BILL No. 2008-10                                                                               ORDINANCE NO. 11829

AN ORDINANCE AUTHORIZING THE ISSUANCE OF $1,500,000 PRINCIPAL AMOUNT OF COMBINED WATERWORKS AND SEWERAGE SYSTEM REVENUE BONDS (STATE OF MISSOURI – DIRECT LOAN PROGRAM) SERIES 2008, OF THE CITY OF KIRKSVILLE, MISSOURI FOR THE PURPOSE OF EXTENDING AND IMPROVING THE CITY’S COMBINED WATERWORKS AND SEWERAGE SYSTEM; PRESCRIBING THE FORM AND DETAILS OF THE BONDS AND THE AGREEMENTS MADE BY THE CITY TO FACILITATE AND PROTECT THEIR PAYMENT AND PRESCRIBING OTHER RELATED MATTERS

WHEREAS, the City of Kirksville, Missouri (the “City”) is a city of the third class organized and existing under the constitution and laws of the State of Missouri; and

            WHEREAS, prior to adoption of Ordinance No. 11740 on December 19, 2005 (the “Combined System Ordinance”), the City operated a Waterworks System and a Sewerage System; and

WHEREAS, by the Combined System Ordinance, the City combined the Waterworks System  (thereafter, the “Waterworks Subsystem”) and the Sewerage System (thereafter, the “Sewerage Subsystem”), into a revenue producing combined waterworks and sewerage system serving the City, its inhabitants and others within its service area, including connected and related appurtenances and facilities and extensions, improvements, additions and enlargements made or acquired by the City after the date of this Ordinance (the “System”); and

WHEREAS, the City desires to extend and improve its System, such extensions and improvements to be financed in whole or in part by the issuance by the City pursuant to this Ordinance of its Combined Waterworks and Sewerage System Revenue Bonds (State of Missouri – Direct Loan Program) Series 2008 (the “Bonds”) in the original principal amount of $1,500,000; and

WHEREAS, to provide for the most cost-effective financing of the extensions and improvements of the System the City desires to participate in the State of Missouri Direct Loan Program (the “Direct Loan Program”) of the Missouri Department of Natural Resources (“DNR”) and the Clean Water Commission of the State of Missouri (the “Commission”); and

            WHEREAS, the City is authorized under the provisions of Chapter 250 of the Revised Statutes of Missouri (the “Act”) to issue and sell revenue bonds for the purpose of paying all or part of the cost of extending and improving the System, with the cost of operation and maintenance of the System and the principal of and interest on revenue bonds payable solely from the Net Revenues (as defined below); and

            WHEREAS, pursuant to the Act, a special bond election was duly held in the City on April 4, 2006 on the following question:

QUESTION

                        Shall the City of Kirksville, Missouri, issue its combined waterworks and sewerage system revenue bonds in the amount of $7,000,000 for the purpose of paying a portion of the cost of improving the combined waterworks and sewerage system of the City, including rehabilitation of the city’s waterworks treatment facility, replacement of the downtown water line, upgrade of the wastewater treatment facility and replacement of sewerage collection components, the cost of operation and maintenance of said combined waterworks and sewerage system and the principal of and interest on said revenue bonds to be payable solely from the revenues derived by the City from the operation of its combined waterworks and sewerage system, including all future improvements and extensions thereto?

and it was found and determined that more than a simple majority of the qualified electors of the City voting on the question had voted in favor of the question, the vote having been 1,925 votes for the question and 461 votes against the question; and

            WHEREAS, the City Council (the “Governing Body”) of the City has caused plans and specifications for extensions and improvements to the System and a cost estimate to be made by the Consulting Engineer (as defined below); and

            WHEREAS, the plans and specifications and the cost estimate are accepted and approved and are on file in the office of the City Clerk, the amount of the estimated cost being not less than $1,500,000; and

            WHEREAS, the City has heretofore issued $3,500,000 principal amount of the bonds authorized at said election (the Outstanding Parity Bonds as further described below), and finds and determines that it is necessary and advisable and in the best interest of the City and of its inhabitants to issue the Bonds in the principal amount of $1,500,000; and

            WHEREAS, by Ordinance No. 11316 adopted on November 13, 1997 (the “Series 1997 Ordinance”), the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1997 (the “Series 1997 Bonds”), dated December 1, 1997, in the original principal amount of $1,465,000, of which $985,000 remains outstanding as of the date of adoption of this Ordinance; and

            WHEREAS, by Ordinance No. 11360 adopted on November 19, 1998 (the “Series 1998 Ordinance”), the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1998 (the “Series 1998 Bonds”), dated December 1, 1998, in the original principal amount of $1,180,000, of which $775,000 remains outstanding as of the date of adoption of this Ordinance; and

            WHEREAS, by Ordinance No. 11422 adopted on November 18, 1999 (the “Series 1999 Ordinance”), the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1999 (the “Series 1999 Bonds”), dated December 1, 1999, in the original principal amount of $1,790,000, of which $1,360,000 remains outstanding as of the date of adoption of this Ordinance; and

            WHEREAS, by Ordinance No. 11531 adopted on November 1, 2001 (the “Series 2001 Ordinance”), the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 2001 (the “Series 2001 Bonds”), dated November 1, 2001, in the original principal amount of $565,000, of which $470,000 remains outstanding as of the date of adoption of this Ordinance; and

            WHEREAS, by Ordinance No. 11596 adopted on October 24, 2002 (the “Series 2002 Ordinance”), the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 2002 (the “Series 2002 Bonds”), dated November 7, 2002, in the original principal amount of $645,000, of which $560,000 remains outstanding as of the date of adoption of this Ordinance; and

            WHEREAS, by Ordinance No. 11613 adopted on April 3, 2003 (the “Series 2003 Ordinance”), the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 2003 (the “Series 2003 Bonds”), dated April 9, 2003, in the original principal amount of $1,385,000, of which $1,135,000 remains outstanding as of the date of adoption of this Ordinance; and

            WHEREAS, by Ordinance No. 11733 adopted on October 17, 2005 (the “Series 2005A Ordinance,” together with the Series 1997 Ordinance, the Series 1998 Ordinance, the Series 1999 Ordinance, the Series 2001 Ordinance, the Series 2002 Ordinance and the Series 2003 Ordinance, the “Outstanding Senior Sewer Bond Ordinance”), the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 2005A (the “Series 2005A Bonds,” together with the Series 1997 Bonds, the Series 1998 Bonds, the Series 1999 Bonds, the Series 2001 Bonds, the Series 2002 Bonds and the Series 2003 Bonds, the “Outstanding Senior Sewer Bonds), dated November 30, 2005, in the original principal amount of $1,595,000, of which $1,510,000 remains outstanding as of the date of adoption of this Ordinance; and

            WHEREAS, by Ordinance No. 11692 adopted on November 18, 2004 (the “Series 2004 Ordinance”), the City has issued its Waterworks System Revenue Bonds (State Revolving Fund Program) Series 2004 (the “Series 2004 Bonds”), dated December 9, 2004, in the original principal amount of $695,000, of which $620,000 remains outstanding as of the date of adoption of this Ordinance; and

            WHEREAS, by Ordinance No. 11732 adopted on October 17, 2005 (the “Series 2005B Ordinance”, together with the Series 2004 Ordinance, the “Outstanding Senior Water Bond Ordinance”), the City has issued its Waterworks System Revenue Bonds (State Revolving Fund Program) Series 2005B (the “Series 2005B Bonds”, together with the Series 2004 Bonds, the “Outstanding Senior Water Bonds”), dated November 30, 2005, in the original principal amount of $1,805,000, of which $1,745,000 remains outstanding as of the date of adoption of this Ordinance; and

            WHEREAS, by Ordinance No. 2007-17 adopted on April 4, 2007 (the “Outstanding Parity Bond Ordinance”), the City has issued its Combined Waterworks and Sewerage System Revenue Bonds (State Revolving Fund Program) Series 2007 (the “Outstanding Parity Bonds), dated May 1, 2007, in the original principal amount of $3,500,000, all of which remains outstanding as of the date of adoption of this Ordinance; and

            WHEREAS, the City, upon the issuance of the Bonds, will not have outstanding any other bonds or other obligations payable from the applicable portion of the Net Revenues other than the Outstanding Senior Sewer Bonds, the Outstanding Senior Water Bonds, the Outstanding Parity Bonds and the Bonds; and

WHEREAS, it is hereby found and determined that it is necessary and advisable and in the best interest of the City and its inhabitants that revenue bonds be issued and secured in the form and manner provided in this Ordinance and be sold to DNR under the State of Missouri Direct Loan Program (the “Direct Loan Program”), and to provide the remainder of costs of extending and improving the System which may be required from subsequent issues of bonds or funds of the City otherwise available.

NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF KIRKSVILLE, MISSOURI AS FOLLOWS:

ARTICLE I

DEFINITIONS  

Section 101.  Definition of Words and Terms .  Capitalized words and terms not otherwise defined in this Ordinance have the meanings set forth in the Purchase Agreement and the Escrow Agreement (each as identified below).  In addition to the foregoing and words and terms defined in the Recitals and elsewhere in this Ordinance, capitalized words and terms have the following meanings in this Ordinance:

“Account” means any of the funds or accounts established by Section 4 of the Escrow Agreement.

“Additional Interest” means additional interest on the Bonds prior to the Completion of Disbursements, equal to the actual earnings on moneys in the Construction Fund less earnings calculated at the interest rate on the Bonds, computed by the Paying Agent on each Interest Payment Date.  The Additional Interest for any period shall not be less than $0.  All references in this Ordinance to the payment of interest on the Bonds includes the Additional Interest.

“Administrative Expense Fund” means the fund designated as such and established by Section 4 of the Escrow Agreement.  The Administrative Expense Fund does not constitute part of the Direct Loan Program.

“Administrative Fee” means the annual administrative fee of DNR equal to 0.50% of the aggregate amount of the Bonds Outstanding as of each Administrative Fee Calculation Date (including the final maturity date of the Bonds), payable to the Paying Agent within 30 days after the City’s receipt of a statement from the Paying Agent for deposit to the Administrative Expense Fund and subsequent transfers to DNR as described in Section 9 of the Escrow Agreement.

“Administrative Fee Calculation Date” means the Business Day preceding each Principal Payment Date.

“Authority” means the State Environmental Improvement and Energy Resources Authority, a body corporate and politic and a governmental instrumentality of the State.

“Authority Program Bonds” means any bonds of the Authority issued under the SRF Leveraged Program, all or a portion of the proceeds of which are loaned to the City pursuant to the SRF Leveraged Program.

“Authorized Representative” means the representative of the City designated as such by the City in accordance with the Regulations.

“Bond Debt Service” means the amount of the principal of and interest due on the Bonds on the date of calculation required in this Ordinance.

“Bond Register” means the books for the registration, transfer and exchange of Bonds kept at the office of the Paying Agent.

“Bonds” means the Combined Waterworks and Sewerage System Revenue Bonds (State Revolving Fund – Direct Loan Program) Series 2008 in the original principal amount of $1,500,000 authorized herein and issued hereunder.

“Consultant” means the Consulting Engineer or an independent certified public accountant or firm of independent certified public accountants.

“Consulting Engineer” means each independent engineer or engineering firm with experience in designing and constructing wastewater treatment, sanitary sewerage or water pollution control facilities, or, if applicable, water production and transmission facilities, and retained by the City.

“Construction Fund” means the Construction Fund established by Section 4 of the Escrow Agreement.

“Costs of Issuance” means the costs of issuance of the Bonds as certified by the City on the date of issuance of the Bonds.

“Current Expenses” means all reasonable and necessary expenses of ownership, operation, maintenance and repair of the System and keeping the System in good repair and working order, determined in accordance with generally accepted accounting principles, including current maintenance charges, expenses of reasonable upkeep and repairs, salaries, wages, costs of materials and supplies, Paying Agent fees and expenses, annual audits, periodic Consultant’s reports, properly allocated share of charges for insurance, the cost of purchased water, gas and power, obligations (other than for borrowed money or for rents payable under capital leases) incurred in the ordinary course of business, liabilities incurred by endorsement for collection or deposit of checks or drafts received in the ordinary course of business, short-term obligations incurred and payable within a particular Fiscal Year, obligations incurred for the purpose of leasing (pursuant to a true or operating lease) equipment, fixtures, inventory or other personal property, and all other expenses incident to the ownership and operation of the System, but excluding interest paid on System Revenue Bonds, depreciation, amortization and other noncash charges (including payments into the Depreciation and Replacement Account), and all general administrative expenses of the City not related to the operation of the System.

“Debt Service Fund” means the Debt Service Fund established by Section 4 of the Escrow Agreement.

            “Debt Service Reserve Fund” means the Debt Service Reserve Fund established by Section 4 of the Escrow Agreement.

“Debt Service Reserve Requirement” means $150,000, subject to reduction to an amount equal to 10% of the principal amount of the Bonds Outstanding upon the mandatory redemption of the Bonds in part under Section 302(b).

“Defeasance Securities” means:

(a)       Federal Securities;

(b)       obligations of the Resolution Funding Corporation or any successor, but only if the use of the obligations to pay and discharge Bonds pursuant to Article X will cause the discharged Bonds to be rated in the highest long-term category by the Rating Agency; or

(c)        obligations of any state of the United States of America or of any agency, instrumentality or local government unit of any state that:

(i)         are not callable at the option of the obligor prior to maturity or for which irrevocable instructions have been given by the obligor to call on the date specified in the instructions, and

(ii)        are fully secured as to principal, redemption premium and interest by a fund, consisting of cash or Federal Securities, that:

(A)       may be applied only to the payment of principal, redemption premium and interest on the obligations, and

(B)       is sufficient, as verified by an independent certified public accountant, to pay the principal, redemption premium and interest on the obligations.

“Depreciation and Replacement Account” means the fund or account designated as such and created or ratified and confirmed by Section 401.

“Escrow Agreement” means the Escrow Trust Agreement dated as of April 1, 2008, between the City and the Paying Agent, as supplemented, modified or amended in accordance with its terms, related to the Bonds.

“Excess Debt Service Reserve Amount” means the amount of the reduction in the Debt Service Reserve Fund Requirement that will result from the redemption of the Bonds in part pursuant to Section 302(b).

“Federal Securities” means any direct obligation of, or obligation the timely payment of the principal of and interest on which is unconditionally guaranteed by, the United States of America and backed by its full faith and credit.

“Interest Payment Date” means each January 1 and July 1, commencing January 1, 2009.

“Investment Securities” means any of the following securities legal for the investment of funds of the City at the time of purchase:

(a)       Federal Securities;

(b)       Direct and general obligations of the State, the payment of the principal of and interest on which the full faith and credit of the State is pledged;

(c)        Deposits which are fully insured by the Federal Deposit Insurance Corporation (“FDIC”) in one or more of the following institutions: banks, trust companies or savings and loan associations (including without limitation, the Paying Agent or any bank affiliated with the Paying Agent) organized under the laws of the United States of America or any state thereof;

(d)       Federal funds, unsecured certificates of deposit, time deposits and bankers acceptances (having maturities of not more than 365 days) of any bank, the short-term obligations of which are rated MIG1 or equivalent by the Rating Agency;

(e)       Unsecured promissory notes of any bank, trust company, national banking association or bank holding company equal in quality to such institution’s outstanding unsecured long-term debt which is rated in the highest rating category by the Rating Agency; and

(f)         Shares in money market mutual funds rated in the highest or second highest applicable rating category by the Rating Agency.

“Net Revenues” means Revenues less Current Expenses.

“Operation and Maintenance Account” means the fund or account designated as such and created or ratified and confirmed by Section 401.

“Ordinance” means this Ordinance as from time to time amended in accordance with its terms.

“Outstanding” means, as of the date of determination, all Bonds issued and delivered under this “Ordinance, except:

(1)       Bonds canceled by the Paying Agent or delivered to the Paying Agent for cancellation;

(2)       Bonds for the payment of the principal or redemption price of and interest on which money or Defeasance Securities are held under Section 1001;

(3)       Bonds in exchange for which, or in lieu of which, other Bonds have been registered and delivered pursuant to this “Ordinance; and

(4)       Bonds allegedly mutilated, destroyed, lost, or stolen and paid under Section 208.

“Owner” means the Program Bondowner and any other owner of the Bonds.

“Parity Bonds” means the Bonds, the Outstanding Parity Bonds and any other parity bonds issued under Section 902 payable from the Net Revenues on a parity basis with the Bonds.

“Parity Ordinance” means this Ordinance, the Outstanding Parity Bond Ordinance and the ordinances under which any other Parity Bonds are issued.

“Paying Agent” means UMB Bank, N.A., the paying agent and escrow agent, and its successors and assigns acting at any time as Paying Agent and Escrow Agent under this Ordinance and the Escrow Agreement.

“Principal Payment Date” means each January 1, commencing January 1, 2009, and any date on which the Bonds are optionally redeemed in accordance with Section 301.

“Program Bondowner” means DNR or any successor or transferee of DNR under the Direct Loan Program.

“Purchase Agreement” means the Purchase Agreement dated as of April 1, 2008, between the City and DNR, as supplemented, modified or amended in accordance with its terms, related to the Bonds.

“Rating Agency” means Moody’s Investors Service or Standard & Poor’s Ratings Service.

“Record Date” for the interest payable on any Interest Payment Date means the 15th day (whether or not a Business Day) of the calendar  month next preceding such Interest Payment Date.

“Repayment Fund” means the fund designated as such and established by Section 4 of the Escrow Agreement.  The Repayment Fund does not constitute part of the Direct Loan Program.

“Revenue Fund” means the fund or account created or ratified by Section 401.

“Revenues” means all income and revenues derived by the City from the System, including investment and rental income, net proceeds from business interruption insurance, sales tax revenues which have been annually appropriated by the City or which are limited solely to the payment of improvements to or expenses of the System and any amounts deposited in escrow in connection with the acquisition, construction, remodeling, renovation and equipping of facilities to be applied during the period of determination to pay interest on System Revenue Bonds, but excluding any profits or losses on the early extinguishment of debt or on the sale or other disposition of investments or fixed or capital assets not in the ordinary course of business.

“Sewer Net Revenues” means Net Revenues derived from the operation of the Sewerage Subsystem.

“Sewer Revenues” means Revenues derived from the operation of the Sewerage Subsystem.

“SRF Leveraged Program” means the Missouri Leveraged State Drinking Water Revolving Fund Program and the Missouri Leveraged State Water Pollution Control Revolving Fund Program.

“SRF Leveraged Program Bonds” means any bonds of the City issued in connection with the City’s participation in the SRF Leveraged Program.

“SRF Subsidy” means the amount of investment earnings which will accrue on the Reserve Account during each Fiscal Year (taking into account scheduled transfers from the Reserve Account which will occur upon the payment of principal on Authority Program Bonds and assuming that the construction for the applicable project has been completed), if the Reserve Security is equal to the Reserve Percentage of the principal amount of the SRF Leveraged Program Bonds outstanding, the Reserve Account is invested in an investment agreement at a fixed rate during the calculation period and earnings are reduced by the Administrative Fee payable to DNR.  Administrative Fee, Reserve Account and Reserve Percentage as used in this definition have the respective meanings set forth in the bond indentures for the applicable Authority Program Bonds.

“State” means the State of Missouri.

“Surplus Account” means the fund or account created or ratified and confirmed in Section 401.

“System Revenue Bonds” means, collectively, the Bonds, the Outstanding Senior Sewer Bonds, the Outstanding Senior Water Bonds, the Outstanding Parity Bonds, any Parity Bonds and all other revenue bonds which are payable from the Net Revenues.

            “User Charge Ordinance” means (a) with respect to the Sewerage Subsystem, Ordinance No. 11310 adopted on October 6, 1997, as amended by Ordinance No. 11814 passed November 20, 2007, and (b) with respect to the Waterworks Subsystem, Ordinance No. 11609 adopted on March 17, 2003, each as amended, supplemented, consolidated or replaced and approved by DNR.

“Water Net Revenues” means Net Revenues derived from the operation of the Waterworks Subsystem.

“Water Revenues” means Revenues derived from the operation of the Waterworks Subsystem.

ARTICLE II

AUTHORIZATION OF BONDS

Section 201.  Authorization of Bonds .  The Bonds are authorized and directed to be issued in the principal amount of $1,500,000 for the purposes of this Ordinance.

Section 202.  Security for Bonds . 

(a)       The Bonds are special, limited obligations of the City payable solely from, and secured by a pledge of, the Net Revenues.  The taxing power of the City is not pledged to the payment of the Bonds.  The Bonds do not constitute a general obligation of the City or an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction.

            (b)       The Bonds are junior and subordinate to the Outstanding Senior Sewer Bonds with respect to payment of principal and interest from the Sewer Net Revenues.  In the event of any default in the payment of the Outstanding Senior Sewer Bonds, the Sewer Net Revenues will be applied solely to the payment of the principal of and interest on the Outstanding Senior Sewer Bonds until the default is cured.

            (c)        The Bonds are junior and subordinate to the Outstanding Senior Water Bonds with respect to payment of principal and interest from the Water Net Revenues.  In the event of any default in the payment of the Outstanding Senior Water Bonds, the Water Net Revenues will be applied solely to the payment of the principal of and interest on the Outstanding Senior Water Bonds until the default is cured.

Section 203.  Description of Bonds .  The Bonds consist of fully registered bonds without coupons, numbered from R-1 consecutively upward, in the denomination of $100 or any integral multiple of $100.  The Bonds will be issued in substantially the form of Exhibit B and will be registered, transferred and exchanged as provided in Section 206.  The Bonds are dated the date of original delivery as set forth on the Bonds.  The Bonds shall mature and become due on January 1, 2028 (subject to optional and mandatory redemption and tender prior to maturity as provided in Article III) and shall bear interest at an annual rate equal to 30% of the Twenty-Five Revenue Bond Index as published in The Bond Buyer most recently prior to the issuance and delivery of the Bonds, rounded up to the nearest 0.05% (computed on the basis of a 360-day year of twelve 30-day months) from the Dated Date or from the most recent Interest Payment Date to which interest has been paid or provided for, plus Additional Interest; provided, however, that at no time shall the Bonds bear interest at a rate exceeding the maximum rate of interest permitted by State law.  Interest (other than Additional Interest) is payable on each Interest Payment Date.  Additional Interest is payable in arrears on each Principal Payment Date prior to the Completion of Disbursements and on the Interest Payment Date immediately following the Completion of Disbursements.

Section 204.  Designation of Paying Agent .  The City has designated the Paying Agent as the City’s paying agent for the payment of the principal of and interest on the Bonds, bond registrar with respect to the registration, transfer and exchange of Bonds and escrow agent with respect to the funds established with the Paying Agent under the Escrow Agreement.

Section 205.  Method and Place of Payment of Bonds .

            (a)       Payment of the Bonds will be made with any coin or currency that is legal tender for the payment of debts due the United States of America on the payment date.

            (b)       The payment of the principal of and redemption premium, if any, payable on each Bond at maturity or upon earlier redemption and the interest payable on each Bond on any Interest Payment Date will be made by check or draft mailed by the Paying Agent to the address of the Owner shown in the Bond Register.  The principal of and redemption premium, if any, and interest on the Bonds is payable by electronic transfer in immediately available federal funds to a bank in the continental United States of America pursuant to instructions from any Owner received by the Paying Agent prior to the Record Date.

            (c)        Payments of principal on the Bonds pursuant to Article III may be made directly to the Owner without surrender of any Bond to the Paying Agent.  Accordingly, any transferee of a Bond should verify with the Paying Agent the principal of the Bond outstanding prior to such purchase or transfer, and the records of the Paying Agent shall be conclusive for such purposes.

            (d)       The Paying Agent will keep a record of payment of principal of, redemption premium, if any, and interest on all Bonds and, at least annually at the request of the City, will forward a copy or summary of the record of payments to the City.

Section 206.    Registration, Transfer and Exchange of Bonds .

(a)         The City will cause the Paying Agent to keep the Bond Register.  Each Bond when issued will be registered in the name of the Owner on the Bond Register.  Bonds will be transferred and exchanged only upon the Bond Register.

            (b)       Upon surrender of any Bond at the payment office of the Paying Agent in St. Louis, Missouri (or other office designated by the Paying Agent), the Paying Agent will transfer or exchange the Bond for a new Bond or Bonds in any authorized denomination of the same maturity and in the same aggregate principal amount as the Bond which was presented for transfer or exchange.  All Bonds presented for transfer or exchange must be accompanied by a written instrument of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Paying Agent, duly executed by the Owner or by the Owner’s authorized agent.  All Bonds presented for transfer or exchange must be surrendered to the Paying Agent for cancellation.

(c)         For every exchange or transfer of Bonds the City or the Paying Agent may levy a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid for the exchange or transfer.  The charge must be paid by the person requesting the exchange or transfer.  Payment of the charge is a condition precedent to the exchange or transfer.  If any Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against the Owner sufficient to pay any governmental charge required to be paid as a result of such failure.  In compliance with Section 3406 of the Code, this amount may be deducted by the Paying Agent from amounts payable to the Owner under the Ordinance and the Bonds.

(d)         The City and the Paying Agent will treat the person in whose name any Bond is registered on the Bond Register as the absolute owner of the Bond, whether or not payment of the Bond is overdue, for the purpose of receiving payment of the principal of, redemption premium, if any, and interest on the Bond and for all other purposes.  All payments made to any Owner or upon the Owner’s order will be valid and effectual to satisfy and discharge the City’s liability for payment of the Bond to the extent of the sum or sums paid.  Neither the City nor the Paying Agent will be affected by any notice to the contrary.

            (e)       At reasonable times and under reasonable rules established by the Paying Agent, the Owners of 25% or more in principal amount of the Outstanding Bonds, or their representative designated in a manner satisfactory to the Paying Agent, may inspect and copy the Bond Register.

(f)         Notwithstanding anything herein contained to the contrary, without the prior consent of City, Bonds shall be transferable only to any successor to DNR or its assigns.

Section 207.    Execution, Authentication and Delivery of Bonds .