomthey act as nominees (or any successor depository) ,
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~ith respect to the Note's in respect of the accuracy of any records maintained by DIC (or any"
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successor depository) or any DTe partic'ipant, the payment by DIC (or any successor dep~sitory)
,or any DTC participant of any amount in :respect of the principal of or interest on Notes, any
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notice which is permitted or required to ,be given to Registered Owners unde~' this ordinance
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(except such notices as shall, be required to be given by,the City to the Registra~ or to DIe (or
any successor depository)), or' any consent given or other action taken by 'DIC (or any 'successor
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depository) as the Registered Owner. For so long 'as '}ny Notes are'held in fully-immobilized
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, form hereunder, DIe or'its successor depository shall be deemed to be the Registered Owner for '
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,all .purposes hereunder, and all references he~ein to the Registered Owners shall mean DIC (or,
, any successor depository) or its nominee and shall not mean the owners of any bene:6.cial interest
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If.any Note shall be duly prese'nted for payment and funds have not been duly provided by ,
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the City on such applicable date, then interest shall continue to accrue thereafter ,on the ilnpaid '
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'principal thereofat the rate stated on such Note until it is paid.
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(d) Use of Depository. .
(1) The Notes shall be registered initially in the name of ."Cede& Co.", as
nominee of DTC, with one Note' matunng 'on each of the mat~rity dates for' the Notes in a
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denomination corresponding to the total principal therein designated to mature on such date.
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. Registered ownership of such immobilized Notes, or any portio1}s thereof, may not thereafter be
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transferred except (A) to any successor of DT~ or its nominee, provided that 'any such succes~or .
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shalt' be qualified under any applicable laws to 'provide the service proposed to be provided by It;
(B) to any'substitute depository appointed by the Treasurer pursu~nt to. subse'ction (2) below. or
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such substitute depository's successor; or (C) to any person as provided in subsection (4) below~ .
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. (2) Upon the resignation of DTC 'or its s~ccessor (or any substitute depository
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or its successor) from its. functions as depository or a determination by the Treasurer to
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discontinue the system of book entry transfers throughDTC or its successor (or any substitute
depository or its successor), the Treasurer may hereafter appoint a'substitute depository. Arty
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such substitute depository shall be qualified under any applicable' laws to prov'ide the servic~~
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propo'sed to be provided by it.
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(3)' In the case of any transfer pursuant to cfause (A) or (B) of subsection (1)
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of the Trea~urer~ issue a si,ngle new Note for each maturity then outstanding; registe~ed in the "
nam~ of such successor or such substitutedepository, or their nominees, as the case may be; all
as specified in such written request of the Treasu~er. :
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(4) '. . In the event that (A) DTC or its ~uccessor (or substitute depository or "its
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s':lccessor) resigns from its functions as depositorY~ and no substitute depository can be obtained,
or (B) the Treasurer d~termines that it is in the 'best 'interest' of the beneficial o~ners of the Notes
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that such owners be able to obtai~ the Notes in the foml of certificates, the ownership:, of such
Notes may then be transferred to anyperson or entity as l1erein provided, and shall no longer be'
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, held in, fully~immobilized form. The Treasurer shall deliver a written request to the 'Registrar,
, tog~ther with a supply of definitive Notes, to issue Notes as herein provided in any authorized,
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. denomination. Upon receipt by the Regist~ar of all then outstanding Notes together with' a
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written requ~st of the, Treasurer to the Registrar, new Notes shall be issued in the appropriate
denominations and registered in the names of such persons as are ~ requested in such written
, request.
(e) . Registration of Transfer of Ownership or Exchange; Change in Denominations.
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The transfer of any Note may be registered and Notes may be exchanged, but no transfer of any ,
such'Note shall be valid unless it is' surrendered to the Registrar with the assignment form
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appearing on such Note duly executed by the Registered ,Owner or such Registered Owner's duly-
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authorized agent in a manner satisfactory to the Registrar. Upon su~h surrender, the Registrar
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shall cancel the surrendered Note and shall authenticate and deliver, wit~ollt: charge' to the.
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Registered Owner' or transferee therefor, 'a new Note (or Notes at the' option, of the new
Registered Owner) of the same date, maturity and interest rate and for the same aggregate
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principal amount in any authorized denomination, naming as Registered Owner the person or
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persons listed as the assignee ': on the assignme~t fCHID appearing on ,the surrendered Note, in
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exchange for, such surrendered and c~ncelled Note.
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Any N" ote may be surrendered to the
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," Registrar and exchanged, without charge, for an equal aggi-egate principal amount of Notes of the '
,same date, maturity and interest rate, in any authorized denomination. The Registrar shal1' not be , '
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'obligated to register the, transfer or to exchange any Note during' the 15 days, preceding' any'
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,interest p'aynient or principal payme~t date any such Note is to be redeemed.
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i
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(1)
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Registrar's Ownership of !fotes. The Registrar may become, the Registered
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'O~ne~ or" any Note with the same' rights it would have if it were not the Registrar, and to the'
, extent permitted by law; may act as depository for and permit any of its officers or directors to,'
"act as member of,'or in any other capacity with respect to, any committe,e formed to protect the. '
. right of the Registered Owners of Notes.
, " (g) \ Registration Covenant. ' The' City covenants that; until all Notes have been
surrerl.dered and canceled, it-will maintain a system for recording the oWne~ship of e~ch Note that'
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,complies withthe provisions of Section 149 of the Code.
(h) 'Place and Medium of Payment. Both principal of and interest on the,Notes shall
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,b~ ,payable 'in . lawful money of the United States of America. Interest on the Notes shall ,be ,
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calCulated on the basisof.a year of 3"60 days 'and twelve 30-daymohths. For so long as all Notes'
,are in fully immobilized. fonn, payments of principa}- and ititerest thereon shall be made as .'
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" '. p~ovided'in accordance, with th~ operationaldarrangements of DTC "referred t() i~ the 'Letter o{
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, ',: Repres~ntCltions. In theevent that the Notes are no longer in fully.immobilized form, interestoti
the ,Notes shall be 'paid by check or draft mailed to the Registered Owners at the' ~ddiesses for'"
-' ,.,) . .', . '. . .'
such ,Registered Owners appearing on the Note Register on the fifteenth day 'o~ the month ,.'
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preceding the interest payment 'date, or upon'the written'request ofa Registered' Owner of more:
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than $1:,000,000 of Notes (received by the Registrar at least'15" days prior to the applicable'
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, payment .' date), such payment shall be made by' the, Registrar by wire transfer'to the account'
within the contin~ntal' United States' designated, by the Registered Owner. ',Principal of the ,Note~
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shan be payable upon presentation' alld surrender of such Notes by the Registered:' Owners at the'.,
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,principal office of the Registrar:,
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Section 5.," Repavrnent Fund-Security and 'Sources, of Payment of Notes; There is
hereby authorized to be established and the Treasurer is authorized and requested to esta,b,lish a
special fund of the City to be known as the "Killion Ro~d LID'No., 2 Repayment Fund" (the
:"~l1ion Road, LID No.2 Repayment Fund;'), which fund shall be a trust fund and shall be dr~'Yn
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upon only for the payment of the principal of and interest on:the Notes. On the, date of issuance
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oft,he Notes, the sum of $190,485 shall be deposited into. the Repayment,Fund and shall be used"
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, to pay the interest on the Notes coming due'on April 1, 2006 and,October 1, 200~.MoneY'in t~e ,,'
, RepaymentFund shall be invested by the City In any investment that is legal for funds of the
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City, and the interest, earnings art such investments shall be deposited into :the Imp~ovements
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Fund., , The City. hereby covenants and agrees, that on or, before on, or before each day" on which
, ~ additional payments of interest are due, it will deposit money into t4e Repayment Fund, frOIp the
, , "proceeds of ~dditional interim financing notes or ,from the Bonds, : afuounts sufficient to pay
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int~rest conling'due and the,Cityhereby further covenantsand agrees that on or'before Octoberl,
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, 2009, 'proceeds of the Bonds or the refunding notes shall be deposited into, the ,Killion Road LID "
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'Nd.2 Repayment Fund in ~n\amount sufficie~t to pay the principal of and interest on the Notes'
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: as the ~ame become due.
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The Notes shall be Qbligation~ only of the Killion Road LID No. 2 RepaYrrient. Fund of
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,'the City. .
Section .6. .
Execution' and Delivery of Notes. . The Notes shalJ. be exec;utedon behalf. .
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of the ,City by, th~ nianual ~t facsi;mile signature of the Mayor and attested by the'manual or " .
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Note shall cease to be an' officer before the 'delivery of' suchNote;suchsiguature shall
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06/10/24
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~evertheless be va!.id and sufficient for all purposes, and such Note maybe authenti~ated and
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'delivered the ;same as if such o~ficer had remained in office until such delivery.
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Only, such ,Notes" as shall bear thereon a Certificate of Authentication In the form
herein<;tfter speci:f1ed.in Section .13, manually executed by the Note Registrar, shall be valid 'or
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obligatory for any purpose or entitled to the benefits of this ordinance. Such Certificate of '
Authentic'ation shall be ,conclusive ~viderice that the Notes so authenticated have beep duly
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'executed, authenticated and delivered hereunder and ate entitled to the benefits of this ordinance.
,Section 7.
Sale'of the Notes.' The City hereby accepts the offer of t~e Underwrit~r
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. delivered to the City Council on this date t~ purchase the"Notes in a~cordance with th~'tetins
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contained in this ordinance and said offer. The City offi~ials arehertbyauthorized and directed, '
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. " " t.o do everything necessary to complete such' sale and'delivery of the Notes to the Underwriter', .
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, upon the payment of the. purchase price, thereof, aU jn accordance with thisotdinance and the
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.' offer of the Underwriter.' The Treasurer ishereby authorized to review and appro\:,e on behalf of,
the City the preliminary and.final, Official Statements., 'The proper', City officials are hereby
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authorized at:lddirect~dto do everythin:g necessary for the prompt execution and delivery o['the'
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, : ,Notes to said purchaser and for the proper application and use 'of the proceeds of sale thereof.
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The preli~in~IY Official Statem~rtt for the Bonds, dated October 16, 2006, .is hereby de~~ed
. final for'thepurposes of the Rule.: '
Section 8'~
. Application of Note Proceeds.
,f
There is hereby authorized to be established and the Treasurer is authorized and requested
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to establish a special fund of the City tobe known as the Killion ,Road Iinprovernents Fund (the'
, , "Killion: Road Improvements Fund") into whi~h 'the principal proceeds of the sale of th~ Notes ",' ,.'
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:shall be paid and applied to payment of the costs of the Improvemen'tsand the costs of issuing " ,
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the Notes (including but ,not limited to engineering, financing, 'legal' or any other incidental costs) ,
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and for'repayjng any advances heretofore or hereafter made on account of such Gosts ,or for
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redeeming the 'Notes, ' All moneys, held in the Killion Road Improvements Fund maybe invested
in any legal investment' for the City's funds, and all investments sh~tll be scheduled to mature a,s
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, costs of the Improvements are rea~oriably' anticipated to be incurred. 'Interest earned and income, "
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or prof.its derived, by virtue of investments of moneys in the Killion Rqad Improvements Fun?'
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. ,may, remain in ,the Kinion, Road Impro~ements 'Fund and may be used for the' payment of
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f . , Improveinentscosts or may be 'transferred to the Killion Road LID No. 2 Repayment Fund;'
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" . ,Upon the . comple~ioh of the Improvements and the payment of all costs thereof, including the,
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paynient, o{ allretainages for, construction,,' the balance " on ," hand -in the' Killion Road
Improvements Fup.d shall be transferred to the Killion Road LID No. '2 Repayment Fund, and the
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Killion Road Improvements Fund shall be closed. .
Section 9.
. Defeasance. In the event that moneY and/or Government Obligations
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':maturirl'gatsuch time or times and bearing interest to be eam~d thereon in amounts sUfflcientto, '
, redeem ,and retire any or all of the Notes in accordance with their terms, are set aside in a special
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,account to effect such red~mpt,ion or retirement and such money 'an~ the prin'Cipal of and interest'
'on such obligations are irrevocably set aside,and pledged' for such purpose" then :no further:'
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, payments need be made into the Killion Road LID No.2 Repayment FuIld,for the payffient ofth~
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~rinc~pal of an~ interest on, the Notes so provided for and s~~h Notes shall cease to 'be entitled to
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any lien, ,benefit or security of this ordinance ex'cept the right to receive thefunds so set aside and
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:. Section 10; ,Lost, Destroved or' Mutilated Notes;
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In the event any NOJe' is . lost,. ,
" destroyed, or mutilated, the City willcau~e to :be 'issued a new Note', substantially similar to the, '
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original, to replace the same, in such manner 'and upon such reasonable terms and conditions as
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the Note Registrar may from time to time determine.
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Representations and W arranties~ 'The City hereby makes the following
, Section lL
, 'representations, warranties and agreements.
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(a)' ,The City has ~lllegal right, power and authority (1) to pass this ordina~ce,(2) to
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,sell; i,ssue and deliver theNotes as provided herein and (3) to carry .out ,and c.oh~ummate aU other.'
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" t~ansaction,s contemplated by'this ordinance.
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(h) " By all necessary official action prior to or concurrently herewith, the City has duly,
,.authorized and approved the execution and delivery of, and the performance"by the City of its,
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obligations contaIned'inthe Notesand this ordinance and the cons~mination by itof all other
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traQ.sactions contemplated by this ordinance~n connection with the issuance o~ the Notes, and
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'"such a,uthorizations and approvals' are in full force and effect and have not 'been, amended,
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, inodified or s~pplemented in any material respect.
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,,(~) T~is ordinance constitutes the legal, valid and binding obligation of the City.:
, ' : (d) The Notes, when issued, authenticated and delivered, ,w-il1 constit~te the legal,
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, valid'and binding obligations of the City, in accordance'~ith their terms. '
(e)
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The City is not in breach of or default under any applicable judgment or decree or
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arty loan a~eement, ordinance, bond;: note, ordinance, agreement or other instrument to which
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. ,the Cityis,apartyor to which the" Cityorany of its .property or assets is otherwise subject where,'
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'such breach or default would, have a material adverse, effect on the' operations, or financial
'condition of the 'City; and (i) the passage of this ordinan~e, and (ii) ,~he sale, is~uance and delivery
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of,theNote~; andcorrtplia~ce with the provisions' on the'City'spartcontained therein, will not
conflict with or constitute,a breach of or, default under any constitution(llprbvision, law;, '
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'administrative regu1atioh, judgm~nt, ,decree, loan agreement, indenture, bond, note; ordinance,
. agreem~nt or .other instrument to which ,the Cityis a pa~y or to which the City, or any of its,
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'pr~perty o~ assets is otherwise subject, nor will any such passage, execution, delivery, sale,
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')s~uance or compliance r~sult in the creation 'or imposition of any lien, charge or other'security'
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interest or encumbrance of any natu~e ~ha~soever, upon any of the property or assets of the City
.or 'under the tenns of any' such law, regulation or instrument, except as provided by the Notes and
this orqinance.
, Section 12. Cov'enants of the City. , 'The City hereby makes the following covenants
with the owners of the Notes. '
, (a) '~, " Punctual Paym,ent of Notes. The' City coyenants that amounts -on deposit in. the
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Killion Road LID No. 2 Repayment Fund shall be drawn upon solely for the purpose ofpaying
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the"principal of and interest on the Notes. The City ftirthercovenants' th,at-'itwill duly and'
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,', 'punctually payor cause to' be paid the principal of and interest'on every 'Note at the place or,
, piaces, on the date or dates and in the ,manner provided in theNote~, a~dherein.The City further" '
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, 'covenants and agrees, that it, will deposit moneys., (rom' the sou~ces. herein' provided' or issue
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tef1;inding notes ~n such amount and at such time as' ,will e~ableit t() make th~ depos~ts into: the
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,Killion Road LID No.' 2 Repayment Fund required by Section 5 of this ordinance.
, (b) ,Nqtes to Remain Tax Exempt,;, Nonarb,itrage Covenant.' The City covenants that it
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'will p,ot take or permit, to be taken on its, behalf any' action that would adversely affect the
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, 'exemption fromfederal incom~ taxation of the interest on the Notes and will take or require to be
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" taken such acts as may reasonably be within its ability and as may from time to time be required '
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under applicable law to' continue the "exemption from federal in~ome taxation of the interest on '
" .the Notes. Without lil~iting the ,generality' of the foregoing, ,the City covenants that it will not'
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P:\CMW\CMW7E4:DOC", '
,06/10/24
take any action or fai~ to take any action with respect to the investment of the proceeds of any
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Notes or other funds that would result in constituting the Notes as' "arbitrage bonds" within the
meaning of such term as used in Section 148 of the Code.
, The City represents that it h~s not been notified of any listing or proposed listing by the '
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Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may
not be relied upon.
Section 13. ,Form of Notes and Certificate of Authentication. The Notes shall be in
substantially the following form:
UNITED STATES OF AMERICA
$
No.
STATE OF WASHINGTON,
,CITY OF YELM
1GLLIONROAD LOCAL IMPROVEMENT DISTRICT
BOND ANTICIPATION NOTE, 2006 ,
, INTEREST RATE:
4.15%
, MATURITY DATE:-
OCTOBER 1,2009
CUSIP NO.:
REGISTERED OWNER:
CEDE & Co.
, PRINCIP ALAMOUNT:
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FIVE MILLION ONE HUNDRED THOUSAND AND NO/I 00 '
DOLLARS
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The City of Yelm; Washington, (the "City"), hereby acknowledges itself to owe and for
value received promises to pay to the Registered Owner identified above, 'or registered assigns,
on the Maturity Date, the PnncipalAmount specified above and to pay interest thereon from the
date hereof or the most, recent date to which inteiest has been paid or duly provided ,for until ,
payment of~his note, at the Interest Rate set forth above payable semiannually on the first days of.
April 'and ,'October, commencing April 1, 2007, solely from the Killion Road LID No. 2
Repayment Fund (the "KillionR6ad, LID No. 2 Repayment Fund") established by Ordinance' ,
, No.8S9 (the "Note Ordinance") payable on the Maturity Date. Both principal of and interest on ,
this note are payable in lawful money of the United States of America. Interest shall be paid as, ,
provided in the ,Blanket Issller Letter of Representations (the "Letter of Representations") from. '
the City to The. Depository Trust Company ("DTC").' Principal shall be paid (ls provided in the'
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, .Letter of Representations to the Registered Owner or assigns upon presentation and surrender of
this bond at the principal .office of the fiscal agency of the State of Washington (the "Note
Registrar");'. Interest shall be calculated on .the basis of a year of ~60 days and twelve 3D-day
months~ '
:' .
The City hereby irrevocably covenants and agrees with the Registered Owne~ of this note
,that it will keep and perform all the covenants of this note and of the Note Ordinance to be by i1'
kept and performed; Reference is hereby made to 'the Note Ordina~ce for a complete statement. '
, of such covenants and for the definition of capitalized tef!TI-s used herein.
, This note is one of art authorized issue of notes of like date, interest rate', maturity date
and tenor, except as to number. and a~ount, in the aggregate principal amount of $5)00,000.
The notes of this issue are ,issued under and in accordance with. the provisions of the Constitution ,
and, applica1?le statutes of the State of Washington and the, Note Ordinance for the purpose of .
, paying part of the costs of improvements in the Killian Road Local Improvement District of the
'City~ The' note~ of this i,ssue are issued in' anticipation: of the issuance of local' improvement
:. district bonds authorized ~y the City to be. issued., ·
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, '.This note is a' specialobligati<?n of the City and js payable solely frOD;1 the Killion Road '
p'LID No.2 Repayment Fund of the City into which the City has covenanted and, agreed to deposit.
,the proceeds of bonds. ,The City has further covenanted to deposit money in the Killion 'Road', .'
, 'LID No. 2 Rep~yment Fund from theproceeds of bonds or refunding notes.
.1;'he notes of this issue are subject to redemption prior to maturity as provided inth,e Note
Ordinance. ,
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_ _ - " ' This note is ~ot' a "privite 'activity bond.'" The City has designatedtl1e notes of this issue.: ' '
-as "qualified tax exempt obligations" for investment by financial institutions pursuant to
Section 26S(b) of the Intema~ Revenue Code of 1986, as amended.
- This note shallnbtbe valid or become obligatory foranyptirpose orbe ~ntit1ed to any ,.'
. security or benefit under theNote Ordinance until the_Certific~te.of Authentication here,on shall, '
have~eenmariually signed by or on behalf of the Note Registrar. ' , .
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.. Ifis hereby certified that all acts, conditions and things required by tbe Constitution and,
statutes .ofth~ State of Washington to exist, to have happened, been done and performed
precedent to and in the issuance of this note have happened, been done,..andperfonned and that . . , '
. the issuance of this 'note and the notes of this issue does not violate any constitutional", statutory, '
: or ot~er limita~ion upon the amount of indebtedness that the City may incur. ' "
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, ' iN WITNESS WHEREOF; the City of Yelm, Washington, has.caused this note to ',be
signed with the - manual or facsimile signature of the Mayor and attested by ~he manual pr
,.facsimile .signature of the. City Clerk, as ofthis~ day of ',2006.
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P:\CMW\CMW7E4.DOC '
06/10i24 : '
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CITY.qF YELM, WASHINGTON
By,
Mayor
ATTEST:
, City Clerk '
The Note Registrar's <:ertificat~of Aut~entication ~n the Note? 'sl).alfbe in substanti,~l1y .
the :following form:
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,CERtIFICA1;'E OF AUTHENTICATION
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.' This 'note'js 'one of the 'notes described in thewithin-:-mentioned Note Ordinance and is
one of the Killion Road Local Improvement District Bond,Anticipation,Notes, 2006 of the City,
of Y elm,W ashington, dated' , 2006.
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WASHINGtON STATE FISCA~ AGENCY,
Note :Registrar
" . By,>
Authorized, Signer'
'Section 14. . ' Tax Covenants.
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(a) " Designatzon.', .The City hereby::desigriates' the ,Notes, as' "qualifi~d tax-exempt, '
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obligations" for purchase by 'financial institutions pursuant to'Section 265(b) of the Code. The
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, City does not anticipate that it" will issue more than' $10,000,000 il,l "q~aiified tax-exempt' .
0bligations" d~ri~gthe ye'a~ 2006.
,,(b) Private Person Use Limitation for Notes. !he District covenants that for ~s l()ng
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as the Notes ,are 6utstanding,itwilInotp'ermif:
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'(1) 'More than 10% o'fthe Net Proceeds of the Notes to be u'sedfor any Private
Person Use; :;lnd ' -
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06/10/24 '
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(2) . . More than 10% of the principal or 'interest payments o~ the Notes in a
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Note Year to be directly or indirectly: (A) secured by any interest iIi.property used or to be used
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for any Private Person Use or secur~d by payments in respect ofp'roperty used or .tobe used for
any Private Person Use, or (B) derived from payments (whether or not made to the District) in
respect of property, or borrowed money, used or to be used for any Private Per~on Use.
The District further. covenants that, if:
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(3) More than five percent of the Net Proceeds of the Notes are to be used'for
any Private Person Use; and
(4) . More than five percent of ~he principal or interest pa~ents on the Notes
in a Note Year are (underthe temisofthis resolution or any underlying arra~gement)direct1y or
. . .
~ indirectly:, (A) secured by any iIiterest in property used or to be used for any' P~vate Person Use:.
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or secured by payments in respect of property used or to be usedfor any Private Person .Use, or.
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. (B) derived from payments (whether or not made to the District)iri respect. of property, or
borrowed money, used or to he used for any Private ~ersori Use, then, (i) any Private Person Use .
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o{the PfojeGts describe~.'in subsection (3) hereof or Private Person 'Use paym~ntsdescribed in \.
. subsection (4) hereof that is, in excess of the five percent limitations dc:scribed in such.'
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. subsections (3) or (4) will be for a Private Person Use that is related to the state or ioeal'
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goveriunental use of the projects financed or refinanced with Note proceeds, and '(ii) any Private
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Perso"n Use will not exceed the amount of Net Proceeds of the Notes used for the state or local'
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. govemnlental use portion of the projects to which the Private Person Use Disuch portion of such
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. . projects relates. . The District ftirthe~ covenants that it will comply with any' limitations 'on the,use .
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. of the projects by other than state and local governmental users that are necessary, i'n t~~ opin. ion: .
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. . of its Note counsel, to preserve the tax exemption of the interest on the Notes. . The covenants of . .
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this section' are specified solely to assure'the continued exemption from r~gular income taxation"
, of the interest on the Notes.
Section IS. General Authorization. The officials of the City are hereby authorized to '
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do and perform from'time to time any and all, acts and ,things consistent with this ordinance
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necessary or 'appropriate to 'carry the same i~to effect'
Section 16. ' 'Effect of PartIal Invalidity. ,In case anyone or more of the provisio'ns of
this, ordinance or of the Notes shall for any reason be held to be illegal or invqJid, such -illegality'
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or i~validity, shall ,not ,affect any other ,provision' of this ordinance or of said Notes', but this
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ordinance and said Notes shall be construed and enforced as ifsuch'illegal or invalid provisi~n'
had notbeen contained ther~in.,In ~ase any covenant, obligation or agreeme~tcontajned,in the
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Notes or in this ordinance sha.l1 for, any reason be held' to ,be in violation of law, then such '
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covenant, obligation o:ragreemen~ shaH be deemed to be the covenant, ,obligation or agreement ,of ' '
, the City to the fuIlextentp'er!nittedby law., ' '
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, Section 17. 'Effect of Covenants. Etc. ,No c6venant, obli~ation of agreement contained "
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. herein shall be deemec.l t6 be a covenant; obligation or agreement of anypresent or futur"e official,
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member, agent or, employee of the City in his or her individual capacity, and neither the members'
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of the City Council nor any officer thereof executing the Notes shall ,be liable personaJlyon the
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N~te8 or be subject to anypersona,J iiabilityor account~bility by reason ofth~ issuancethmof. ... ....
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: No member,' officer, agent, or' employee of the ,~ity" shall incur any' liability in: acting' or
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" proceeding, or in not ,'acting or proceeding; in good' faith in accot4ancewith, the terms '?f this',
ordinance.
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" Section 18. Undertaking to Provide Ongoing Disclosure.
(a) Contr~ct/Undertaking. This section constitutes the City's written undertaking for,
the benefit of the owners of the Notes: as required by Section (b)(5) of the Rule.
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(b) Financial Statements/Operating Data. The City agrees to provide, or cause to be
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provided to each person upon request or to theSW, ifany, in each case as designated by the SEe
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'in accordance with the Rule, annual financial statements for the prior' fiscal yea~ (commencing in
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2007 for the fiscal year ended December} 1, 2006), which statements maior may notbe audited,
" showing ending fund balances for the City's general fund prepared in accordance with, the, "
Budgeting Accounting, and Reporting. System prescribed by' the. Washington' State Auditor'
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pursuant to RC~ 43.09.200; (or any successor statute)~,
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(c) , Material Events: The City agrees to' provide or cause to be provided, in a timely
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manner, to the SID, if any~ and to each NRMSIR or to the MSRB, notice of the occurrence of any
of the follo'win'g even~s'with respect'to the Notes, if material: '
· Principal and interest payment delinquencies;
. '. Non-payment related defaults;
." ,Unscheduled draws on debt service reserves reflecting financial difftculties;
· ' Unscheduled draws'on'credit enharicements reflecting financial difficulties; .
'. , Substitution of credit or liquidity providers, or their failure to perform;
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No~e calls (optional, contingent or ,unscheduled Note' calls bther than scheduled
"sinking fund ..redemptions for which notice IS gIven, pursu~nt to, Exchange' Act
Release 34-238560); " " :
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. Defeasances;
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. 'Release, substitution or, sale of property, securing repayment of the Notes; and
. ' Rating changes.
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(d) 'Terminati~n/Modiflc~tion., The City's obligations to provide notices of materia.l'
, ,ev~nts 'shall t~rminate'upon the legal defeasance, pri~r 'redemption or payment in full of all of the
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, ,Notes. Any provision of this section shall be null and ~oid if the City (1) obtains an bpinion,oJ
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nationally' rec6gnized bond counsel 'to the effect that the portion of the 'Rule that requ'ires that.
provision'is invalid, has been repealed retroactively or. otherwise does not apply to the Notes and,
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(2)" notifies e(lch NRMSIR ,and the SID; if ~ny, of such opinion' and the cancellatio.n of this
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"section. The, City may amend this s~ction with an appioying op~nion of tlationally rec~gnized:
, pond counsel in accordance with the Rule.
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(e) Note' Owner's Remedies Under This Section; 'The right of any bondowner or'
.'beneficial' owner' of Notes to, enforce the' provisions of this section 'shall be limited to a right to"
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obtain specific enforcement of the City's obligations under this section, and any failure by,the '
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'City ,to.' comply with :the provisions of this underta.king shall not'be an' e:ven~ 'of default -with
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,respect..to the Notes. For purPoses of this section, ~'beneficial owner'? means any person who has'
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" the power, directly or indirectly, t,~ vote or consent with respect to, or todisp()se ofownership of, ,
any N~t~s, including persol1s holding Notes through nominees or d~positories:
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(f)" 'DisciosureUSA.' The' City may elect to "sub'mit the inforn1 atl on required by' this,
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, Section 18 to be filed with, the NRM'SIRs and the SID; if any, directlY' to' Disc1osureUSA.,org
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u~less 'or '~ntil the SEe 'withdraws its approval GEthis submission process.
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Section 19. 'Ordinance to Constitute C01?-tract. In' consideration of the purchase, and
. l ',:, accepta.nce of any of ..the Not,es: a,:thoiizedtobeissuedhereunder by ,those ,who shal1.hold the"
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same from time to 'time, this ordinance shall be deemed to be a~d shall .constitute a contract.
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betw~Em the City and such owners, and tl)ecovenants and agreements 'set forth in this ordinance
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to be performed on behalf of the City shan be for the equal benefit, protection andsecu~ty ,of the .
, owners of 'any and aU of the Notes, all of whi~h shall be of equal rank 'without preference,~ ','
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priority or dist~nction of any of the Notes over any other thereof.
. APPROVED' by the ~ity 'Council of City ofYelm, -Washington, at ''1' ~egularmeeting'
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ther~ofheld this 24th day of October, 2006.
CITY OF YELM, WASHINGTON
By
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CERTIFICATE'
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I~ the undersigned, City Clerk of City of"y elm, W ashington (the"City~') and keeper of the
"records of.the City Council (the "Gouticil"), DO HEREBY CERTIFY:.
,1. That the 'attached ordinanc~ is'a true a~d correct copy of O'rdinance No. 859 of the '
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, Council (the "Ordinance"), duly approved at a regular meeting thereof held on the 24t4 day of
Octobe~; 2006.
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2. ThaLsaid meeting was duly convened and held iIi all respects in ac~ord~mcewith , '
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law, and,to the extent required by law, due and proper notice of such meeting was given; that a '
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legal quorum 'was' prese~t t4roughout themedipg and a legally sufficient number of ~embers of , "
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the Council: voted in the' proper manner for the passage of the Ordinance; thatall other
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, ,requirements and proceedIngs' incident to the proper' passage of theOr~inance have' been duly
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. . fulfilled; ,carrieq. out and otherwise, obserVed; and that I am authorized to execute this certificate.
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, IN ,WITNESS WHEREOf, thave hereunto. set my h~nd ~his 24th dayof October, 200'6:' ,
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Clerk:
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.', P:\CMW\CMW7E4' 10/24/2006,