HomeMy WebLinkAboutOrd 1534 - waterworks and sewer revenue bonds, 1996A
ORDINANCE NO. 1534
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $4,970,000
CITY OF WEST UNIVERSITY PLACE, TEXAS, WATERWORKS AND SEWER
SYSTEM REVENUE BONDS, SERIES 1996A; AND AUTHORIZING AN
ESCROW AGREEMENT
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WEST UNIVERSITY
PLACE:
ARTICLE I
FINDINGS ANn DETERMTN A TTnN~
Section 1: Findimrs and Determinations. The bonds hereinafter authorized were duly and
favorably voted at an election held in the City of West University Place, Texas (the "City") on the
7th day of November, 1995. The City Council of the City does hereby determine that bonds in the
amount of $4,970,000 should be issued as the first installment of the $12,800,000 revenue bonds
voted for sanitary sewer system improvements at the election mentioned above, leaving the
remaining $7,930,000 of such bonds to be issued, sold, and delivered ata later date.
ARTICLE II
DEFINITIONS AND INTERPRETATIONS
Section 2.1: Definitions. In this Ordinance, the following terms shall have the following
meanings, unless the context clearly indicates otherwise:
"Act" shall mean Articles 1111 through 1118, Vernon's Texas Civil Statutes, as amended.
"Additional Parity Bonds" shall mean the additional parity revenue bonds permitted to.be
issued by the City pursuant to Section 6.1 of this Ordinance.
"Bonds" shall mean the City of West University Place, Texas, Waterworks and Sewer System
Revenue Bonds, Series 1996A, authorized by this Ordinance. ,The Bonds and the Series 1996B
Bonds, which are being issued concurrently with the Bonds, are the first two series of Parity Bonds
(as defined herein) issued by the City. .
"Business Day" shall mean any day which is not a Saturday, Sunday, a day on which
banking institutions in the city where the principal corporate trust office of the Registrar is located
are authorized by law or executive order to close, or a legal holiday.
"City" shall mean the City of West University Place, Texas, and where appropriate, the City
Council thereof and any successor to the City as owner of the System.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas.
"Constmction Fund"shall mean the constmction fund established by the City pursuant to
Section 8.3 of this Ordinance.
"Gross Revenues" shall mean all revenues, income and receipts of every nature derived or
received by the City from the operation and ownership of the System and the interest income from
the investment or deposit of money in the Revenue Fund, the Debt Service Fund, and the Reserve
Fund.
"Interest Payment Date", when used in connection with any Bond, shall mean February 1,
1997, and each August 1 and February 1 thereafter until maturity or earlier redemption.
"Issuance Date", with respect to the Bonds initially delivered to the TWDB, shall mean the
date on which each such Bond is authenticated by the Registrar and delivered to and paid for by the
TWDB. Bonds delivered on transfer of or in exchange for other Bonds shall bear the same Issuance
Date as the Bond or Bonds in lieu of or in exchange for which the new Bond is delivered.
"Maintenance and Operation Expenses" shall mean the reasonable and necessary expenses
of operation and maintenance of the System, including all salaries, labor, materials, repairs and
extensions necessary to render efficient serVice, and all payments under contracts now or hereafter
defined as operating expenses by the Legislature of Texas. Depreciation shall never be considered
as a Maintenance and Operation Expense.
"Net Revenues" shall mean all Gross Revenues remaining after deducting the Maintenance
and Operation Expenses.
"Ordinance"shall mean this bond ordinance and all amendments hereof and supplements
hereto.
"Owner", when used with'respect.to any Bond shall mean the person or.entity in whose
name such Bond is registered in the Register. Any reference to a particular percentage or proportion
of the Owners shall mean the Owners at a particular time of the specified percentage or proportion
in aggregate principal amount of all Bonds then outstanding under ~s Ordinance, exclusive of
Bonds held by the City.
"Parity Bonds" shall mean the Bonds, the Series 1996B Bonds, and each series of Additional
Parity Bonds from time to time hereafter issued, but only to the extent such Parity Bonds remaih
outstanding within the meaning of this Ordinance.
"Record Date" shall mean, for any Interest Payment Date, the fifteenth day of the month next
preceding each Interest Payment Date.
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"Register" shall mean the books of registration kept by the Registrar in which are maintained
the names and addresses of, and the principal amounts of the Bonds registered to, each Owner.
"Registrar" shall mean Bank One, Texas, N.A., Houston, Texas, and its successors in that
capacity .
"Reserve Fund Requirement" shall mean the average annual principal and interest
requirements on the Parity Bonds, which may be determined and redetermined each year by the City
but in no event less frequently than upon the issuance of each series of Parity Bonds.
"Series 1996B Bonds" means the $1,520,000 City of West University Place, Texas,
Waterworks and Sewer System RevenUe Bonds, Series 1996B, issued concurrently with the Bonds.
"Special Project" means, to the extent permitted by law, any waterworks or sanitary sewer
system property, improvement or facility declared by the City not to be part of the System and
substantially all of the costs of acquisition, construction, and installation of which is paid from
proceeds of a financing transaction other than the issuance of bonds payable from ad valorem taxes
or Net Revenues of the System, and for which all maintenance and operation expenses are payable
from sources other than revenues of the System, but only to the extent that and for so long as all or
any part of the revenues or proceeds of which are or will be pledged to secure the payment or
repayment of such costs of acquisition~ construction and installation under such financing
transaction.
"System" means all properties, facilities, improvements, equipment, interests, and rights
constituting the waterworks and sanitary sewer system of the City, including all future extensions,
replacements, betterments, additions, and improvements to the System. The System shall not
include any Special Project.
"TWDB" means the Texas Water Development Board and any successor agency.
Section 2.2: Inteq>retatiops. All terms defined herein and all pronouns used in this
Ordinance shall be deemed to apply ~qually to singular and plural and to all genders. The titles and
headings of the articles and sections of this Ordinance have been inserted for convenience of
reference only and are not to be considered a part hereof and shall not in any way modify or restrict
any of the terms or provisions hereof. This Ordinance and all the term~ and provisions hereof shall
be liberally construed to effectuate the purposes set forth herein and to sustain the validity of the
Parity Bonds and the validity of the lien on and pledge of the Net Revenues to secure the payment
of the Parity Bonds.
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ARTICLE III
TERMS OF THE BONDS
Section 3.1: Authorization and Authorized Amount. The Bonds shall be issued, pursuant
to the Act, in fully registered form in the principal amount Four Million Nine Hundred Seventy
Thousand Dollars ($4,970,000) for the purpose of constructing improvements and extensions to the
City's sanitary sewer system.
Section 3.2: Deshmation. Date. ~4 Interest Pavment Dates. The Bonds shall be designated
as "City of West University Place, Texas, Waterworks and Sewer System Revenue Bonds, Series
1996A," and shall be dated September 15, 1996. The Bonds shall bear interest at the rates set out
in Section 3.3 of this Ordinance from the later of the Issuance Date to TWDB or the most recent
Interest Payment Dat~ to which interest has been paid or duly provided for, calculated on the basis
of a 360 day year of twelve 30 day months, payable on February 1, 1997, and semiannually
thereafter on August 1 and February 1 of each year until maturity or earlier redemption.
Section 3.3: Initial BOllds: Numbers and Denomination. The Bonds shall be initially issued
bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in the
following schedule, and may be transferred and exchanged as set out in this Ordinance. The Bonds
shall mature, subject to prior redemption ir1 accordance with this Ordinance, on February 1 in each
of the years and in the amounts set out in such schedule. Bonds delivered on transfer of or in
exchange for other Bonds shall be numbered in order of their authentication by the Registrar, shall
be in the denomination of $5,000 or integral multiples thereof, and shall mature on the same date and
bear interest at the same rate as the Bond or Bonds in lieu of which they are delivered.
Bond Principal Year of Interest
Number Amount Maturity Rate
R- 1 $ 5,000 1997 2.650%
R- 2 17Q,000 1998 2.950%
R- 3 175,qOO 1999 3.150%
R- 4 . 185,000 2000 3.300%
R- 5 190,000 2001 3.400%
R- 6 200,000 2002 ' 3.500%
R- 7 210,000 2003 3.600%
R- 8 220,000 2004 3.700%
R- 9 230,000 2005 3.800%
R-10 240,000 2006 3.900%
R-11 255,000 2007 4.000%
R-12 265,000 2008 4.100%
R-13 275,000 2009 4.200%
R-14 290,000 2010 4.300%
R-15 305,000 2011 4.350%
R-16 320,000 2012 4.400%
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R-17
R-18
R-19
R,;20
335,000
350,000
365,000
385,000
2013
2014
2015
.2016
4.450%
4.500%
4.550 %
4.550%
Section 3.4: Execution of Bonds: Seal. The Bonds shall be signed on behalf of the City by
the Mayor and countersigned by the. City Secretary, by their manual, lithographed, or facsimile
signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such
facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed
manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the
same effect as if the official seal of the City had. been manually impressed upon each of the Bonds.
If any officer of the City whose manual or facsimile signature shall appear on the Bonds shall cease
to be such officer before the authentication of such Bonds or before the delivery of such Bonds, such
manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such
officer had remained in such office.
Section 3.5.: AnDroval Bv Attornev General: ReQistration by Comptroller. The Bonds to
be initially issued shall be delivered to the Attorney General of Texas for examination and approval
and shall be registered by the Comptroller. The manually executed registration certificate of the
Comptroller substantially in the form provided in Section 4.1 of this Ordinance shall be affixed or
attached to the Bonds to be initially issued.
Section 3.6: Authentication.. Only such Bonds as shall bear thereon a certificate of
authentication substantially in the form provided in Article 4 of this Ordinance, manually executed
by an authorized representative of the Registrar, shall be entitled to the benefits of this Ordinance
or shall be valid or obligatory for any purpose. Such duly executed certificate of authentication shall
be conclusive evidence that the Bond so authenticated was delivered by the Registrar hereunder.
The Registrar, when it authenticates a Bond, shall cause the Issuance Date to be stamped,
typed or imprinted on such Bond. Bonds issued on transfer of or in exchange for other Bonds sl1all
bear the same Issuance Date as the .Bond or Bonds presented for transfer or exchange.
Section 3.7. Pavment of Princinal and Interest. The Registrar is hereby appointed as the
registrar and paying agent for the Bonds. The principal of the Bonds shall be -payable, without
exchange or collection charges, in any coin or currency of the United .States of America which, on
the date of payment, is legal tender for the payment of debts due the United States of America, upon
their presentation and surrender as they respectively become due and payable at the principal
corporate trust office of the Registrar. The interest on each Bond shall be payable by check payable
on the Interest Payment Date, mailed by the Registrar on or before each Interest Payment Date to
the Owner of record as of the Record Date, to the address of such Owner as shown on the Register;
provided, however, that for so long as the TWDB is the Owner of the Bonds, all payments of
principal and interest will be made in wire transfer form at no cost to the TWDB.
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If the date for the payment of principal or interest on any Bond is not a Business Day, then
the date for such payment shall be the next succeeding Business Day, and payment on such date shall
have the same force and effect as if made on the original date such payment was due.
Section ).8. Successor Re~istrars. The City covenants that at all times while any Bonds are
outstanding it will provide a commercial bank or trust company, organized under the laws of the
United States or any state, authorized under such laws to exercise trust powers, and subject to
supervision or.examination by federal or state authority, to serve as and perform the duties and
services of Registrar for the Bonds. The City reserves the right to change the Registrar for the Bonds
on not less than 60 days written notice to the Registrar, so long as any such notice is effective not.
less than 60 days prior to the next succeeding principal or interest payment date on the Bonds.
Promptly upon the appointment of any successor Registrar, the previous Registrar shall deliver the
Register or a copy thereof to the new Registrar, and the new Registrar shall notify each Owner, by
United States mail, first class postage prepaid, of such change and of the address of the new
Registrar. Each Registrar hereunder, by acting in that capacity, shall be deemed to have agreed to
the provisions of this Section.
Section 3.9. Special Record Date. If interest on any Bond is not paid on any Interest
Payment Date and continues unpaid for thirty (30) days thereafter, the Registrar shall establish a new
record date for the payment of such interest, to be known as a Special Record Date. The Registrar
shall establish a Special Record Date when funds to make such interest payment are received from
or on behalf of the City. Such Special Record Date shall be fifteen (15) days prior to the date fixed
for payment of such past due interest, c:uid notice of the date of payment and the Special Record Date
shall be sent by United States mail, first class, postage prepaid, not later than five (5).days prior to
the Special Record Date, to each Owner or record of an affected Bond as of the close of business on
the day prior to the mailing of such notice.
Section 3 ~ 1 O. Ownership: Unclaimed Principal and Interest. Subject to the further provisions
of this Section, the City, the Registrar and any other person may treat the person in whose name any
Bond is registered as the absolute Owner of such Bond for the purpose of making andreceivmg
payment of the principal of or inter~st on such Bond, and for all other purposes, whether or not such
Bond is overdue, and neither the City nor the Registrar shall be bound by any notice or knowledge
to the contrary. All payments made to the person deemed to be the Owner of any Bond in
accordance with this Section 3.10 shall be valid and effectual andshall discharge the liability of the
City and the Registrar upon such Bond to the extent of the sums paid,
Amounts held by the Registrar which represent principal of and interest on the Bonds
remaining unclaimed by the Owner after the expiration of three years from the date such amounts
have become due and payable shall be reported and disposed of by the Registrar in accordance with
the applicable provisions of Texas law including, to the extent applicable, Title 6 of the Texas
Property Code, as. amended.
Section 3 .11. Re~istration, Transfer. and Exchansze. So long as any Bonds remain
outstanding, the Registrar shall keep the Register at its principal corporate trust office. Subject to
such reasonable regulations as it may prescribe, the Registrar shall provide for the registr~tion and
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transfer of Bonds in accordance with the terms of this Ordinance. The Issuance Date of each Bond
originally delivered to and paid for by TWDB shall be recorded in the Register.
Each Bond shall be transferable only upon the presentation and surrender thereof at the
principal corporate trust office of the Registrar, duly endorsed for transfer, or accompanied by an
assignment duly executed by the registered Owner or his authorized representative in form
satisfactory to the Registrar. Upon due presentation of any Bond in proper form for transfer, the
Registrar shall authenticate and deliver in exchange therefor, within three (3) Business Days after
such presentation, a new Bond or Bonds, registered in the name of the transferee or transferees, in
authorized denominations and of the same maturity, aggregate principal amount, and Issuance Date,
bearing interest at the same rate as the Bond or Bonds so presented.
All Bonds shall be exchangeable upon presentation and surrender thereof at the principal
corporate trust office of the Registrar for a Bond or Bonds of the same maturity, Issuance Date, and
interest rate and in any authorized denomination, in an aggregate amount equal to the unpaid
principal amount of the Bond or Bonds presented for exchange. The Registrar shall be and is hereby
authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this
Section 3.11. Each Bond delivered in accordance with this Section 3.11 shall be entitled to the
benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such
Bond is delivered.
The CitY or the Registrar may require the Owner of any Bond to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with the transfer or
exchange of such Bond. Any fee or charge of the Registrar for such transfer or exchange shall be
paid by the City.
Section 3.12. Cancellation of Bonds. All Bonds paid or redeemed in accordance with this
Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated
and delivered in accordance herewith, shall be cancelled and destroyed upon the making of proper
records regarding such payment or redemption. The Registrar shall furnish the City with appropriate
certificates of destruction of such ~onds.
Section 3.13. Mutilated. Lost. or Stolen Bonds. Upon the presentation and surrender to the
Registrar of a mutilated Bond, the Registrar shall authenticate and deliver in exchange therefor a
replacement Bond of like maturity, Issuance Date, interest rate and .principal amount, bearing a
number not contemporaneously outstanding. The City or the Registrar may require the Owner of
such Bond to pay a sum sufficient to cover any tax or other governmental charge. that may be
imposed in connection therewith and any other expenses connected therewith, including the fees and
expenses of the Registrar.
If any Bond is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the
applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has
been acquired by a bona fide purchaser, shall execute and the Registrar shall authenticate and deliver
a replacement Bond of like maturity, Issuance l?ate, interest rate and principal amount, bearing a
number not contemporaneously outstanding, provided that the Owner thereof shall have:
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(1) furnished to the City and the Registrar satisfactory evidence of the ownership
of and the circumstances of the loss, destruction or theft of such Bond;
(2) furnished such security or indemnity as may be required by the Registrar and
the City to save them hannless;
(3) paid all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Registrar and any tax or other
governmental charge that may be imposed; and
(4) met any other reasonable requirements of the City and the Registrar.
If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in lieu
of which such replacement Bond was issued presents for payment such original Bond, the City and
the Registrar shall be entitled to recover such replacement Bond from the person to whom it was
delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the City or the Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or
is about to become due and payable, the City in its discretion may, instead of issuing a replacement
Bond, authorize the Registrar to pay such Bond.
Each replacement Bond delivered in accordance with this Section 3.13 shall be entitled to
the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which
such replacement Bond is delivered.
Section 3.14: Redemption. The City reserves the right to redeem Bonds priori to maturity,
in whole or from time to time in part, in inverse order of maturity, on February 1, 2006i or any date
thereafter at a price of par, plus accrued interest on the Bonds called for redemption to the date fi~ed
for redemption. If less than all of t:qe Bonds are redeemed, the particular Bonds or portions thereof
to be redeemed shall be selected by ~e City.
I
Principal amounts may be redeemed only in integral multiples of $5,000. If a Bond subject
to redemption is in a denomination larger than $5,000, a portion ofsuc~ Bond may be r~deemed, but
only in integral multiples of $5,000. . Upon surrender of any Bond for redemptio~ in part, the
Registrar, in accordance with Section 3.11 hereof, shall authenticate and deliver in exchange therefor
a Bond or Bonds of like maturity, Issuance Date, and interest rate in an aggregate principal amount
equal to the unredeemed portion of the Bond so surrendered. '
Unless waived by an Owner, notice of any redemption identifying the Bonds to be redeemed
in whole or in part shall be given by the Registrar at least thirty days prior to the date fixed for
redemption by sending written notice by first class mail, postage prepaid, to the Owner of each Bond
to be redeemed in whole or in part at the address shown on the Register. Such notices shall state the
redemption date, the redemption price, the place at which Bonds are to be surrendered for payment
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and, if less than all Bonds outstanding of a particular maturity are to be redeemed, the numbers of
the Bonds or portions thereof of such maturity to be redeemed. Any notice given as provided in this
Section 3.14 shall be conclusively presumed to have been duly given, whether or not the Owner
receives such notice. By the date fixed for redemption, due provision shall be made with the
Registrar for payment of the redemption price of the Bonds or portions thereof to be redeemed, plus
accrued interest to the date fixed for redemption. When Bonds have been c8Iled for redemption in
whole or in part and due provision has been made to redeem the same as herein provided, the Bonds
or portions thereof so redeemed shall no longer be regarded as outstanding except for the purpose
of receiving payment solely from the funds so provided for redemption, and the rights of the Owners
to collect interest which would otherwise accrue after the redemption date on any Bond or portion
thereof called for redemption shall temiinate on the date fixed. for redemption.
ARTICLE IV
FORM DE R()NT)~ ANT) rPRTlJ<'Tr A TP~
Section 4.1: Forms. The form of the Bonds, including the form of the Registrar's
authentication certificate, the form of assignment, the form of the Comptroller's Registration
Certificate, and the form of insurance legend, for the bonds to be initially issued, shall be
substantially as follows, with. such additions, deletions and variations as may be necessary or
desirable and not prohibited by this Ordinance:
FORM OR R()l\TT)
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF HARRIS
REGISTERED
NUMBER
R-
REGISTERED
DENOMINATION.
$
CITY OF wEST UNIVERSITY PLACE, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND
. SERIES 1996A
INTEREST RATE: MATURITY DATE:
ISSUANCE DATE:
CUSIP:
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
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The City of West University Place, Texas, a municipal corporation duly incorporated under
the laws of the State of Texas (herein the "City") for value received, promises to pay, but solely from
certain Net Revenues as hereinafter provided, to the registered owner' identified above or registered
assigns, on the maturity date specified above, upon presentation and surrender of this Bond at the
principal corporate trust office of Bank One, Texas, N.A., Houston, Texas (the "Registrar"), the
principal amount identified above, in any coin or currency of the United States of America which
on the date of payment of such principal is legal tender for the payment of debts due the United
States of America, and to pay ~ solely from such Net Revenues, interest thereon at the rate shown
above, calculated on the basis of a 360 day year of twelve 30 day months, from the later of the
Issuance Date, or the most recent interest payment date to which interest has been paid or duly
provided for. The date of this Bond is September 15,1996, but interest shall accrue on the principal
amount hereof from the Issuance Date. Interest on this Bond is payable by check on February 1 and
August 1, beginning on February 1,1997, mailed to the registered owner as shown on the books of
registration kept by the Registrar as of the. fifteenth day of the month next preceding each interest
payment date; provided, however, that for so long as the Texas Water Development Board is the
registered owner of this Bond, all payments of principal and interest will be made in wire transfer
form at no cost to the Texas Water Development Board.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF TIllS BOND
SET FORTH ON THE REVERSE HEREOF, WInCH PROVISIONS SHALL HAVE THE SAME
FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE.
IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed, printed,
or lithographed hereon and has caused this Bond to be executed by the manual or facsimile
signatures of the Mayor and City Secretary.
(AUTHENTICATION
CERTIFICATE)
(SEAL)
CITY OF WEST UNIVERSITY PLACE,
TEXAS
xxxxxxxxx
Mayor
COUNTERSIGNED:
\
xxxxxxxxx
City Secretary
(Back Panel of Bond)
THIS BOND IS ONE OF A DUL Y AUTHORIZED SERIES OF BONDS aggregating
$4,970,000, issued for the purpose of improving and extending the City's sanitary sewer system,
under and in strict conformity with the Constitution and laws of the State of Texas, particularly
Articles 1111 through 1118, Vernon's Texas Civil Statutes, as amended, by authority of an election
held for and within the City on November 7, 1995, and pursuant to an ordinance adopted by the City
Council on August 26, 1996 (the "Ordinance"), which Ordinance is of record in the City's official
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minutes. Concurrently with the issuance of the Bonds, the City has also issued $1,520,000
Waterworks and Sewer System Revenue Bonds, Series 1996B for the purpo'se of improving and
extending the City's waterworks system (the "Series 1996B Bonds").
THE CITY RESERVES THE RIGHT to redeem Bonds, in whole or from time to time in
part, in inverse order of maturity, in integral multiples of $5,000, on February 1,2006, or any date
thereafter at par plus accrued interest on the principal amounts called for redemption to the date fixed .
for redemption. Reference is made to the Ordinance for complete details concerning the manner of
redeeming the Bonds. .
NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the date
fixed for redemption by first class mail, addressed to the registered owners of each Bond to be
redeemed in whole or in part at the address shown on the books of registration kept by the Registrar.
When Bonds or portions thereof have been called for redemption, and due provision has been made
to redeem the same, the principal amounts so redeemed shall be payable solely from the funds
provided for redemption, and interest which would otherwise accrue on the amounts called for
redemption shall terminate on the date fIxed for redemption.
THIS BOND IS TRANSFERABLE only upon presentation and surrender.at the principal
corporate trust office of the Registrar duly endorsed for transfer or accompanied by an assignment
duly executed by the registered owner or his authorized representative, subject to the terms and
conditions of the Ordinance.
THE BONDS ARE EXCHANGEABLE at the principal corporate trust office of the Registrar
for bonds in the principal amount of $5,000 or any integral multiple thereof, subject to the terms and
conditions of the Ordinance.
THIS BOND AND THE SERIES OF WHICH IT IS APART are special obligations of the
City, and together with the Series 1996B Bonds, are payable from and equally and ratably secured
by a first lien on the revenues of the City's waterworks and sewer system remaining after deduction
of the operation and maintenance ~xpenses of that system (the "Net Revenues"), as defined and
provided in the Ordinance, which Jlfet Revenues are required to be set aside and pledged to the
payment of the Bonds, the Series 1996B Bonds and all additional bonds issued on a parity therewith,
in the Debt Service Fund and the Reserve Fund maintained for the payment of all such bonds, all as
more fully described and provided for in the Ordinance. This Bond. and the series of which it is a
part, together with the interest thereon, are payable solely from such Net Revenues and do not
constitute an indebtedness or general obligation of the City. The holder hereof shall never have the
right to. demand payment of this obligation out of any funds raised or to be raised by taxation.
THE CITY HAS RESERVED THE RIGHT to issue additional parity revenue bonds, subject
to the restrictions contained in the Ordinance, which may be equally and ratably payable from, and
secured by a first lien on and pledge of, the Net Revenues in the same manner and to the same extent
as the Bonds and the Series 1996B Bonds.
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IT IS HEREBY DECLARED AND REPRESENTED that this Bond has been duly and
validly issued and delivered; that all acts, conditions, and things required or proper to be performed,
exist, and be done precedent to or in the issuance and delivery of this Bond have been performed,
existed, and been done in accordance with law; that the Bonds do not exceed any statutory
limitation; and that p:rovision has been made for the payment of the principal of and interest on this
Bond and all of the Bonds by the creation of the aforesaid lien on and pledge of the Net Revenues.
FORM OF REGISTRA TION CERTIFICATE
COMPTROLLER'S REGISTRATION CERTIFICATE:
REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this
(SEAL)
xxxxxxxxxx
Comptroller of Public Accounts
of the State of Texas
FORM OF AUTHENTICATION CERTIFICATE
AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been delivered pursuant to the Bond
Ordinance described in the text of this Bond.
Bank One, Texas, N.A.
By
Authorized Signature
Date of Authentication
\
FORM OF ~SSIGNMENT
ASSIGNMENT
F or value received, the undersigned hereby sells, assigns, and transfers unto
(please print or type name, address, and zip code of Transferee)
(please insert Social Security or Taxpayer Identification Number of Transferee)
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the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer said Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature Guaranteed:
Registered Owner
NOTICE: The signature above must
correspond to the name of the registered
owner as shown on the face of this Bond in
every particular, without any alteration,
enlargement or change whatsoever.
NOTICE: Signature must be guaranteed
by a member fIrm of the New York Stock
Exchange or a commercial bank or trust
company.
FORM OF INSURANCE T ,EGENn
Financial Security Assurance Inc. ("Financial Security"), New York, New York, has
delivered its insurance policy with respect to the scheduled payments due of principal of and interest
on this Bond to Bank One, Texas, N.A.~ Houston, Texas, or its successor, as paying agent for the
Bonds (the "Paying Agent"). Said Policy is on file and available for inspection at the principal office
of the Paying Agent an a copy thereof may be obtained from Financial Security or the Paymg Agent.
Section 4.2: Lellal Oninion: Cusip NumQers: Bond Insurance. The approving opinion of
Vinson & Elkins L.L.P., Houston, Texas, and CUSIP Numbers may be printed on the Bonds, but
errors or omissions in the printing of such opinion or such numbers shall have no effect on the
validity of the Bonds.
The purchase of and payme~t of the premium for municipal bond insurance by the City, in
accordance with the terms of a commitment for such insurance presented to and hereby approved
by the City Council is hereby authoriZed. All officials and representatives of the City are authorized
and directed to execute such documents and to do any and all things necessary or desirable to obtain
such insurance, and the printing on the Bonds of an appropriate legen4 regarding such insurance is
hereby approved.
ARTICLE V
SECURITY AND SOURCE OF.
PAYMENT FOR ALL PARITY BONDS
Section 5.1: Pledlle and Source ofPavment. The City hereby covenants and agrees that all
Gross Revenues of the System shall be deposited and paid into the special funds established for
Parity Bonds in this Ordinance, and shall be applied in the manner set out herein, to provide for the
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payment of all Maintenance and Operation Expenses and to provide for the payment of principal,
interest and any redemption premium of the Parity Bonds and all expenses of paying, securing and
insuring the same. The Parity Bonds shall constitute special obligations of the City that shall be
payable solely from, and shall be equally and ratably secured by a fIrst lien on, the Net Revenues,
as collected and received by the City, from the operation and ownership of the System, which Net
Revenues shall, in the manner herein provided, be set aside for and pledged to the payment of the
Parity Bonds in the Debt Service Fund and Reserve Fund as hereinafter provided, and the Parity
Bonds shall be in all respects on a parity with and of equal dignity with one another. The owners
of the Parity Bonds shall never have the right to demand payment out of any funds raised or to be
raised by taxation.
Section 5.2: Rates and Char,ies. So long as any Parity Bonds remain outstanding, the City
shall fix, charge and collect rates and charges for the use and services of the System which are
calculated to be fully sufficient to produce Net Revenues. in each fiscal year at least equal to 110%
of the principal and interest requirements scheduled to occur in such fiscal year on all Parity Bonds
then outstanding plus an amount equal to the sum of all deposits required to be made to the Reserve
Fund in such fiscal year; but in no event shall Net Revenues ever be less than the amount required
to maintain the Debt Service Fund and the Reserve Fund as hereinafter provided, and, to the extent
that funds for such purpose are not otherwise available, to pay all other outstanding obligations
payable from the Net Revenues of the System, as and when the same become due.
The City will not grant or permit ~Y free service from the System except for public buildings
and institutions operated by the City. "
Section 5.3: Special Funds.' The following special Funds are hereby created and established,
and such Funds shall be maintained and accounted for as hereinafter provided, so long as any Parity
Bonds remain outstanding:
(a) Waterworks and Sewer System Revenue Fund (the "Revenue Fund");
(b) Waterworks and S~wer System Revenue Bonds Debt Service Fund (the
"Debt Service Fund"); and
(c) Waterworks and Sewer System Revenue Bonds Reserve Fund (the "Reserve
Fund").
The Revenue Fund shall be maintained as a separate account on the books of the City. The Debt
Service Fund and the Reserve Fund shall be maintained at an official depository bank of the City
separate and apart from all other funds and accounts of the City and shall constitute trust funds which
shall be held in trust for the benefIt of the Owners of the Parity Bonds and the proceeds of which
(except for interest income, which shall be transferred to the Revenue Fund) shall be and are hereby
pledged to the payment of the Parity Bonds. All of the Funds named above shall be used solely as
provided in this Ordinance so long as any Parity Bonds remain outstanding.
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_Section 5.4: Flow of Funds. All Gross Revenues of the System shall be deposited as
collected into the Revenue Fund. Money from time to time on deposit to the credit of the Revenue
Fund shall be applied as follows in the following order of priority:
(a) Eim, to pay Maintenance and Operation Expenses.
(b) Second, to make all deposits into the Debt Service Fund required by this
Ordinance, the ordinance authorizing the issuance of the Series 1996B Bonds,
and any ordinance authorizing the issuance of Additional Parity Bonds.
(c) Ihinl, to make all deposits into the Reserve Fund required by this Ordinance,
the ordinance authorizing the issuance of the Series 1996B Bonds, and any
ordinance authorizing the issuance of Additional Parity Bonds.
(d) F ourth, to pay any amounts due to any bond insurer of Parity Bonds
not paid pursuant to subsections (b) or (c) above.
(e) fifth, for any lawful purpose, including transfers to the General Fund
as permitted by law.
Whenever the total amounts on deposit to the credit of the Debt Service Fund and the Reserve Fund
shall be equivalent to the sum of theaggr~gate principal amount of all outstanding Parity Bonds plus
the aggregate amount of all interest accrued and to accrue thereon, no further payments need be made
into the Debt Service Fund or the Reserve Fund.
Section 5.5: Debt Service Fund. On or before the last Business Day of each month so long
as any Parity Bonds remain outstanding, after making all required payments and provision for
payment of Maintenance and Operation Expenses, there shall be transferred into the Debt Service
Fund from the Revenue Fund:
(i) such amoun~, in approximately equal monthly installments,
as will be sufficient to accumulate the. amount required to pay
the interest scheduled to become due on the Parity Bonds on
the next interest payment date; and \
(ii) such amounts, in approximately equal monthly installments,
as will be sufficient to accumulate the amount required to pay
the next maturing principal.of the Parity Bonds, including the
principal amounts of, and any redemption premium on, any
Parity Bonds payable as a result of the exercise or operation
of any optional or mandatory redemption provision contained
in this Ordinance or in any ordinance authorizing the issuance
of Parity Bonds.
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Money deposited to the credit of the Debt Service Fund shall be used solely for the purpose of
paying principal (at maturity or prior redemption or to purchase Parity Bonds issued as term bonds
in the open market to be credited against mandatory redemption requirements), interest and any
redemption premium on the Parity Bonds, plus all bank charges and other costs and expenses
relating to such payment. The paying agent shall totally destroy all paid Parity Bonds and shall
provide the City with appropriate certificates of destruction.
Section 5.6: Reserve Fund. On or before the last Business Day of each month so long as any
Parity Bonds remain outstanding, after making all required payments and provision for payment of
Maintenance and Operation Expenses, and after making the transfers into the Debt Service Fund
required in the preceding Section, there shall be transferred into the Reserve Fund from the Revenue
Fund, in approximately equal monthly installments, amounts sufficient to accumulate the Reserve
Fund Requirement within sixty (60) months. Each increase in the Reserve Fund Requirement
resulting from the issuance of Additional Parity Bonds shall be accumulated within sixty (60)
months of the issuance of such bonds by making transfers from the Revenue Fund into the Reserve
Fund in approximately equal monthly installments of amounts sufficient for such purpose. After the
Reserve Fund Requirement has accumulated in the Reserve Fund and so long thereafter as such Fund
contains the Reserve Fund Requirement, no further deposits shall be required to be made into the
Reserve Fund, and any excess amounts may be transferred to the Revenue Fund. But if and
whenever the balance in the Reserve Fund is reduced below the Reserve Fund Requirement, monthly
deposits into such Fund shall be resumed:and continued in amounts at least equal to one-twelfth
(l/12th) of the deficiency in the Reserve. Fund Requirement until the Reserve Fund again equals the
Reserve Fund Requirement. The Reserve Fund shall be used to pay the principal of and interest on
the Parity Bonds at any time when there is not sufficient money available in the Debt Service Fund
for such purpose and to pay and retire the last Parity Bonds to mature or be redeemed.
Section 5.7: Deficiencies in Funds. If in any month there shall not be deposited into any
Fund maintained pursuant to this Article the full amounts required herein, amounts equivalent to
such deficiency shall be set apart and paid into such Fund or Funds from the tirstavailable and
unallocated money in the Revenue Fund, and such payment shall be in addition to the amounts
otherwise required to be paid into s~ch Funds during the succeeding month or months. To the extent
necessary, the rates and charges for the System shall be increased to make up for any such
deficiencies. '
--
Section 5.8: Investment of Funds: Transfer of Investment IQ.come. (a) Money in the
Revenue Fund, the Debt Service Fund and the Reserve Fund may ,at the option of the City, be
invested as permitted by law; provided that all such deposits and investments shall be made in such
manner that the money required to be expended from any Fund will be available at the proper time
or times, and provided further that in no event shall such deposits or investments.ofmoney in the
Reserve Fund mature later than the final maturity date of the Parity Bonds. Any obligation in which
money is so invested shall be kept and held in the Fund from which the investment was made. All
such investments shall be promptly sold when necessary to prevent any default in connection with
the Parity Bonds.
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(b) All interest and income derived from such deposits and investments shall be
transferred or credited as received to the Revenue Fund, and shall constitute Gross Revenues of the
System.
ARTICLE VI
ADDITIONAL BONDS
Section 6.1: Additional ~ Bonds. The City reserves the right to issue, for any lawful
purpose (including the refunding of any previously issued Parity Bonds or any other bonds or
obligations of the City issued in connection with or payable from the revenues of the System), one
or more series of Additional Parity Bonds payable from and secured by a ftrst lien on the Net
Revenues of the System on a parity with the Bonds, the Series 1996B, and any previously issued
Parity Bonds; provided, however, that no Additional Parity Bonds may be issued unless:
(a) The Additional Parity Bonds mature on, and interest is payable on,
the same days of the year as the Bonds; and
(b) The Debt Service Fund and the Reserve Fund each contains the
amount of money then required to be on deposit therein; and
(c) For either the preceding fiscal year or a 12 consecutive calendar
month period ending no more than 90 days prior to adoption of the
ordinance authorizing. such Additional Parity Bonds, Net Revenues
were equal to at least 125% of the . average annual principal and
interest requirements on all Parity Bonds that will be outstanding
after the issuance of the series of Additional Parity Bonds then
proposed to be issued, as certified by the City's Finance Director or
by an independent certifted public accountant or firm of independent
certified public accountants; or
(d) If the City cannot meet the test described in (c) above, but a change
in the rates and charges applicable to the System becomes effective
at least sixty (60) days prior to the adoption of the ordinance
authorizing Additional Parity Bonds and the City's Finance Director
certifies that, had such change in rates and charges beeri.effective for
the preceding fiscal year or 12 consecutive calendar month period
ending no more than 90 days prior to adoption of said ordinance, the
Net Revenues for such period would have met the test described in (c)
above.
Section 6.2: Subordinate Lien Bonds. The City reserves the right to issue, for any lawful
purpose, bonds, notes or other obligations secured in whole or in part by liens on the Net Revenues
that are junior and subordinate to the lien on the Net Revenues securing payment of the Parity
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Bonds. Such subordinate lien obligations may be further secured by any other source of payment
lawfully available for such purpose.
Section 63: Special PI6ie,Gt Buud:s. The City reserves the right to issue revenue bonds
secured by liens on and pledges of revenues and proceeds derived from Special Projects.
ARTICLE VII
COVENANTS AND PROVISIONS
RELATING TO ALL PARITY BONDS
Section 7.1: Punctual Payment of Paritv Bonds. The City will punctually payor cause to
be paid the interest on and principal of all Parity Bonds according to the terms thereof and will
faithfully do and perform, and at all times fully observe, any and all covenants, undertakings,
stipulations and provisions contained in this Ordinance and in any ordinance authorizing the issuance
of Additional Parity Bonds.
Section 7.2: Maintenance of System. So long as any Parity Bonds remain outstanding, the
City covenants that it will at all times maintain the System, or within the limits of its authority cause
the same to be maintained, in good condition and working order and will operate the same, or cause
the same to be operated, in an efficient and economical manner at a reasonable cost and in
acc'ordance with sound business principles. In operating and maintaining the System, the City will
comply with all contractual provisions and agreements entered into by it and with all v~id rules,
regulations, directions or orders of any governmental, administrative, or judicial body promulgating
same, noncompliance with which would materially and adversely affect the operation of the System.
Section 7.3: Sale or Encumbrance of Svstem. So long as any Parity Bonds remain
outstanding, the City will not sell, dispose of or, except as permitted in Article VI, further encumber
the System; provided, however, that this provision shall not prevent the City from disposing of any
portion of the System which is being replaced or is deemed by the City to be obsolete, worn GUt,
surplus or no longer needed for th~ proper operation of the System. Any agreement pursuant to
which the City contracts with a person, corporation, municipal corporation or political subdivision
to operate the System or to lease andior operate all or part of the System shall not be considered as
an encumbrance of the System. "'
Section 7.4: Insurance. The City further covenants and agrees that it will keep the System
insured with insurers of good standing against risks, accidents or casualties against which and to the
extent customarily insured against by political subdivisions of the State of Texas operating similar
systems, to the extent that such insurance is available. The cost of all such insurance together with
any additional insurance, shall be a part of the Maintenance and Operation Expenses. All net
proceeds of such insurance shall be applied to repair or replace the insured property that is damaged
or destroyed, or to make other capital improvements to the System, or to redeem Parity Bonds.
Section 7.5: Accounts. Records. and Audits. So long as any Parity Bonds remain
outstanding, the City covenants and agrees that'it will maintain a proper and complete system of
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records and accounts pertaining to the operation of the System in which full, true and proper entries
will be made of all dealings, transactions, business and affairs which in any way affect or pertain to
the System or the Gross Revenues or the Net Revenues thereof. The City shall after the close of
each of its fiscal. years cause an audit report of such records. and accounts to be prepared by an
independent certified public accountant or independent firm of certifiecl public accountants. Each
year promptly after such audit report is prepared, the City shall furnish a copy thereof without cost
to the Municipal Advisory Council of Texas, and any Owner of Parity Bonds who shall request
same. All expenses incurred in preparing such audits shall be Maintenance and Operation Expenses.
Section 7.6: Competition. To the extent it legally may, the City will not grant any franchise
or permit for the acquisition, construction, or operation of any competing facilities which might be
used as a substitute for the System and will prohibit the operation of any such competing facilities.
Section 7.7: Pled~e and Encumbrance of Net Revenues. The City covenants and represents
that it has the lawful power to create a lien on and to pledge the Net Revenues to secure the payment
of the Parity Bonds and has lawfully exercised such power under the Constitution and laws of the
State of Texas. The City further covenants and represents that, other than to the payment of the
Parity Bonds, the Net Revenues are not and will not be made subject to any other lien, pledge or
encumbrance to secure the payment of any debt or obligation of the City, unless such lien, pledge
or encumbrance is junior and subordinate to the lien and pledge securing payment of the Parity
Bonds.
Section 7.8: Bondowners' Remedies. This Ordinance shall constitute a contract between the
City and the Owners of the Parity Bonds from time to time outstanding (including. any bond insurers
of Parity Bonds) and shall remain in effect until the Parity Bonds and the interest thereon shall be
fully paid or discharged or provision therefor shall have been made as provided herein (including
payments of any amounts due to bond insurers of Parity Bonds). In the event of a default in the
payment of the principal of or interest on any of the Parity Bonds or a default in the performance of
any duty or covenant provided by law or in this Ordinance, the Owner or Owners of any of the Parity
Bonds may pursue all legal remedies afforded by the Constitution and laws of the State of T ex~ to
compel the City to remedy such default and to prevent further default or defaults. . Without in any
way limiting the generalitY of the foregoing, it is expressly provided that any Owner of any of the
Parity Bonds may at law or in equity, by suit, action, mandamus, or other proceedings, enforce and
compel performance of all duties required to be performed by the City under this Ordinance,
including the making and collection of reasonable and sufficient rates and charges for the use and
services of the System, the deposit of the Gross Revenues into the special funds herein provided, and
the application of the Gross Revenues and the Net Revenues in the manner required in this
Ordinance.
Section 7.9: Discharl!e bv Denosit. Except as provided in Section 8.2(h), the City may
discharge its obligation to the Owners of any or all of the Parity Bonds to pay principal, interest and
redemption premium (if any) thereon in any manner then pennitted by law, including by depositing
with any paying agent for such Parity Bonds or with the State Treasurer of the State of Texas either:
(i) cash in an amount equal to the principal amount and redemption premium, if any, of such Parity
Bonds plus interest thereon to the date of maturity or redemption, or (ii) pursuant to an escrow or
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trust agreement, cash and/or direct obligations of the United States of America, in principal amounts
and maturities and bearing interest at rates sufficient to provide for the timely payment of the
principal amount and redemption premium, if any, of such Parity Bonds plus interest thereon to the
date of maturity or redemption; provided, however, that if any of such Parity Bonds are to be
redeemed prior to their respective dates of maturity, provision shall have been made for giving notice
of redemption as provided in the ordinance authorizing such Parity Bonds. Upon such deposit, such
Parity Bonds shall no longer be regarded as outstanding or unpaid.
Section 7.10: PavinQ: AQ:ents Mav Own Parity Bonds. The paying agents for the Parity
Bonds, in their individual or any other capacity, may become holders or pledgees of the Parity Bonds
with the same rights they would have if they were not paying agents.
Section 7.11: No Recourse A~ainst City Offic1~l"1 No recourse shall be had for the payment
of principal of or interest on any Parity Bonds or for any claim based thereon or on this Ordinance
against any official of the City or any person executing any Parity Bonds.
ARTICLE VIII
PROVISIONS CONCERNING SALE AND
APPLICA nON OF PROCEEDS OF BONDS
Section 8.1: ~. The Bonds ar~ hereby sold and shall be delivered to the TWDB at a price
of par, subject to the approval of the Attorney General of Texas and Vinson & Elkins L.L.P., bond
counsel. The Mayor and other appropriate officers, agents and representatives of the City are hereby
authorized to do any and all things necessary or desirable to provide for the issuance and delivery
of the Bonds.
Section 8.2: Tax Exemption. (a) General Tax Covenant. The City intends that the interest
on the Bonds shall be excludable from gross income for purposes of federal income taxation
pursuant to sections 103 and 141 through 150 of the Code, and applicable regulations. The City
covenants and agrees not to take any, action, or knowingly omit to take any action within its control,
that if taken or omitted, respectively, would cause the interest on the Bonds to be includable in gross
income, as defined in section 61 offue Code, of the owners thereof for purposes of federal income
taxation. In particular, the City covenants and agrees to comply with each requirement of this
Section 8.2; provided, however, that the City shall not be required t~ comply with any particular
requirement of this Section 8,2 if the City has received an opinion of nationally recognized bond
counsel ("Counsel's Opinion") that such noncompliance will not adversely affect the exclusion from
gross income for federal income tax purposes of interest on the Bonds or if the City has received a
Counsel's Opinion to the effect that compliance with some other requirement set forth in this
Section 8.2 will satisfy the applicable requirements of the Code, in which case compliance with such
other requirement specified in such Counsel's Opinion shall constitute compliance with the
corresponding requirement specified in this Section 8.2.
(b) Use of Proceeds. The City covenants and agrees that its use of the Net Proceeds of the
Bonds will at all times satisfy the following requirements: .
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(i) The City will limit the amount of original or investment proceeds of the
Bonds to be used (other than use as a member of the general public) in the trade or
business of any person other than a governmental unit to an amount aggregating no
more than ten percent of the Net Proceeds of the Bonds ("private-use proceeds"). For
purposes of this Section, the term "person" includes any individual, corporation,
partnership, unincorporated association, or any other entity capable of carrying on
a trade or business; and the term "trade or business" means, with respect to any
natural person, any activity regularly carried on for profit and, with respect to persons
other than natural persons, any activity other than an activity carried on by a
governmental unit. Any use of proceeds of the Bonds in any manner contrary to the
guidelines set forth in Revenue Procedure 93-19, including any revisions or
amendments thereto, shall constitute the use of such proceeds in the trade or business
of one who is not a governmental unit;
(ii) The City will not permit more than five percent of the Net Proceeds of the
Bonds and, to be used in the trade or business of any person other than a
governmental unit if such use is unrelated to the governmental purpose of the Bonds.
Further, the amount of private-use proceeds of the Bonds in excess of five percent
of the Net Proceeds of the Bonds ("excess private-use proceeds") did not and will not
exceed the proceeds of the Bonds expended for the governmental purpose of the
Bonds to which such excess private-use proceeds relate;
(iii) The City will not permi~'an amount of proceeds of the Bonds exceeding the
lesser of (a) $5,000,000 or (b) five percent of the Net Proceeds of the Bonds to be
used, directly or indirectly, to finance loans to persons other than governmental units.
When used in this Section 8.2, the term Net Proceeds. of the Bonds shall mean the proceeds from the
sale of the Bonds, including investment earnings on such proceeds, less accrued interest.
(c) No Federal Guarantv. The City covenants and agrees riot to take any action,. or
knowingly.omit to take any action within its control, that, if taken or omitted, respectively, would
cause the Bonds to be "federally guBranteed" within the meaning of section 149(b) of the Code and
applicable regulations thereunder, except as permitted by section 149(b)(3) of the Code and such
regulations. "
(d) Bonds Are Not Hed~e Bonds. The City covenants and agrees that not more than 50
percent of the proceeds of the Bonds will be invested in nonpurpose investments (as defmed in
section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four years or more
within the meaning of section 149(g)(3)(A)(ii) of the Code, and the City reasonably expects that at
least 85 percent of the spendable proceeds of the Bonds will be used to carry out the governmental
purposes of the Bonds within the three-year period beginning on the date the Bonds are issued.
(e) No-Arbitra,~e Covenant. The City shall certify, through an authorized officer, employee
or agent, that based upon all facts and estimates known or reasonably expected to be in existence on
the date the Bonds are delivered, the City will reaSonably expect that the proceeds of the Bonds will
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not be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of
section 148(a) of the Code and applicable regulations thereunder. Moreover, the City covenants and
agrees that it will make such use of the proceeds of the Bonds including interest or other investment
income derived from Bond proceeds, regulate investments of proceeds of the Bonds, and take such
other and further action as may be required so that the Bonds will not be "arbitrage bonds" within
the meaning of section 148(a) of the Code and applicable regulations thereunder.
(1) Arhitr~ge Rp.h~tp. The City will take all necessary steps to comply with the requirement
that certain amounts earned by the City on the investment of the "gross proceeds" of the Bonds
(within the meaning of section 148(1)(6)(B) of the Code), be rebated to the federal government.
Specifically, the City will (i) maintain records regardiitg the investment of the gross proceeds of the
Bonds as may. be required to calculate the amount earned on the investment of the gross proceeds
of the Bonds separately from records of amounts on deposit in the funds and accounts of the City
allocable to other bond issues of the City or moneys which do not represent gross proceeds of any
bonds. of the City, (ii) calculate at such times as are required by applicable regulations,. the amount
earned from the investment of the gross proceeds of the Bonds which is required to be rebated to the
federal government,.and (iii) pay, not less often than every fifth anniversary date of the Issuance
Date of the first Bond delivered to TWDB and within sixty days following retirement of the Bonds,
all amounts required to be rebated to the federal government. Further, the City will not indirectly
pay any amount otherwise payable to the federal government pursuant to the foregoing requirements
to any person other than the federal government by entering into any investment arrangement with
respect to the gross proceeds of the Bonds that might result in a reduction in the amount required to
be paid to the federal government becaUse such arrangement results in a smaller profit or larger loss
than would have resulted if the arrangement had been at arm's length and had the yield on the issue
not been relevant to either party.
(g) Information Renortiml. The City covenants and agrees to file or cause to be filed with
the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close
of the calendar quarter in which the Issuance Date of the first Bond delivered to the TWDB occurs,
an information statement concerning the Bonds, all under and in accordance with section 149( e} of
the Code and applicable regulation~ thereunder.
(h) Continuin~ Obli~ation. Notwithstanding any other provision of this Ordinance, the
City's obligations under the covenants and provisions of this Section shall survive the defeasance
and discharge of the Bonds.
Section 8.3: Construction Fund. There is hereby created and established a special fund of
the City, to be known as the "City of West University Place, Texas, Waterworks and Sewer ~ystem
Revenue Bonds, Series 1996A Construction Fund", which shall be established at an official
depository of the City and kept separate and apart from other funds of the City. The proceeds of the
Bonds, as received, shall be deposited in the Construction Fund. Money on deposit in the
Construction Fund shall be used only for the purposes set forth in Section 3.1 of this Ordinance and
to pay costs of issuance. Money on deposit in the Construction Fund, may, at the option of the City,
be invested as permitted by Texas law; provided that all such deposits and investments shall be made
in such manner that the money required to be expended from the Construction Fund will be available
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at the proper time or times. All interest and income derived from such deposits and investments
shall be used for the purposes set forth m Section 3.1 of this Ordinance and to pay the costs of
issuing the Bonds.
Section 8.4: Escrow A~eement. To facilitate the delivery of and payment for the Bonds
pending completion of review of plans and specifications, the City Council hereby authorizes an
Escrow Agreement to be entered into by and between the City and Bank One, Texas, N.A., Houston,
Texas, as Escrow Agent, which shall be substantially in the form attached hereto as Exhibit A, the
terms and conditions of which are hereby approved, subject to such insertions, additions, and
modifications as shall be necessary to comply with all applicable laws, regulations, and procedures
and to carry out the intent and purposes of this Ordinance. The Mayor or Mayor Pro Tem and the
City Secretary or Assistant City Secretary are authorized to execute and deliver such Escrow
Agreement in multiple counterparts on behalf of the City.
Section 8.5: TWDB Rules. In compliance with the published rules and regulations of
TWDB, the City covenants and agrees that upon final completion of the project to be financed with
the proceeds of the Bonds, and if all or any portion of the Bonds shall be held by or on account of
TWDB or the State of Texas, the proper officials of the City shall render due and final accounting
to TWDB of the total cost of the project. If, following completion of the project, funds remain on
hand in the Construction Fund, or if the Development Fund Manager disapproves construction of
any portion of the project as not being in accordance with the plans and specifications, the City shall,
immediately after filing the final accounting, return to TWDB the amount of such excess and/or the
cost as determined by the DeveloPIlltmt Fund Manager relating to the parts of the project not
constructed in accordance with the plans and specifications, to the nearest multiple of $5,000, and
TWDB shall thereupon cancel and deliver to the City, in inverse maturity order, a like amount.of
Bonds held by TWDB. Any further amounts remaining in the City's Construction Fund thereafter
shall be promptly deposited by the City into the Debt Service Fund and applied to the payment of
the principal of and interest on the Bonds. Unless otherwise stated in the loan commitment of
TWDB with respect to the purchase of the Bonds, in determining the amount of available funds for
constructing the project to be ftnanced, the City shall account for all monies in the Construction
Fund, including all loan funds ext~nded by TWDB, all other funds available from the project as
described in the project engineer's sufficiency offunds statement required for closing TWDB's loan
and all interest earned by the City OIi money in the Construction Fund. This requirement shall not
be interpreted as prohibiting TWDB from enforcing such other rights as it may have under law.
Section 8.6: Amlit. So long as any of the Bonds are held by TWDB, the City shall provide
to TWDB's Development Fund Manager a copy of an annual audit of the City's fmances.
Section 8.7: ~. The City covenants that "as built" plans shall be provided to TWDB, and
that so long as any Bonds are held by TWDB it will abide by TWDB's rules and the relevant statutes
of the State of Texas, including Chapters 15, 16 and 17, Texas Water Code.
Section 8.8: Conservation ProlP'aID. The City covenants that to the extent required by
TWDB, the City will implement any water conservation program adopted by the City and approved
by TWDB in connection with the sale of the Bonds to TWDB, together with any amendments to
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such program which are so adopted and approved, for so long as any outstanding Bond or Bonds are
owned by TWDB.
Section 8.9: Environmental Determinations. The City covenants that to the extent requited
by TWDB, the City will comply with any special conditions specified by TWDB's environmental
determination in connection with the sale of the Bonds to TWDB, for so long as any outstanding
Bond or Bonds are owned by the TWDB.
Section 8.10: Comnliance with Rules and Statutes. The City covenants that it will comply
With TWDB's rules and relevant state statutes in connection with the sale of the Bonds to TWDB and
the use of the proceeds in connection with the construction of improvements and extensions to the
City's waterworks and sanitary sewer system project approved by TWDB.
ARTICLE IX
CONTINUING DISCLOSURE
Section 9.1: Continuim! Disclosure Undertakinl!. (a) Annual Reports. The City shall
provide annually to each NRMSIR and the SID, within six months after the end of each fiscal year
ending in or after 1996, financial information and operating data with respect to the City of the
general type included in the Audit Report. The information to be provided shall include the
complete fmancial statements of the City prepared in accordance with the accounting principles the
City may be required to employ from ,time to time pursuant to State law or regulation and audited,
if the audit is completed within the period during which they must be provided. If the audit of such
financial statements is not complete within such period, then the City shall provide unaudited
financial statements for the applicable fiscal year to each NRMSIR and the SID within such six
month period, and audited fmancial statements when the audit report on such statements becomes
available.
If the City changes its fiscal year, it will notify each NRMSIR and the SID of the change (and
of the date of the new fiscal year e~d) prior to the next date by which the City otherwise would be
required to provide fmancialinform~tion and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may be
set forth in full in one or more documents or may be included by specific reference to any document
(including an official statement or other offering document, if it is available from the MSRB) that
theretofore has been provided to each NRMSIR and the SID or filed with the SEC.
(b) Material Event Notices. The City shall notify the SID and either each NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event
is material within the meaning of the federal securities laws:
A. Principal and interest payment delinquencies;
B. Non-payment related def8:ults;
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C. Unscheduled draws on debt service reserves reflecting financial
difficulties;
D. Unscheduled draws on credit enhancements reflecting financial
difficulties;
E. Substitution of credit or liquidity providers, or their failure to
perform;
F. Adverse tax opinions or events affecting the tax-exempt status of the
Bonds;
G. Modifications to rights of holders of the Bonds;
H. Bond calls;
I. Defeasances;
1. Release, substitution, or sale of property securing repayment of the
Bonds; and
K. Rating changes.
The City shall notify the SID and either each NRMSIR or the MSRB, in a timely manner,
of any failure by the City to provide financial information or operating data in accordance with
Section 9. 1 (a) of this Ordinance by the time required by such Section.
(c) Limitations. Disclaimers. and Amendments. The City shall be obligated to. observe and
perform the covenants specified in this Section for so long as, but only for so long as, the City
remains an "obligated person" with res~ct to the Bonds within the meaning of the Rule, except that
the City in any event will give notice of any deposit made in accordance with Texas law that causes
Bonds no longer to be outstanding.
The provisions of this Section are for the sole benefit of the holders and beneficial owners
of the Bonds and the beneficial owners of the TWDB's bonds if the City is an obligated person with
respect to the TWDB's bonds under the Rule, and nothing in this Section, express or implied, shall
give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The
City undertakes to provide only the financial information, operating data, fmancial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update any
information provided in accordance with this Section or otherWise, except as expressly provided
herein. The City does not make any representation or warranty concepling such information or its
usefulness to a decision to invest in or sell Bonds at any future date. .
UNDERNO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORt,
FOR DAMAGES RESULTING IN WHOLE ORIN PART FROM ANY BREACH BY THE CITY,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH
PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH
SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
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No default by the City in observing or performing its obligations under this Section shall
comprise a. breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, change in law, or change in
the identity, nature, status or type of operations of the City, if (i) the agreement, as amended, would
have permitted an underwriter to purchase or sell Bonds in the original primary offering in
compliance with the Rule, taking into account any amendments or interpretations of the Rule to the
date of such amendment, as well as such changed circumstances, and (ii) either (a) the holders of a
majority in aggregate principal amount of the outstanding Bonds consent to such amendment, or (b)
any person unaffiliated with the City (such as nationally recognized bond counsel), determines that
the amendment will not materially impair the interests of the holders and beneficial owners of the
Bonds. If any such amendment is made, the City will include in its next annual update an
explanation in narrative form of the reasons for the amendment and its impact on the type of
operating data or financial information being provided.
ARTICLE X
SERIES I 996A-BOND INSURANCE PROVISIONS
Section 10.1: Benefit of Article: Authorization and Puroose. (a) This Article exists solely
for the benefit of the Bond Insurer, and may be modified or amended at any time with the consent
of, or may be waived in whole or in part by, the Bond Insurer, and may not be enforced or relied
upon in any way by.any of the Owners of the Bonds or the Owners of any other Parity Bonds.
(b) In order to reduce the debt service requirements on the Bonds, the City is authorize<.i to
purchase the Bond Insurance Policy. from the Bond Insurer in accordance with the provisions of its
commitment to the City and as mor~ fully provided in Section 10.2 below. The Mayor and City
Manager are authorized and directed to take all action necessary to purchase such Bond Insurance
Policy for the Bonds. In consideration for the Bond Insurer's iss1.iance of the Bond Insurance Policy,
the City hereby makes the agreements, covenants, provisions and representations set forth in this
Article.
Section 10.2: Special Provisions Relatin~ to Bond InsurancePolicy. (a) In the event of
conflict with any other provisionS of this Ordinance, the following provisions of this Article shall
govern and control.
(b) In this Article, the following terms shall have the following meanings:
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(i) "Bond Insurance Policy" shall mean the municipal bond insurance
policy issued by the Bond Insurer guaranteeing the scheduled
payment of principal of and interest on the Bonds.
(ii) "Bond Insurer" shall mean Financial Security Assurance Inc., a
New York stock insurance company, or any successor thereto.
(iii) "Bondholder" shall mean Owner.
(iv) "Event of Default" shall mean the failure to pay principal of and
interest on the Bonds, insolvency proceedings regarding the Issuer,
or the continued breach of any covenant by the Issuer hereunder
following written notice thereof by the Bond Insurer to the Issuer and
the Issuer's failure to cure the same within 60 days or such longer
period as shall be reasonably necessary and agreed upon by the Bond
Insurer.
(v) "Issuer" shall mean the City, as issuer of the Bonds.
(v) "Paying Agent" shall mean the Registrar.
(c) The prior written consent of the Bond Insurer shall be a condition precedent to the
deposit of any credit instrument provided in lieu of a cash deposit into the Reserve Fund unless such
instrument shall consist of a surety bond or insurance policy iss~ed by a monoline financial
guarantor whose claims paying ability is rated "AAA" ami "Aaa" by S&P and Moody's.
(d) The Bond Insurer shall be deemed to be the .sQk holder of the Bonds insured by it for the
purpose of exercising any voting right or privilege or giving any consent or direction or taking any
other action that the holders of the Bonds insured by it are entitled to take pertaining to defaults and
remedies.
(e) No amendment or supplement to the Ordinance may become effective except upon
obtaining the prior written consent of the Bond Insurer; provided, however, this provision shall not
affect the ability of the Issuer to issue Additional Bonds. \
(t) Copies of any modification or amendment to the Ordinance shall be sent to Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and Moody's Investors
Service, Inc. at least 10 days prior to the effective date thereof.
(g) The rights of the Bond Insurer to direct or consent to Issuer or Bondholder actions under
the Ordinance shall be suspended during any period in which the Bond Insurer is in default in its
payment obligations under the Bond Insurance Policy (except to the extent of amounts previously
paid by the Bond Insurer and due and owing to the Bond Insurer) and shall be of no force or effect
in the event the Bond Insurance Policy is no longer in effect or the Bond Insurer asserts that the Bon
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Insurance Policy is not in effect or the Bond Insurer shall have provided written notice that it waives
such rights.
(h) The rights granted to the Bond Insurer under the Ordinance to request, consent to or
direct any action are rights granted to the Bond Insurer in consideration of its issuance of the Bond
Insurance Policy. Any exercise by the Bond Insurer of such rights is merely an exercise of the Bond
Insurer's contractual rights and shall not be construed or deemed to be taken for the benefit of or on
behalf of the Bondholders nor does such action evidence any position of the Bond Insurer, positive
or negative, as to whether Bondholder consent is required in addition to consent of the Bond Insurer.
(i) Only (i) cash, (ii) non-callable direct obligations of the United States of America
("Treasuries'), (Hi) evidences of ownership of proportionate interests in future interest and principal
payments on Treasuries held by a bank or trust company as custodian, under which the owner of the
investment is the real party in interest and has the right to proceed directly and individually against
the obligor and the underlying Treasuries are not available to any person claiming through the
custodian or to whom the custodian may be obligated or (iv) pre-refunded municipal obligations
rated "AAA" and "Aaa" by S&P and Moody's, respectively, or any combination thereof, shall be
authorized to be used to effect defeasance of the Bonds unless the Bond Insurer otherwise approves.
Notwithstanding Section 7.9, none of the Bonds shall be deemed defeased until the Issuer
shall cause to be delivered (i) a report of an independent firm of nationally recognized certified
public accountants or such other accountant as shall be acceptable to the Bond Insurer
("Accountant") verifying the sufficiently of the escrow established to pay the Bonds in ~ll on the
maturity or redemption date ("Verification"), (ii) an Escrow Agreement (which shall be acceptable
in form and substance to the Bond Insurer), and (Hi) an opinion of nationally recognized bond
counsel to the effect that the Bonds are no longer "Outstanding" under the Ordinance; each
Verification and defeasance opinion shall be acceptable in form and substance, and addressed, to the
Issuer and the Bond Insurer. In the event a forward purchase agreement will be employed in the
refunding, such agreement shall be subject to the approval of the Bond Insurer and shall be
accompanied by such opinions of counsel as may be required by the Bond Insurer. The Bond Insltl'er
shall be provided with fmal drafts of the above-referenced documentation not less than five business
days prior to the funding of the escrow.
Bonds shall be deemed "Outstanding" under the Ordinarice unless and until they are in fact
paid and retired or the above criteria are met.
G) Bond principal and interest paid by the Bond Insurer under the Bond Insurance Policy
shall not be deemed paid for purposes of the Ordinance and shall remain Outstanding and continue
to be due and owing until paid by the Issuer in accordance with the Ordinance.
Notwithstanding Section 7.9, the Ordinance shall not be discharged unless all amounts due
or to become due to the Bond Insurer have been paid in full or duly provided for.
(k) If, on the third business day prior to the. related scheduled interest payment date or
principal payment date ("Payment Date") there is not on deposit with the Paying Agent, after making
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all transfers and deposits required under the Ordinance, moneys sufficient to pay the principal of and
interest on the Bonds due on such payment date, the Paying Agent shall give notice to the Bond
Insurer and to its designated agent (if any) (the "Insurer's Fiscal Agent") by telephone or telecopy
of the amount of such deficiency by 12:00 noon, New York City time, on such business date. If, on
the second Business Day prior to the related payment date, there continues to be a deficiency in the
amount available to pay the principal of and interest on the Bonds due on such payment date, the
Paying Agent shall make a claim under the Bond Insurance Policy and give notice to the Bond
Insurer and the Insurer's Fiscal Agent (if any) by telephone of the amount of such deficiency, and
the allocation of such deficiency between the amount required to pay interest on the Bonds and the
amount required to pay principal of the Bonds, confirmed in writing to the Bond Insurer and the
Insurer's Fiscal Agent by 12:00 noon, New York City time, on such second Business Day by filling
in the form of Notice of Claim and Certificate delivered with the Bond Insurance Policy.
In the event the claim to be made is for a mandatory sinking fund redemption installment,
upon receipt of the moneys due, the Paying Agent shall authenticate and deliver to affected
Bondholders who surrender their Bonds a new Bond or Bonds in an aggregate principal amount
equal to the unredeemed portion of the Bond surrendered. The Paying Agent shall designate any
portion of payment of principal on Bonds paid by the Bond Insurer, whether by virtue of mandatory
sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in
the principal amount of Bonds registered to the then current Bondholder, whether DTC or its
nominee or otherwise, and shall issue a replacement Bond to the Bond Insurer, registered in the
name of Financial Security Assurance Inc., in a principal amount equal to the amount of principal
so paid (without regard to authorized denominations); provided that the Paying Agent's failure to so
designate any payment or issue any replacement bond shall have no effect on the amount of principal
or interest payable by the Issuer on any Bond or the subrogation rights of the Bond Insurer.
The Paying Agent shall keep a complete and accurate record of all funds deposited by the
Bond Insurer into the Policy Payment Account and the allocation of such funds to payment of
interest on and principal paid in respect to any Bond. The Bond Insurer shall have the right to
inspect such records at reasonable times upon reasonable notice to the Paying Agent.
Upon payment of a claim under the Bond Insurance Policy the Paying Agent shall establish
a separate special purpose trust account for the benefit of Bondholders referred to her~in as the
"Policy Payments Account" and over which the Paying Agent shall have exclusive control and sole
right of withdrawal. The Paying Agent shall receive any amount paid under the Bond Insurance
Policy in trust on behalf of Bondholders and shall deposit any such amount in the Policy Payments
Account and distribute such amount only for purposes of making the payments for which a claim
was made. Such amounts shall. be disbursed by the Paying Agent to Bondholders in the same
manner as principal and interest payments are to be made with respect to the Bonds under the
sections hereof regarding payment of Bonds. It shall not be necessary for such payments to be made
by checks or wire transfers separate from the check or wire transfer used to pay debt service with
other funds available to make such payments.
Funds held in the Policy Payments Account shall not be invested by the Paying Agent and
may not be applied to satisfy any costs, expenses or liabilities of the Paying Agent.
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Any funds remaining in the Policy Payments Account following a Bond payment date shall
promptly be remitted to the Bond Insurer.
(1) The Bond Insurer shall, to the extent it makes any payment of principal or interest on the
Bonds, become subrogated to the rights of the recipients of such payments in accordance with the
terms of the Bond Insurance Policy.
(m) The Issuer shall payor reimburse the bond Insurer any and all charges, fees, costs and
expenses which the Bond Insurer may reasonably payor incur in connection with (i) the
administration, enforcement, defense or preservation of any rights or security in respect of the
Ordinance or any other transaction document (each a "Related Document"), (ii) the pursuit of any
remedies under the Ordinance or any other Related Document or otherwise afforded by law or
equity, (Hi) any amendment, waiver or other action with respect to, or related to, the Ordinance or
any other Related Document whether or not executed or completed, (iv) the violation by the Issuer
or the Obligor of any law, rule or regulation, or any judgment, order or decree applicable to it or (v)
any litigation or other dispute in connection with the Ordinance or any other Related Document or
the transactions contemplated thereby, other than amounts resulting from the failure of the Bond
Insurer to honor its obligations under the Bond Insurance Policy. The Bond Insurer reserves the
right to charge a reasonable fee as a condition to executing any amendment, waiver or consent
proposed in respect of the Ordinance or any other Related Document.
(n) Payments required to be made to the Bond Insurer shall be payable solely from the Net
Revenues and shall be paid (i) prior t~r an event of default, to the extent not paid from the Interest
and Sinking Fund, after required deposits to the Reserve Fund and (ii) after an event of default, with
respect to amounts other than principal and interest on the Bonds, prior to deposits to the Reserve
Fund. The obligations to the Bond Insurer shall survive discharge or termination of the Related
Documents.
(0) The Bond Insurer shall be entitled to pay principal or interest on the Bonds that shall
become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such teImS
are defined in the Bond Insuranc.e Policy) and any amounts due on the Bonds as a result of
acceleration of the maturity thereof in accordance with the Ordinance, whether or not the Bond
Insurer has received a Notice (as defined in the Bond Insurance Policy) of Nonpayment or a claim
upon the Bond Insurance Policy.'
(P) The notice address of the Bond Insurer is: Financial Security Assurance Inc., 350 Park
Avenue, New York, New York 10022-6022, Attention: Managing Director--Surveillance.--Re:
Policy No. Telephone: (212)826-0100; Telecopier: (212)339-3529. In each case in which
notice or other communication refers to an Event of Default or with respect to which failure on the
part of the Bond Insurer to respond shall be deemed to constitute consent or acceptance, then a copy
of such notice or other communication shall also be sent to the attention of General Counsel and
shall be marked to indicate "URGENT MATERIAL ENCLOSED."
(q) The Bond Insurer shall be provided with the following information:
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(i) Annual audited financial statements within 120 days after the end
of the Issuer's fiscal year and the Issuer's annual budget witliin 30
days after the approval thereof;
(ii) ,Notice of any draw upon the Reserve Fund within two Business
Days after knowledge thereof other than (i) withdrawal of amounts in
excess of the ReselVe Requirement and (ii) withdrawals in connection
with a refunding of Bonds;
(iii) Notice of any default known to the Paying Agent within five
Business Days after knowledge thereof;
(iv) Prior notice of the advance refunding or redemption of any of the
Bonds, including the principal amount, . maturities and CUSIP
numbers thereof;
(v) Notice of the resignation or removal of the Paying Agent and the
appointment of, and acceptance of duties by, any successor thereto;
(vi) The commencement of any proceeding by or against the Issuer
or the Obligor commenced under the United States Bankruptcy Code
or any other applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law (an "Insolvency Proceeding");
(vii) The making of any claim in connection with any Insolvency
Proceeding seeking the avoidance as a preferential transfer of any
payment of principal of, or interest on, the Bonds;
(viii) A full original transcript of all proceedings relating to the
execution of any amendment or supplement to the Related
Documents; and
(ix) All reports, notices and correspondence to be delivered under the
terms of the Related Documents.'
ARTICLE XI
MISCELLANEOUS
Section 11.1: Further Proceedinlls. The Mayor, the City Manager, the City Secretary, the
Finance Director, and other appropriate officials of the City are hereby authorized and directed to
do any and all things necessary and/or convenient to carry out the terms of this Ordinance.
Section 11.2: Severability. If any Section, paragraph, clause or provision of this Ordinance
shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such
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Section, paragraph, clause or provision shall not affect any of the remaining provisions of this
Ordinance.
Section 11.3: Open Meetini. IUs hereby officially found and determined that the meeting
at which this Ordinance was adopted was open to the public, and that public notice of the time, place
and purpose of said meeting. was given, all as required by the Texas.Open Meetings Act.
Section 11.4: P~inll Allent/Rellistrar AiIeement. The form of agreement setting forth the
duties of the Registrar is hereby approved, and an appropriate official of the City is hereby
authorized to execute such agreement for and on behalf of the City.
Section 11.5: No Personal Liability. No recourse shall be had for payment of the principal
of or interest on any Bonds or for any claim based thereon, or on this Ordinance, against any official
or employee of the City or any person executing any Bonds.
Section 11.6: Parties Interested. Nothing in this Ordinance expressed or implied is intended
or shall be construed to confer upon, or to give to, any person or entity, other than the City, the
Registrar, and the Owners of the Bonds, any right, remedy or claim under or by reason of this
Ordinance or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises
and agreements in this Ordinance shall be for the sole and exclusive benefit of the City, the
Registrar, and the Owners of the Bonds.
Section 11.7: Repealer~ All orders, resolutions .and ordinances, or parts thereof, inconsistent
herewith are'hereby repedled to the extent of such inconsistency.
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PASSED AND APPROVED this 26th day of August, 1996.
~1 QJ ~L
,
Mayor
City of West University Place, Texas
ATTEST:
~~~
City of West University Place, Texas
(SEAL)
REVIEWED:
J~...
,
City Attorney
City of West University Place, Texas
I certify that the above and foregoing ordinance complies with a budget appropriation
(Account No. ), and that there is or will be enough unencumbered money in that
account to meet the obligation when it is due.
'\
J-Ue/11.i ~~ -/'
Finance Director
City of West University Place, Texas
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ExmBIT A
SPECIAL ESCROW DEPOSIT AGREEMENT
THIS SPECIAL ESCROW DEPOSIT AGREEMENT, dated as of August 26, 1996, is made
by and between the City of West University Place, Texas, a municipal corporation and home-rule
city in Harris County, Texas (the "City") acting by and through the Mayor and City Secretary of the
City and Bank One, Texas, N.A., Houston, Texas, (the "Bank"), a banking association organized and
existing under the laws of the United States of America.
WITNESSETH:
WHEREAS, pursuant to an ordinance finally adopted on August 26, 1996, the City Council
of the City authorized the issuance of $4,970,000 Waterworks and Sewer System Revenue Bonds,
Series 1996A", dated September 15, 1996 (the "Bonds") for the purpose of improving and extending
the City's sanitary sewer system; and
WHEREAS, such ordinance also confirmed the sale of the Bonds to the Texas Water
Development Board (the "Board"); and
WHEREAS, a condition to the purchase of the Bonds by the Board is the deposit of the
proceeds of sale in escrow subject to b~fug withdrawn only with the approval of the Development
Fund Manager of the Board or an allth.orized representative; provided, however, the funds can be
transferred to different investments so long as all parties hereto consent to such transfer;
NOW, THEREFORE, the City andthe Bank hereby mutually agree as follows:
Section 1: Upon the delivery of the Bonds described above, the proceeds of sale shall be
deposited to. the credit of the Construction Fund referenced in the ordinance authorizing the issuance
of the bonds to be maintained by the Bank on behalf of the City and the Board, and such amcJ\mt
deposited to the credit of such fund shall be held.in escrow by the Bank in accordance with the terms
of this Agreement.
Section 2: The Bank shall not honor any disbursement from said fund unless and until it has
been supplied with written approval and consent by the Development Fund Manager of the Board
or an authorized represented to the release from escrow such funds, or portion thereof, as the Board
shall indicate in such release. . No written approval and consent by the Development Fund Manager
shall be required if the disbursement involves transferring funds from one investment to another.
Notice reflecting the type of investments purchased for the Construction Fund shall be sent to the
Development Fund Manager of the Board.
Section 3: Any sums remaining unexpended after completion of the construction and after
full and final payment of the facilities and improvements to be financed with the proceeds of the
Bonds and after such facilities have been accepted by the City and the Board, shall be returned to the
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Board to the nearest multiple of $5,000, for the purpose of cancellation of a like amount of Bonds
in inverse order of maturity, at par plus accrued interest to the date of redemption. Any remaining
surplus thereafter shall be transferred to the credit of the Debt Service Fund referenced in the
ordinance authorizing the issuance of the Bonds.
Section 4' The Bank shall be authorized to accept and rely upon the certifications and
documents furnished to the Bank by the City and shall not be liable for the payment of any funds in
reliance in good faith upon such certificates or other evidence of approval as herein recited.
Section S' The Bank shall have no liability except as expressly set forth herein, and should
a controversy arise either party hereto may introduce the dispute into a court of proper jurisdiction
for adjudication thereof and the Bank shall not be liable for any costs and expenses in connection
therewith, including reasonable attorney's fees.
Section 6: All cash deposited to the credit of such Construction Fund in excess of the
amounts insured by the Federal Deposit Insurance Corporation and remaining uninvested under the
terms of this Agreement shall be continuously secured by a valid pledge of securities authorized to
secure such deposits under the Public Funds Collateral Act having an aggregate market value,
exclusive of accrued interest, at all times, at least equal to the sums on deposit in said Bank.
Section 7: While funds are held in such Construction Fund, the Bank, at the direction of the
City, is authorized to invest such funds in direct obligations of the United States of America or other
authorized investments for political s~bdivisions of the State of Texas.
Section 8: An account statement of the escrow account will be provided by the City to the
Development Fund Manager's office upon request by the Development Fund Manager.
Section 9: This Agreement may be amended from time to time as necessary with the consent
of the City Council and the Board, but no such amendments shall increase the liabilities or
responsibilities or diminish the rights of the Bank without its consent.
. Section 10: No provision hereof shall be construed to prevent the investment, in any manner
prescribed by law, of any of the City's funds held in escrow under the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have e~ch caused this Agreement to be
executed by their duly authorized officers and their corporate seals to be hereunto affixed and
attested as of the date first above written.
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EXECUTED as of the date first written above.
CITY OF WEST UNIVERSITY
PLACE, TEXAS
By
Mayor
~~
ATTEST:
~~
City e retary 7
(SEAL)
BANK ONE, TEXAS, N.A.,
Houston, Texas
By
Title
ATTEST:
'\
Title:
(SEAL)
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