Loading...
0705 Water Revenue Bonds 2011ORDINANCE NO. ! �� AN ORDINANCE OF THE CITY OF CHUBBUCK, IDAHO, AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF WATER REVENUE BONDS, SERIES 2011, IN THE AGGREGATE PRINCIPAL AMOUNT OF $2,000,000, FOR THE PURPOSE OF FINANCING IMPROVEMENTS TO THE DOMESTIC WATER SYSTEM OF THE CITY OF CHUBBUCK, BANNOCK COUNTY, IDAHO; DESCRIBING THE BONDS; PROVIDING FOR THE COLLECTION AND DISPOSITION OF REVENUES; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL OF THE BONDS; ESTABLISHING FUNDS AND ACCOUNTS; PROVIDING COVENANTS RELATING TO THE BONDS; PROVIDING FOR THE SALE OF THE BONDS TO SEATTLE - NORTHWEST SECURITIES CORPORATION; PROVIDING FOR RELATED MATTERS; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the. City of Chubbuck, Bannock County, Idaho (the "City"), is a municipal corporation organized and operating under the laws of the State of Idaho; and WHEREAS, the City operates and maintains a domestic water system; and WHEREAS, the City is authorized by the Constitution and laws of Idaho to issue revenue bonds to finance all or part of the cost of acquisition, construction, and installation of improvements and betterments to the domestic water system of the City; and WHEREAS, the City Council (the "Council") of the City, obtained a judgment in Case No. CV 10-5253 in the Sixth Judicial District of the State of Idaho on March 7, 2011, confirming the City's determination that the expenditure of $2,000,000 for the purchase of water rights is an ordinary and necessary expense of the City and the City is authorized by the Idaho Constitution to sell its revenue bonds in the principal amount of $200,000 in order to provide funds for such improvements to the City's domestic water system; and WHEREAS, Section 50-1036, Idaho Code, authorizes the sale of water revenue bonds at private sale in such manner as the Council may determine; and WHEREAS, the City has received an offer from Seattle - Northwest Securities Corporation to purchase the Bonds of the City, and the Council has determined to accept such offer. NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF CHUBBUCK, IDAHO, as follows: Section 1: DEFINITIONS As used in this Ordinance, the following words shall have the following meanings: Page 1 Additional Bonds means any bonds issued pursuant to Section 18 of this Ordinance. Bond Counsel means Poore Smith Buxton & Turcke, Chartered, Boise, Idaho, or another attorney at law or a firm of attorneys of nationally recognized standing in matters pertaining to the tax-exempt status of interest on obligations issued by states and their political subdivisions, duly admitted to the practice of law before the highest court of any state of the United States Bond Fund means the "City of Chubbuck Water Revenue Bond Fund" created by Section 15 of this Ordinance. Bond Register means the registration books on which -are maintained the names and addresses of the owners or nominees of the owners of the Bonds. Bond Registrar means the bond registrar, transfer agent, and authenticating and paying agent appointed and designated in Section 7 of this Ordinance. Bond Purchase Agreement means the agreement between the City and the Underwriter for the purchase of the Bonds as provided in Section 22 of this Bond Resolution. Bonds means the "City of Chubbuck Water Revenue Bonds, Series 2011," herein authorized to be issued, sold, and delivered in the aggregate principal amount of $2,000,000. Book -Entry -Only System means the system of recordation of ownership of the Bonds on the books of DTC pursuant to Section 4 of this Bond Resolution. Business Dav means any day, other than a Saturday or Sunday, on which banks located in the State of Idaho and in the state where the Bond Registrar's Principal Corporate Trust Office is located, are open for the purpose of conducting commercial banking business. Capital Improvement Fund means the "City of Chubbuck Water Project Capital Improvement Fund" created by Section 13 of this Ordinance. Cede means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to the Bonds pursuant to Section 4 hereof. Certificated Bond(s) means a Bond or Bonds evidenced by a printed certificate in the event that the Book -Entry -Only System is discontinued. City means the City of Chubbuck, Bannock County, Idaho. City Clerk means the Clerk of the City, or other officer of the City who is the custodian of the seal of the City and of the Page 2 records of the proceedings of the City, or his/her successor in functions, if any. Cost of Issuance Fund means the fund created by Section 13 of this Bond Resolution for the payment of the costs of issuance of the Bonds. Cost of Project or any phrase of similar import, means all or any part designated by the Council of the costs of the Project, or interest therein, which costs, at the option of the Council, may include all or any part of the incidental costs pertaining to the Project, including, without limitation: (1) Preliminary expenses advanced by the City from funds available for the. use therefore, or advanced by the Federal Government, or from any other source, with approval of the Council, or any combination thereof; (2) The costs of making surveys, audits, preliminary plans, other plans, specifications, estimates of costs and other preliminaries; (3) The costs of appraising, printing, estimates, advice, services of engineers, architects, financial consultants, attorneys at law, clerical help, or other agents or employees; (4) The costs of contingencies; (5) The costs of the issuance of the Bond; (6) The costs of funding any short-term financing, bond anticipation notes, and other temporary loans per- taining to the Project and of the incidental expenses incurred in connection with such loans; (7) The costs of any properties, rights, easements, or other interest in properties, or any licenses, privileges, agreements and franchises; and (8) All other expenses necessary or desirable and pertaining to the Project, as estimated or otherwise ascertained by the Council. Council means the City Council of the City. DTC means The Depository Trust Company, New York, New York, and its successors and assigns Estimated Net Revenues means, for any year, the estimated Revenues of the System for such year less the estimated Operation and Maintenance Expenses for such year, based upon estimates prepared by the City Engineer or an independent engineer, or an independent certified public accountant. In computing Estimated Page 3 Net Revenues, Revenues of the System may be adjusted as necessary to reflect any changed schedule of rates and charges. Exchange Bond means any Exchange Bond as defined in Section 8 hereof. Interest Payment Date(s) means the payment date(s) set forth in Section 4of this Bond Resolution. Mayor means the Mayor of the City, or his/her successor in functions, if any. Net Revenues means Revenue of the System after the deduction of Operation and Maintenance Expenses: - Operation and Maintenance Expenses or any phrase of similar import means all reasonable and necessary current expenses of the City, paid or accrued, of operating, maintaining, and repairing the System or of levying, collecting, and otherwise administering the Net Revenues for the payment of the Bonds; and the term includes (except as limited by contract or otherwise limited by law) without limiting the generality of the foregoing: (1) Engineering, auditing, reporting, legal, and other overhead expenses of the various City departments directly relating and reasonably allocable to the administration of the System; (2) Fidelity bonds and property and liability insurance premiums pertaining to the System, or a reasonably allocable share of a premium of any blanket bond or policy pertaining thereto; (3) Payments to pension, retirement, health, and hospitalization funds and other insurance; (4) Any taxes, assessments, excise taxes, or other charges which may be lawfully imposed on the City, the System, revenues therefrom, or any privilege in connection with their operation; (5) The reasonable charges of the bond registrar, fiscal or paying agent, commercial bank, trust bank, or other depository bank pertaining to the Bond issued by the City or pertaining to the Project, if any; (6) Contractual services, professional services, salaries, other administrative expenses, and the cost of materials, supplies, repairs, and labor, pertaining to the issuance of the Bond and to the ordinary operation of the System; and (7) All other administrative, general, and commercial expenses. Page 4 Ordinance means this Ordinance No. adopted on 2011. Participants mean those broker-dealers, banks, and other financial institutions from time to time for which DTC holds Bonds as securities depository. Principal Corporate Trust Office means, with respect, to the Bond 'Registrar, the office of. the Bond Registrar at Salt Lake City, Utah; provided, however, that with respect to payments on the Bonds and any exchange, transfer, or surrender of the Bonds, Principal Corporate Trust Office shall mean the office of the Bond Registrar at U.S. Bank Trust National Association, 60 Livingston Avenue, St. Paul, MN 55107 or such other or additional offices as may be specified by the Bond Registrar Project means the water system improvement project described in Section 3 of this Ordinance. Record Date means in the case of each interest payment date, the Bond Registrar's close of business on the last business day of the month next preceding such interest payment date. Registered Owner means the purchaser of the Bond and any subsequent transferee or purchaser of the Bond. Regulations means the Treasury Regulations issued or proposed under Section 103, Section 148, Section 149, or Section 150 of the Code (26 CFR Part 2) or other sections of the Code relating to "arbitrage bonds" or rebate, including without limitation Sections 1.148-0 through 1.148-11 and 1.150-1 of the Treasury Regulations, to the extent applicable, and includes amendments thereto or successor provisions. Representation Letter means the representation letter from the City to DTC, as authorized in Section 4 hereof. Reserve Fund means the "City of Chubbuck Water Revenue Bond Reserve Fund," created by Section 16 of this Ordinance. Reserve Requirement means the monies to be held by the City in the Reserve Fund to secure payment of debt service on the loan and the Bond which shall be in an amount provided for in the Loan Agreement, which amount shall not exceed the lesser of (i) the maximum annual principal and interest requirements on the Bond, or (ii) 125% of the average annual principal and interest requirements on the Bond, not to exceed ten percent (10%) of the proceeds of the Bond. Revenue Fund means the -City of Chubbuck Water Revenue Fund" created by Section 14 of this Ordinance. Revenue of the System means all revenues received by the City from its System and may include, at the discretion of the City, moneys derived from one, all, or any combination of revenue Page 5 sources pertaining to the System, including, without limitation, rates, charges, rents, fees, and any other income derived from the operation or ownership of, the use of services of, or the availability of or services pertaining to, or otherwise derived in connection with, the System or all or any part of any property pertaining to the System. System, for purposes of this Ordinance, means the domestic water system of the City, as the same -now exists, including its assets, real and personal, tangible and intangible, and as it may later be added to, extended, and improved, and shall include buildings, structures, utilities, or other income producing water facilities from the operation of or in connection with which the revenues of the payment of the Bond to be issued hereunder will be derived, and the lands pertaining thereto. Treasurer means the Treasurer of the City, or his/her successor in functions, if any. Underwriter means Seattle -Northwest Securities Corporation as initial purchaser of the Bonds. Written Certificate means an instrument in writing on behalf of the City executed by an authorized officer of the City. Section 2: BONDS AUTHORIZED Revenue bonds of the City, in fully registered form, designated "City of Chubbuck Water Revenue Bonds, Series 2011," are herein authorized to be issued, sold, and delivered in the aggregate principal amount of $2,000,000. Section 3: PURPOSE OF BONDS A. Prosect Description. The Bonds are being sold to finance the water improvement project, which consists of the acquisition of additional water rights, together with costs of engineering, legal, accounting, and other necessary professional services, costs of bond issuance, interest on borrowed funds (if any), and related costs (the "Project"). B. Project Changes. The Council may make changes in the Project, provided such changes are found necessary and desirable by the Council and that such changes do not substantially affect or alter the plans or the cost of the Project. C. Costs. The total estimated cost of the Project is $2,000,000, $2,000,000 of which will be paid from the issuance and sale of the Bonds, hereinafter defined. Section 4: DESCRIPTION OF THE BONDS A. The Bonds. The Bonds shall be dated as of their date of delivery, shall be substantially in the form of Exhibit "A" which Page 6 is annexed hereto, shall be issued in accordance with the Book - Entry -Only System described in this Section 4, shall be issued only in fully registered form, in denominations of $5,000 each, or integral multiples thereof within a maturity, not exceeding the total amount of Bonds maturing in a single maturity, and shall be numbered separately in a consecutive series, in the manner and with any additional designation as the Bond Registrar (hereinafter defined) deems necessary for the purposes of identification. Interest on*the Bonds shall be calculated on the basis bf a 360 -day year and twelve 30 -day months. The Bonds bear interest from their date, payable commencing on 2011, and semiannually on each and thereafter until their maturity or prior redemption, at the following rates of interest- and shall mature on of each year in the amounts set forth in the following schedule: Maturity Date Principal Amount Interest Rate B. The Book -Entry -Only System (1) Book -Entry Only System; Limited Obligation of City. The Bonds shall be initially issued in the form of a separate single fully registered Bond for each of the maturities set forth hereinabove. Each such Bond shall be manually executed by the Mayor and manually countersigned by the Clerk, and the corporate seal of the City shall be impressed thereon. Each Bond shall also be manually authenticated by the Bond Registrar. Upon initial issuance, the ownership of each Bond shall be registered in the registration books kept by the Bond Registrar in the name of Cede, as nominee of DTC. Except as provided in Section 6 hereof, all of the outstanding Bonds shall be registered in the registration books kept by the Bond Registrar in the name of Cede, as nominee of DTC. With respect to Bonds registered in the registration books kept by the Bond Registrar in the name of Cede, as nominee of DTC, the City and the Bond Registrar shall have no responsibility or obligation to any Participant or to any person on behalf of which a Participant holds an interest in the Bonds with respect to (i) the accuracy of the records of DTC, Cede or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person, other than a Registered Owner, as shown in the registration books kept by the Bond Registrar, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a Registered Owner, as shown in the registration books kept by the Bond Registrar, of any amount with respect to principal of or interest on the Bonds. The City and the Bond Registrar may treat and consider the Page 7 person in whose name each Bond is registered in the registration books kept by the Bond Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal and interest with respect to such Bond, and for all other purposes whatsoever. The Bond Registrar shall pay all principal of and interest on the Bonds only to or upon the order of the respective Registered Owners, as shown in the registration books kept by the Bond Registrar, or their respective attorneys duly authorized in writing, as provided in Section 7 hereof, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of principal of and interest on the Bonds to the extent of' the sum or sums so paid. No person other than a Registered Owner, as shown in the registration books kept by the Bond Registrar, -shall-receive a - Bond certificate evidencing the obligation of the City .to make payments of principal and interest pursuant to this Bond Resolution. Upon delivery by DTC to the City of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede, and subject to the provisions herein with respect to Record Dates, the word "Cede" in this Bond Resolution shall refer to such new nominee of DTC; and upon receipt of such a notice the City shall promptly deliver a copy of the same to the Bond Registrar. (2) Representation Letter. The Representation Letter in substantially the form annexed hereto as Exhibit "B" and by reference incorporated herein, is hereby authorized for use in connection with the Bonds. The Representation Letter shall not in any way limit the provisions of Paragraph A of this Section 4 or in any other way impose upon the City any obligation whatsoever with respect to persons having interests in the Bonds other than the Registered Owners, as shown on the registration books kept by the Bond Registrar. In the written acceptance of each Bond Registrar referred to in Section 7 hereof, such Bond Registrar shall agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Bond Registrar to at all times be complied with. (3) Transfers Outside Book -Entry -Only System. In the event that (a) the City determines that DTC is incapable of discharging or is unwilling to discharge its responsibilities described herein and in the Representation Letter, (b) DTC determines to discontinue providing its service as securities depository with respect to the Bonds at any time as provided in the Representation Letter, or (c) the City determines that it is in the best interests of the beneficial owners of the Bonds that they be able to obtain Certificated Bonds in certificated form, and an alternative book -entry system is not available or is not selected as provided in the succeeding sentence, the City shall notify DTC and direct DTC to notify the Participants of the availability through DTC of Bond certificates, and the Bonds shall no longer be restricted to being registered in the registration books kept by the Bond Registrar in the name of Cede, as nominee of DTC. At that time, the City may determine Page 8 that the Bonds shall be registered in the name of and deposited with such other depository operating a universal book -entry system, as may be acceptable to the City, or such depository's agent or designee, and if the City does not select such alternate universal book -entry system, then the Bonds shall no longer be restricted to being registered in the registration books kept by the Bond Registrar in the name of Cede, as nominee of DTC, but may be registered in whatever name or names Registered Owners 'transferring or exchanging Bonds shall designate, in accordance with the provisions of Section 8 hereof. (4) Payments to Cede. Notwithstanding any other provision of this Bond Resolution to the contrary, so long as any 'Bond or is registered in the name of Cede, as nominee of DTC, all payments with respect to principal of and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, in the manner provided in the Representation Letter. Section 5: PAYMENT OF THE BONDS Both the principal of and interest on the Bonds shall be payable in lawful money of the United States of America to the registered owners thereof whose names and addresses shall appear on the registration records of the City (the "Bond Register"), maintained by the Bond Registrar. Principal of each Bond shall be paid to the registered owner thereof, upon presentation and surrender of such Bond by the registered owner at the principal corporate trust office of the Bond Registrar, on or after the date of maturity or prior redemption. Payment of each installment of interest shall be made to the registered owner whose name appears on the Bond Register on the Record Date next preceding the interest payment date, and shall bepaid by check or draft of the Bond Registrar mailed to such registered owner on the due date at the address appearing on the Bond Register, or at such other address as may be furnished in writing by such registered owner to the Bond Registrar. Section 6: EXECUTION OF CERTIFICATED BONDS In the event that the Book -Entry -Only System is discontinued with respect to the Bonds, the City shall cause Certificated Bonds to be prepared, executed, authenticated, and delivered. The Certificated Bonds shall be numbered separately in the manner and with such additional designation as the Bond Registrar shall deem necessary for purposes of identification. Certificated Bonds shall be executed on behalf of the City by the Mayor and countersigned by the Clerk (the signatures of said Mayor and Clerk being either manual or by facsimile) and the Corporate seal of the City shall be impressed thereon or the Page 9 facsimile of the corporate seal of the City shall be printed thereon. The said officials and each of them are hereby authorized and instructed to execute the Certificated Bonds accordingly, and the use of such facsimile signatures of said Mayor and Clerk and such facsimile of the seal of the City on the Certificated Bonds are hereby authorized, approved, and adopted as the authorized and authentic execution, countersigning, and sealing of the Certificated Bonds by said officials. The Certificated Bonds shall then be delivered to the Bond Registrar for manual authentication. Only such of the Certificated Bonds shall bear thereon a certificate of authentication, manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this Bond Resolution, and such certificate of the Bond Registrar shall be conclusive evidence that the Certificated Bonds so authenticated have been duly authenticated and delivered under, and are entitled to the benefits of, this Bond Resolution and that the Registered Owner thereof is entitled to the benefits of this Bond Resolution. The certificate of authentication of the Bond Registrar on any Certificated Bond shall be deemed to have been executed by it if (a) such Certificated Bond is signed by an authorized officer of the Bond Registrar, but it shall not be necessary that the same officer sign the certificate of authentication on all of the Certificated Bonds issued hereunder or that all of the Certificated Bonds hereunder be authenticated by the same Bond Registrar, and (b) the date of registration and authentication of the Certificated Bond is inserted in the place provided therefor on the certificate of authentication. The Mayor and Clerk are authorized to execute, countersign, and seal from time to time, in the manner described above, Certificated Bonds (the "Exchange Bonds") to be issued and delivered for the purpose of effecting transfers and exchanges of Bonds pursuant to Section 8 hereof. At the time of the execution, countersigning, and sealing of the Exchange Bonds by the City, the payee, maturity, or due date, as applicable, and interest rate, if applicable, shall be in blank. All Exchange Bonds shall be in the denomination of $5,000 or integral multiples thereof. Upon any transfer or exchange of Bonds pursuant to Section 8 hereof, the Bond Registrar shall cause to be inserted in appropriate Exchange Bonds the appropriate payee, maturity, or due date, as applicable, and interest rate. The Bond Registrar is hereby authorized and directed to hold the Exchange Bonds, and to complete, authenticate, and deliver the Exchange Bonds, for the purpose of effecting transfers and exchanges of Certificated Bonds; provided that any Exchange Bonds authenticated and delivered by the Bond Registrar shall bear the same series, maturity, or due date, as applicable, and interest rate as Bonds delivered to the Bond Registrar for exchange or transfer, and shall bear the name of such payee as the Registered Owner requesting an exchange or transfer shall designate; and provided further that upon the delivery of any Exchange Bonds by the Bond Registrar a like principal amount, if applicable, of Certificated Bonds submitted for transfer or exchange, and of Page 10 like series and having like maturities and interest rates, if applicable, shall be canceled. The execution, countersigning, and sealing by the City and delivery to the Bond Registrar of any Exchange Bond shall constitute full and due authorization of such Certificated Bond containing such payee, maturity, or due date, as applicable, and interest rate, if applicable, as the Bond Registrar shall cause to be inserted, and the Bond Registrar shall thereby be authorized to authenticate and deliver such Exchang.e Bond in accordance with the provisions hereof. In case any officer whose signature or a facsimile of whose signature shall appear on any Bond (including any Exchange Bond) shall cease to be such officer before the issuance or deliver of such Bond, such signature or such facsimile shall nevertheless- be valid and sufficient. for all purposes, the same as if such officer had remained in office until such issuance of delivery, respectively. Section 7: BOND REGISTRAR U.S. Bank National Association is hereby appointed the Bond Registrar for the Bonds. The City may remove any Bond Registrar, and any successor thereto, and appoint a successor or successors thereto. Each Bond Registrar shall signify its acceptance of the duties and obligations imposed upon it by the Bond Resolution by executing and delivering to the City a written acceptance thereof. The principal of and interest on the Bonds shall be payable in any coin or currency of the United States of America which, at the respective dates of payment thereof, is legal tender for the payment of public and private debts. Principal of the Bonds shall be payable when due to the Registered Owner of each Bond at the principal corporate trust office of the Bond Registrar. Payment of interest on each Bond shall be made to the person who, as of the Record Date, is the Registered Owner of the Bond and shall be made by check or draft mailed to the Registered Owner, at the address of such Registered Owner as it appears on the registration books of the City kept by the. Bond Registrar, or at such other address as is furnished to the Bond Registrar in writing by such Registered Owner on or prior to the Record Date. Section 8: TRANSFER AND EXCHANGE OF BONDS A. Transfer of Bonds. (1) Any Bond may, in accordance with its terms, be transferred, upon the registration books kept by the Bond Registrar pursuant to Paragraph C of this Section 8, by the Registered Owner, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Bond Registrar, duly executed. No transfer shall be effective until entered on the registration books kept by the Bond Registrar. The City and the Bond Registrar may treat and consider the Registered Owner as the absolute owner thereof for Page 11 the purpose of receiving payment of, or on account of, the principal, if any, or redemption price thereof and interest due thereon and for all other purposes whatsoever. (2) Whenever any Bond or Bonds shall be surrendered for transfer, the Bond Registrar shall authenticate and deliver a new fully registered Bond or Bonds (which may be an Exchange Bond or Bonds pursuant to Paragraph B of this Section 8) of the same series, designation, maturity, or due date, as applicable, and interest rate and of authorized denominations duly executed by the City, for a like aggregate principal amount or interest amount, as applicable. The Bond Registrar shall require the payment by the Registered Owner requesting such transfer of any tax or -othergovernmental charge required to be paid with respect to such transfer. With respect to each Bond, no such transfer shall be required to be made after the Record Date with respect to any interest payment date to and including such interest payment date. If Exchange Bonds are prepared in connection with transfers outside the book-entry registration system as provided in Section 4, the foregoing provisions of this Section 8 shall apply to such transfers or exchanges. B. Exchange of Bonds. Bonds may be exchanged at the principal corporate trust office of the Bond Registrar for a like aggregate principal amount of fully registered Bonds (which may be an Exchange Bond or Bonds) of the same series, designation, maturity, or due date, as applicable, and interest rate of other authorized denominations or amounts, as applicable. The Bond Registrar shall require the payment by the Registered Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. With respect to each Bond, no such exchange shall be required to be made after the Record Date with respect to any interest payment date to and including such interest payment date. C. Bond Registration Books. This Bond Resolution shall constitute a system of registration within the meaning and for all purposes of the Registered Public Obligations Act of Idaho, Chapter 9 of Title 57, Idaho Code. The Bond Registrar shall keep or cause to be kept, at its principal corporate trust office, sufficient books for the registration and transfer of the Bonds, which shall at all times be open to inspection by the City; and, upon presentation for such purpose, the Bond Registrar shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Bonds as herein provided. D. List of Registered Owners. The Bond Registrar shall maintain a list of the names and addresses of the Registered Owners of all Bonds and upon any transfer shall add the name and address of the new Registered Owners and eliminate the name and address of the transferor Registered Owner. Page 12 E. Duties of Bond Registrar. If requested by the Bond Registrar, the Mayor and Clerk are authorized to execute the Bond Registrar's standard form of agreement between the City and the Bond Registrar with respect to the compensation, obligations, and duties of the Bond Registrar hereunder which may include the following: (1) to act as bond registrar, authenticating agent, paying agent, and -transfer agent as provided herein; (2) to maintain a list of Registered Owners as set forth herein and to furnish such list to the City upon request, but otherwise to keep such list confidential; (3) to give. notice of redemption of Bonds as provided herein; (4) to cancel and/or destroy Bonds which have been paid at maturity or upon earlier redemption or submitted for exchange or transfer; (5) to furnish the City at least annually a certificate with respect to Bonds canceled and/or destroyed; (6) to furnish the City at least annually an audit confirmation of Bonds paid, Bonds outstanding and payments made with respect to interest on the Bonds; and (7) to comply with all applicable provisions of the Representation Letter, as called for in Section 4(B) hereof. Section 9: REDEMPTION PRIOR TO MATURITY A. Optional Redemption. The Bonds maturing on or before shall not be subject to call or redemption prior to their stated dates of maturity. On any date on or after the Bonds maturing on or after , shall be subject to redemption, at the option of the City, in whole or in part (and by lot selected by the Bond Registrar if less than the entire maturity is being redeemed), upon notice as hereinafter provided, at the redemption price of 100% of the principal amount of the Bonds to be redeemed, plus accrued interest to the date of redemption. B. Notice of Redemption. Notice of redemption of any Bonds prior to their stated maturity shall be given by mailing of notice by the Bond Registrar to the registered owner of any Bond being called for redemption not less than thirty nor more than sixty days prior to the redemption date by first class mail, postage prepaid, at the address appearing on the Bond Register, or at such other address as may be furnished in writing by such registered owner to the Bond Registrar. The foregoing requirements shall be deemed to be complied with when notice is mailed as provided herein, regardless of whether or not it is Page 13 actually received by the owner of such Bond. Notice shall also be given by one (1) publication not less than thirty (30) days prior to said redemption date, in a newspaper of general circulation in the City, and by mailing of a copy of the notice to The Bond Buyer, a publication printed in New York City. The notice shall specify the Bonds to be redeemed, the date and place of redemption, and shall provide that the Bonds so called for redemption shall cease to accrue interest on the specified redemption date, provided funds for such redemption are on deposit atthe place of payment at such time, and shall not be deemed.to be outstanding as of such redemption date. C. Other Redemption Provisions. Portions of any Bond of a denomination of more than $5,000 may be redeemed. The portion of any Bond of a denomination of more than $5,000 to be. redeemed shall be in the principal amount of $5,000 or any integral multiple of $5,000, and in selecting portions of such Bonds for redemption, the Bond Registrar will treat each such Bond as representing that number of Bonds of $5,000 denomination which is obtained by dividing the principal amount of such bond by $5,000. Section 10: DEFEASANCE OF THE BONDS In the event that money and/or government obligations, maturing or having guaranteed redemption prices at the option of the owner at such time or times and bearing interest to be earned thereon in such amounts as are sufficient (together with any resulting cash balances) to redeem and retire part or all of the Bonds in accordance with its terms, are hereafter irrevocably set aside in a special Fund and pledged to effect such redemption and retirement, then no further payments need be made into the Bond Fund for the payment of the principal of and interest on the Bonds so provided for, and the Bonds and interest accrued thereon shall then cease to be entitled to any lien, benefit, or security of this Bond Resolution, except the right to receive the funds so set aside and pledged, and the Bonds and interest accrued thereon shall no longer be deemed to be outstanding hereunder. Section 11: CHARGES The City has established, may from time to time revise, and shall maintain and collect water rates and charges for furnishing the services of the System to its customers, which rates and charges are, and shall continue to be, uniform as to all persons or properties which are of the same class, which rates and charges shall be collected from the users thereof. Section 12: PLEDGE OF REVENUES The Net Revenues of the System are hereby pledged for the payment of the Bond and shall be used and applied in the order of priority provided in Section 14 of this Ordinance. Page 14 The City shall establish, revise, maintain, and collect charges sufficient, with other revenues received, after taking into consideration anticipated delinquencies, to provide Net Revenues equal to not less than 1.10 times the average annual debt service on the Bond and any Additional Bonds issued in accordance with Section 18 of this Ordinance. Section 13: FUNDS A. Establishment of Funds. The following funds on the accounting records of the City are hereby created in this Section with respect to the Bonds: (1) Capital Improvement Fund, to be held by the City. (2) Cost of Issuance Fund, to be held by the City. B. Delivery of Bonds• Application of Proceeds. The Treasurer of the City is hereby instructed to make delivery of the Bonds to the Underwriter and to receive payment therefor in accordance with the terms of the Bond Purchase Agreement and to deposit the proceeds of sale (after deduction of underwriter's discount) as follows: (1) A portion of the proceeds of sale of the Bonds shall be deposited in the Cost of Issuance Fund to be used as described in Section 13(D). (2) A portion of the proceeds of sale of the Bonds shall be deposited into the Capital Improvement Fund to be used as described in Section 13(C). (3) The remaining portion of the proceeds of the sale of the Bonds shall be deposited into the Debt Service Reserve Fund to be used as described in Section 16. C. Capital Improvement Fund. There has is hereby been created in the office of the Treasurer of the City a fund separate and distinct from all other funds of the City, known as the "City of Chubbuck Capital Improvement Fund" (the "Capital Improvement Fund"), into which shall be deposited the proceeds of the sale of the Bonds, except accrued interest, if any, which shall be deposited into the Bond Fund, and except for amounts deposited into the Cost of Issuance Fund pursuant to Section 13(D) below, and except for amounts deposited into the Debt Service Reserve Fund pursuant to Section 14. The proceeds of the Bonds shall be used to pay for the costs of the capital improvements heretofore authorized. Monies in the Capital Improvement Fund may be invested in lawful investments until needed for purposes for which the Bonds are issued. Any investment earnings shall accrue to and be used solely for the purposes of the Capital Improvement Fund. In the event there are funds remaining in said Capital Improvement Fund after all Page 15 expenditures for improvements as set forth hereinabove, any surplus funds shall be deposited into the Bond Fund and used for the payment of principal of and interest on the outstanding Bonds as the same shall accrue. D. Cost of Issuance Fund. There is hereby established in the office of the Treasurer of the City a separate fund designated as the "Cost of Issuance Fund." At the time of the delivery 'of the Bonds the City shall deposit into the Cost of Issuance Fund such amount as shall be required to pay the reasonable and necessary costs of issuance of the Bonds. Moneys in the Cost of Issuance Fund shall be used for the payment of costs of issuance of the Bonds. Any moneys remaining in the Cost of Issuance Fund on the date of the full and final payment of all costs of issuance of the Bands shall be transferred into the.Bond Fund. Section 14: THE REVENUE FUND There has heretofore been created a special fund, designated the "City of Chubbuck Water Revenue Fund" (the "Revenue Fund"), which shall be maintained by the Treasurer and into which the Revenue of the System shall be deposited immediately upon its receipt. A. Use of Revenues. The Revenue of the System shall be used for the payment of the following obligations in the following order of priority: (1) First Charge and Lien: The costs of Operation and Maintenance Expenses. (2) Second Charge and Lien: Payment of the Bond and any Additional Bonds, by payment into the Bond Fund, as provided in Section 15 of this Ordinance. . (3) Third Charge and Lien: To maintain the Reserve Fund as provided by Section 16 of this Ordinance; and (4) To administer surplus funds. B. Interest Earnings. Interest earnings on deposits in the Revenue Fund shall remain in and be used for the purposes of the Revenue Fund. C. Surplus Funds. Funds remaining in the Revenue Fund after having been applied to designated funds for the purposes provided in this section shall constitute surplus funds and may be used for the purposes set forth in Section 17 of this Ordinance. Section 15: THE BOND FUND Page 16 There is hereby created a special fund, designated the "City of Chubbuck Water Revenue Bond Fund" (the "Bond Fund"). There shall be deposited, from Net Revenues of the System the following amounts: A. Such amounts, in approximately equal monthly installments from the Revenue Fund, as will cause to be accumulated, not less than ten (10) days prior to each semiannual payment date, the amount sufficient, to make each semiannual payment ori the Bond as the same becomes due. The moneys herein allocated shall be used solely.to pay currently maturing payments on the Bond. B. If the City for any reason shall fail- to accumulate within the Bond Fund sufficient moneys to make the required semiannual payment on the Bond as the same becomes due, then an amount equal to the deficiency shall be deposited into the Bond Fund, not less than ten (10) days prior to such payment date, from the Reserve Fund, described hereinafter. Section 16: DEBT SERVICE RESERVE FUND A.. Deposits. There is hereby created a special fund known as the "City of Chubbuck Water Revenue Bond Reserve Fund" (the "Reserve Fund"), which shall be maintained by the Treasurer so long as the Bond remains outstanding, into which shall be deposited, from funds of the City, the amount of the Reserve Requirement, which amount shall be maintained as a debt service reserve fund for the Bond until the Bond has been paid in full. B. Deficiencies or Withdrawals. Whenever any moneys are withdrawn from the Reserve Fund to make required payments on the Bond, or if a deficiency exists therein, the amount so withdrawn or the .amount of such deficiency shall be restored by monthly deposits from Net Revenues until there has been restored therein the gross amount provided heretofore in subdivision A of this Section. C. Refunding. In the event refunding bonds are ever issued, the amount set aside into the Reserve Fund to secure the payment of the Bond may be used to retire bonds or may be held in the Reserve Fund to secure payment of the refunding bonds issued, to refund the outstanding refunding bonds, or may be held in the Reserve Fund to secure the payment of any other issue or series of bonds payable out of the Bond Fund and issued on a parity with the Bond. D. Investments. All moneys in the Reserve Fund may be kept in cash or deposited in institutions permitted by law in an amount in each institution not greater than the amount insured by any department or agency of the United States Government, or may be invested and reinvested in any legal investment permitted for City moneys maturing not later than the last maturity date of any outstanding bonds. Interest earned on any such investment shall be deposited, directly as earned, into the Bond Fund. Page 17 Section 17: SURPLUS FUNDS Funds remaining in the Reserve Fund after having been applied to or designated funds for the purposes provided in Section 14 of this Ordinance shall constitute surplus funds and may be used for any of the following purposes: A. To pay the costs of unusual or extraordinary maintenance of or repair to the System; B. To pay the principal of and interest on any subordinate lien obligations which may have been issued to provide water facilities in or for the City; C. To improve, extend, enlarge, or replace any water facilities; D. To acquire or construct additional water facilities in or for the City; E. To call or redeem prior to their fixed dates of maturity any Bond, parity bonds, or subordinate lien obligations issued to provide water facilities for the City; and F. For any other lawful purpose. Section 18: ADDITIONAL BONDS OR OTHER OBLIGATIONS A. Limitation Upon Issuance of Parity Obligations. Nothing contained in this Ordinance shall be construed in such a manner as to prevent the issuance by the City of Additional Bonds or other additional obligations payable from the Net Revenues on a parity with, but neither prior nor superior to, the lien of the Bond herein authorized; provided, however, that before any such Additional Bonds or other additional parity obligations are authorized or actually issued: (1) The City is not, and has not been, in default as to any payments required by this Ordinance for a period of not less than twelve (12) months immediately preceding the issuance of such Additional Bonds, and there is no deficiency in the Bond Fund or Reserve Fund. (2) The principal of and interest on the Additional Bonds shall be payable from the Bond Fund and further secured by the Reserve Fund, the Reserve Requirement for which shall be increased in proportion to the principal amount of the Additional Bonds being issued. (3) Prior to the delivery of any Additional Bonds, the City shall have on file at the office of the City Clerk a certificate of a licensed professional engineer, who may be the City engineer, or a certificate of an independent certified public accountant, dated prior to the Page 18 authorization of such Additional Bonds, showing that the Estimated Net Revenues, determined and adjusted as hereafter provided, for each fiscal year after the issuance of such Additional Bonds, will equal at least 1.10 times the amount required for the average annual debt service payment on the Bond and any Additional Bonds then outstanding, plus the Additional Bonds proposed to be issued. (4) In determining Estimated .Net Revenues, the Net Revenues for the past twelve (12) consecutive months. .immediately preceding the year of the proposed Additional Bonds shall be adjusted by such engineer or accountant to take into consideration changes in Net Revenues estimated to occur under one or more of the following conditions for each year after delivery. of the Additional Bonds for so long as the Bond and any Additional Bonds, including the Additional Bonds to be issued, shall be outstanding: a. any increase or decrease in Net Revenues which would result if any change in rates or charges adopted prior to the date of such certificate and subsequent to the beginning of such twelve (12) month period had been in force during the full twelve (12) month period; b. any increase or decrease in Net Revenues estimated by such engineer or accountant to result from any additions, betterments, and improvements to and extension of any facilities 'of the System which (i) become fully operational during such twelve (12) month period, (ii) were under construction at the time of such certificate, or (iii) will be constructed from the proceeds of the Additional Bonds to be issued; and/or C. the additional Net Revenue which would have been received if any customers added to the System prior to the date of such certificate and subsequent to the beginning of such twelve (12) month period were customers for the entire period. (5) The foregoing limitations, or any of them, may be waived or modified by the written consent of the Registered Owner of the Bond. B. Subordinate Lien Bonds. No provision of this Ordinance shall be deemed to limit or restrict the power of the City to issue bonds, notes or warrants, or to make pledges of the revenues which shall be subordinate as to the lien of the Bond and which shall provide for compliance with the current provisions hereof prior to the application of any funds to said subordinate purpose, provided that any consent required by the Loan and Grant Approval Conditions and Loan Resolution referred to in Section 3 of this Ordinance shall have been obtained. Page 19 C. Refunding. The restrictions with respect to the issuance of parity obligations shall not apply if such additional parity bonds proposed to be issued are for the sole purpose of refunding outstanding water revenue bonds. Section 19: INVESTMENTS Surplus funds in any'of the funds or accounts set forth in this Ordinance may be invested in securities 'as permitted by law. Section 20: GENERAL COVENANTS For the protection and security of the Bond, it is covenanted and agreed to and with the Registered Owner of the Bond from time to time, that the City will perform the following covenants: A. Operate System. It will operate the System in an efficient and economical manner and prescribe, revise, and collect such charges in connection therewith so that the services, facilities, and properties of the System may be furnished at the lowest possible cost consistent with sound economy and prudent management. B. Good Repair. It will operate, maintain, preserve, and keep the System and every part hereof in good repair, working order, and condition. C. Corporate Status. It will maintain its status as a municipal corporation of the State of Idaho and will take no steps to disincorporate or otherwise change its corporate status. D. Preserve Security. It will preserve and protect the security of the Bond and the rights of the Registered Owner thereof. E. Collect Revenues. It will collect and hold in trust the revenues and other funds pledged to the payment of the Bond and apply such revenue or other funds only as provided in this Ordinance. F. Service Bond. It will pay and cause to be paid punctually the principal of the Bond and the interest thereon on the date or dates and at the place or places and in the manner mentioned in the Bond, and in accordance with this Ordinance. G. Pay Claims. It will pay and discharge any and all lawful claims for labor, materials, and supplies which, if unpaid, might by law become a lien or charge upon the Revenue of the System, or any part of said Revenue of the System, or any funds in the hands of the Treasurer, prior or superior to the lien of the Bond or which might impair the security of the Bond, Page 20 to the end that the priority and security of the Bond shall be fully preserved and protected. H. Encumbrances. It will not mortgage or otherwise encumber, sell, lease, or dispose of the System or any part thereof, nor enter into any lease or agreement which would impair or impede the. operation of the System or any part thereof necessary to secure adequate revenues for the payment of the principal of and interest on the Bond, nor which would otherwise impair or impede the rights of the Registered Owner of the Bond with respect to such revenues of the operation of the System without- provisions for the retirement of the Bond then outstanding from the proceeds thereof. I. Insurance. It will procure and keep in force insurance upon all buildings and structures of the System and the machinery and equipment therein, which are usually insured by entities operating like property, in good and responsible insurance companies. The amount of the insurance shall be such as may be required to adequately protect it and the Registered Owner of the Bond from loss due to any casualty, and in the event of any such loss, the proceeds shall be used to repair or restore the System or for the payment of the Bond issued under this Ordinance. J. Fidelity Bonds. It will procure suitable fidelity bonds covering all of its officers and other employees charged with the operation of the System and the collection and disburse- ment of revenues therefrom. K. Engineers. It will employ consulting engineers of acknowledged reputation, skill, and experience in the improvement and operation of the System for any unusual or extraordinary items of maintenance, repair, or betterments as shall be required from time to time, all reports, estimates, and recommendations of such consulting engineers to be filed with the Clerk and furnished to the Registered Owner of the Bond issued hereunder, upon request. M. Accounts. It will keep proper and separate accounts and records in which complete and separate entries shall be made of all transactions relating to the System, and it will furnish complete operating and income statements upon request. N. Delinquencies. It will not furnish water service to any customer whatsoever free of charge, and it shall not later than sixty (60) days after an account becomes delinquent, take such legal action as may be reasonable to enforce collection of any collectible delinquent account. Page 21 Section 21: SPECIAL COVENANTS The City further covenants and agrees: A. In accordance with Section 149(a) of the Internal Revenue Code of 1986, as amended (the "Code"), the Bond, and any serial bonds to which it may be converted, shall be issued and remain in fully registered form in order that interest thereon, if any, be excluded from gross income of the -owner or owners for federal income tax purposes. The City covenants and agrees that it will take no action to permit the Bond, or any serial bonds to which.it may be converted, to be issued in or converted to bearer or coupon form. B. The Bond is hereby designated as a "qualified tax- exempt obligation" within the meaning and for the purposes of Section 265(b)(3) of the Code, and the City does not reasonably anticipate that it will designate more than $10,000,000, including the Bond, as qualified tax-exempt obligations during the calendar year in which the Bond is issued. C. None of the proceeds of the Bond will be used, directly or indirectly, (i) to make or finance loans to persons or (ii) in any trade or business carried on by any person (other than as a member of the general public). For purposes of the preceding sentence, the term "person" does not include a government unit other than the United States or any agency or instrumentality thereof, and the term "trade or business" means any activity carried on by a person other than a natural person. The City further covenants and agrees to take no action which would cause the Bond to be a "private activity bond," nor will it omit to take any action necessary to prevent the Bond from becoming a "private activity bond," within the meaning of Section 141 of the Code. D. The City has general taxing powers. The Bond is not a "private activity bond" within the meaning of Section 141 of the Code. 95% or more of the net proceeds of the Bond is to be used for the local governmental activities of the City. The City has no subordinate entities. The City has not issued, and does not reasonably anticipate that it will issue, tax-exempt obligations in the calendar year in which the Bond is issued in a face amount which exceeds $5,000,000. Accordingly, under Section 148(f)(4)(D) of the Code, the City is not required to pay rebates to the United States under Section 148(f) of the Code. E. The Mayor, Clerk, and Treasurer, and other appropriate officials of the City, or any one or more of such officials, as may be appropriate, are each hereby authorized and directed to execute, on behalf of the City, such certificate or certificates as shall be necessary to establish that the Bond is not an "arbitrage bond" within the meaning of Section 148 of the Code and the Treasury Regulations promulgated thereunder, and to establish that interest on the Bond, if any, is not and will not Page 22 become includable in the gross income of the owner(s) of the Bond under the Code and applicable regulations. The City covenants and agrees that no use will be made of the proceeds of the Bond, or any funds of the City which may, pursuant to Section 148 of the Code and applicable regulations, be deemed to be proceeds of the Bond, which would cause the Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code. The City further covenants to comply throughout the term of the Bond with the requirements of Section 148 of the Code and the regulations promulgated thereunder in order to prevent the Bond from becoming an "arbitrage bond." F. The City will comply with the information reporting requirements of Section.149(e) of the'Code. G. None of the proceeds of the Bond will be used to reimburse the City for capital expenditures made prior to the date of delivery of the Bond unless the City, not later than 60 days after the payment of such expenditure, shall have adopted an official intent resolution as provided by Section 1.150-2 of the Treasury Regulations. H. Continuing Disclosure. The City will comply with the requirements of Rule 15c2 -12(a)(5) of the U.S. Securities and Exchange Commission with respect to the continuing disclosure of certain material events with respect to the Bonds, as more fully set forth in the Information Reporting Agreement which is annexed hereto as Exhibit "C". The Corporate Trust Department of U.S. Bank National Association is hereby designated as agent of the City for purposes of Rule 15c2 -12(a)(5). Section 22: SALE OF BONDS The Bonds are hereby sold to the Underwriter upon the terms and conditions set forth in the Bond Purchase Agreement which is annexed hereto as Exhibit "D." The final Official Statement of the City for the sale of the Bonds, in substantially the form presented at this meeting, with such changes, omissions, insertions, and revisions as the Mayor shall approve, is hereby authorized, and the Mayor shall sign such final Official Statement and deliver such final Official Statement to the Underwriter for distribution to prospective purchasers of the Bonds and other interested persons, which signature shall evidence such approval. The use of the Preliminary Official Statement by the Underwriters, and the actions of the City, including the certification by the Mayor as to the "deemed finality" of the Preliminary Official Statement pursuant to SEC Rule 15c2-12 in connection with the offering of the Bonds, are hereby acknowledged, approved, and ratified. The Mayor and the Clerk of the City are, and each of them is, hereby authorized to do or perform all such acts as may be Page 23 necessary or advisable to comply with the Bond Purchase Agreement and to carry the same into effect. Section 23: AMENDMENTS A. The City from time to time and at any time may adopt an ordinance or ordinances supplemental hereto, which ordinance or ordinances thereafter shall become a part of.this Ordinance, for any one or more of all of the following purposes: (1) To add to the covenants and agreements of the City in this Ordinance, other covenants and agreements thereafter to be observed, which shall not adversely affect the interest of the Registered Owner of.-. the Bond, or- to surrender any right or power herein reserved. (2) To make such provisions for the purpose of curing any ambiguities or of curing, correcting, or supplementing any defective provisions contained in this Ordinance, or any ordinance authorizing future bonds in regard to matters or questions arising under such ordinances as the Council may deem necessary or desirable and not inconsistent with such ordinances and which shall not adversely affect, in any material respect, the interest of the Registered Owner of the Bond. Any such supplemental ordinance may be adopted without the consent of the Registered Owner of the Bond at any time outstanding, notwithstanding any of the provisions of subsection B of this Section. B. With the consent of the Registered Owner of not less than 75% in aggregate principal amount of the Bond at the time outstanding, the Council may adopt an ordinance or ordinances supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Ordinance or of any supplemental ordinance; provided, however, that no such supplemental ordinance shall: (1) Extend the fixed maturities of the Bond, or reduce the rate of interest thereon, or extend the time of payments of interest from their due date, or reduce the amount of the principal thereof, or reduce any premium payable on the redemption thereof, if applicable, without the consent of the Registered Owner of the Bond so affected; or (2) Reduce the aforesaid percentage of the Registered Owner required to approve any such supplemental ordinance. It shall not be necessary for the consent of the Registered Owner under this subsection B to approve the particular form of any proposed supplemental ordinance, but it shall be sufficient if such consent shall approve the substance thereof. Page 24 C. Upon the adoption of any supplemental ordinance pursuant to the provisions of this Section, this Ordinance shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties, and obligations of the City under this Ordinance and the Registered Owner of the Bond outstanding hereunder shall thereafter be determined, exercised, and enforced thereunder, subject in all respects to such modification and amendments, and all terms and conditions of any such supplemental ordinance shall be deemed to be part of the terms and conditions of this Ordinance for any and all purposes. D. ' Any Bond executed and delivered after the execution of any supplemental ordinance adopted pursuant to the provisions of this Section may have a notation as to any matter provided for in such supplemental ordinance, and if such supplemental ordinance shall so provide, new bonds so modified as to conform, in the opinion of the Council, to any modification of this Ordinance contained in any such supplemental ordinance, may be prepared and delivered without cost to the Registered Owner of the Bond then outstanding, upon surrender for cancellation of the Bond. Section 24: VALIDITY OF ISSUANCE The Bonds are issued pursuant to the Idaho Revenue Bond Act, being Idaho Code Sections 50-1027 through 50-1042. This recital is conclusive evidence of the validity of the Bonds and the regularity of its issuance. Section 25: REGISTERED OWNER'S REMEDIES —RECEIVER By action or suit in equity, the Registered Owner or subse- quent owners of the Bond may, in the event of a material violation of any of the foregoing covenants, cause the appointment of a receiver, which receiver may enter and take possession of the System and any Net Revenues for the payment of the Bond, prescribe fees to be derived from the System, and collect, receive, and apply all Net Revenues of other moneys pledged for the payment of the Bond in the same manner as the City might do in accordance with the obligations of the City. Section 26: ORDINANCE A CONTRACT The provisions of this Ordinance shall constitute a contract between the City and the Registered Owner so long as the Bond hereby authorized remains unpaid. Section 27: SEVERABILITY If any one or more of the covenants or agreements provided in this Ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements in this Ordinance and shall in Page 25 no way affect the validity of the other provisions of this Ordinance or of the Bond. Section 28: REPEALER All prior ordinances or parts thereof, to the extent inconsistent herewith, are hereby repealed and shall, to the extent of such inconsistency, have no further force or effect. Section 29: AUTHORIZATION The Mayor, City Clerk, and City Treasurer, or any one of such officers, as may be appropriate to the circumstances, are hereby authorized to execute; on .behalf of -the City, all such additional documents as may be necessary to effect the sale and delivery of the Bond. Section 30: PUBLICATION AND EFFECTIVE DATE This Ordinance, or a summary thereof in compliance with Section 50-901A, Idaho Code, substantially in the form annexed hereto as Exhibit "E," shall be published once in the official newspaper of the City, and shall take effect immediately upon its passage and approval. DATED this � day of , 2011. CITY OF CHUBBUCK Bannock County, Idaho B�--L== Y f4ld4a Mayor 64 ATTEST: PA Uo City Clerk-) ( S E A L ) Page 26